EXECUTIVE SUMMARY

This report demonstrates the understanding of International Human Resource

Management strategies which depicts a joint venture between The Coca-Cola Company
and Dabur India Limited. The soft drink giant of the world is ready to invest in Indian
market with new product line of healthy beverages. The joint venture between Coke and
Dabur would result in the manufacturing of various healthy fruit juices which are free
from carbonated elements. The crucial Human Resource strategies and functions which
are to be applied are explained thoroughly.

Initially, in this report the Human Resource Management (HRM) strategies are
explained with the overall introduction of the subject. The joint venture between Coca-
Cola and Dabur India in the new market is addressed in the report. The major
differences between culture and legislation approaches of the host are discussed and
resolved using polycentric methods. The introduction of both the organization is
discussed in brief in order to provide the ground realities of the host and home
countries. The macro environment of the Indian market is explained using the Pestle
analysis. The environmental analysis shows the feasibility and accessibility of Coca-
Cola in the Indian market.

Furthermore, this report depicts HR functions of the joint partners, which will highlight
the following elements of the employees in detail such as recruitment and selection
process, training and development, reward management, performance management
and finally employee involvement.

Finally, the report is concluded with a brief conclusion of International Human Resource
Management strategies and recommendations in order to increase the efficiency of the
joint venture.
INTRODUCTION
Human Resource Management (HRM) can be defined in simple manner in the following
way, the management of employees or people in the organization. In other words the
major responsibility of a Human Resource manager involves staffing, employee benefits
and defining the work in an organization. The process which depicts the analysis and
management of the needs and satisfaction of employees is termed as Human Resource
management (Dessler, 2007). HRM is the most crucial element in an organization and it
is connected to many macro factors such as legislation policies, globalization, cultural
differences, technological advancements and economical changes. The increasing
culture of globalization has led to change in the traditional practices of HRM, in order to
manage new strategies effectively, following ways are utilised in modern era, such as:

The operational efficiency of the organization is increased by the implementation

of new strategies
The cost of the products are revised using the budget management techniques,
which results in value addition to organization
The global competition of organization is managed with the help of sustainable
development methods

The above mentioned measures are the crucial steps taken by the HR managers for the
development of organization in the current global market scenarios. The operational
efficiency, product value addition and global competition are the challenges faced by the
HRM in todays organization in real time. The HRM policies include various aspects of
management position for the management and analysis of human resource or
employees of the company. These aspects involve recruitment of staff, appraisal
system, training and screening of the employees (Dias, 2016).

The major skills required for improving HRM in the organization include three main skills
which are explained below:

Training and development of employees: A proper system must be embedded in the

organization in order to improve the efficiency of the staff members. The training and
development of the employees must be done according to the required organizational
objectives of the company. Training and development improves the quality of the
Human Resource of the company and provides a competitive advantage to them, over
other organization.

Recruiting and hiring skills: The recruitment and hiring are the major processes which
depicts the quality of Human Resource in any organization. HR helps in adding value to
the company, as it is the most effective and unique resource of any organization. The
poor performing employees results in increased cost for an organization and also
results in poor performance of the company.

Motivational skills: Motivational skills are considered to be the best set of practices for
HR managers as it leads to the improvement in the efficiency and productivity of the
existing Human Resource of an organization. It involves reward systems and appraisal
system for the employees to motivate them. The motivational system must be properly
established in an organization to implement target and work based commitments of the
employees. The implementation of motivational system helps employees to develop and
increase their personal working abilities, which finally add up for the benefit of whole
organization (Hellriegel et al., 2009).

The Coca-Cola Company is a Multinational beverage corporation which is popular for

manufacturing of non-alcoholic beverages and syrups. The American multinational
wanted to expand their business operations in South Asian economies. India is an
emerging market in which Coca-Cola wants to establish non-carbonated fruit juices with
the joint venture of Dabur India Limited. Dabur has similar range of product and is an
Indian manufacturer since 1884. The joint venture between the two companies is
carried out by The Coca-Cola Company using FDI (Foreign Direct Investment) under
FEMA Act 1999 (Foreign Exchange Management Act).
COMPANY PROFILE
The Coca-Cola Company is an American multinational beverage company which is
responsible for manufacturing of non-alcoholic carbonated beverages. The company
has its headquarter at Atlanta, Georgia and was founded in 1886. The Annual Report of
company suggests that Coca-Cola sells its products in more than 200 countries. It has a
long list of products ranging from carbonated beverages, fruit drinks, flavoured milk,
sparkling water and many more. Practically Coca-Cola has its presence on all the major
markets of the world except Cuba and North Korea. The Coca-Cola Company wants to
increase their presence in South Asian economies, thus they have decided to go for a
joint venture with an Indian Ayurvedic brand to emerge in non-carbonated and healthy
fruit juices (Stringer, 2015).

Dabur India Limited is undoubtedly largest Ayurvedic medicine and related product
manufacturer. It was founded in 1884 and since then the company has come a long way
in its field. In 2015, Trust Research Advisory had put Dabur on 19 th rank for the most
trusted brand in India. It is one of the leading manufacturers of FMCG products. The
brand image of Dabur depicts purity and healthy nature of its products due to presence
of Ayurvedic medicinal properties of their products. The key product categories involve
health care, skin care, hair care, oral care, home care and food items. The distribution
network of the company is having a wider approach with over 5.3 million retail outlets
covering both the urban and rural markets. Dabur has an international presence of over
120 countries worldwide and the revenue generations from overseas markets are 30
per cent of the total revenue of the company (Reid, Barrington and Brown, 2004).

COUNTRY PROFILE
India is an Asian country with the largest democracy in the world. Also, it is the second
most populous country in the world which includes a large number skilled workforce and
a huge consumer base. Indian economy is one of the fastest growing economies in
world with third largest PPP (Purchasing power parity). Also, it is one of the progressive
industrialised countries with an average growth rate of 7 per cent since last two
decades. The economic crisis and uncertainties of last decade were not able to hinder
the growth rate of this South Asian giant. Irrespective of recession, Indias growth rate is
7.6 per cent and is estimated to become 7.8 per cent by the next two year. According to
Silicon India (2015), the estimated retail sector expansion of Indias market would be of
$1.3 trillion in next three years and the GDP (Gross Domestic Product) will be at 8 per
cent till 2020 (Anand, 2011).

India is considered to be a fertile land and is known for its agriculture and farmers since
centuries. The increasing demand of herbal and healthy products has led to emergence
of a new market, i.e. organic food and beverages. The Coca-Cola Company has a great
opportunity to fulfil the increasing demand of herbal and healthy fruit juices in this
market. India currently offers everything to Coca-Cola with skilled workforce, raw
materials, infrastructure and a growing market. Dabur has an experience of over 130
years in its home country and can offer a huge potential in this joint venture.

The Republic of India has a rich cultural diversity and is experiencing a steep growth in
its GDP since 1991. Since then, the foreign policies and trade directories of the country
has been revolutionised in order to promote the growth of investors around the globe
and invite more foreign companies to its door step. The following PESTLE analysis will
provide detailed understanding of business environment in India (Smith and Mazin,
2004).

PESTLE
POLITICAL FACTORS

The federal form of government shapes the democracy of India. Indian economy is
greatly influenced by the political environment of the country, as governments policies,
political ideologies and interests of the political groups define the laws in the country.
The business environment of India is affected by multilevel of political factors. The
public and private sectors have corruption and taxation system has various levels of
well-developed taxes by the government. So in order to justify and encourage open
business to foreign multi nationals, government has issued variety of programs such as
FDI (Foreign Direct Investment) and Make in India initiative.
ECONOMIC FACTORS

The industrial reform policies of India in year 1991 have been helpful in stabilising the
significant growth of the country. The reductions in licence acquisition, liberal foreign
capital, introduction of FDI and many more led to a sustainable business environment
for home and multi-national companies. In year 2013 the total GDP of India was
registered to of $5.07 trillion which improved significantly in 2014 by 5 per cent. Another
favourable part of India is low labour wages which ultimately reduces the cost of
manufacturing for the companies.

SOCIAL FACTORS

India offers a high literacy rate among its citizens and has the largest number of English
speaking people in the world. The second largest population of the world offers a large
number of vegetarians; this is a potential customer base for the increasing demand of
healthy fruit beverages in the country. More than 70 per cent of the population is
between the ages of 15 to 60, which provide a variety of income distribution among the
citizens of the country. The increase in literacy leads the consumers to opt for healthier
choices of food items; with changing social attributes of the country people are choosing
more healthy products over carbonated soft drinks.

TECHNOLOGICAL FACTORS

Indian IT sector has strong foundations and is considered to be at constant growth since
a long time. From software upgrades, technological advancements and IT development
India offers a strong IT sector support with a large number of highly skilled labours. The
workforce of the country offers valuable input and saves the cost of training expenses
as well.

LEGAL AND ENVIRONMENTAL FACTORS

The legal factors involve corruption, recycling and minimum wage increment factors in
India. The environmental factors involve strict laws for waste control and disposal
system. The growth in population and industrialization of the country leads to degrade
the quality of air and overall environment.
RECRUITMENT AND SELECTION
Recruitment and selection is the crucial part of business as it defines the success of the
business organization. The strategy is supposed to have proactive approach and
systematic manner in order to make recruitment cost effective and efficient for the
company (Beardwell and Claydon, 2007).

RECRUITMENT
Recruitment is defined as the search process for potential Human Resources which
have preferred set of skills, knowledge, enthusiasm and experience which fulfils the
organizations goals and objectives.

The main purpose of recruitment process is to discover the candidates among a wide
pool of applicants, which can provide greatest opportunity to fit in the roles and
responsibilities of an organization.

Recruitment process of The Coca-Cola Company as depicted on their website shows

the following process

Recruitment source:

The Coca-Cola Company can use two major approaches for recruitment process in their
joint venture, such as-

1. Hire an external recruitment agency which can provide effective team members
to the company using a third party recruitment procedure. Coca-Cola can
outsource its recruitment process to an external consultancy and share the
desired skills required by their organization.
2. The internal recruitment process where company can expand themselves in
horizontal and vertical promotional strategy in order to get desired results. In this
process transfer and promotion of employees are held within the company in
order to expand the companys objectives.
Strategy of Recruitment:

The Coca-Cola Company can utilize following recruiting strategies for their joint venture
with Dabur:

1. As Coca-Cola require a large number of ground workers for their initiative,

company can utilise broad scope of recruitment process to get desired results in
less time. The broad scope will be helpful to company in recruiting a large
number of employees with desired set of skills for the floor jobs in organization.
2. For the specific job opportunity which requires high set of skills such as
managers and important job positions, company must use a targeted scope. The
candidates required for major job roles are lower than the ground workers, so a
targeted approach will be used to attract a certain type of candidates with specific
skill sets, experience and competencies (Beardwell, 2004).

SELECTION
Selection comes after the recruitment process where the most appropriate candidates
are identified among the recruited ones. The whole process of selection provides
conformation of the best candidate chosen for an organization. This leads to give
organization an added bonus of effective and efficient Human Resource.

The Coca-Cola Company has a large number of job roles which are open to a vast
number of people such as team leaders, managers, analysts, laboratory managements,
maintenance engineers, brand managers, team trainees, hospitality partners, safety and
environment associated and many more. The company can advertise these
recruitments through a strategic framework of recruitment process over there website.

After short listing the candidates for selection the following process can be utilised:
Rodgers 7 point plan:

1. Physical make-up Health, physique, speech, bearing

2. Attainment Education, training, achievements
3. Intelligence Learning capacity, analytical ability, cognitive ability
4. Special aptitudes Mathematical knowledge, leadership, IT ability etc.
5. Interests Practical, active, social, culture
6. Disposition Mature, self-reliable, committed, influencing, relationships
7. Circumstances Geographical mobility, age, plans, domicile

TRAINING AND DEVELOPMENT

Training and development are the subsystems of any organization which is focused
over the development of the performance of operatives and executives. In other words
training and development is a process in which we try to accelerate the capacities of
existing Human Resource of an organization. it helps in expanding the efficiency and
effectivity of the employees and provide an exceptional competency to an organization
from its contemporaries. Thus, large multinational companies are investing in training
and development of their employees in order to get benefits out of their employees.
Training and development are objectified as single strategy but they are way different in
practical manner. The Community Foundations of Canada suggests that training of
employees is the major liability of an organization which is transferred into asset later
on, but development is considered to be a joint operation of employee as well as the
employer which gives fruitful results (Reeve, 2009).

There are lot importance of training and development such as it helps in the optimum
utilization, skill development, increases productivity, provides zeal of team spirit,
improves quality and safety and finally increase profitability of the Human Resources in
the company. The main reason behind going for training and development is to train
specific job responsibility to the employees, test the new methodology in order to
increase productivity of the firm and to set a benchmark of improvement.
FIGURE: TRAINING AND DEVELOPMENT

[SOURCE: http://www.mbaskool.com/business-concepts/human-resources-hr-
terms/8685-training-and-development.html]

The Coca-Cola Company must implement an effective training program for its
employees in order to get desired results and a successful joint venture in Indian
marketplace. The training program will depict the following issues, that the employees of
company pose the required skill set or not. Coca-Cola has a predefined set of training
programs which can be utilised in this joint venture which can shape their Human
Resource in a better way and provide company a significant boom and head start in
their new venture. Not only the existing members of Coca-cola but training and
development is to be also required by the Indian employees of Dabur as well as the
expatriates of coke. The new employees of Indian background will able to understand
the roles and responsibility of Coca-Cola in an effective way, also the expatriates will
have time to adjust in the new country and grasp the market conditions in better
manner. The Indian employees require training and development for providing job
satisfaction, increase productivity, technical knowledge, minimise errors and inspiration
from MNCs. Training and development is a two-step process where the expatriates will
provide the Indian employees regarding the companys roles, responsibilities and values
while the home company Dabur will provide the expatriates with cultural, working styles
and other shades of the Indian market effectively.
REWARD MANAGEMENT
Reward management can be defined as the analysis and implementation of strategies
which deals with employee benefits, remunerations and compensations. The monetary
and non-monetary payments which are given by the organizations to their employees in
order to show a sense of appreciation of work is called reward management. This is an
important part of HRM strategy where deserving employees are provided with rewards
as a token of respect for their work and commitment towards their company. The reward
system is also utilised to provide a benchmark in an organization, in order to inspire
their own employees. For example, Coca-Cola provides bonus to their employees after
each quarter out of its profits, this bonus motivates its employees to work hard and
generate as much as profit to the company to receive bonuses constantly.

The reward system consist of various benefits including monetary and non-monetary
policies such as cash rewards, salary raise, gifts, promotions, social recognitions, profit
sharing, shares etc. The major classification of reward system is in two types which are
extrinsic and intrinsic rewards. The extrinsic rewards are those which have monetary
benefits for the employees provided by their company. These monetary rewards
involves cash prize, salary hike, bonuses, profit sharing etc. whereas, the intrinsic
rewards are non-monetary rewards or psychological satisfactions which are awarded to
the employees such as social recognition, promotion, employee of the week/month etc.

Coca-Cola has effective reward system where they link performance objectives of the
employees with reward management system. This strategy motivates their employees
to involve in self-development zone and thus provides effective work ability from their
employees. In India also, Coca-Cola must apply the same strategy in order to motivate
their employees and generate higher efficiency among the employees. A set criterion for
rewarding employee will definitely improve the effectivity and efficiency of the
employees. Reward criteria defines the standards of an organization, this would help
the employees to learn about their company more accurately (Saaty, 2006).
Following criteria can be utilised by The Coca-Cola Company:

Grade jump
Designation change
Special assignments including transfers among inter departments
Grade jumps
Financial aspects
Personal development
Career grooming

The above mentioned criteria can be adjusted in three main divisions such as yearly,
monthly and quarterly basis for the different parts of the company.

PERFORMANCE MANAGEMENT
Performance management is the process where an organization looks after its
employees to check the status for their working capacity. The business organization
expects their employees to work towards increasing productivity of the firm.
Performance management is a continuous process which lasts all over the year. This
system involves strategic planning, feedbacks, reviews, discussions and outcomes. The
three step performance management system includes planning, follow-up and
reviewing. Initially planning process depicts the over-all expectations of the company
from their employees by discussing their criteria. Secondly, a follow-up process is used
to check the updates of employees. At last, the employees performance is tested on the
basis of expected goals and objectives of the company (Jeanne, 2012).

Performance management and appraisal is the crucial part of Human Resource

Management in an organization as it shows the negative as well as positives aspects
the employees. This process helps in the elimination of negative traits such as
corruption and deficiency in an organization.

Performance appraisal
Performance appraisal process can be defined as the systematic evaluation of workers
in order to understand their limitations, work ability and future scope for growth. The
performance appraisal can be explained by the following steps:

1. The HR mangers must scale the pay of workers to compare with their plans and
targets.
2. The work factors of workers must be analysed by managers such as
performance indicators.
3. The managers must guide their workers in a positive direction to get effective
results.

The Coca-Cola Company must adopt 360 degree feedback system for performance
appraisal in their joint venture to ensure effectivity. 360 degree feedback provides a
detailed performance of the employees through peers, clients, seniors etc. This is better
than most of the conventional methods of performance appraisal systems and quite
efficient as well. Also, Coca-Cola can implement fast feedback system in order to get a
wide outlook for decision making purposes.

EMPLOYEE INVOLVEMENT
Employee involvement can be explained simply as it depicts the commitment level of
the workers in an organization. Almost, every organization requires committed and
hardworking candidates which show their dedication and commitment towards their
organization. Employee involvement helps in providing increased performance of the
company by utilising the existing skills of the employees. In other words if any company
has a large number employees which are actively engaged in their work, definitely the
effectivity of their organization will increase and result in added bonus to the firm. Thus
companies tend to provide better conditions to their active employees and it forms an
active bond between employer and employees as well (Armstrong, 2009).

Employee involvement involves vigour, dedication and absorption.

 Vigour: Vigour depicts the effective efforts and energy by which employee
performs for their company
Dedication: It relates to the self-motivation and enthusiasm of the employees
Absorption: The efficiency and willingness

The three steps works in a cycle in order to provide extra benefit to an organization,
which leads to high quality returns and customer satisfaction of the company (Richard
and Desi, 2000).

Coca-Cola requires a lot of employee involvement in order to complete its set targets
out of the new joint venture. It is quite difficult to nurture and preserve talented
employees. Thus, in order to get more potential of employee involvement the
recruitment part of the company must be looked effectively. Also, for consistent
performance of the employees in Indian market, Coco-Cola must support and maintain
their quality by providing motivation, support and proper training.

CONCLUSION
At last I want to conclude that The Coca-Cola Company is safe to move forward
towards India for the joint venture with Dabur International. Indian market stats are
positive and show good signs for growth. Also, with an experience of over 100 years in
international market both Coca-Cola and Dabur will gain advantage out of this joint
venture. With the research and data from this report it is clear that the recruitment and
selection is the most important aspect of Human Resource Management in this joint
scheme. At last I want to conclude that it will be advantageous for both home and host
country to apply polycentric approach in HRM.
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