ORGANIZATIONAL THEORY (A CASE OF COCA COLA)-54078

Question: Choose two of the four organisational theory perspectives and discuss how and why
they provide us with alternative ways of understanding and analysing Coca-Cola and its
relationship with its organisational environment. Draw upon the required textbook and Coca-
Cola readings, and your own research to answer the question.

Introduction
According to Gready (2013) organizational theory is based on four major perspectives namely the
Classical, modern prospective, symbolic interpretive and postmodern perspectives.
Management at Coca Cola focuses in adopting modern and postmodern perspectives in order to
maintain the relation with business environment. Gill (2007) opined that adoption of modern
perspective has enabled managers at Coca Cola to focus on reality of market situation based on
the concepts and theories. Moreover, the adoption of the postmodern perspective helps the
organization to increase the productivity of the different geographical operating division and
focus on local and international customer satisfaction.
The company faces various external problems due to lack of appropriate adoption of
organizational perspectives. In US, the company is facing low market share due to lack of
appropriate modernism by the company to provide healthy soft drink to the health conscious
customers. Moreover, the post modernists have criticized Coca-Cola for the lack of its
environmental sustainable activities. Hence the adoption of the modernist and the post
modernist perspectives will help Coca Cola to enhance its activities and productivity levels
(Gopinath and Prasad, 2012).

Exploration of the organizational perspectives

Organizational perspectives are based on two philosophies namely ontology and epistemology.
Ravi Raman (2007) opined that ontology is concerned with identifying the truth of a situation
based on the actual existence of the fact and epistemology is concerned with the methods used
to figure out the truth. The organizational complexities can be expressed with the help of
ontological perspective and the epistemology perspective will help the managers within the
organization to deal with the organizational complexities by devising the different methods.

Modernist perspective
The modernist perspective of the organizational theory is based on management theories of
Weber and Taylor. The modernist perspective states that the rational modern mind is trained for
progress and hence the organizations adopting this perspective will be able to attend progress
scientifically. The modernism perspective includes four core concepts namely capitalism,
industrialism, surveillance and control of violence. The capitalism refers to the fact that the
organizations should make competitive productions and private ownership is encouraged. The
industrialism states that the organizations should use inorganic power sources and surveillance
states that the constant monitoring and supervision of workers within the industry should be
done in order to continue smooth workflow. Regassa and Corradino (2011) opined that
modernists also prefer having strong organizational culture where the priority is given on
organizational interest over the individual interests. Moreover, the modernists believe that the
presence of an appropriate organizational structure is essential to increase the productivity of
the workers.

Postmodern perspective
The postmodern theory states that the organizations should comprise of a set of diverse, self-
managed and self-controlled team with controlling centers to advice and monitor them when
necessary. Myers, Hulks and Wiggins (2012) added that this perspective believes in providing
equal rights to all employees within the organization. The post modernism focuses on the need
to adopt only approaches that guarantees positive changes. However, Moses and Vest (2010)
argued that the sole adoption of post modernism perspective by the organizations would restrain
the organizations from conducting deep research on any external business environment.
Moreover, Colella and Miller (2009) further argued that the post modernism suggests that the
internal organizational information should be given to all employees within the organization so
that they can be responsible for increasing their part of productivity. However, access to internal
information may at times result in occurring of insider trading. In adopting post modernism, the
organizations also have to make changes in branding and adopt a personalized customer centric
approach.

Adoption of different organizational perspectives by Coca Cola

Coca Cola adopts both mechanistic and organic models of organizational control and hence
incorporates both modernist and post modernist perspectives in the organizational
management. Previously Coca Cola followed a centralized organizational structure with chain of
command. The company at that time followed McGregors theory X Y to devise motivational
techniques for the employees. However, the lack in the productivity of the employees provoked
the company to adopt a post modernist perspective (Fellenz and Martin, 2010). Coca Cola then
adopted the post modernist perspective by maintaining decentralized organization structure
with two main operating groups namely bottling investments, the corporate group. The two
operating groups are further divided based on geographical location. This ensured constant
monitoring and increased productivity of labor in Coca Cola. With the decentralization of the
authority and tasks, the employees became more responsible and accountable and the
productivity increased. The Company employs around 31,000 people from all kinds of cultural
diversities in order to maintain organizational diversity within the work culture and to generate
high employment opportunity (Barkay, 2011). This shows the adoption of post modernism
perspective by the company. Ciafone (2012) opined that majority of the problems of Coca Cola
arises due to diversities in the prices of the raw materials in global market conditions. Depending
on the geographical demand and supply chain the prices of the raw materials and supplier costs
increases. Consequently, the cost of production and the bottling costs also increase. Hence, the
decentralization of the organizational structure of Coca Cola has helped the company to
concentrate on the pricing, marketing and branding strategies separately for the separate
geographical regions (Aritz and Walker, 2012). Hence by decentralizing the organizational
structure and commencing the responsibility of the separate locations on the location head has
helped Coca Cola to indentify the unique target market ( like diet coke for US customers). The
company can is also able to adopt appropriate pricing strategy for the target market (low pricing
strategy in India) and promote the product to suit the local customers (story telling experiences
in developing countries).
The companys flexibility, stability and high degree of standardization are the mechanistic
features of the company and on the contrary, the high degree of responsiveness, efficiency and
top down communication channels are the features of the organic model of Coca Cola. With the
progress in the consumer markets, the consumers have also adopted post modernism
perspective instated of modernism perspective in relation to the acceptance of a particular brand
(Benedict, 2009). The postmodern consumer is focused on customer experience, meaning of the
product rather than the product features, brand name and brand image. Hence, the consumption
of Coca Cola by the postmodern consumers depends on the meaning that the consumers make
out about the Coke brand. Thus, Coca Cola adopts a unique branding strategy to in influence the
emotions of the consumers so that the consumers are able o connect with the brand and product.
Coca Cola for the purpose of glocalisation produced local advertisement in countries like India.
The Thanda matlab Coca Cola campaign showed various stories of the Indian customers in a
social setting where the consumption of Coke made a pleasurable experience for the consumers.
This made the product a meaningful product in the eye of the Indian target customers and coke
as treated as a substituted for all local drinks like nimboo pani, water, soda and lassi. However,
the adoption of modernist approach in terms of pursuing cheap and abundant labor from the
developing countries made the company lose its market share drastically (Hannan and Carroll,
2007).
Coca-Cola since the time of its inception has faced numerous problems in relation to the effective
management of labor within the organization. The labor policy of Coca Cola in 2005 showed a
situation of unrest in the organizational structure. The policy introduced by the company in 2005
compelled the employees to pay for their medical bill more than the employers contribution.
The high demand of Coca Cola indicated that the labor unrest will result in lowering of the
production of coke and the company will not be able to meet the consumer requirements. The
company went against the negative side of the modernist approach.
Further, the company adopts the modernistic X and Y theory of motivation in order to assess the
productivity levels of the employees and accordingly generate the motivational techniques.
Baligh (2007) opined that the theory divides the managers within an organization into two parts
namely X mangers and the Y managers. The X managers assume that the employees are lazy and
are devising strategies to avoid hard work. On the contrary, the Y managers assume that all
employees are productive and smart to handle all organizational situations with proper care.
Although from the organization point of view theory Y managers, create more congenial working
environment however, Coca Cola adopts theory X strategies to increase the productivity of the
employees.
Bansemir (2013) suggests that theory Y managers believe that the employees are capable of
displaying self-direction and self-control and are capable of providing important suggestions that
will help to increase organizational effectiveness. On the contrary the theory X managers do not
take into account the views, creativity and ideas of the employees and creates a situation of
dictatorship within the organization. Sagie and Koslowsky (2000) however commented that in
Coca Cola the employees are required to undertake activities in a structured manner. The overall
activity of the company is divided primarily into production, marketing and human resource
segments. The employees of these divisions are required to perform similar activities for the total
life span of the organization. The employees in the production segment are required to
manufacture bottle, the employees in the packaging departments are required to bottle the
products along with labels. Hence, these are some of the repetitive activities engaged in by the
employees of Coke. Hence, the adoption of theory X in management of these segments helps the
managers in Coca Cola to supervise the progress and monitor the work process. However, Coca
Cola has switched over to the adoption of theory Y technique in case of managing the employees
in the marketing division. The marketing division particularly employees connected with branding
development needs to device creative strategies in order to attract the customers. Hence, the
management of Coca Cola adopts a theory Y motivation technique in order to monitor their
performance levels. The employees of this division are given the freedom take their own
decisions and are equally accountable for any creative failure. Bukovsky (2011) suggested that
the dual adoption of the combined leadership and motivational technique has helped Coca Cola
in building a competitive work culture.
The company also faces difficulty in maintaining and controlling the suppliers. Free flow of raw
materials is hampered due to the lack of reliable suppliers in all geographical regions. Moreover
depending upon a single supplier has also contributed to the inefficient supply chain system of
the company especially the company faces geographical issues in regard to the supply of raw
materials. Gill (2007) suggested the adoption of modernistic approach of ownership would help
the company in resolving the supply issues. If the company adopts ownership strategies and
instated of controlling suppliers, owns or purchases a supplier company then the company can
develop its own supply as and when required. The owning of a supplier will enable Coca Cola to
reduce the supplier costs and increase the make the business profitable.