Impact of the Effective Leadership on the Organisation Performance: Coca-Cola Company
Effective leadership remains a core component to the success of any business. As many organisations entrust their success to the employee’s satisfaction, Hurduzeu (2015) suggests that the task of the corporate leaders is significantly more crucial to the employee’s performance than any other component set to determine an enterprise achieving its goals. An effective leader is a person who motivates employees, help them become competitive, and use the most appropriate leadership styles to deliver a standard of excellence in the workplace (Noruzy et al., 2013). Good leadership helps in ensuring employees’ satisfaction, which in turn influences the organisation’s productivity and profitability level (Widodo, 2014). Over the past years, different factors have been found to affect business performance, among them, being corporate leadership and internal relationship between leaders and the workforce (Noruzy et al., 2013). Therefore, this study focused on reviewing the concept of effective leadership at Coca-Cola Company as a core factor ensuring the organisation’s high performance. As the study focuses on examining different leadership concepts and its impact on the performance of Coca-Cola, the researcher hoped to provide insightful ideas concerning how effective leadership can influence the success of businesses in a competitive market. The study was applied to builds a clear argument that was based on the existing literature on the topic of leadership and its effect on the performance of most modern companies. The previous studies that were used in this research were essential, as the information supported the research and linked the study with facts that concern the subject of the survey.
Objective of the Study
Primary Objective
The general purpose of this investigation was to examine the positive effects of leadership on the organisational performance. For clarity, the research focused on studying Coca-Cola Company by reviewing the way effective leadership has influenced the success of the firm for many years.
Secondary Objectives
- First, the research explored the role of leadership in performance management.
- The other aim of this survey was to explain the relationship between effective leaders and organisational performance.
- The investigation was also aiming at revealing interpersonal leadership effectiveness and its impact on Coca-Cola Company.
- Lastly, this research was based on the purpose of showing the attributes of effective leaders and their effect to modern companies.
Literature Review
Similarly, Ullah (2013) notes that leadership commitment as one of the leaders’ behaviours that can influence the organisational performance. Uttah (2013) proposes that it is substantial for leaders to work in a dedicated manner in the enterprise because when a leader is committed to his or her work, this changes the employees’ attitude and encourages them to continue to work for one group. The aspect of business commitment is significant, as it brings a strong belief within the organisation, making the employees accept the goals and values of the firm (Ullah 2013). This study suggests a strong relationship between leadership commitment and corporate performance, as it makes employees remain in their current working station and contribute their effort to make the businesses achieve their desired goals and objectives. Ullah (2013) further notes that leadership commitment has an impact on employees’ performance, as the employees work in the most efficient way when their leaders are committed to the organisational task and values. Significantly, the behaviour of commitment in the workplace gives an enterprise the opportunity to have increased sales, successful financial records, and meet its profit figures (Ullah, 2013). Another study by Colbert, Barrick, and Bradley (2014) affirms that leaders can make a business succeed and become competitive through management models such as making strategic decisions and creating a sound relationship between employees and the organisation (Colbert, Barrick, & Bradley 2014). As these are some of the crucial responsibilities of the leaders within an organisation, it is clear that the mechanism influences the company’s performance, as most are applicable in a complex situation in the companies.
Leadership behaviours interact with the business’s environment (Song, 2008). From the review of leadership concept by Song (2008), it is noted that when leaders interact with the organisation’s environment efficiently, this interaction helps in building the employees. As a result, the employees understand business uncertainties. In the analyses of the Leadership Behaviors and Human Resource Development in Public Sector Organizations, Song (2008) claims that a visionary leader has a greater impact on the employees and the firm itself by providing guidance on the uncertainties that may influence the organisational performance. From this task, it is evident that effective leaders influence the corporate values, purpose, and its meaning with the employees at any period of organisational operation.
Blazey (2009) reports that effective leadership and governance allows organisations to accomplish their mission as planned. The study clearly demonstrates that most of the results of the firm’s performance are based on the proper level of leadership and governance. In a different research, it is said that leadership is a crucial driving force that increases the performance of an organisation (Karadağ, 2015; Blazey, 2009). According to Karadağ (2015), effective leadership is critical to making a business accomplish its corporate goals and objectives. When the management drives a firm to carry out its mission, purpose, and output, this tends to be an indication of the quality of leadership within an organisation (Karadağ 2015). To explore the impact of leadership on the modern businesses, Karadağ (2015) suggests that effective leadership styles make organisations innovation-oriented since the leaders focus on dynamic markets and making the agencies more competent and profitable. Karadağ (2015) also links effective leadership with the enterprise competitive advantage. In this context, the study reveals that effective leadership facilitates the development of the management group in the organisations, which in turn lead to sustainability of the concept of competitive advantage as delivered by a firm.
Based on extensive literature presented by Shermon (n.d.), it is apparent that most of the effective leaders have an impact on forming a positive culture in the organisation, which further enhances the improvement of the company and its performance in different levels of management. Zehir et al. (2011) agree with this argument by saying that exceptional leaders develop a strong culture in the organisation with the aim of making the business perform efficiently and gain competitive advantage. In addition, Keyton (2011) says that effective managers facilitate a positive culture in their businesses, especially a culture that encourages the workforce to embrace change where necessary. As such, it implies that a leader is more effective in influencing assumptions in the firm, values, and norms that will underpin the work of every staff in the organisation (Dimmock & Walker, 2005). Schein (2010) posits that culture is an essential element of organisational success, and through cultural based leadership, managers aiming at ensuring that the performance of the company is as the best as needed, it is vital to work on implementing a powerful culture. Evidently, from the available literature, it is noted that culture is a tool that effective leaders can use to improve business performance and influence the achievement of the organisational goals.
Hurduzeu (2015) suggested that transformation leadership is a leadership strategy that top managers in most enterprises use to influence the organisational performance. The study reveals that a transformational leader is a person who changes the corporate culture by inspiring the employees (Hurduzeu 2015). In addition, Noruzy, et al. (2013) examined the relationship between transformational leadership, knowledge, innovation, and organisational performance, and established that transformational leaders within most businesses inspire employees through their decisions, which makes the leader more dedicated to meeting corporate goals.
Jung, Chow, and Wu (2003) assert that effective leaders have a high influence on the employees’ creative behaviours and performance. In this case, the study claims that leaders can affect their followers’ creativity in a direct or indirect way. The researchers recommend that transformational leaders support employees’ creativity by establishing a working environment that encourages the workforce to come up with different approaches intended at realising positive outcomes toward the performance of a firm.
Ojokuku, Odetayo, and Sajuyigbe (2011) protrude that leadership style has a direct relationship with corporate performance. More research has demonstrated that an effective leader can be defined according to the leadership style that he or she is using to execute activities in the enterprise. Obiwuru et al. (2011) support this point by reporting that in many businesses, effective leadership styles are seen as a compelling source of organisational strength, management development, and sustained competitive advantage. As these are key components that can be used to show improved corporate performance, it is true that the type of leadership method adopted by managers in the firms will be a major factor to help leaders and personnel group achieve their current objectives more efficiently (Mohammed et al., 2014). On a study that analysis the aspect of ‘Leadership Styles’ Nanjundeswaraswamy and Swamy (2014) assert that managers in the international companies can use effective leadership styles to reduce attrition rate in a competitive environment and achieve the business goals in the markets with a high level of competition. Sun (2002) presents a review showing that leadership styles have an essential correlation with the performance of a company, as the type of managing style that leaders use can attribute to the success or failure of the business depending on the level of adaptability of management style by all the subordinates. In this case, effective leaders are the one who uses a leadership method that assists a firm to attain its profitability target, as well as aid employees to perform their work better and productively.
Research Methodology
Research is the systematic analysis to determine the facts of a case and develop conclusions based on the findings of the study (Creswell, 2014). A research methodology entails the collection of data to help meet the objectives of a study (Creswell, 2014). Choosing the best research methodology requires that a researcher identify the aims of their research. Qualitative research is used when research does not require numerical data (Creswell, 2014). Quantitative data is used when the study is statistical data (Creswell, 2014). Finally, mixed methods include the input of both qualitative and quantitative research. Therefore, for effectiveness on the subject of investigation for this study, it was relevant for the researcher to use the most appropriate research approach. Based on the nature and objective of this study, the researcher used qualitative research approach. As a qualitative study, the researcher applied the literature that is available for data collection on the impact of leadership on the performance of Coca-Cola Company.
For the collection of data, the researcher also carried out a self-analysis, by obtaining secondary data through desk research technique. The investigator summarised and synthesised other studies concerning leadership at the Coca-Cola Company and the way it influences the performance of the organisation within the global market. According to Bradley (2013), desk researchers’ looks for secondary data within the agencies used in the study through the review of online or secondary materials and offline materials. For this study, the researcher examined articles, books, case studies about on Coca-Cola, and company’s web pages for the collection of data, which was followed by interpreting the data collected in order to answer the research questions.
Sampling
Since this study involved the use of secondary data, the researcher did not need to sample any participants. Creswell (2014) alludes that sampling and primary data collection may be cumbersome, especially when dealing with a large population. However, this study ensured that studies used in the secondary analysis had credible sampling techniques and that their reports were substantive.
Methodology Justification
Hair (2013) writes that in any investigation, it is vital for the individual carrying out the survey to give the rationale of the method that was applied in data assembling process. With no doubt, secondary data was considered for this review because of its purpose that it serves as well as the flexibility of the technique. According to Sarstedt and Mooi (2014), secondary data collection method is economical, as the cost that surveyors incur to gather original data is saved. From this perspective, the approach was taken into consideration, mostly because it is cost effective compared to primary data collection model. Through the secondary method, the researcher accessed data quickly, which promoted the completion of the inquiry within a short duration of time. This means that as the investigator focused on analysing the published data, it was possible to collect data more conveniently and little time was required. This was essential to the research, as the surveyor was able to complete the research on time and present the data that was specifically relevant to answer the research question. Finally, the researcher was able to accumulate the relevant and significant amount of data, without being limited to the information necessary to achieve the research objectives. Therefore, it is justifiable to say that secondary data method had the potential value and meaningful contribution to the development of this study.
Methodology Assumption
The researcher ensured that for appropriateness of the secondary data some assumptions should be observed. There are varieties of techniques that the researcher could have used to collect the data for this project. However, due to the aspect of time and cost, the investigator selected secondary method as the prime technique, but under the assumption that the data presented in the secondary sources was based on what the participants knew about the research question. The researcher also assumed the people who had been interviewed in the secondary sources that were applied did not have any problem with the research question and they meet statistical models such as age, sex, among others characteristics used in the grouping of primary data.
Ethical Considerations
Fouka and Marianna (2011) argue that it is important for researchers to consider research ethics while conducting any study. The primary research ethics that researchers should take into account in any study is the protection of formality and publication of the information in the research (Fouka & Marianna 2011). Therefore, for this study, the research ethics that the investigator necessarily considered include confidentiality and respect for anonymity of all participants. In this situation, the researcher did not disclose any confidential information about respondents without their consent.
The researcher also considered acknowledging the owners of the data used in this study. The data for this research was readily available on the books, the internet, and other public forums. The investigator was thinking of requesting permission from the original owners to use the data available, but due to the time that was set for this study, the surveyor opted to acknowledge all the owners of the information utilised in this study and respect the copyright provision. Tripathy (2013) outlines that written permission for the use of the secondary data is included in the application for ethical clearances. This means that the researcher had to adhere to the rule of borrowed data, through the use of the available ways to show that the study observes different ethical considerations.
Research Findings and Analysis
The investigator analysed the data obtained to show the value of this investigation. From the analysis of what was gathered, the surveyor demonstrated the result of the research activity, supported by both textual and numerical data. Thus, to analyse the data accumulated from the literature, it was remarkable for the researcher to present the following findings.
Coca-Cola Company Overview
Coca-Cola is a global business, and the company was created in 1886 in Atlanta in the United States (The Coca-Cola Company, 2017). In the beginning, the organisation was set to manufacture formal drinks and serve the local market in Atlanta, but in time, the firm expanded to global markets. The company name mean success, as instituted by the founder leader and the then CEO Robert Goizueta (Coca-Cola Leaders, 2017). For the company to become internationalised, it started selling its coke product in bottles, which its leaders used as a strategy to venture into the world market and become the most competitive beverage company. The strategy was effective, and between 1895 and 1896, the company was successfully known all over the world. Currently, Coca-Cola Company has become one of the best globally with 500 brands, which are highly popular and purchased by its customers (The Coca-Cola Company, 2017). Some of the factors that have made Coca-Cola a successful company for long include its mission, vision, the winning culture, and leadership portfolio. From the enterprise’s website, it is noted that Coca-Cola mission is set to make the world refreshed, inspire happiness, create value, and bring a difference where necessary (The Coca-Cola, Company). For the vision of Coca-Cola, the enterprise believes its growth is in the hand of the people, its product, partners, and productivity. On the essence of the culture, Coca-Cola Company understands the need for positive attitudes and behaviours that will assist the business to achieve its vision 2020 in the most efficient manner.
In the organisation, it is the responsibility of the leadership team to shape its better future. The recent company leader, who is the Chairman of the Board, is called Muhtar Kent (Coca-Cola Leaders, 2017). The goal of the leader is to become more active and leads the company into the modern century and makes the company’s employee work committed to the values of the company’s brand. Furthermore, as Kent is an effective leader, Coca-Cola Company has been sustainable in the market by maintaining its profitability growth (Coca-Cola Leaders, 2017). The manager has also worked to ensure that the firm’s management structure is strengthened in order to focus on serving the external customers in the segment, increase productivity, and effectiveness in every objective that the company aims to achieve.
Findings on Impact of an Effective Leader
Peterson et al. (2003) proclaim that effective leadership in the organisations plays a diminutive role in the overall performance of the business. In this case, it was identified that leaders account for 10% of the firm’s performance variability (Peterson et al., 2003). On the similar study, the investigator found out that from 1966 to 1980, Coca-Cola leader was one of the best manager globally (Peterson et al., 2003). For effectiveness, the leader who was Paul Austin had distinctive personality characteristics, which made him an effective leader in delivering the goals of Coca-Cola Company. From this finding, the researcher understood, leadership attributes and traits have been part of the success of the Coca-Cola business. The investigator established that in 1919, Asa Candler incorporated with Coca-Cola Company, which made him part of the leadership team (Hnatko, Sidhu, & Li Zhang, 2014). In the period, under the direction of an effective manager, Coca-Cola made substantial innovation such as 6-bottle carton products and 12-particles cans (Hnatko, Sidhu, & Li Zhang, 2014). The researcher also revealed that effective leadership performance at Coca-Cola influenced its growth with the company expanding into global markets year by years. In 1923, the company Board appointed Robert W. Woodruff as the President and a leader who was focusing on making the company one of the best in the beverage industry. In 1939, Woodruff through his leadership skills and attributes, he helped the company create new products such as Fanta Orange and distributed the merchandise in Naples city in Italy (Hnatko, Sidhu, & Li Zhang, 2014). From the available literature, the surveyor found out that the market value of the soft drink was $307.2 billion in 2004, and it was projected that the market for the same product would increase to $367.1 billion in the year 2009 (Deichert et al., 2006). As a matter of success under the influence of effective leader, in 2004, Coca-Cola was the top company in the market, as in this era the company had acquired 50% of the soft drink market value, followed by PepsiCo with 21%, and other soft drink makers companies with only 7% (Deichert et al., 2006). From the analysis, the investigator noted that leaders who have been appointed from time to time at Coca-Cola had influenced the company performance, in terms of profitability, growth rate, and the market size that the firm has acquired over the years.
Table 1: Global soft drink market volume between 2000 and 2004
Source: (Deichert et al., 2006)
From a survey that was completed by Alkahtani et al. (2011), the researcher identified that effective leaders’ lead to the change in the organisational performance. On the same case, it is quoted that effective leaders are defined according to their personality traits, which are significant to the implementation of change management in an enterprise (Banutu-Gomez, 2013). In reference to the case of Coca-Cola Company, the researcher realised that at one time the leadership team at the organisation used their traits to influence change and performance of the business (Alkahtani et al., 2011). For example, Doug Ivester, who was once the leader at Coca-Cola had some low degree of dominant and extroversion traits. From this case, the manager did not serve the company for long, because the senior staffs felt that Ivester was not using the right leadership traits to run the organisation to success. From this context, the company appointed a leader with the traits of agreeable and conscientiousness and it was a strategic decision because the manager would organise, plan, and involves the workforce in the decision-making process (Alkahtani et al., 2011). Additionally, it was found that Coca-Cola Company has tried to adopt different leadership styles, with the company selecting the PPP management (purpose, process, and people) as its primary form of leadership (Karodia, Mandiya, & Machera 2014). In the cases where Philip Gutsche, used a top-down leadership style at Coca-Cola, the company was not achieving its desired goals, but when Martin Jansen, used the PPP leadership approach the company yielded the result it wanted in the new reality (Karodia, Mandiya, & Machera 2014). Hence, the researcher understood that through effective leadership styles, Coca-Cola supports the philosophy of collaboration, commitment, and the company benefits from the diverse team working in the different management department.
Figure 1: The Coca-Cola Company and PepsiCo: growth in terms of market share from 2007 to 2012. (Source: Hnatko, Sidhu, & Li Zhang, 2014)
Conclusion
This research investigated the impact of effective leadership on the organisational performance, specifically on Coca-Cola Company. The findings of this survey revealed an effective leader is a person who understands his or her role, knows the most effective leadership style, use the most prominent traits to learn the business, and incorporates employees to the management of the organisation. In essence, from the study, it is clear that for most of the modern enterprises, leadership is a critical administration skill that involves the capability to encourage employees within the firm toward achieving a common objective. In the context where leadership works positively, the leader focuses on the aspect of followers development, their needs, and growth of the company. From this point, it is noted that leaders are the core principles who determine the business values, culture, staffs motivation, and change management. At Coca-Cola Company, leaders influence the people around them so that they can reap optimal benefits from the company’s resources. Finally, the Coca-Cola company leadership scheme is important, and its does not match with that of its competitors, thus making its performance outstanding and crucial to the overall growth of the business and competitive advantage.
Recommendation
Coca-Cola Company can improve its work results by considering adopting transformational leadership style, as one of the best methods of management. When the company uses the transformational leadership style, it will focus on developing the value system of the staffs, making the employees motivational, developing their skills, and inducing their performance as expected. In turn, the style would assist the workforce at Coca-Cola achieve their personal goals, as well as adapt to the new working practice, which will improve organisational performance. A transformational leader is someone who is visionary and the person who act consistently to ensure that the business succeeds under any situation. Therefore, it is recommended that Coca-Cola should consider redesigning its leadership structure, and implement transformational leadership model, as through the style, the leaders would create strategic visions, communicate the plans to the staffs, and build valuable management elements such as trust, commitment, and motivation. Consequently, this will change the company performance level because, through transformational leadership, the organisation will result in high level of cohesion and improve company’s performance in its current and new organisational environment.
Reflective Learning
This study was essential to the researcher in different ways. Personally, I learned that leadership in an organisation is a fundamental factor that can influence the company’s performance. From the research literature and findings, I believe that leadership and organisational performance are two different components, but work in one route, as they influence each other. As such, I have confirmed that a corporate performance is properly done through the division of labour, functions, through a hierarchy of authority, and responsibilities or what is simply known as leadership. From the case of Coca-Cola Company, I came to know that leaders use their ability to ensure that businesses attain their visions while ensuring that there are short-term stability and long-term viability.
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