Apply Henri Fayol’s five rules of management to the Coca-Cola Case.

Fayol’s 5 rules of management:

Foresight—to complete a plan of action for the future

Various flavors of Coke have been introduced to satisfy the taste of people in different parts of the
world. The Coca Cola plant will produce more of the highly purchased flavor than the other one. It is
obvious that detailed market research has been done in order to plan for these changes.

Organization—to provide and mobilize resources to implement the plan

Concern for the environment in conjunction with the appeal for accessibility and convenience is
definitely one of Coca Cola’s strengths. Without complete cooperation with their bottling partners, the
distribution of the product would be impossible. By owning a share of the distribution system, the
company is able to understand the land on which they operate.

Command

Daft’s newly proposed leaner 10-person executive management team is each selected with an exclusive
purpose, displayed in their job title. The senior vice president and chief marketing officer for example,
would be in charge of marketing the product(s) of focus, and hired for that specific task. Those who are
managed and work under him would ideally, have the same focus.

Coordination—to fit diverse efforts together, and ensure information is shared and problems solved

Through the leaner executive management team proposed and implemented by Daft, the gap between
workers and managers is decreased, making communication better and more efficient. With a tightly
knit company, the accessibility of information and the convenience of communication would definitely
tackle problems during the early stages and solve them.

Control—to make sure things happen according to plan and to take necessary corrective action

By owning a share of the distribution system, Coca-Cola is able to make modifications to their system for
a more efficient and cost effective way of doing business.
Q.2.

Consider the following quote from Coca-Cola’s statement on diversity: “We embrace our commitment
to diversity in all its forms at The Coca-Cola Company as a core value. Diversity—of race, gender, sexual
orientation, ideas, ways of living, cultures and business practices—provides the creativity and innovation
essential to our economic well-being. Equally important is a highly motivated, health and productive
workforce that achieves business success through superior execution and superb customer satisfaction.”

Relate this quote to the case and to the behavioral approaches to management.

The company embraces diversity by becoming a part of the different cultures at different geographical
locations, the company builds up knowledge about the cultures and systems they operate in. The newly
improved executive management team fits the company’s needs in order to achieve the required
customer satisfaction

Q.3.

How does Coca-Cola score on the eight attributes of performance excellence?

Eight attributes of performance excellence:

Bias toward action

The twenty-four division and operations Presidents actively implement the six strategic priorities of the
company. If these operations presidents carry out the priorities, the decisions made and plans should
be successfully executed.

Closeness to the customers

Coca-Cola has shown the flexibility to try new ways to develop their brand through new flavors and
variations. With careful planning and market research, they have been able to work through their
employees and reach out to customers in order to gain feedback and in turn, ensure customer
satisfaction.

Autonomy and entrepreneurship—supporting innovation

The various flavors of Coke that the company has released to the public demonstrates risk taking.
Instances like New Coke was not so well received, while diet Coke and diet lemon Coke have.
Experimentation and risk taking are ways to expand the company and promote more publicity.
Productivity through people—valuing human resources as keys to quality and performance

Each employee hired by the company is used for their forte/strengths. We can see through the
managerial positions that each person is hired for that specific position. Quality and performance can be
better managed, and these people can also target problem areas that need to be improved by providing
suggestions.

Hands-on and value-driven

Coca-Cola, a company that has been around for many years already, is past the stage of having to start
from scratch and structuring it from ground zero. Through the years, what it has been working toward is
refining and making improvements to its present state. The current CEO, Douglas Daft, has mapped out
a managerial structure in hopes of making the company run smoothly in an attempt to bring its sales up
once again, and restoring the legacy of growth established by Goizueta.

Sticking to the knitting

The company is famous for its carbonated beverages in the Coke family, and focuses only on that. Not
only does it do well at preserving the quality of its product, its vertical integration of producing the
product, bottling the product, and marketing the product to be sold worldwide is definitely its forte.
There is no doubt that this company does not lose its focus. With the flexibility to adapt to various
countries and geographical locations, it molds its distribution down to the science of bottling, and
marketing its product through various languages (taken from research done on my own).

Simple form and lean staff—minimizing management levels and staff personnel

When Daft axed 6,000 employees in Atlanta, Coca-Cola was on its way to “a leaner, more
entrepreneurial organization.” As the corporation has grown, it is important to focus leadership on a
few managers, who then have their own set of employees to manage under them. Here, we can see the
pyramid structure in progress. In this manner though, employees are able to voice their concerns to the
manager above them, who is not far from the executive positions. Employees who work on the
foundation of the pyramid structure may be able to have better insight on customer satisfaction,
limitations and difficulties in distribution, etc. Since communication is key, I think this decision will help
Coca-Cola become an even stronger and stable company.

Simultaneous loose-tight properties—allowing flexibility while staying in control

The introduction of new and well-received flavors such as Diet Coke, Vanilla Coke, Diet Coke with
Lemon, and the not-so-popular New Coke definitely demonstrate the company’s willingness to expand
their horizon while maintaining the quality on their original product. I see the decisions made by Coca-
Cola as a meeting of the old and new. The willingness to come up with new ideas and explore whether
or not they are well received by the young generation is demonstrative of the latest fad. What makes
this company successful is also because it makes the strong attempt to preserve the American nostalgia
through Classic Coke, an all time favorite of the old generation as well as the new. As a result, Coca-Cola
Company definitely allows flexibility as well as stays in control.