10pg Case Analysis

Running head: COKE- IVESTER

Coke-Ivester: Individual Case Analysis Exam

Texas A&M University Central Texas

Submitted in l Fulfillment of

MGMT 501- Organizational Behavior

Due Date- June 28, 2015 Submitted- June 28, 2015

Dr. Barbara W. Altman

Spring 2015

COKE- IVESTER 2

Coke-Ivester: Individual Case Analysis Exam

Situation Analysis

Ivester’s lack of self-awareness, controlling behavior, data-driven leadership style

resulted in his untimely, forced resignation from his position as the chairman and CEO of Coca-

Cola. As the CEO of Coca-Cola, Ivester was expected to move his subordinates by giving them

a sense of purpose or direction, as leaders are expected to. Instead, he acted as a manager by

tightly controlling every detail of operations. Ivester’s weight of component over style and

failure to see the big picture ultimately led to a marketing failure. During his tenure as the COE

of Coke, Ivester was results driven. Under his management, Coke’s earning declined, the market

value was flat, the highest-ranking African-American at the company resigned, and the

diplomatic relationship with the bottlers was ruined. Additionally, Ivester was heavily involved

in every detail of operations, that he often missed the bottom-line.

Prior to his resignation, Ivester was called in by two of Coke’s directors and informed

that Coke needed a change and that he was not the man who should be running the company.

Although the gentlemen did not come up with ‘the way forward’, Ivester left the meeting, having

chose flight over fight. This speaks volumes about his leadership ability, or lack there of. He

could have taken the meeting with the directors as an opportunity to change, grow, and improve.

Vision Statement

The leading supplier of delicious, superior quality beverages that quenches the thirst of the

human race.

Purpose Statement

To deliver global value to customers by facilitating hope, togetherness, happiness, and

inspiration for generations to come.

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Mission Statement

Our superb and proficient family provides beverage drinkers globally superiority, categorically

through our proficient team of bottlers and distributors.

Organizational Values

Doug Ivester was appointed as the CEO of Coca-Cola following the untimely death of his

predecessor and mentor, Roberto Goizueta, a man who has had a successful tenure as CEO and

groomed Ivester for the position through an emphasis on marketing, international relations,

interpersonal relations, and public speaking. Ivester did not exemplify all seven of the values

that Coca-Cola represented: leadership, collaboration, integrity, accountability, passion, diversity

and quality. Cola-Cola was defined leadership as the courage to shape a better future. Ivester

was not able to shape a future in which he created value for the company going forward so that

the company would experience growth rather than loss. This is apparent in the fact that Coke’s

earning declined for two years straight under his leadership. Another one of Coke’s values that

Ivester did not embody was collaboration. Ivester was unable to maintain political relationships

with those companies with which they did business and/or had a role in the facilitation of Coke’s

business. Additionally, Ivester had a difficult time maintaining relationships with and accepting

help from those internal to the company.

Coca-Cola did not hold Ivester accountable for his actions until it was too late. From

Ivester’s first day, he too a bold, aggressive and progressive approach that was viewed as

offensive to some other employees and/ or board members; however, it was not addressed until

the meeting in which Buffet and Allen informed him that they had lost ability in his leadership.

Rather than putting him on probation or giving him a course of action going forward, they stated

that they had lost confidence in him. This was not something that happened over night, so issues

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should have been addressed as they arose. Ivester did not value diversity. This was apparent in

his actions with Ware, in which he put the senior ranking African- American (senior vice

president) in a position to report to his peer. Ivester was not living up to Coca Cola’s

expectations; he did not follow Coke’s traditional values.

Stakeholder Analysis

Ivester , as the center of the Stakeholder Analysis, is ineffective because he cannot meet

the needs or exceeds the expectations of key stakeholders. The stakeholders are

bottlers/distributers customers, Keough, Board of directors (Buffet & Allen), employees, and

shareholders. Issues arise to the extent that Ivester is not meeting stakeholder expectations. These

stakeholders stood to benefit from any success that Ivester brought to the organization during his

time leading up to the CEO position. Subsequently, these stakeholders are negatively affected by

any failure.

Stakeholder Expectations

Ivester expects to bring something new to Coca-Cola that will result in more sales, more

customers, and the growth of the company. He believes that he can achieve this through

disciplined employees and by knowing the details of the entire company. Ivester’s goal was to

change Coca-Cola by bringing them out of the “technological dark ages”. The customers are

high power, high importance stakeholders in the sense that the perceived brand was a driver of

sales. If the customers did not see value in the company, they company would not be successful.

The bottlers and distributers are low power, high importance stakeholders. They are not being

given the respect that they deserve. Since 90% of Coke’s business was in the hands of the

bottler, it was essential that maintain political relationships with them. The bottling company

provided a service that facilitated the sales of Coca Cola. They expected Ivester to stay in his

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lane, instead of crossing over into the bottling company industry, which included vending

machines. Last- and probably most important- they expected to have constant profit that was not

affected Coke’s problems or increased concentrate prices. Shareholders are low importance, low

power stakeholders. They expect the company to have positive cells and profit, as well as

growth in customers. The stockholders expected Ivester to maximize profit and to increase their

return on investment; however, profits have declined since Ivester became CEO. They expected

Ivester to lead the company in such a manner that the cash flows over time to the company

would cause the value of a company’s stock to be maximized, rather than minimized. They also

expect Ivester to maintain the company’s mission statement and values. The board of directors

expects that Ivester increases the return on investment and raise the market value. Additionally,

they expected him to behave as a leader by motivating employees to perform by giving them

purpose Coca-Cola employees expected to contribute to the success of the company without

every detail of their department operations being micromanaged by Ivester. Senior company

leadership expected not to have to report to leaders that were in lateral positions. Board members

expectations of “Good CEO skills” that can expertly handle crisis management are not being

met. Customers, employees, and bottlers all have complaints are not being addressed.

Strengths, Weakness, Opportunities, and Threats (SWOT) Analysis

The most effective tool that Ivester and the board of directors could have used in

analyzing Ivester and exploiting his gifts would be an examination of his strengths, weaknesses,

opportunities, and the threats.

Strengths

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The strengths that Coca-Cola had were its brand recognition, reputation, and good

working relationship with the bottling companies. Ivester was hardworking and determined to be

successful.

Weaknesses

The weaknesses faced by Coca-Cola under Investor were micromanagement of all

aspects of operations, decreased revenue, and poor relationships with business facilitators.

Ivester’s weaknesses are his arrogance and rigidness.

Opportunities

Coca-Cola has the opportunity to continue to grow by introducing additional flavors/

variations to the market. They also had the opportunity to use technology to creatively advertise

and expand its customer base.

Threats

The threats faced by Coca-Cola under Ivester were the broken relationship between the

bottling companies and the perpetual downward trend of Coca-Cola in the stock market. In order

to get Coca-Cola back on track, they need to behave in a manner in which there is collaboration

between themselves, the bottlers and distributors.

Issue Statements

Under the leadership of Ivester, Coke’s return on investment significantly decreased. The board

of directors has lost faith in his ability to run Coca-Cola. Major issues between Ivester and the

Board of Directors are as follows:

 There has been a decline in revenue that began when Ivester took control of Coca-Cola.

 Working relationship with senior leaders and the bottling company has been disrupted

since Ivester took over.

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 The Board of Directors realizes that Ivester is not the person that should be running

Coca-Cola.

 Ivester resigned from Coca-Cola instead of fighting for his place in the organization.

Management Question

What individual and organizational modifications should Ivester assume to rebuild the

confidence of the shareholders and continue to support Coke as a profitable company that

delivers superior beverages?

Organizational Behavior Analysis

Dynamics of Organizational Culture

Coca-Cola’s organization culture is outlined by its strong relationships with the business

facilitators. The bottling company provided 90% of Coca Cola’s business. A poor working

relationship with them would be detrimental in the continuance of production going forward.

Ivester’s motto of “be different or be damned” is in contradistinction with the organizational

culture. The relationship between the bottling company and Coca Cola was effective; there was

no reason to change it. According to the value-percept theory, job satisfaction is contingent

upon whether an individual perceives that their work supplies things of significance (Colquitt,

LePine, & Wesson, 2015). Ivester fostered an environment in which others in the organization

or with working relationship in the organization did not view their contributions as essential.

This is due to the fact that the CEO was involved in the day-to-day operations of the company,

rather than in goal setting and delegation to carry out the mission of the company. The works

itself, followed by supervision are the main drivers of job satisfaction. Employees were not

satisfied because they did not have the creative freedom to run their departments and they were

micromanaged by the CEO.

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Competencies for Individual, Team, and Organizational Effectiveness

Ivester forced a military style of strict discipline on his subordinates in order to control

his subordinates. His subordinates knew that details and planning in advance were important to

him. They also know that the consequences of failing to do so would result in scolding. Ivester

was interested in data analysis and wanted an environment in which his employees could learn.

Ivester’s individual competencies were disadvantageous to the organization and often led to

Ivester making decisions that were in contradistinction with team effectiveness.

Coca-Cola’s collaboration played a huge role in their competency of teamwork and

relationship building. The board of directors and the bottling company had trouble adjusting to

Ivester’s conflict resolution style. Their perception of him is that his need to be involved in

every detail of the company was harmful. This behavior alienated the bottling companies and

offended the board of directors. When a director attempted to provide constructive feedback to

Ivester, he disregarded it. Rather than trying to collaborate, to find an integrative solution and

gain insight from other perspectives, Ivester took the competing conflict resolution approach in

which “he was always right” and he took advantage of subordinate or lateral relationships.

Basis of Personality

Ivester’s lack of self-awareness was apparent in the fact that he could not understand his

effect on others. He lacked empathy- understanding of the emotional make up of others; this

was apparent in his decision to have a senior vice president report to a lateral leader. Ivester did

not realize that this was a problem. Ivester had poor social skill; this was apparent in his actions

that alienated the bottling companies. His high level of emotional stability made him appear to

be too composed. He projected confidence, even while under extreme pressure. This made him

appear to be uninspiring or lacking urgency. He also lacked openness. This was apparent in his

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failure to accept advice from others. He also lacked the moral intelligence of responsibility.

Even after his resignation, Ivester failed to acknowledge that he did anything wrong. Ivester

needs to look at the big picture rather than task related goals. This will help with his need to

personally oversee small tasks. If Ivester was more agreeable, bottlers/ distributers would

understand the importance of their working relationships and would possibly put aside

differences for better working relationships. Ivester came into the organization striving for status

and trying to build his personal brand by distinguishing himself from his predecessor. In doing

so, he trivialized the efforts of others and refused to accept help or constructive criticism.

Identification and Evaluation of Alternatives

Three alternatives should be evaluated to address how Coca-Cola should reorganize the

company in order to increase revenue and improve relations with the bottling companies.

1) Work on emotional Intelligence. This can be achieved through the help of a management-

consulting firm.

Pro: This would have provided Ivester feedback details of his performance from a

disinterested third party. Ivester could have taken this information change his behavior and

improve the organization.

Con: This feedback could be ignored, just like feedback provided in the past. Based on

the leadership characteristics that Ivester displayed, he may continue on the path that he had

previously displayed- lacking regard for criticism.

2) Coca-Cola’s board of directors could have put Ivester on probation and coached him into

becoming the leader that the company needed.

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Pro: Ivester would have clearly understood his shortcomings as well as the expectations

of his superiors. They could have helped him to get back on track and to move the company in

the direction that it needed to move.

Con: Ivester may have gotten offended by the criticism or the participative leadership

style from his superiors and resigned.

3) Hire a second in command and delegate

Pro: Ivester would have someone to assist him with the daily management and operations

of the company.

Con: Ivester may have a difficult time delegating to this person, just as he does with his

senior vice presidents.

Recommended Alternatives

I recommend bringing in a consulting firm to evaluate Ivester and the senior leadership of

the company. In evaluating all of the senior leadership, Ivestor may think that the Board is

interested in looking at the company and systems as a whole, rather than just him. This may

make him more open to change. Coca-Cola has already given Ivester an abundance of chances,

but his arrogance prevents him from satisfying the needs of the organization. Perhaps a

consultant firm, as a disinterested party, would give him honest feedback that will be well

received and he can move forward with new expectations, duties and standards of maintaining

relationships with essential stakeholders.

Implementation and Timelines

Coca-Cola call in a consultant firm and give Ivester new direction in order to restore the

company to a thriving organization and to mend its broken relationship with the bottling

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companies. Upon receipt of the final report, Coca-Cola must take steps and adhere to the

following timeline that will prevent further injury to the company’s reputation and brand:

Within 7 days: Call Ivester in for a counseling and inform him that a leadership consulting firm

is coming in to assess the health of the organization.

7-9 days: Ivester address subordinates with the aforementioned information

10-40 days: Leadership consulting assessment

45 days: Consultant results

46-48 days: Review with directors to discuss continue path forward

50-56 day: Leadership retreat with Board, CEO, Senior VPs

60 days: Meeting with Bottler/ Distributors to negotiate/ reestablishes business rules

90 days: Quarterly review with Ivester

Conclusion

In conclusion, a consultant company may prove to be beneficial to restore the working

relationships between Coke and its business partners, if Ivester is opened to change. The

challenges to the aforementioned plan are Ivester’s reluctance to receive feedback and to let

others perform. If Ivester continues down this path, the only choice will be forced resignation.