Managing Organization Behavior: A Case Study Report of Coca Cola Company
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Case Study Report: Coca Cola Company
Introduction
In the modern world of business, from the perspective of organizational behavior, various factors determine the success and failure of an organization. One of the factors that are recognized that can lead to failure of an organization is unethical decisions that are made in the different department. Organizations view decision making as a complex process, in which the organizational leaders take the mandate of identifying the decisions that will make the organization achieve its desired goals and objectives. In most cases, the decisions that an organization makes are set in a way that they will bring change and have an impact on the organizational behavior (David, David and Marshall). The unethical decision in a company may lead to disreputable behavior and when customer notices unethical behavior within an organization, this will ruin its reputation and destroys its image in the market. Therefore, this case analyzes the way some of the decisions made by organizational leaders may demonstrate unethical behaviors and contribute to organizational failure. The discussion considers Coca-Cola Company as the suitable organization for the case study, as one of the largest organization globally. Thus, using Coca-Cola as the company for this study, the paper will look at the operating decision that the company managements integrates in the company’s operation. At Coca-Cola, the decision-making made concerning the company operation includes brand operation, marketing, and ensuring that Coca-Cola brand is placed in the market through the right procedures. The company leaders are therefore required to make the top most decision so that the company’s operation does not show the aspect of unethical behaviors. For supportive information concerning the case study, the discussion also links the company with some of the ethical theories.
Decision-Making in an Organization
First, it is clear that organizational behavior (OB) is a system that is applied in critical aspects of an organization among them in the decision-making process, especially concerning marketing techniques. In the context of OB, some of the organizations assume that only the managers make the decisions in the organization, but to avoid the unethical decision, employees at every level in organizations should participate in the process as well. Fred suggests that individuals, groups, or teams make decisions in the organization. Through OB the decisions made by the groups or teams in organizations are beneficial in various ways, as the process bring out the best of the group or teams members. At the same time, as the important of decisions making process is to solve a problem, the people involved the process give more knowledge and expertise ideas that may be used by the company to influence its performance. Shooshtarian and Amini reveals that OB requires effective managers in organizations uses should have a close relationship with the subordinates’ in order to ensure that the decision made in the organization does not influence subordinates ‘behavior. With the right leadership in place, the organization gets to focus on the fundamental decisions and things that will make it achieve its goals.
In addition, in the concept of OB in decision-making is a tool for training the future leaders in the organizational (Arnold and Wilmar). As such, Unethical decisions may reflect a behavior that will make the future leaders fail on reflecting the strategic approach that will make the organization to be unsuccessful (Ata Elayyan). Within the decision-making process and OB, organizations face many complex situations, in which the organizations are required to make ethical decisions from the perspective of customers and organizations themselves. Although unethical behavior regarding decision-making process may occur due to the behavior of the employees on the daily basis, the people who are viewed to be responsible for unethical decision are the leader. Octavia, Jeffrey and Jetonga say that when an organization implements decisions that are unethical in nature, the company may have poor organizational performance, encounter financial losses, reputational damage, and lose the customer who will buy from the competitors.
Context
With this understanding, it is significant to note that Coca-Cola is one of the largest soft drink producers globally, with the company having more than 500 sparkling and brands. The company’s brands are among the top 10 soft drink that is consumed by different consumers worldwide (Wilhelmina, Robert, and Linda). This reflects a strong relationship between the company’s decision makers who are the company’s leaders. Coca-Cola Company focuses on the global markets with the organization working with the aim to become more profitable and attain an increased customers share. Apparently, Coca Cola history began with the soft drink that was made with spiced syrup mixed with carbonated water (Governance and Ethics). Initially, when the company was started, the product was sold out in glasses and the company served at about nine people per day in the Atlanta region. However, today the company serves more than 1.9 billion customers on a daily basis per day across the world. Coca-Cola packages its product in a strategic way, as the packing of the product is in the form of cans or bottle glasses. Wilhelmina, Robert, and Linda outline that as time goes by, Coca-Cola has developed more than 3500 products, and it has increased the selling of its brand, with the company selling its product in more than 200 countries worldwide.
For the company’s product to be competitive Coca Cola uses high sugar as part of the product ingredients and this can cause several problems to the health of the customers purchasing the products. On the other hand, the decision to use misleading marketing campaign with the objective of attracting more customers is another issue that makes people questions about the ethical business practices of the Coca-Cola Company. In 2009, Coca-Cola Company targeted young and sports spectators by claiming that its product has vitamin water that has nutrient-enhanced ingredients. With the company leaders, especially the marketing managers choosing to use this marketing technique, there was the rise of public awareness regarding the impact of the Coca-Cola drinks (Indra, Purjittam, Majed, and Mohammed). The decision to apply this marketing technique had negative impacts on the company, as in 2009, Coca-Cola sales decreased, and this brought a financial crisis within the organization. The scandal continued as the decision to use this marketing technique was reviewed by the legal systems in the United States. Here, the company was under legal scrutiny in 2009, in which the legal examination was named as Ackerman. The Coca-Cola Company lawsuit. The major issues that the case outlined relate to the unethical behavior of the company, whereby it applied unfair business practice through false or unethical advertisement. Indra, Purjittam, Majed, and Mohammed point out that in the U.S sugar that is used in different type of products is not unhealthy, but according to the Food and Drug Association, sugar is not an ingredient that Coca-Cola should tell its customers it would make their life healthier. With the company using this misleading advert, which was a decision made by the company leaders; it is clear that the company’s OB had negative implications for the company. First, Coca-Cola had to face a lawsuit case that had an impact on the company’s reputation. Additionally, with a bad reputation, the company’s sales declined; thus the organization failing to achieve its goal of making excessive profit.
Furthermore, the decision to use a misleading marketing technique makes Coca-Cola Company appear as an unethical global company. (Indra, Purjittam, Majed, and Mohammed assert that as a company that is known for various CSR project globally, declaring that its products have Vitamin Water, as a way to attract more customers is not a moral way to do business. In fact, with the company’s product packed in a can or bottle having 33 grams of sugar, this demonstrate the company was not presenting the facts in the adverts, but only focused on attracting more customers and becoming competitive (Wilhelmina, Robert, and Linda). In simple terms, the aspect of hiding the impact of sugar component in the products makes the decision to use the advert as a key strategy to attract customers makes Coca-Cola unethical. Sugar component in food substances is known for causing diabetes, tooth decay, and obesity when used frequently (Indra, Purjittam, Majed, and Mohammed). This is another point that shows the unethical behavior of Coca-Cola, as the company did not reveal the side effect that sugar component in the products contributes to its customers.
Analysis of Factors that Are Causing Unethical Decisions at Coca-Cola
In most of the multinational organizations, the management is often faced with challenges within the different situation that are set to make the organization attain its goals. Decision making being the process that is configured to eliminate or reduce the tendency of unethical behavior within an organization, some of the managers fails to observe the impact of unethical decisions to the organization, employees, and customers. Marcus and Johansen notes that for the last ten years Coca-Cola has struggled with ethical crises, with the cause of these crises is the decision that the company has been making so that they sell more and retain its customers.
Decision making Style
The decision-making style is one factor that is making Coca-Cola Company to make a decision that portrays unethical behaviors (Shooshtarian and Amini). At the Coca-Cola Company, decisions are made in a way that every decision are passed by the board members. As such, the board members fail to consider the interest of the company’s stakeholders when passing or identifying new decisions that will give the company a competitive advantage and an improved market share. According to (Indra, Purjittam, Majed, and Mohammed) Coca-Cola values the social initiatives, whereby the company commits itself to the CSR projects with the aim of improving its performance (Governance and Ethics). This is an OB tool, but for Coca-Cola to come up with a clear decision on which project to carry out as a form of CSR, the decisions pass through the board members. On a different study by Ata Elayyan in most of the organization that wants to succeed the decision-making style that they adopt involves the board members, stakeholders, and employees. Therefore, as one issue at Coca-Cola, the company should at least come up with the decision-making style that intends at achieving diverse experience and knowledge from different personalities apart from that of the company’s board members.
Responsibility Distribution
The responsibility of the employees is another factor that is lead to the decision-making process that is characterized by unethical behavior at Coca-Cola. In this situation, Coca-Cola Company gives the board members the responsibility to represent the interest of the company’s stakeholders, employees, and customers. Fred says that according to the management theorist, in some cases decision-making gives an organization unethical behavior if the management does not understand that decision-making is one of the most important activities that the administration carries out within an organization. The researcher continues and says that as decision-making has become an OB tool in the organization, a company should consider group decisions, in which the process will be a responsibility of the employees, management team, and stakeholders. For instance, if Coca-Cola consulted the subordinates about the marketing techniques that lead to that company facing a lawsuit scrutiny and decline in sales, to some extent some of the workers would have come up with ideas that the company would have used to place its product on the market (Indra, Purjittam, Majed, and Mohammed). As such, Coca-Cola Company has five hierarchic levels, with eight operating directors from the company’s divisions (Governance and Ethics). With this form of organization structure, it becomes hard for the company employees to be involved in the decision-making process, and therefore, the directors from the various division in the organization will assume the responsibility of decision-making. In the context of OB, when an organization does not foster employees’ involvement in the decision passing procedure the chances are the directors make the decision that has unethical consequences.
According to the normative theory, an organization should focus on the way it does things and the impact of the decisions that it is implementing (Indra, Purjittam, Majed, and Mohammed). From the 2009 issue that was surrounding Coca-Cola, one can see that the company did not consider the Normative Theory, as it concentrated on reaching out to the people through the misleading advertisement technique. The company should have involved some decisions that would have made its product healthier, instead of focusing on gaining more profit from the customers through advertisement influence. In fact, Coca-Cola Company should have considered that an organization is not judged ethically by how much it gain regarding profit, but the way the company behavior demonstrates sensitivity to the impacts of the decisions that are made (Indra, Purjittam, Majed, and Mohammed). On the other hand, the company behavior through the decision to consider its product as Vitamin Water in 2009 does not show the aspect of honest and dutiful within the OB programs. According to the deontological theory, a company behavior is declared ethical, when the organization makes a decision to gives correct information concerning its products through the marketing programs ((Indra, Purjittam, Majed, and Mohammed). With no doubt, the company suffered sale decline and faced a lawsuit that made the customers wonder about the credibility of Coca-Cola Company in the sale of carbonated beverages. Above all, basing it on the OB perspective, before passing of the decisions that Coca-Cola ought to use in placing its products in the global market, the company should at least involve the ideas of the employees and company stakeholders and not depend on the management alone for effective and ethical decisions.
For Coca-Cola Company to overcome the unethical claim, the company has come up with ideas that show its support to the customers through social responsibility activities (Indra, Purjittam, Majed, and Mohammed). This implies that the company has now identified its problem with the decision-making process, in which it invites the employees to the boardroom, in any situation where amicable decisions are needed. For the company to become ethical in different ways, Coca-Cola has identified to become part of the group of organizations that are involved in the fight of the greenhouse gas that over the years has become environmental challenges.
Conclusion
From the above discussions, one can see that the case study focuses on discussing decision-making and the impact of unethical decisions made by an organization. For the case of Coca-Cola Company, OB is applied in different ways from the way it is structured to the style the company uses to identify and implement decisions. The responsibilities assigned to the managers and employees is another factor that shows the company understands the values OB as a powerful tool that determines its achievements. Apparently, Coca-Cola organizational leaders are concerned more with the internal operation of the organizations, but it is important for the leaders to look at the way their decisions affect the external customers. With the fact that the organization leaders at Coca-Cola are the one who perpetuates the ethical behaviors from the decisions that enterprises make, the managers need to identify that involving employees in the organization is actually the best thing that an organization can do for success.
Recommendations
The company can improve its decision-making activity, or it can make the decision-making process to become ethical, in which the result of the process will not have any unethical impact. At Coca Cola Company, the improvement of decision-making practices can be achieved through regular switch of the tasks that the directors in the company handle. This will enable the directors to come up with creative decisions and suggestions that will enhance that the decision made does not have unethical characteristics. Secondly, to promote OB concerning decision-making, Coca-Cola should have a policy that involves employees voluntarily to give suggestion about the decisions regarding marketing techniques. The act of involving the employees in the decision-making process will give the directors an opportunity even to identify any problem that is about to erupt, especially when it comes to the decisions that relates the aspect of placing its product in the market.
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