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PRESENTED BY:-
BY:-
ROHIT GOEL
(M.B.A. HONS. 2.2)
ROLL NO - 2207
The case looks at the human resource
restructuring exercise taken up coca-
coca-cola
in the late 1990.
1990. The case essentially
brings out the different circumstances
that lead to the restructuring and
repercussions of the exercise.
exercise.
Three major strands have emerged in cokes
mistakes.. It never managed its infrastructure,
mistakes
it never managed its crate of 10 brands , and
it never managed its people
In 1999,
1999, following the merger of Coca
Coca--Colas four
bottling operations, human resources issues
gained significance at the company . Two new
companies Coca-
Coca-Cola India , and Coca- Coca-Cola
beverages were the result of the merger.
merger.
Coca
Coca--Cola also declared a voluntary retirement scheme at the
bottling plants, and this was used by about 1100 employees.
employees.
Coca
Coca--Cola also undertook a cost reduction
drive on the human resources front
front..
Coca
Coca--Cola began benchmarking itself with
other major Indian companies.
companies.
In march 20002000,, Coca-
Coca-Cola received reports of
wrongdoings in its North India operations.
operations. The
company decided to take action after the summer
season . In July 2000,
2000, Coca-
Coca-Cola appointed Arthur
Anderson to inspect the accounts of the North India
operations for a fee of Rs
Rs.. 1 crore
crore.. The team inspected
all offices,godowns,bottling plants and depots of
Jammu, Kanpur, Najibabad, Varanasi, and Jaipur . The
findings revealed that the North Indian team had
violated discounting terms and the credit policy, apart
from being unfair in cash dealings.
dealings. The team was
giving discounts that were five times higher than
those given in the other regions in the country.
country. There
were also unexplained cancellations and
reappointments of dealerships.
dealerships.
In light of the above findings by the Arthur Anderson
team, Coca
Coca--Cola carried out a performance appraisal
exercise for 560 managers.
managers. This lead to resignations in
a mass.
mass. Around 40 managers resigned between July
and November 2000 2000.. Coca-
Coca-Cola also sacked some
employees in its drive to improve the HR functioning.
functioning.
By January 2001 the company had shed 70 managers ,
accounting for 12
12%% of the management.
management.
However, media reports revealed a different side of the
picture altogether.
altogether. The managers who had quit voiced
their thoughts vociferously against Coca-
Coca-Cola , claiming
that the whole performance appraisal exercise was
farcical and that the management had already decided
on the people to get rid of.of. They termed the issue as
Coca--Colas witch hunt in India.
Coca India.
Worried by such adverse comments about the
company , Von Bohr(CEO) decided to take steps
to ensure a smooth relationship with the new
people in the company . He personally met the
finance head in every territory and made the
companys policy clear to them.
them. Coca
Coca--Cola also
standardized the discounting limits and best
practices irrespective of market compulsions
compulsions..
The company launched a major IT initiative as
well, to make the functioning of the entire
organization transparent at the touch of a
button..
button
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In 1999,
1999, after restructuring Coca
Coca--Cola
reported an increase in case volume by 9%,
volumes increased by 14% 14% and market
share increased by 1% after the
regionalization drive.
drive. The companys
improving prospects were further reflected
by the 18%
18% rise in sales in the second
quarter of 2000.
2000.