Management: Project Recommendations – Coca Cola Company

Coca Cola Company: Decision-Making

John A. Gnanaranjan

Davenport University

January 26, 2014

Coca Cola Company: Decision-Making

Decision-making has long been considered as a vital determinant in a firm’s performance, particularly in large business environments. Oftentimes, the basis of success or failure largely depends on the decisions made along the line. The main step in a decision-making process is to first identify the problem and define it. This is perhaps the most difficult process since a company may not be able to reveal the definite problem. The second process is to create and analyze alternative solutions (Kunc & Morecroft, 2010).

The decision-making process at Coca Cola Company is centralized. The method employed is classical, where the top management makes considerations and takes time while making decisions. They explore and analyze the entire relevant and possible alternatives before arising at a rationally economic, as well as feasible, solution (Kownatzki et al., 2011). Programmed decisions are only generated by the top executives without consultation with the line managers; whereas the daily routine decisions are generated by the line managers, only with prior permission from the general manager (Clark & Maggitti, 2012). Some of the decisions made at the top management relate to: product positioning; market and distribution; price reduction; and trade discounts.

The managers are responsible for the company’s results. Nevertheless, the management is cooperative and encourages its employees to bring their ideas in relation to their duties in order to increase the entire efficiency of the organization. This means increasing the productivity, which may mean profit realization (Amason, 1996).

Every year, the company’s management analyzes results, and makes slight alternations in operations in order to generate better results for the following year. Nonetheless, the company does not hurriedly decide to develop new products or make any change in operations. For the company, drastic takes the course. For example, lately, upon realizing that it was in dire need for a drastic change, the management sought to figure out why the performance of the company was deteriorating. Through starting and exploring at the lower levels of the organization to seek solutions, the company was in a better position to generate drastic changes to the employees, and how they were rewarded. The company’s culture is to seek efforts to get employees more engaged (Amason, 1996).

The effectiveness of this process is evident.  As the company has constantly developed, top managers have delegated the operational duties and decision-making down to the lower levels.  This change enables the company to perform better to each market, and at the same time, enables corporate managers to concentrate and focus on strategic and long-term planning.  Moreover, by allowing lower level executives to become intricately engaged in the company's growth efforts, Isdel, the current CEO, created a conducive environment where each person’s voice is heard and felt responsible for the welfare and company’s performance (Harris, 1995).  The marketing department possesses the highest power in the company (Harris, 1995).  This is because it is the department considered to attract more clients.  The department has been generating more market research by making more effective advertisements, hence increasing profit yield to the company.

In conclusion, decision-making is vital especially if it has to yield positive outcome in a business strategy. The Coca Cola Company has continued to thrive in the market despite of competition due to its defined decision-making process.  The decision-making model used by the company is efficient. This means that decisions are made based on the inputs generated by the lower level of workforce, as well as the managers in the middle level. The top management then seeks for its subordinates’ suggestions and ideas, and take the final decision-making.

 

References

Amason, A.C. (1996). Distinguishing the Effects of Functional and Dysfunctional Conflict on Strategic Decision Making: Resolving a Paradox for Top Management Teams. Academy of Management Journal.39(1) 123-148.

Clark, K. D., & Maggitti, P. G. (2012). TMT Potency and Strategic Decision‐Making in High Technology Firms. Journal of Management Studies, 49(7), 1168-1193.

Harris, N. (1995). The World of Coca-Cola. The Journal of American History, 82(1), 154-158.

Kownatzki, M., Walter, J., Floyd, S., and Christoph, L. (2011). Corporate Control and the Speed of Strategic Business Unit Decision Making. Academic of Management Journal. 56(5) 1295-1324.

Kunc, M. H., & Morecroft, J. D. (2010). Managerial decision making and firm performance under a resource‐based paradigm. Strategic Management Journal, 31(11), 1164-1182.