Coca-Cola Amatil: Business Management and Change
.... Greater sharing of information and knowledge between various units through meetings etc.vi. Use of EDI supply chain. vii. Use of e-commerce.viii. Computerisation of sales points and vending machines. Social Values and Attitudes – Society in the new millennium is much more aware of the legal and social responsibilities of business organisations. Businesses need to conduct themselves ethically, responsibly and in an environmentally friendly manner. External i. Donations of $105,000 over three years to Parramatta Council to clean up tributaries of the Parramatta River.ii. They operate a PET plant, which reproduces and manufactures recycled plastic for their bottles ranging from 375ml and upwards. iii. They are aware of ‘global’ issues regarding the exploitation of workers in poorer countries and they have policies formed and in place relating to child labour and other associated problems. iv. A founding member of the Beverage Industry Environment Council. Political Policies and Legislation – The Australian government has introduced many changes in the business landscape, which has had a huge effect on the conducting of business in this country. E.g. New tax system, fuel excise taxes, ACCC monitors, government policies. External i. These changes have forced CCA management to respond accordingly and abide by law.ii. There has been increased expenditure since the GST was introduced. iii. CCA wanted to merge with Cadbury Schappes, but the ACCC refused to ratify the deal as they felt it would create a monopolistic situation. Legal Influences – The laws and regulations that effect a business. External i. CCA wanted to acquire all the Indonesia, but laws in the country restricted this, and they were forced to make a joint purchase with Pan Java Bottling company in 1991, CCA only acquired 49%. However, the following year it acquired 91%. b. Analyse the management theories adopted, and in current use at CCA There are many different management theories adopted within this company. With traces of Political, Classical/Scientific and Behavioural in many different areas within the within this business. The implementation of these management theories are largely dependant on the CEO at the time, one major internal change for the business was the sacking of David Kennedy and the implementation of a new CEO, Terry Davis. Davis has continued some of the steps that Kennedy implemented as well as adding in some of his own touches. Management Theory How its been adopted Classical-Scientific – This theory is highly structured, each person has his or her own role in the business. It is organised, efficient and gets the job done. i. In assembly lines, the most efficient area to use this method. The drinks are produced in a step by step manner, so therefore, it is more efficient for all workers to have a specific role on the assembly line. ii. The CCA has however, been quite flexible, with changes to the times of shifts in factories, with the negotiation of 12 hours shifts.iii. Terry Davis is also looking at a focus on capital management and reduction of costs by eliminating duplication. Political Theory – This is when managerial power is shared amongst various groups within the business. Managers need to deal with subordinates according to their characteristics and mental situation. i. Terry Davis is using Reward power through the use of motivational strategies for top management focusing on reward based remuneration. ii. Terry Davis is very Consultive/People oriented. He asks a question and seeks a resolution from a variety of employees. iii. Stakeholder views, are another important part of the business, stakeholders can include people who are directly or indirectly associated with the business. For those with an interest, with no connection, CCA is an ecologically sustainable company, eg. Use of 100% recyclable PET bottles. For those with a connection, like shareholders and employees etc, the CCA looks after their workers, negotiating many things. One of the key drivers for CCA is maximising shareholder return. Systems Theory – Saying a business is a set of interrelated parts that are arranged in such a manner that they make a unified whole. i. The systems theory works on saying that a business is a system, it goes step by step and goes through a number of processes in which it creates a product. This applies to the Coca-Cola production. In that it has:- Raw materials – Coke syrup, Human resources, capital, technology- Transformation – Employees working to change it into a finished product- Outputs – Selling their products, gaining information and then gaining profits from the business, and feedback of products. Behavioural Theory – Managers gets job done by working with and through other people. Largely concerned with organisational behaviour. ii. High levels of communication between members of staff using e-mails and meetings. Terry Davis has carried on many of David Kennedy’s approaches to management “The sense of wanting others to share the common view instead of preaching it from the top” and “Strong on accountability but gives employees the freedom to make decisions. Terry Davis has also stressed the importance of communication between staff and wants to improve the flow of ideas between regions. iii. High degrees of leading, Terry David regularly sets an example to his employees, by motivating and encouraging. iv. Flatter organisational structures the company has kept in line with trends in the 1990’s. This has improved OHS and absentee statistics improving. This has also encouraged the use of teams within the organisation, which has improved efficiency. c. Analyse how effectively change has been managed at the CCA in the past To manage change effectively a business organisation must go through these basic steps: Identifying the Need for Change - For a business organisation to improve, it must realise the need to change, In November 2001, the new CEO, Terry Davis (01 – present), initiated a top down bottom up review of ‘how we do business’. The review being undertaken will identify those areas of the business where it is not delivering the best breed of performance and to understand what strategies they need to develop and to address the shortfalls. Their priority was to accelerate the improvement in the return on capital employed. The need for change was also recognised when it was evident in the demerger of operations in Europe. They realised that operating operations on both sides of the world, Europe and Asia were a tough task. “The benefit of the demerger strategy is that it puts CCA Asian Pacific in a really good position because, whereas this group of people had been managing a business on both sides of the world, they are now, in effect, focused on this part of the world and therefore have that capacity”. The demerger created the CCB, which managed Europe; they gained Northern Italy, while CCA acquired South Korea, which balances their portfolio. They also realised the need to change when the performance of the Philippines was not achieving goals they realised that they were under-performing. With problems with their partner San Miguel also did not help the situation. They realised that their operations in the Philippines were not working out so they sold it to the TCCC. Analysts believe that CCA without the Philipp...