Coca Cola’s Organizational Culture By Virginia Varela
What is Organizational Culture? “Organization culture” is a common perception held by the organization’s members that distinguishes the organization from other organizations, i.e. “personality.” Because organization culture represents common perceptions shared by the organization’s members, though individuals may have different backgrounds or levels in an organization, they will tend to describe in similar terms the organization’s dominant culture shared by the majority of the organization’s members.
Coca Cola’s Organizational Culture Beginnings In 1886 - Atlanta, GA, pharmacist John Pemberton, searching for a quick cure for headaches creates a caramel- colored liquid formula mixes it with carbonated water at Jacob’s Pharmacy, and invents Coca Cola. Between 1888-1891, Pemberton sold the Coca Cola Company to Atlanta businessman Asa Griggs Candler, a natural born salesman, who transformed Coca-Cola from an invention into a business by distributing clock, urns, calendars, and apothecary scales bearing the Coca Cola brand to his distributors. INTERESTING FACT #1: Until 1905, the soft drink, marketed as a tonic, contained extracts of cocaine as well as the caffeine-rich kola nut, hence the name Coca Cola. INTERESTING FACT #2: John Pemberton was a morphine addict and advertised Coca Cola "temperance drink."
Coca Cola’s Organizational Culture Beginnings 1899 two Chattanooga lawyers, Benjamin F. Thomas and Joseph B. Whitehead, began bottling Coca Cola, and made the drink portable. 1916 - the invention of distinctive contoured bottle was created to assure its consumers they were getting the genuine article from copy-cat beverages.
Coca Cola’s Organizational Culture Beginnings In 1923, Ernest Woodruff purchased the company from Asa Candler. His son Robert Woodruff, was a marketing genius who captivated foreign markets with innovative campaigns: Coca-Cola traveled with the U.S. team to the 1928 Amsterdam Olympics, the logo was emblazoned on racing dog sleds in Canada and the walls of bullfighting arenas in Spain. Woodruff pushed development and distribution of –the six-pack –the open top cooler –and all innovations that made it easier for people to drink Coca-Cola. –When it became clear to the company that housewives would be more inclined to buy six-packs they could open easily at home, women were sent door to door, installing branded Coca-Cola openers.
Coca Cola’s Organizational Culture Beginnings 2 key points of the founders’ philosophy Innovative Spirit: –Pemberton’s idea for a quick fix to the common headache –Robert Woodruff Use of the Olympics as global marketing forum, across the world. Marketing Prowess –Asa Candler aggressive promotion of Coca Cola with commonly used objects used in businesses as marketing materials containing the Coca Cola logo –Invention of immensely recognizable contoured bottle shape –The six-pack –The open top cooler
How is Culture Created? Culture creation occurs 3 ways: 1 - Founders hire and keep only employees who think and feel the same way they do. 2 - They indoctrinate and socialize theses employees to their way of thinking and feeling. 3 - The founder acts as a role model that encourages employees to identify with him and thereby internalize his beliefs, values, and assumptions.
Organizational Culture & Dependent Variables A strong organizational culture is: a “control mechanism that guides and shapes the attitudes and behavior of employees” it enhances organization commitment increases consistency of employee behavior and advantageously promotes low turnover Understanding the importance of the organizational cultural is a means for an organization and its managers to control the dependent variables of: Productivity Absenteeism Turnover Job satisfaction.
Coca Cola’s Functions & Dysfunctions Benefits of understanding organization cultures Eliminating the dysfunctions when the core values are not in agreement with those that will further an organization’s effectiveness. When cultural compatibility inhibits mergers and acquisitions. Paradox when the existing core values become barriers to diversity and when diversity inhibits core values. Diversity Advantages Competitive Advantage - cost, resource acquisition, marketing, creativity, problem solving, and systems flexibility arguments Diversity Disadvantages Conflict in an organization: stereotyping, prejudice, racism, sexism, etc. Must be maintained by both individuals and the organization itself: understanding, empathy, tolerance, and willingness to communicate. Organizational approaches: policies, practices, diversity training, and culture.
Coca Cola’s Sustaining of Organizational Culture Coca Cola Employs Strategic Workplace Programs Diversity programs: Cultural Sensations Program (Learn about different cultures and regions of the world in which they do business with art, music, dance, food and special events.) The Diversity Advisory Council (Representatives from all levels, functions and business units of the organization, develop recommendations for senior management on advancing the company's efforts towards achieving diversity objectives.) Employee Forums in the United States (Connect employees who share similar interests and backgrounds) –The Coca-Cola Company Administrative Professionals –African-American Employee Forum –Asian Pacific American Employee Forum –Latin Employee Forum –Gay & Lesbian Employee Forum –Women's Forum INTERESTING FACT #3: The diversity of an international cast was displayed by Coca’s Cola’s 1971 commercial, who’s song “I’d Like to Buy the World a Coke” became a Top 10 hit.
Coca Cola’s Sustaining of Organizational Culture Employment Practices The selection criteria - Identify and hire individuals who have knowledge, skills, and abilities to perform the jobs successfully, but the decision as to who is hired is significantly influenced by the decision- makers’ judgment of how the candidates will fit into the organization. The result is hiring people who have values is socially consistent with those of the organization. In addition, the selection process provides information to applicants about the organization. Candidates learn about the organization and can choose for themselves whether or not they will fit into the organization. Selection therefore becomes a two-way street.
Coca Cola’s Sustaining of Organizational Culture Strong emphasis on the well being of its employees, including respect and openness to diversity, as seen in Coca Cola’s employee benefits package. Immediately from the date of hire employees, spouses, and dependents, including same-sex domestic partners, are eligible for: Medical, dental, vision, life and disability insurance programs, 401(k), Tuition Aid Program, Flextime, Summer Hours, Adoption Assistance Program, Employee Assistance Program (confidential counseling services) Active Living Program (reimbursement for employees to join a health club), and Matching Gifts Program (employees donate monies to education, arts or cultural institutions, which The Coca-Cola Company matches in part per calendar year.)
Coca Cola’s Sustaining of Organizational Culture Top management behavior (Senior executives’ behavior filter down to the organization) Socialization ( The process that adapts employees to the organization’s culture, helps sustain a strong organizational culture.) Philosophy, company jargon, orientation, and socialization. 3 stages: 1.Pre-arrival (All the learning that occurs before a new member joins the organization) 2.Encounter (When the new employee sees what the organization is really like and confronts the possibility that expectations and reality may diverge) 3.Metamorphosis (When the new employee masters the skills required for his or her job, successfully performs new roles, and makes adjustments to workgroup values and norms. Rituals (Repetitive sequences of activities that express and reinforce the key values of the organization such as chants, songs, etc.), Material Symbols (The company headquarters, company car, corporate jet, sizes of offices, elegance of furnishings, executive perks, etc.) Terminology, acronyms (Descriptions of equipment, key personnel, suppliers, customers, or products that relate to the business) INTERESTING FACT #4: John Pemberton's Bookkeeper, Frank Robinson, had excellent penmanship, and it was he who first scripted "Coca Cola" into the flowing letters which has become the famous logo of today.
Coca Cola’s Sustaining of Organizational Culture Stories are meant to convey what an organization is about, i.e. spirit of innovation, commitment, mistakes, etc. Coca-Cola’s advertising helping create the modern image of Santa Claus with the commission of famous painter Haddon Sundblom. Norman Rockwell created a time-less vision of mid-century American life.
Coca Cola’s Sustaining of Organizational Culture The Story of New Coke April 23, 1985, “Marketing Blunder of the Century," when The Coca-Cola Company changed the formula. Why? The reality is that Coca Cola had a continual 15- year decline in share lead over its chief competitor, Pepsi. The fabled secret formula for Coca-Cola was changed for a formula preferred in taste tests of nearly 200,000 consumers. Consequences? Consumers panicked; protest groups popped up around the country; Songs were written to honor the old taste. Message Sent: Chairman & CEO Roberto Goizueta "…the most significant result of 'new Coke' -- by far, was that it sent an incredibly powerful signal... a signal that we really were ready to do whatever was necessary to build value for the owners of our business." Moral: What these tastes tests didn't show, of course, was the bond consumers felt with their Coca-Cola - something they didn't want anyone, including The Coca-Cola Company, tampering with. The original formula, now called Coca-Cola classic®, returned a few months later. INTERESTING FACT #5: In 1985 Coca Cola was the first soft drink ever in outer-space.
Conclusion Coca Cola’s core values: Innovation Entrepreneurship Respect for diversity Coca has not only managed to create a strong organizational culture, but has successfully imprinted its mark on the minds of its consumers all over the world. It is not only a part of the culture, but has created culture, from the vision of Santa Clause, to a time-less vision of mid- century American life.