Final Group portfolio

Organizational Design
6/25/2013 Hogeschool Rotterdam

Authors:
Lisette ten Have Amy Sarr Billy Weststraate 0839678 0842438 0837330

Table of content
Introduction Decision and politics Decision making process Main ethical issues in the soft drink industry Decision making style Organization and culture Organisation Design Responsibility and decision making centres Organisation culture Process Management Graph Process Management The Coca Cola production process flow What have we learned from process management Work plan Start-up division Decision and politics report Organization and Culture report Process Management report Activity logs Of Amy Sarr Of Billy Westraate Of Lisette ten Have Peer assesments Of Amy Sarr Of Billy Weststraate Of Lisette ten Have Conclusion Bibliography Page 2 Page 3 Page 3 Page 5 Page 6 Page 7 Page 7 Page 7 Page 8 Page 9 Page 10 Page 10 Page 11 Page 12 Page 12 Page 12 Page 12 Page 13 Page 14 Page 14 Page 14 Page 14 Page 15 Page 15 Page 15 Page 15 Page 16 Page 17

Introduction
The object of this assignment, which was part of the subject Organizational Design is to make a report based on the analysis of an organization, by using the theoretical models. In this report you can find the Ethical problem-solving and decision making within Coca Cola company, their organizational structure and organizational culture and further the process management. In 1886 developed Mr. Pemberton, a pharmacistst, the syrop which is today known as Coca Cola. He did not live long enough to see and experience the huge success of his drink, he died a few years after his invention. In 1889 bought by Mr. Chandler the recipe, incorporated it three years later and named it after the drink; Coca Cola. Its headquarters is located in Atlanta, where it still is. (heritage) Today is the Coca Cola Company the best-known beverage retailer, manufacturer and marketer of non-alcoholic beverage concentrates and syrup. The company sells its 500 brands worldwide, operates in about 200 countries and sell 1.6 billion servings a day. (heritage)

We hope you will enjoy reading it, feel free to contact us if you have any questions.

Kind regards, Amy Sarr Billy Westraate Lisette ten Have .

Decision and Politics

Decision Making proces
The Coca-Cola Company makes the majority of its decisions based on the incremental approach. An incremental approach is charactarized by evluating results and taking action based on the results, and everlasting circle. (Bloisi) Visually it looks like the picture placed below on this page. (AgiTools) An important indicator that the Coca Cola Company uses this approach is that it analyses every year the results of the previous year and then make slight changes in the operations to improve the outcomes for next year. In the past the decisions were made in a centralised setting; in the headquarters in Alanta were the decisions made for all operations. As this turned out to be too bureaucratic and time-consuming, the company decided to change this centraliced setting toward a decentralised setting. (UKessays) A Decentralized structure is charactarised by that there is more than one powercentre and that the powercentres are delegated further down the hierarchy, away from the headquarters, while staying closely in touch. (Ukessays) Within the Coca Cola Company has this approach led to a separation by region, and as the majority of the companys problems are geographically based, this approach turned out to be a huge success. Each region has different regulations, different consumer needs, and different problems to deal with. Problems can be solved quickly and effectively due to this structure. (scribd) Some functions remained centralised, such as marketing and finance. This allows the company to formulate and communicate one global message, but also allow that message to be tailored at the local level. This way the organization can quickly respond to changing market demand, and higherlevel management can focus more on long-term planning. (scribd)

Main ethical issues in the soft drink industry

The picture on the previous page clearly shows disturbing issues which are specifically addressed to the Coca Cola Company. The whole soft drink industry is facing ethical issues, according to Mr. Hall (founder and chairman of Zennith International) they can be divided in three main topics: health, environment and choice. We have chosen Mr. Hall as a source for this text, as he is a specialist on this topic, while he is not on the payroll by one of the larger soft drink manufacturers. Health Organisations worldwide are increasing consumersawareness with regard to the potential impact on their health when they are consuming soft drinks and energy drinks. One example can be seen in Australia, where the Cancer Council, Diabetes Australia and the heart foundation of Australia have joined forces to encourage healthier choices. (MacDonald) Another example can be seen in New York City, where the major wants to ban the big sizes of cans filled with sugary drinks. (Grynbaum) Due to the change for demand by consumers, a healthier product, the Coca Cola Company changed its product line overtime. The latest developments is the introduction of Coca Cola Zero in 2005 and 5 years later Coca Cola Zero caffeine free. (TheCocaColaCompany) The Coca Cola Company wants to link its brand to health. And example for this is the financial support to the foundation: The Heart Truth by the company under name of Diet Coke. In the article, the company clearly mention that they are worried about health issues, especially with regard to heart diseases, and want to get rid of the taboo which is appearantly on this topic. (Moye)

Environment Todaysconsumers are more aware of the environment an thus of the impact of companies on the environment. People value nowadays, more than ever, a sustainable approach from companies. And will in general start to ask questions with regard to packaging, waste and transportation. According to the company Incpen, 43% of the British consumers is of the opinion that soft drinks are overpackaged. (Sexton) To produce one PET bottle, 7 liter of water is being used. So, 3 bottles of water against one bottle of coke. About 60.5% of the water is wasted by the Coca Cola Company, against 39.5% of used water. Which means that 176 million liter water is wasted, an enormous number. (HiddenFace) The Coca Cola Company is well aware of the negative impact on its reputation, and makes promises to improve the current situation. Every year the company is publishing a sustainability report on their website, available for everyone. The company is promoting recycling programs around the world and promises to be water neutral in 2020. (TheCocaColaCompany)

Choice Mr. Hall is stating at the Global Beverages Congress in 2013 that the soft drink indrustry should have had an answer to social concerns. 5

Firms should had to balanced social needs against the increase in demand for choice. As the Coca Cola company is selling 500 different kind of products around the world, it is indeed a legimite question if the Coca Cola Company is actually having such an ethical approach.

Decision Making style

The decision making style of Coca Cola is decentralised as mentioned before, but is also charactarised by hierarchy. Hierarchical organizations are also known as "tall organizations" and are characterized by a large number of management layers. And organisation tend to be slow by making decisions for the first time when they encounter a particular problem. (Bloisi) According to a general organizational chart obtained from the companys website, there are at least 5 hierarchical levels at the corporate level. (TheCocaColaCompany) For example: the head of the Canadian division reports to the president and COO of the North American Group. That president reports to the CFO, who reports to the Office of the General Counsel. The General Counsel then reports to the CEO. It is fair to assume that there are at least a few more steps in the hierarchy at the local level. Due to its tall structure, the organization has experienced communication problems. This will be shown graphically on the next page.

Organisation and Culture

Organisation Design
The graph on this page shows the organisational structure of the Coca Cola Company, which was described in the previous chapter named as decision and politics. In the graph can be seen that the marketing,- and finance department are centralised, while other departments, as mentioned before, have a decentralized structure based on geographical region. This graph, which can be found under organizational structure in the bibliography, shows that the company is hierarchical. Mentioned in the previous chapter, this is charactarized by the numerous management layers.

Responsbility and decision making centres

The different divisions all have their own management and their own specialism in working in that particular part of the world. Cultures, climate, language and ethics are very different all around the world and in order to do proper business, these aspects have to be taken into consideration. (123helpme) It is important to have management members locally that have loads of experience in the regions, in order to be able to reach out to customers or new employees. (Ukessays, HellenicCocaCola) The Coca Cola Company does this well, they have a clear structure and organogram for every division. The organograms for the separate divisions were real hard to find, but they will not differ from any other international market leader.

The low relevance decisions are made by the management of the divisions or even by the managers of certain departments of the specific divisions; this is an indication of a decentralised structure. This can be different for each division, as each division in another region needs a different approach. (123helpme) Thus minor decisions are made by the divisions themselves. Regularly, the management of the divisions and the coca cola board of directors contact one another to monitor changes and discuss future actions. (Ukessays)This is another indication of the incremental approach. Even though the majority of the organization has a decentralized structure, it is obvious that the president and the board of directors still have the biggest veto. The only decisions made by the president of overall board of directors is e.g. to enter new markets, or design a new product line. These decisions then mostly are integrated in all the coca cola divisions, making it also slightly centralised.

Organization Culture
According to TheCoca-colacompany.com. The Coca Cola inclusive culture is defined by seven core values: leadership, passion, integrity, collaboration, diversity, quality, and accountability. The culture of Coca Cola organization is mission driven; focused on refreshing the mind; inspiring optimism and making a difference. (theCocaColaCompany) Mission the Coca Cola Company its mission is to refresh the world; to inspire moments of optimism and happiness and to create value and make a difference. Vision The Coca cola company vision is giving people great place to work where people are inspired to be the best they can be, bring to the world a portfolio of quality beverage brands that anticipate and satisfy people's desires and needs. Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring value. (TheCoca-colacompany.com.) Most companies do take care of their employees, think of trainings, promotions or financial rewards, as does the Coca Cola Company. This is also one of the ways how the Coca Cola Company is attracting and retaining new employees, by taking tests and a personal interview before they get hired, by encouraging them to develop an innovatove and creative approach of doing business etcetera. (en.coca-colahellenic.hr)

Production process

2 1

Source: http://processflowsheets.blogs

Input 3 Empty Bottle 2L Water (3 Bottles) Water (washing) Liquid sugar (42 blocks) Syrop Flavor concentrate

Output

1x Coca cola bottle 2L

Process Management
The Coca-cola production process flow
The figure on the previous page gives a glance in the general production process of one bottle of two litres of Coca Cola. This overview excludes currently a location and a responsible person for each activity. Each step will be motivated and clearly described. The number 1, 2 and 3 are representing three production lines, by which Coca Cola is made of. The next paragraphs are describing these production lines. Production line 1 Among this production line, the following phases are being passed: tank car, pump 1, liquid sugar and pump 2. The National Soft Drink Association provided quality guidelines for the soft drink industry. These guidelines need to be followed in order to prevent spoilage of a product; when it does not reach the demanded quality, the product will be thrown away. The ingredients need to be of a certain quality and the machines used need to reach certain requirements. All tanks and pumps are for example being sterilized and are regularly tested on their performance. (Avizienis) About 7 to maximum 12% of a soft drink contain sugar, an important ingredient which has the characteristic to sweeten the drink, besides balancing the flavour concentrates and acids. (Avizienis) The sugar, which is meeting the quality standards of the NSDA, is hermetically implemented into the process. This is to prevent any external input. For micro biological reasons, the sugar gets heated up to 850 degrees Celsius, in order to make sure any external input has no chance. (Avizienis) The sugar get mixed part by part, via the so-called elevators certain amounts are being added to the bigger amount to get heated up. This temperature makes the sugar liquid and will be cooled down to a level of about 40 degrees Celsius before it gets stored. This process will last for an hour; the next step is to mix the sugar with the mixture of flavour concentrates and water. (ProcessFlowsheet) Production line 2 The different ingredients are carefully being prepared for implementation into the drink. The water is being filtered and sterilized, as the drink contains 94% water; it is of major importance that the quality is high and constant. The water, the flavour concentrates and the citric acid are being combined and with the liquid sugar carefully mixed. during the this process there arise an impurity water which will be removed through a process of coagulation, filtration, and chlorination, after this water will be purified and sterilize. After the mixture ( sugar and different ingredient) are filtered and cooled. Raw material will be pump into the concentrate preparing vessel. From there the production flow direct into the mixing and storing vessel (Soft drinks production process flow chart) after all this mixture are stirred and mixing vessel you will obtain a syrup and CO2 will be sparger.

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After mixing the mixture of flavour concentrates with the liquid sugar, syrop (with the secret ingredients) and sparger, with added carbon dioxide. The syrup will give the characteristic taste to the drink and the carbon dioxide will add the sparkle to the drink. The temperature of the mixture needs to be carefully checked and maintained when the carbon dioxide get added to the drink. In order to have the right mixture, the drink will be mixed for another 15 minutes in the last mixer. After the added carbon dioxide, the temperature needs to be lowered to 15 degrees Celsius, in order to be able to put into the bottles which are provided by production line 3. Production line 3 As can be seen in the graph on page 1, production line 3 deals with the input of bottles into the last part of the production chain. The wash water tank clearly provides water to wash the bottles which are about to get filled with Coca Cola. The process is going fast and smoothly, the bottles get washed, dried and a label is being put on before it is heading towards the production line of the product itself. It is of major importance that the mixture gets cooled even further down to 15 degrees Celsius, as otherwise the bottles will condense and the labels will thus get loose. (Avizienis)

What have we learned from process management

Amy: I find that the production process of Coca Cola is quite complicated but it is not a long process. The company uses the qualities standers guidelines in order to produce a good and high quality product. Like they uses the National Soft Drink Association quality guidelines in order to prevent spoilage of a product. I learned that Coca Cola uses heated sugar during the production process up to 850 degrees Celsius, in order to make sure any external input has no chance. During this process The company uses many different ingredient and uses different stages to obtain the syrup and after thy added the carbon dioxide in to the mixture , the temperature needs to be lowered to 15 degrees Celsius, in order to be able to put into the bottles which are provided by production line 3. And Coca Cola produce in an sustainable way, because the impurity water which will be removed through a process of coagulation, filtration, and chlorination, after this water will be purified and sterilize for reuse Lisette: I never realized that a soft drink contained that amount of sugar and water, I thought it was real interesting to read how the production process goes Billy: after analyzing and building the flow chart of the coca cola production process, I can truly say I will decrease my soft drink consumption to a minimum. For the organizational aspect, I have learned the most of designing the flow chart that contained multiple product lines. I would love to see the production process in the factory.

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Workplan
Activity Name of the organization and the main channels of access Work-plan listing the activities your group will conduct over the next 7 weeks. Name the team member that is responsible for each activity Who is responsible Amy Lisette Lisette Date May 15, 2013 May 16, 2013 May 16, 2013

Decision & Politics report on Coca Cola met 1500 woorden Week 2+ 3: Ethical problem-solving and decision making Prepare a report on the organisation of your choice covering the following subjects: Activity Describe the organisational decision making process considering the types of decisions that are made and the level in the organisation where these decisions are made, the organisational approaches to gather information. Evaluating alternative solutions and implementation the final decision Describe the main ethical issues that are part of the industry of your choice and to what extent do they play a role in the organisation of your choice What is the decision style applied in your organisation Provide background information? Improve report according to feedback teacher Who is responsible Amy Date May 22, 2013

Lisette

May 22, 2013

Amy Lisette

May 22, 2013 June 25, 2013

Organisation and culture report (1000 words) Week 4 + 5: Organisational structure and organisational culture. Provide the organisational structure in an organogram and analyse it based on the following topics. Activity Is the organisation designed by function, by geography, by product line or by customer/market Does this organogram provide you with insight who is responsible for what and where decision centres are situated Describe the organisational culture by using the rational and expressive elements as mentioned in the table at page 761 Improve report according to feedback teacher Process management report (1,500 words) Who is responsible Lisette Billy Date May 29, 2013 May 29, 2013

Amy

May 29, 2013

Lisette

June 25, 2013

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Week 6+7: Process Management. Assignment: Business Process Mapping Activity Map of a self-chosen process (A3 format) (use different colours and forms for the various elements of your process such as inputs, outputs, activities and who is involved) Introduction (what do you want to achieve) be as specific as possible about all actions you need to take into account Evaluation (what have you learnt from this exercize) Improve report according to feedback teacher Who is responsible Billy Date June 20, 2013

Billy Amy + Lisette Billy Nvt no feedback

June 20, 2013 June 20, 2013 June 25, 2013 --

Activity Finalizing report Referencing peer assesments Make the powerpoint for the presentation Preparing presentation

Who is responsible Lisette All of us All of us Amy All of us

Date June 25, 2013 June 25, 2013 June 25, 2013 June 26, 2013 June 26, 2013

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Activity logs
Amy Sarr Date 14-05-2013 19-05-2013 19-052013 6-6-13 20-6-13 22-06 25-06-13 25-06-13 Description activity Name of the organization and the main channels of access The organisational decision The decision style apply in organization Organizational Culture Production line 2 in production process Improved own work according to teacher comment introduction Peerassesment time 1hours 2 hours 2 hours 1h 30mn 1,5h 20-30mn 30mn

Billy Weststraate

Date
07-06-2013 17-06-2013 20-06-2013 25-06-2013

Description activity
Making organogram and explaining decision making process Making flow chart in-class Finished flow chart and production process overview Making peer assessment, adding conclusion and editing some of own work. Defining my lessons learned from this course

time
1,5 hours 1 hours 1,5 hours 2.5 hours

0,5 hours

Lisette ten Have

Date 15-05-2013 16-05-2013 23-05-2013 24-05-2013 07-06- 2013 21-06-2013 21-06-2013 25-06-2013

Description activity Developing of the workplan Revising + finalising work plan Report about ethical issues Finalizing first report Finalizing second resport Description production lines Finalizing third report Finalizing group portfolio

time 30min 30min 3 hours 1 hour 1 hour 2,5 hours 30min 4 hours

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Peer assesments
Individual Peer Ass. Group Member: Lisette Ten Have Evaluation 1 8,8 Evaluation 2 9,2 Total 18 Average Evaluation (ie All Evaluations/4) 9 Individual Peer Ass. Group Member: Billy Weststraate Evaluation 1 7.1 Evaluation 2 7 Total 14,1 Average Evaluation (ie All Evaluations/4) 7,1 Individual Peer Ass. Group Member: Amy Sarr Evaluation 1 Evaluation 2 Total Average Evaluation (ie All Evaluations/4)

8 8 16 8

Total Peer Ass All member Amy Sarr Billy Weststrate Lisette Ten Have Total Average Evaluation (ie All Evaluations/4)

8 7,1 9 24,1 8

Total Peer Ass All members Amy Sarr Billy Weststrate Lisette Ten Have Average Evaluation

8 7,1 9 8

+/- from Average +0,0 -0,9 +1

Total Peer Ass All member Amy Sarr Billy Westrate Lisette Ten Have

Teacher Grade

+/- from Average + 0,0 -0,9 +1

Final Grade

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Conclusion
Being a group full of third year students, this was a course added to our third year classes. This added a little more complexity to the course but nevertheless we managed to finish all the assignments in time and used the feedback from the teacher to improve them. Also the group was backed up with a third member halfway the block which enabled the work to be divided over three instead of two people. As said in the introduction, for this course, we got to analyse the organizational design of a huge company. The organizational structure, the ethical aspect as well as the production process have been analysed thoroughly. Afterwards, the report is made based on the assignments given in the course outline. Coca cola turned out to be a good choice, because there was an abundance of data to be found on the internet making the analysis easier and more accurate. I can say on behalf of the group that we enjoyed the course and that weve learned a lot about the organization of a big company. We hope that you have enjoyed reading our report.

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Bibliography
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Profitable growthand value creationin the soft drink industry. May 23, 2013. Deloitte.com. <http://www.deloitte.com/assets/DcomVenezuela/Local%20Assets/Documents/White%20Paper_Soft%20Drinks(2).pdf> Product Descriptions.May 23, 2013. TheCocaColaCompany. < http://www.cocacolacompany.com/brands/product-descriptions#coca-cola-zero> Sexton, Alex. November 25, 2010. A review of the environmental impact of soft drink packaging. May 23, 2013. < http://www.sodastream.co.uk/gbretail/softdrinksreport.pdf> Soft drinks production process flow chart. (2010) ProcessFlowsheets. <http://processflowsheets.blogspot.nl/2011/08/soft-drinks-production-process-flow.html> The Coca Cola Company" . (2006) 123HelpMe.com. <http://www.123HelpMe.com/view.asp?id=148943> The hidden face behind your favourite drink. May 23, 2013. <http://thumbnails.visually.netdnacdn.com/BehindCocaCola_5172c2c207f1c.png> Workplace Culture (2006) TheCocaColaCompany. < http://www.coca-colacompany.com/ourcompany/diversity/workplace-culture>

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