Coca Cola Synopsis Mba 501

Coca-Cola

Coca-cola (Coke) is a Fortune 500 company and one of the most recognized brands in the world. While Coca-Cola is experiencing strong growth in international markets with a 9% increase in volume sales in the first six months of 2007, sales have declined 2% in North America during this same time. Coca-Cola once considered its domestic operations a benchmark for global units, but according to Chief Operating Officer Muhtar Kent, this is no longer the case. Poor performance in the United States has spurred Coke to reorganize its North American division. This includes restructuring jobs as well as negotiating with the current employee stakeholder groups in order to seek out cost-cutting opportunities (Stanford, 2007). Coke met significant resistance from the Teamsters employee union during labor negotiations. Amid sentiments that Coca-Cola is discriminating against workers and slashing health benefits, the employee union has threatened an employee strike (Teamsters Converge). Employee attitudes toward the company have shifted due to the repercussions of cost cutting and this has impacted Coke's cohesiveness and the foundation of its corporate culture.

Fortunately for Coca-Cola, it has encountered and overcome this type of difficulty in the past. Over a thousand jobs in North America were cut in 2003 (Stanford, 2007). In order to improve employee attitudes and build organizational commitment, Coke took several steps to bolster morale. Coca-Cola started giving each employee a personalized "Total Rewards" statement. This statement provides employees with data on total earnings, retirement options, stock option grants and benefit summaries. The statement was essentially designed to help employees plan for their futures; as well as provide additional information for health and educational concerns. These statements are personally customized to each employee, in turn creating a sense of involvement and affection toward the company (Greenwald, 2004). Additionally, understanding what people desire in the organizational context (in this case job stability and a plan for the future) will instill a sense of loyalty, responsibility and a desire for continued service with Coke within the organizational culture.

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