"globalization is the inexorable integration of market, nation-sate and technologies to a diploma never witnessed before in a way that is permitting individuals, company and region sates to reach round the world farther, faster, deeper, cheaper than previously, and in a way that is enabling the planet into individuals, organization and nation-sate farther, faster, deeper, cheaper than ever before" (Thomas Friedman)
The coca-cola is multi-billion dollars company. The coca-cola company started out building its global network in 1920. At the beginning of the world-war 2, coca cola was bottled in 44 countries and produces almost 400 brands. Today, the coca-cola functions in more than 200 countries.
The benefit of the globalization
Competitive advantages for coca-cola company:
Company is continually trying to increase profits, minimize deficits, and attaining more market talk about. I. e. Competitive edge makes coca-cola stick out from its strong competition such as Pepsi. Coca-Cola employs its center competence Coca Cola's main power in order to achieve competitive benefit and stick out. In order for Coca-Cola have higher requirements than its strong competitors. Coca cola must do something new and unique, which makes that product better than the rest competitors.
Development in transportation, technology and network.
Recently Coca cola improve to its Inventory control system. Coca cola setup electronically keep an eye on inventory levels at supermarkets to ensure that products are always at the suitable level.
Coca cola selling their product direct to the client through direct syndication channel, such as vending machines. Nearly all Coca cola's sale their product through intermediaries, such as hotel, supermarket and store, that allows Coca cola to market its products to a more substantial numbers of customers in less pries.
Development in communication network- potential to communicate easier and rapidly due to new technology.
Because of new Telecommunication technology such as Text message and internet has also allows Coca cola endemic its promotion through different resources. Advertising is too costly and dominant. Coca cola introduce its product via in TV, radio and billboard. Coca cola imagine the statement that the public relationship is highly important to increase a global market value.
Increased competition in home market:
Coca cola enter in new market that time it have to add their product to the customer and it improve quality of product as well as company do cheap because of their product and Company upgraded customer support. As the home company have deal with out international competition. They are simply compelled to raise their specifications and client satisfaction on level in order to survive on the market. And that created competition in home country because of multinational companies.
Lower creation cost in less developed countries:
Coca cola make their product in less expanding countries due to income and salary is very low, raw materials is cheaper and lighter rules from resulted the production cost is leaner.
Liberalization of trade, offering rise to huge increase in investment across nationwide boundary
Free trade checking new opportunities in rising market.
Free trade create an monetary system where the government does not discriminate against transfer or interfere with export and division of labor among countries that lead to specialization better efficiency and higher aggregate development.
Challenges for the coca cola as a result of globalization
Political and instability ( politics risk)
Coca cola also encounters the international politics and take it as an effort. Political expertise is a must for everyone but it becomes all so essential when working at global market. If some ideas were befitting your trade, a big change in ruling federal can bring strong changes in those ideas. Political disarray provides down the economic climate and that can affect your business. In order to avoid guard business from such unhelpful bangs, you will need to make sound political decisions.
Cultural variations :
Coca cola encounters such problems like different countries have different civilizations and they react to things in an alternative manner. It very difficult to create their product in different style and way is too costly for the coca cola.
Different countries have different government policies:
Different countries have different federal policies like taxes system, exchange rate, international regulation and bureaucracy, investment concern and allowances that highly damaged to the coca cola's financial situation.
Hire wage :
Living standard and minimal wages is greater than producing countries is big challenges of the multinational companies.
Every country have different money, if coca cola want begin to business far away they need to change money that is very expenses for the coca cola to exchange money because developed money rate is greater than producing countries.
2) Organization structure of the Coca- Cola Hellenic:
Coca-Cola Hellenic acts around 560 million people in 28 countries. We have been one of the greatest bottlers and sellers with the Coca-Cola Company's products on the globe, and the largest based in European countries.
The coca cola company has geographical organization framework and it used since it allowed unbiased divisions and has set up support functions. The geographical structure is gives more versatility to help deal with its uncertain environment. But, the disadvantage of the geographical is coordination problem with section, higher cost, and communication. The geographical framework divided in separate subunit for every single with their operating group. Each region director is accountable for everyone else in their divisions and are accountable to their mother board of director and table of director report to Coca Cola company's CEO.
The planning process of the coca cola company and their inputs and result of the organization: the coca cola produce only concentrate and syrup and distributers add other ingredient and carbonate normal water and that make a final product of coca cola. The outcome of the coca cola is merely concentrate and the syrup.
The coca cola face many obstacles resulted of globalization, different region has different demand, style and own developments. Consumer in some market is becoming over mindful resulted of coca cola have to make diet and low calories from fat drinks. Because of the global market of the coca cola many problems and opportunity occur like coca cola company face social and political dissimilarities of every region. Different countries have different federal government rules and rules. The coca cola company uses the law of every different country that this operates like that. Corporate responsibility in the coca cola company is incredibly formal. The code of conduct of business rigidly enforces the code of do is very expensive and violated, staff will be disciplined every worker appointed is trained on the code.
The coca cola company needs to in a position to meet every demand of its customer in resulted of the coca cola has two operating group called bottling group and corporate. There's also group divided by different region like European countries, united sate of America, Africa, Asia and this divided geographic region.
Certain department of the coca cola company, such as individual resource, finance, functioning department, informational team, public affair office, marketing palling and tactical department are centrally located within the organization division of the business. Most division created by the most notable management. The CEO of the coca cola started to using more technical integrating mechanisms in order to the company extremely low expansion rate. And CEO of the coca cola company used teams of top directors and managers to produce solution of the business's most pressing problem and he take care of in person meeting were presented regularly at the neighborhood levels so worker could remind enlightened responsibility and expert of the organization.
The company has different division for the reason that top managers and employee and they involve some responsibility and specialist of each division like finance section is responsible for correct record of the business's budget its include ensure about the quantity on all financial assertions are correct. The human tool department is accountable for recruitment process and completed the payroll system for company's employees. Marketing division done main role in the coca cola Hellenic. Marketing office constantly trying to find out what customer want and company try produce that item. Marketing department produce each and every time new product in the each of the countries it manages in. marketing office attract the customer, it is better department in the business. The strong emphasis on marketing has allowed to coca cola to be one of the most recognized brands name on the globe which give company to benefit over its strong competitive world and provides it more bringing power.
3) THE IMPACT OF BUSINESS ETHICS ON ORGANIZATIONAL PERFORMANCE
Business ethics concerns itself with the choices exercised by the folks in organizations in terms of decisions and actions. Some choices are considered to be good plus some aren't. But there are no standard definitions. Most of the choice depends on the point of view of what's good for the business and from whose viewpoint.
Ethics plays important functions in the business. Bottorff (2004) gives both good and bad examples of what happens when organizations have positive or negative ethics. Low quality ethics are defined here as "harmful organizational performance" productivity is reduced, group dynamics put up with, communication becomes more elusive and complicated and a declining organizational environment is the effect.
Businesses that stand and enforce clear ethical code of conducts and ethical standards generate honest working environment. Business ethics create good reputation that bring more income and trust from clients and devotion from employees. If companies that operate unethically, often are not successful in an extended run, and companies placed on unconstructive reputation and distrust from the clients. Business ethics assist in business world to set-up set ups that are inviting for all members of the equation and support those to consider internationally about the near future.
Business Ethics and employee -
Around the entire world, businesses are applying and making business ethics program to address the legal, sociable responsibility, environmental issues, moral issues they face. The companies can improve their issues in a organized way in their own business performance, contribute to the development of social capital, expand chance of growth in their market. The firms can realize specific business benefits,
Reduced Risk and costs
Strong positions among competitive
Protection from their own employees and agents
Enhance reputation in the market and good will
continued long term growth
International value for enterprises and emerging markets.
The Corporation that glimmer these areas create a weather of superiority for their shareholders, employees, neighborhoods, and donate to the monetary comfort of their countries.
The Coca-Cola company conducts a business ethics program and this program courses a integrity, business do and requiring integrity. All the directors and associates are required to understand and read the business ethics codes and program to check out its principles at work and larger community.
Ethics and Conformity committee are implemented the business ethics code and program. The variety of ethics and compliance training courses run over the worldwide and keep an eye on or audit by the committee. The business ethics training curriculum improve the staff ability, business development, and alert to organization performance for the reason that area. Employee running a business environment tend to be creative and ready to produce a difference to benefit the company. Moral environment at a small business setting attracts better employee facilitates " good will " of the employees which in turn raises the value of the organization, promotes expansion and development.
Ethical business performance draws in more customers. Customers would stay with that organization which support and implement honest program because the customers know what to anticipate in return for what they pay. Ethical approach pays off in a long-term run with acquiring devoted customers.
The ethics and conformity program supports to the suppliers, customers and consumers.
4) advice and polices of commercial governance for the Coca Cola Company:
"CORPORATE GOVERNANCE is the machine by which business firms are controlled and directed. The organization governance specifies the sharing of duties and right to different office in the business, such as, the supervisor, boards, stakeholders and other shareholders, and spells out the guidelines and regulation for making decisions on commercial affairs. it also provides the structure through which the company objectives are set, and how attaining those targets and monitoring performance. "
4. 1) Recommendation of the organization governance in the coca cola company are as follow:
4. 1. 1)The Cadbury committee was create to advise financial aspect: -
The obligations of the director for looking at and confirming on performance to shareholders -
The table of director main responsibility is to appointed to do something on behalf of the shareholders to run daily affairs of the business enterprise.
The directors will maintain an annual general meeting at which the directors provide to shareholders company performance record and its own future programs and the business strategic and also submit themselves for re-election to the table.
The table of the director is ensures the company's prosperity by collectively directing the company's affairs.
Appointment of audit committee:
Audit committee is in charge of company's financial statement and reporting and managing the financial processes with respect to the panel and information of its activities to the plank of directors. Audit committee has specialist to take the correct to set all corporate and business activities for quality financial sound and reporting, honest tendencies and business risk practices.
The auditors are in the accounting field and their main responsibility to verify a company's information ensure that the information are matches up to what was provide. The auditor accountable to check on bookkeeper records, taxes and creditors record in order to determine if any mistake in the record than they have to fix them.
As completed work among person in the countries and identify some typically common elements, which underline good commercial.
The coca cola company has more branches in several countries. The plank of director of the business set public issue and corporate responsibility committee which l estimation political, public and environmental movements, issues and matter which impact to activities of the business's business and the business's performance; and make advice to the Mother board and management related how the business can adapt with these styles. And make good commercial governance.
4. 1. 2) The Greenbury Committee was setup examine directors remuneration and compensation
Disclosure of director's remuneration and compensation:
The Committee shall hold the authorities and ability vested in it by stock option, motivation, limited stock, and other remuneration and payment plans of the business. The Committee have the power to approve, alter or amend all non-equity ideas and collateral plan, and the committee shall recommend adoption of equity programs to the Board.
The Committee shall approve and review payment of corporate office buildings and all older executive at suited schedules. The Committee shall take article of the principle Executive Officer's recommendation and estimate performance of each individual, the Company's efficiency and comparable remuneration and settlement paid to similarly-situated executives in comparable companies.
Appointment of the non exec directors: -
Bringing additional experience and knowledge to the plank.
Warning executive directors about the higher-risk areas moral problem or inappropriate behavior.
Providing assurance to other gatherings as non exec directors can providing self-employed and high level supervision
Example: non executive directors are not allowed to half talk about option in the coca cola company so their remuneration is self-employed of company's performance.
Determine professional remuneration ( as mentioned area)
Appointing and liaising with auditors.
Providing confidential advises to both board and specific directors.
Regulation for the Coca Cola
the oecd main of commercial goverance :
The corporate governance construction should protect and facilitated the exercise of the shareholders protection under the law by region capital by shareholders, companies committee them self to making and investment retain on the capital. The panel of the coca cola company must there for the responsible to shareholders for the use their money
The commercial governance framework should realize their right of the shareholders as set up by law. And encourage dynamic co-operation and stakeholder in creating prosperity, jobs and sustainability potential of financial audio enterprise.
The corporate and business governance should ensure that timely and appropriate disclosure is manufactured on all material matter about the corporation including the financial situation, performance, ownership and governance of the coca cola company.
The corporate and business governance platform should ensure the tactical direction of the coca cola company the effective monitoring of the management by the mother board and the panel accountability to the coca cola company and the shareholders.
Company function 2006
Company can make better use of electric communication for communicating with shareholder.
Directors can file service address on open public record rather than their private home addresses.
The requirement for an businesses and financial review (OFR) is not reinstated alternatively company is encourage the produce a high quality business review.
Nominee shareholder can choose to get information in hard copy form or electronically if indeed they wise to achieve this task.
There will be simpler model articles of association for private company, to echo how company operate.
Shareholder will obtain more timely information.
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