HR Restructuring of

Coca-Cola & Dabur

Aditya Kohli B03
Parth Khurana B15
Vigneshwar B29

Shusank Parihar B39

Ajinkya Thorat B51
Mitali Barot B63

WHY WAS IT NEEDED?

CAUSE

4 CEOs replaced within 7 years.

Huge losses and heavy employee attrition
Negative mass media information

IMPACT

Arch rivals: Pepsi making

Write off assets worth $ 405 million
Corruption and Rule Violation

THE COCA-COLA WAY- HR

RESTRUCTURING
Merging of four bottling operations in 1999
Two new companies -Coca Cola India and Coca Cola
Beverages

Plant Incharge became Profit Centre Head

Regions increased from 3 to 6
People driven company
VRS system
Talent development
Salary restructuring and Cutting Expenses

ISSUES DURING RESTRUCTURING

Reports received for wrongdoings in North India operations
Large number of employee resigning due to regionalization
including Senior managers

Violation in discounting terms and the credit policy

Unexplained cancellations and re-appointments of
dealerships

The manager who quit or were sacked claimed the company

to be farcical and the company was already planning to get
rid of them

MAJOR CHANGES AFTER

RESTRUCTURING
Talent development
Inculcate feeling of belongingness in employee
Setting up hierarchy in a proper manner
Standardized the discounting limits and best practices
Launched a major IT initiative

STRENGTHS
The strength of Brand
Position as the largest beverage company
Incomparable promotions
Sponsors of main events
Wide distribution globally
Improved packing and new products
Customers loving coco cola(Brand loyalty)
Large involvement in CSR activities

OPPORTUNITIES
Drinking water issues- high demand for
bottled water
Rise of beverage as style quotient
Ability to promote anything along with.
Potential expansion to many third-tier
countries
Mergers and acquisitions

WEAKNESSES
Diminishing performance in markets
Health issues regarding carbonation
Some promotions presenting negative image
Less diversification-Only in FMCG

THREATS
Strong competition ( from Pepsi)
People becoming more health conscious
Different countries having different
regulations
Demand and trends changing frequently
Inflation, economic slowdown and instability

S
W
O
T

INTRODUCTION TO THE PROBLEM

Family oriented work culture

Higher net working capital

Low return on Net worth

Low operating profit margins.

RESTRUCTURING PLAN
Burmans tacking back seat and appointing a CEO to run Dabur

To concentrate on few businesses

To improve the supply chain and procurement process

To reorganize the appraisal and compensation systems

SOLUTIONS
Outside professionals were appointed
Annual Sales conferences and cash incentives to Junior level sales officers
Performance Appraisals and compensation planning was based on KPAs

AFTER RESTRUCTURING
Board of Directors
Management Committee
CEO

BUSINESS UNIT HEADS

Health Care
Personal Care
Ayurvedic Specialities
Ayurvedic Veterinary
Pharmaceuticals
Oncology
Foods

FUNCTION HEADS

Operations
Supply Chain
Purchase
IT
HR
Packaging Development
R&D
Quality Assurance
Finance & Accounts
Corporate Communications

AFTER EFFECTS

Overall feel good sentiment

Increased Employee efficiency and morale

Increased sales from Rs. 9.14bn in 1998-99 to Rs. 10.37bn in 1999-00

Increased profits by 53%

S
W
O
T

STRENGTHS
Strong brand
Performance Appraisals and
compensation planning was based on
KPAs(Key Performance Areas)
Cash incentives to Junior level sales
officers
Improved morale of employees

OPPORTUNITIES
More competitive environment can be
created
Expansion (merger and acquisition)

WEAKNESSES
Price to Earnings(P/E) Ratio was less
prior to restructuring
Low return on Net worth
Inefficient organization

THREATS
Increasing competition
Increasing bargaining power

THANK YOU!