Change Management including Case Study on Coca
Cola
According to a Greek philosopher Heraclitus “there is nothing permanent than change”. He
believed that change is the core of universe. This quote describes the importance of managing
change in human as well as organizational life.
A structured approach to transfer organization, its people and processes from current state to a
desired future state is called change management. This process gives employees the ability to
accept changes in the existing environment of the business. Change can be of different type for
example, change in technology, operations or strategies etc. company needs to implement
individual strategies to cope with each type of change.
Organizations need to change and adopt dynamic survival strategies to stay alive in uncertain
political, social and economic environment (Hiatt and Creasy, 2003). All environmental factors
present in the nature experience change on continuous basis. Human nature resists change, so
managing that resistance requires well planned change management strategies.
This report is aimed at describing the importance of change management for organization its
motives and objectives, change management processes, how company can involve all the
stakeholders for successful implantation of change management and the strategies that an
organization can adopt to implement the successful change.
Reasons for adopting change
Organizations need change for the following reasons:
To respond to the rapidly changing environment
To improve the overall performance of the company
To rapidly respond to the customers’ demands
To improve the effectiveness and efficiency
To increase the employee performance
To create the best practices inside the organization and setting standards for the industry
To improve profitability and return on overall investment
Change management is needed for organizational survival. So the company should adopt to
change management techniques in order to maintain its worth in the industry.
Importance of change management
In a study 327 project managers had responded to the question that “if you had a chance to do it
again, what would you do differently?” Most of them responded that we will implement an
effective change management program planned way before starting the project. This study
highlights the importance of change management in an organizational perspective. Change
management moderates the risks that can cause failure (Jeff and Creasey, 2003).
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The change management process
Change management is being studied by the philosophers, researchers and business experts for
many years. A number of change management theories, approaches and philosophies are
developed by psychologists and management professionals to implement successful change in
the organization (Paton and MacCalman, 2008). There are three phases of change management
i.e. preparing for change, managing change and reinforcing change. Preparation for change phase
includes assessment of change capabilities and capacity and developing a strategy that fit to
those capabilities. Second phase i.e. “managing change” phase includes processes like planning
and implementation of strategies made in the first phase. Last phase which is the reinforcement
of change includes the processes like collection and analyzing of feedback data, finding out gaps
and coping with determined degree of resistance from inside and outside the organization and
taking corrective actions to successfully conclude the change management process (change
management learning center, 1996-2011). According to “Lewin’s 3 step model”, change is
“episodic” i.e. it can be easily planned into three stages:
1. “Unfreezing
2. Changing
3. Freezing
Managers at Coca Cola Company can motivate workforce in the “unfreezing” stage by informing
them about the vitality of change being planned in context of organization benefits. Training to
the staff members can make them more adept at accepting the transformational stage.
In the “changing phase” the company can initiate practical steps with regard to the strategic plan
for change. It can be achieved by developing strong relationships and offering rewards.
“Refreezing” phase allows Coca Cola Corporation to make recently innovated change a part of
their strategy so that workforce does not get back to the previously used operational methods of
the organization (Robbins and Coulter, 2008).
Change management - A case study on Coca Cola Corporation
Coca Cola is a retailer, marketer and manufacturer of non-alcoholic drinks and is known
worldwide for it coca cola beverage. In addition to its coca cola brand, Coca Cola Company
offers 500 beverages and non beverages brands in about two hundred countries. The company
was founded by Asa Candler in year 1892. It’s headquarter is located in Atlanta, Georgia of
United States of America. The company had total net income of approximately 11.8 billion US
dollars in year 2010 with total number of employees 139,600 worldwide. Company’s brand i.e.
Coca Cola stands number one in the list of most well known brands of the world (Coca Cola
company, 2006-2011).
Coca Cola is a type of company that requires making changes in its products and business
strategies according to the consumer expectations and external environment. Here in this study
we would quote different examples from coca cola corporation’s history and will examine that
what were the triggering events for opting the change and what strategies the company
developed and implemented in order to successfully going through the transitioning process.
The need for change in an organization is often created by external and internal factors, where
external ones encompass governmental laws, labor markets, market conditions, economin
scenario etc. and internal factors are the workforce, resources, attitudes of workers and strategy
adopted by the organization (Robbins and Coulter, 2008). Coca Cola Corporation is among one
of the oldest corporations of the world. It has gone through many internal and external changes
since it has been in existence. The company has used techniques of change management in order
to survive from the consequences of those events.
The company has faced a lot of external changes, for example in world war II, the company was
able to manage its existing position at that time and also entered in many new markets and
discovered new niches (Coca Cola company, 2006-2011). The company also provided free
drinks to soldiers which were the part of its strategy to become a patriotic symbol for the people
of the country. Also it boosted the sales, so the company achieved two objectives by carefully
planning to respond to that external environmental change. The plants developed by the company
in war era helped its expansion after the war.
Barton et al (2002) reported that Coca Cola Corporation adopted acquisition strategy in time of
Asian financial crisis. The company acquired bottling, coffee and tea shop businesses in Korea
and Malaysia. Beverage is a type of industry where tastes and preferences of the consumers
change on continuous basis. Coca Cola Company also responded to such consumer changing
behaviors in an effective way by developing new products like Diet Coke and Coca Cola Zero.
The company also committed a marketing blender when a rival company launched a black
beverage with comparatively sweet and smooth taste. The product was named as new Coke. But
the sales gradually went down and company faced severe consumer critics and protests. The
company managed this situation very commendably by restoring the old formula and naming the
bottle as diet coke (Kotler and Armstrong, 2010). As people are becoming more health conscious
and willing to invest on health based products, coca cola is developing juices and various energy
drinks as well. This shows the company’s strategy to responding varying consumer tastes and
expectations and changing itself according to it.
The coco cola company used theory of organization change presented by Kotler (1996) which
elaborated the procedure to manage change on the people dimension of the organization. In
addition to making operational and strategic changes, the company also changed its advertising
strategy by targeting various groups of consumers like American consumers, African consumers,
Middle and far eastern consumers and European consumers. The company altered the packaging
of its coca cola brand and developed more product lines and broadened them globally (The
Coca-Cola company case. n.d.).
The present condition of Coca cola Company worldwide is very good. The company is selling its
beverages throughout the world successfully. But in some countries, coca cola stores are not as
according to the company’s main marketing, inventory and efficiency theme. The company is
planning to align its performance standards according to its own corporate culture and strategies
with the help of a comprehensive change management plan. These changes will be implemented
within the business operations and management of the company.
Change Management at Coca Cola
Organizational change might be referred to as any change brought about in structure technology
or people of an organization. Change in structure is maintaining the span of control, specifying
different work roles, redesigning job scenarios etc. Change in technology could be an
introduction to new innovative methods for improving the product’s quality launched by the
organization. While change in people is to bring about alterations in the way people think and
act. It means to modify their behavior towards the betterment of organization (Robbins and
Coulter, 2008, p.364).
Employee engagement
The recent change management at coca cola is directed towards the intrinsic values and
motivations of the employees and can be referred to as ’employee engagement’. The change
management process, together with internal branding programs is expected to bring about ideal
behaviors in employees, which would align the operations of coca cola worldwide, and bring
about efficiency throughout coca cola across all its business segments.
Coca cola hopes to bring about a thoroughly integrated system of communications, and focus on
creating brand relationships with their employees. This would enhance the operations of Coca
cola, as an integrated approach would mean all employees believe in engaging fully in the
values, and this would become an inherent part of the employees at a personal level. Coca-cola is
actively seeking to incorporate the change into its company for “building capability in
engagement, maintaining engagement momentum and ensuring that engagement is integrated
into CCR’s people practices” (Samdahl,2011). For this purpose, employee engagement surveys
are conducted twice every year for all the coca cola associates, which serve to highlight the areas
where action is required, and further actions and implementations can henceforth be executed.
Coca-cola believes that their business results hinge on the dedication of their employees to
operational excellence. The company truly recognizes the importance of the people to the
business, and knows that to continue to bring about tremendous results it is bringing in,
employees throughout the world should believe in the values intrinsically, and therefore the
employee engagement is being focused on all the countries the company serves to align,
thoroughly integrate and align the company so that operational efficiency can be achieved.
Importance of change to coca cola
Employee engagement is very significant to all segments of operations at coca-cola and has
translated into performance in areas where employee engagement is higher.
For coca-cola, an engaged workforce means:
A more committed workforce
Employee performance aligned with organizational objectives
Employees have a clear idea of what is expected of them and what are the deliverables
Customer experience focuses an inherent part of employees’ values, who strives to provide a
better experience to the customers. Customer focus was identified as a central tenant of the
multi-year engagement strategy to be implemented in 2011(Gee,2011)
When employees are aligned with company goals, they themselves adopt a proactive
approach towards issues such as waste elimination
Employees awareness gives them a voice which helps to influence legislations at local levels
An integrated system of communication is very helpful in the volatile and dynamic markets
of today, where conditions change very often and the company has to be responsive at all
times
Therefore, for all the business segment of coca-cola wherever they are located across the world,
the change towards employee engagement is justified if they have to reap the fruits gained by an
effective system of integration.
Ensuring the Involvement of Required Stakeholders
Coca Cola Company can use two change management tools to make sure that all people who are
required to be the part of change management process. These tools are Force Field analysis and
AKADAR model. Force field analysis is a technique developed by Kurt Lewin to scrutinize the
forces that are causing an opposition to change process (Bass, 2009). By doing Force Field
Analysis, Coca Cola Company will be able to induct people who are in need of appropriate
training. Another useful tool is AKADAR model which stands for Awareness, Desire,
Knowledge, Ability and Reinforcement. Through AKDAR model, firm creates awareness about
the need of change, generate desire in the people to help in transitioning process, give knowledge
to the people that how they can help the change process, develop an ability in the people to go
through the change and provide them with continuous reinforcement to withstand the change
(CMLR, 2011).
Ensuring that change is successful
Some considerations that will facilitate the change management process include:
Productive and consequential dialogues and talks with employee representatives
Online and paper surveys from all the stakeholders involved in the ‘change’ throughout the
world, and with associates to gain an insight on their perceptions
Effective communication at this stage for informing the stakeholders the reasons for change
and the benefits it would bring
Overcoming the ‘inertia’ by taking all stakeholders in confidence. The surveys can serve as a
pre requisite to gain an insight on the stakeholder perspective
Details of the action planning process communicated to all those who would initiate the
change
Recommendations for Coca Cola Company
In the volatile dynamics with which companies operate today, change is inevitable. Therefore,
the focus should not be on avoiding change, rather bringing about a smooth transition towards
the new change by communicating about the change, and ensuring all parties of the change that it
is for the best of all those involved. To successfully implement organizational change of any
nature, a specific regards to organizational structure, design, culture, management and leadership
is required to see whether the change would make a best fit with the organizational goals and
objectives.
First of all the company should ascertain the core problems exist in the company for the change
management. The company may develop a change management program for responding to
financially uncertain environment of the world. It can also develop change management
programs for better operations and logistics. The company can introduce new procedures and
technological systems to carry out operations. Programs can be introduced in forms changing
company’s mission and corporate culture enhancements. For all that, the most essential thing is
to train upper management to provide them with specific skills necessary to effectively going
through the transitioning process. Following is the brief expression of plans that the company
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Systems thinking
Systems thinking can be used to guide the successful change in the organization. The model is
based on an integrative and interactive open system which consists of the variables, attributes,
internal relations and environment. The system is based on characteristics like wholeness,
interdependence, chain of influence, need for balance and adaptability etc in an open system
where communication is seen as an integrated process that facilitates change within the
organization.
Several system characteristics are: wholeness and interdependence (the whole is more than the
sum of all parts), correlations, perceiving causes, chain of influence, hierarchy, supra-systems
and subsystems, self-regulation and control, goal-oriented interchange with the environment,
inputs/outputs, the need for balance/homeostasis, change and adaptability (morphogenesis) and
equifinality: there are various ways to achieve goals. Different types of networks are: line,
commune, hierarchy and dictator networks. Communication in this perspective can be seen as an
integrated process – not as an isolated event.
Establishing new structure
It is a well known fact that Coca Cola Corporation was an entrepreneurial venture started by one
person who bought the formula from another firm and laid foundations of that beverages
manufacturing firm. Current structure of the coca cola company is simple with minimal labor
and management division. New system that can be adopted by the company may be the
“machine bureaucracy” which Henry Mintzberg (1992) defined as an organization with clearly
defined hierarchy, well defined area of operations, standard operating procedures, proper rules
and regulations, well division of labor, formal relationships among the member of organization,
centralized decision making, technical competence and standardization of work.
Reducing employee defiance
Opposition of change is a common human behavior. Particularly, in the workplace people resist
the change in organizational culture, structure and policies. But in order to successfully and
effectively implement the change management program, it is important for Coca Cola Company
that it should develop strategies to reduce employee defiance to change. Kotter and Schlesinger
(1979) explained six strategies which can be useful for coca cola Company in employee defiance
management.
First strategy is to involve the employee in change process and make them participate as far as
they can.
Second strategy is to communicate the change management programs to the people effectively to
educate them about the benefits the programs would bring. This will make them comfortable in
adopting the change.
Third strategy is negotiation and agreement. The company should create a consensus on
important change issues and with the agreement of all important stakeholders; it should launch
the change management program. The resistance level will be zero on change programs that are
being launched with the mutual agreement of all relevant stakeholders.
Fourth strategy is that to support the employees who are due to some disability or emotional or
psychological issue or some other threat unable to adapt to the change. If the company develops
proper channel for such people, they would adjust gradually to the change management program.
In case of failure of above mentioned four strategies, company can manipulate the employees by
calling union leader other than relevant ones as fifth strategy.
Sixth strategy is to force the employees with articulate or non-articulate methods but this is not a
very good approach.
Conclusion
To conclude, it may be said that communication can be a key element to successful change
management. Communicate the changes to the employees; tell them why the change was
inevitable and how they will benefit from the change. The management should itself adopt a
positive attitude towards the change so that employees can follow their lead and welcome the
change. Coca-cola as a company has a heritage of embracing change rather than resist it and it
should translate into their future endeavors towards change management to ensure that the
organization is best poised to market under all sorts of environmental conditions.
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