Pressure Causing Organizational Change – Coca Cola Company
The coca cola company is a multinational corporation that has its headquarters in Atlanta Georgia. The company deals with selling and distribution of nonalcoholic soft drink beverages and syrup. The company was incorporated in 1892 and has been in the food and beverage industry since then. Over the years the company has grown and expanded to other countries in Europe, Africa and Asia. The company is best for its main and flagship product known as the Coca-Cola drink. The main business model of operation that this company has adopted is franchising. The company has contracted many other independent bottlers across the world to carry out bottling of its products on its behalf. As such, the Coca-Cola Company only produces the syrup used for the bottling of its products. However, the company regulates the activities of its bottlers to ensure that the Coca-Cola products maintain a high quality and the brand are not compromised in the market. Moreover, the company runs its anchor bottler located in North America and is called the Coca-Cola refreshments.
The food and beverage industry within which the Coca-Cola Company operates is a dynamic one. It is the fastest growth industry many start up business investing in it. The competition within this industry is relatively high given the large number of business that has ventured in food and beverages in the recent past. As such every business is focusing on the needs of the consumer and the quality of their products in order to remain competitive and operate profitably. The contemporary issues of health are equally playing a major role in shaping the food and beverage industry (Mokhov & Ryabukhin, 2018). Due to the increasing health consciousness and the need for healthy foods, many companies within the food and beverage industry are restructuring their product portfolio to fit in these customer requirements.
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There are two types of pressures that are currently affecting the food and beverage industry not only in America but across the world. The first type of pressure is the health pressure as has already been identified. Majority of people within the food and beverage industry are becoming increasingly conscious of their health. For instance, many people are trying to reduce on their calorie intake in order to avoid obesity. The rate of prevalence of obesity within the United States by 2016 was estimated to be about 39% among adults (Gertner & Rifkin, 2017). The health implication of obesity and overweight are far reaching and piles pressure on the existing healthcare systems. Cardiovascular complications that have caused the deaths of millions of people are largely coursed by the state of Obesity (Gertner & Rifkin, 2017). These health implications have caused people to be cautious of the food they take. Both Governmental as well as non-governmental organizations have initiated campaigns aimed at reducing the level of calorie intake. This has placed pressure on food producing companies to produce foods that are healthy for consumption and provide least calories.
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The second type of pressure is the environmental pressure. Many of the beverage producing companies packages their products in plastic bottles. These plastic bottles are non-biodegradable when disposed to the environment causing great environmental hazards. It is worth noting that environmental conservation has gained great traction from the international community and several environmental conservation groups. As such, there is mounting pressure to reduce the quantity of plastic being disposed to the environment. This environmental pressure is getting to the food and beverage industry who largely package their products in plastic material. There is increasing public pressure for organizations within this industry to rethink their packaging strategies in order to reduce the environmental threats of plastic packaging.
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The two types of pressure directly affect the viability of the Coca-Cola business and structure of operations in different ways. To begin with, the Coca-Cola products are mainly beverages that contain large quantities of sugar (Gertner & Rifkin, 2017). As such, they contain high calories and are likely to cause increase in a person’s weight if they are consistently consumed. Therefore, the health concern discussed above may lead majority of Coca-Cola customers to stop consuming their products. Consequently, this will adversely affect the sales volumes and consequently the economic viability of the business. Secondly, most of the Coca-Cola company products are packaged in plastic bottles. Therefore, the business accounts for a substantial percentage of the plastic that are disposed to the environment. Therefore, the environmental pressure regarding the plastic bottles directly affects the packaging process of the company. Should the government impose any legislations regarding plastic packaging, the Coca-Cola Company will be greatly affected.
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The pressures discussed above are likely to cause first order organizational change within the Coca-Cola organization. The first order organizational change involves incremental changes within the organization. Such changes are mainly characterized by moderate adjustments within the organization. The organization changes its processes and approach gradually to adapt to the changing environment or external pressure (Whelan-Berry & Somerville, 2009). In the case of the Coca-Cola Company, the organization is likely to change gradually in different ways. First, the organization is likely to reduce the amount of sugar in its products gradually (Gertner & Rifkin, 2017). Such reduction may be accompanied by a close monitoring of the reaction from the public and the customers. The change in the concentration of sugar is likely to be gradual because the company will not be willing to compromise on the quality of its products and the original taste of such product. As such the gradual incremental changes will help the organization to monitor changes in the products taste as well as customer reactions.
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On the other hand, the environmental pressure associated with the plastic bottles is likely to yield second order organizational change. The second order organizational change involves a total change in the organizational way of doing things. It often requires new learning and a change in approach for it to be successful (Whelan-Berry & Somerville, 2009). The environmental pressure on plastics is likely to drive the Coca-Cola Company to completely stop using plastic packaging and strictly adhere to the returnable glass bottles. Alternatively, the company may consider setting up a recycling plant for the waste bottles. This will require new learning and new machinery installation that will aid the recycling process. In summary, the Coca-Cola Company is one of the American based largest Multinational companies that deal in the food and beverages industry. The two types of pressures facing this industry are the pressure from the health concerns and the environmental pressure of plastic waste disposal. These two pressures directly affect the operations and viability of the Coca-Cola business. The health concern pressure is likely to cause the first order organizational change. This is because the organization will adjust the sugar content in its products. The environmental concern is likely to cause a second order organizational change since the organization is likely to completely change the packaging material.Order Unique Answer Now