The Coca-Cola Company is the world leading beverage organization in manufacturing industry with a history of 126 years, operating

in more than 200 countries worldwide. CocaCola is the worlds most valuable brand in which the company features 15 billion dollars brands that includes Diet Coke, Coca-Cola Zero, Sprite, Fanta, Minute Maid and others (The Coca-Cola Company, 2006-2012). The company is not a single entity as the organizational operations required cooperation with almost 300 bottling partners globally, which is known as the Coca-Cola system (The Coca-Cola Company, 2006-2012). The role of Coca-Cola Company is to manufactures beverage bases, concentrates and syrups and hence sells their manufactured products to bottling operations. The bottling partners are responsible in packaging, merchandising, and distributing the final products to vending partners and also consumers.

The Coca-Cola Company has a divisional structure. The divisional structure consists of a set of autonomous self contained units (Robbins, Barnwell, 2006). Each division is operated by separate management and is a profit centre. Every divisional manager is responsible for all associates in their region and subsequently report to the corporate headquarters.

Headquarter
Atlanta, Georgia

Regions

Eurasia & Africa

Europe

Latin America

North America

Pacific

Bottling Investment & Corporate

Figure 1.1 Regional Structure of the Coca-Cola Company (The Coca-Cola Company, 2006-2012) Spatial dispersion refers to the degree to which the location of an organizations offices, plant and personnel is dispersed (Robbins, Barnwell, 2006). Spatial dispersion in The Coca-Cola Company is high as the operations of the organizations are widely spread geographically to regions as shown in Figure 1.1. These geographic segments are known as

strategic business units (SBUs) in which all of these units must operate accordingly to achieve organizational objectives.

Chairman Board of Governors Vice Chairman and Chief Operating Officer

Executive Vice Presidents

Senior Vice Presidents Vice Presidents Figure 1.0 Hierarchical level in The Coca-Cola Company (Scribd Inc, 2012) Vertical differentiation refers to the number of hierarchical levels between top management and operatives; sometimes referred to as layers of management (Robbins, Barnwell, 2006). According to Figure 1.0, the organization structure is considered tall as there are at least five layers of management in the organization. Tall structure in an organization makes decision making less effective and information are passed from one level to another which is time consuming.

In each region, different departments are formed to help in the daily operation of the organization. There are six functional departments within the company such as Marketing, Finance, Sales, Packaging, Research and Development, and also Administration. The classification of departments is known as horizontal differentiation. Each of the departments carried out different operations according to employees specialized knowledge and skills. Marketing department is responsible for marketing, advertising and promoting the products. Finance departments duty is responsible for financial record keeping whereas packaging department duty is to package the products in an attractive manner to enhance consumer purchase. Besides, Research and Development is responsible for investigate new product

possibilities and product improvement. Sales department requires managing and coordinating selling program. Last but not least, Administration department exists to assist in business operations.

The Coca-Cola Company is high in formalisation as it practices strict Code of Business Conduct within the organization. Code of Business Conduct exists to guide all associates in the organization which define the standardized behaviour of employees as representatives of the organization. In addition, the code addresses staffs responsibilities to the organization, to each other, and to customers, consumers, suppliers and governments. The company offers online training course to all the associates in which ethics and compliance is discussed including Anti-Bribery Policy, Information Protection and Privacy. This is to ensure ongoing commitment to the organization and make sure that the understanding of Code of Business Conduct is reached (The Coca-Cola Company, 2006-2012).

The organizational design of the Coca-Cola Company shows the characteristics the hybrid model which is a combination of mechanistic and organic. Mechanistic structure is defined as hierarchical, bureaucratic, organizational-structure characterized by

centralization of authority, formalization of procedures and practices and specialization of functions (businessdictionary.com, 2012). On the other hand, organic structure is characterized by flatness of organizational structure, low specialization and decentralization.

The decision making in the company is applying both centralization and decentralization approach. In terms of centralization, there is a corporate head office exists in The Coca-Cola Company that guides the company by providing guidelines and support to the regional divisions as well as playing as a role to deliver the overall direction to different divisions.

Delegation of authority gives lower-level management the right to make decisions. Since nineties, Coca-Cola Company emphasizes more on decentralisation managerial style in order to meet the fast changing consumers demands. Some of the operations take place at regional lower level management of the company. Divisional operations made decision making easier and faster which the organization can immediately respond to the changing of market demands. The delegation of decision making authority to lower-level management enables managers to focus more on organization long-term planning.

An example is explained below to show centralization and decentralization decision making in the organization. In year 2002, the corporate level in the company made the decision on the World Cup sponsorship. However, authorities have been delegated to different division associates to allow local divisions to decide on advertising decisions. The heads of each regional division are allowed to customize and design the commercials that best appeal to the local market. The coordination between upper and lower management added values to the organization. The Coca-Cola Company remained its position as World Cup most recognized sponsor with 14 percent brand association in 2002 and 17 percent in 2006 (Ipsos.com, 2006).

It is an appropriate design for The Coca-Cola Company to use. The organization needs to balance between mechanistic and organic systems to achieve the organizational goals effectively and efficiently. It provides clear responsibility and accountability for the performance of every division. Tasks are highly specialized which leads to classification of departments or horizontal differentiation. This will contribute high efficiency and production within the organization. In addition, decentralization gives advantages to the organization to develop competitive advantage in each division according to the regions customers, competitors and others. Adaptability in the local market will boost the sales and helps increase market share. Each divisional manager can report and provide useful information to the head office and ease the long-term planning of the organization.

Overall, the Coca-Cola Company is a successful organization with divisional structure that has characteristics of mechanistic and organic models. The organization is spatially dispersed and operated in several regions. It is high in formalisation; communication and decision-making can be both centralized and decentralized. The Coca-Cola Company should continue using the same managerial style and structure to remain its position as world topranking beverage with largest market share.

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