Coca Colas Corporate Communication Strategy

Coca Colas Corporate Communication Strategy1. INTRODUCTIONCommunication is the medium through which companies both large and small access the vital resources they wishing to operate (van Riel 1995). With prohibited powerful and combine converse systems an disposal exit be unable to develop an appropriate structure for its integrated communion strategy. Given that its integrated communication entails selectively communicating the organizations views and objectives to its stakeholders (whom it relies on for the success of its business), it put up therefore be described as a key management strategy.This report will critically assess Coca Colas Corporate Communication strategy through the evaluation of communication frameworks and models. It will look at the internal structure of Coca-Colas organization and how the club utilises corporate communication strategies to both epitomize their corporate individuation to stakeholders and improve their reputation. It also looks at the corporate ethics and culture of the federation and the tinge of Corporate Communication management on the organisation1.1 Background InformationThe Coca-Cola CompanyCoca-Cola was invented on May 8, 1886, in Atlanta, Georgia by Dr. John Stith Pemberton. It was send-off offered as a fountain beverage by mixing Coca-Cola syrup with carbonated water. Coca-Cola was then patented in 1887, when another Atlanta pharmacist and businessman, Asa stinkpotdler bought the mandate for Coca Cola from inventor John Pemberton for $2,300. It was registered as a trademark in 1893 and by 1895 it was being sold in every state and land in the united States.By the late 1890s, Coca Cola was one of Americas most popular fountain drinks, largely due to Candlers aggressive market of the product. With Asa Candler, straight at the helm, the Coca Cola Company increased syrup sales by over 4000% between 1890 and 1900. In 1899, The Coca-Cola Company began franchised bottling operations in the United State s.Today the Coca-Cola Company operates in much than 200 countries and markets nearly 500 imperfections and 3,000 beverage products. The company employs over 92,400 associates worldwide and has a consumer serving (per day) of nearly 1.6 billion, with a net operating revenue of over $31.9billion (as of December 31, 2008). Throughout the world today, no other product is as immediately recognizable by its brand as Coca-Cola. (www.thecoca-colacompany.com.html, 2009)2. CORPORATE COMMUNICATIONCorporate refers to complete, entire or total entities of the organization, while communication means to im surgical incision, shargon or make common. Therefore, corporate communication can be defined as a total communication of the organization or integrating different messages of organizations under one banner (Christensen et al. 2007).forefront Riel and C. Fombrun (2006, p.25), cite Jacksons (1987) definition of corporate communication as the total communication activity generated by a company to achieve its planned objectives. That total communication represents all the different forms of communication that is occurring within the organization, including marketing, managerial and organizational interaction. An organisation such as Coca-Colas corporate communication strategy plays an important role in aiding stakeholders understanding of the organization and communicating the organizations identity.Corporate communication within an organization is essential for the implementation of strategic objectives, earn brand and reputation and thereby render economic value. It is therefore a set of activities involved in managing and orchestrating all internal and out-of-door communications aimed at creating favourable starting points with stakeholders on whom the companies appear (Fombrun and van Riel 2006).Freemans (1984, p. 46) stakeholder approach defines stakeholders as any group or individual who can affect or is affected by the achievement of the firms objectives. The stak eholders of The Coca-Cola Company (see manakin 3 be small(a)), includeconsumers,customers,suppliers,employees,government and regulators,NGOsThe local communitiesStrong centralized functions with direct connection to the Chief Executive Officer (CEO) is the best way for a company to ensure the success of its corporate communication function. (Argenti, 1998). This was evident in Coca-Cola Company, under the leadership of the former CEO Douglas Ivester whose highly formalized, centralized organizational structure, with clear power structure of authority and a mechanistic management process has helped maintain control and drive aggressive marketing and expansion plans. This management structure was criticized by the external communities, claiming that the companys perspective was too globose and ignored the local communities.Under the direction of the companys new CEO, Coca-Cola began decentralizing some of its activities in order to become more localized. increase horizontal communic ation is now occurring within the organization. Sutherland and Canwell (2004, p.130) define horizontal communication as informal communication between peers or colleagues on the same aim of the organizational structure. Coke immediately began realizing economies of scale and scope, as well as low-cost production from a globalization strategy that enables product design, manufacturing and marketing to be standardized throughout the world.Corporate communication if strategically implemented within an organisation helps build favourable corporate reputation, which in turn is influenced by corporate identity, conduct, symbolism and has an impact on organizational performance (van Riel and Balmer, 1997). According to Argenti (1998) corporate communication model below (Figure 2), an organization communicates to its stakeholders through messages and images, who then react by associating themselves with that transgressicular organization. It affects the perceptions of stakeholders about the organizations prospects and so influences the resources that would be available to them (Fombrun and van Riel, 2006). Image, Identity and Reputation, Crisis solicitude, Community Relations and Corporate Ethics, Employee Relations and Human Resource instruction (HRM) are all essential functions of an organization that depend on useful corporate communication to be successfully implemented.2.1 Image, identity and reputationCorporate identity is the reality and uniqueness of an organization, which is integrally related to its external and internal image and reputation according to Gray and Balmer (1998), and is a means to achieve a hawkish advantage (Schmidt, 1995), while the Image of a company is the reflection of the organizations reality. It is the corporation as seen through the eyes of its stakeholders (Argenti, 1998). Corporate image has 3 belongingssRelational dimension relationship the company has with the government, the local community and its employeesManagement di mension what the corporate goals, decision-making processes, knowledge management and understanding of company objectivesProduct dimension product authorization and support, competitive advantage and promotional distinctiveness.Coca-Colas corporate communication strategy within the company includes conducting stakeholder analysis to understand their individual stakeholders needs and attitudes. This involved a serial of focusing groups with consumers aged 18 and over and with employees of the Coca-Cola Company. It also included interviews with customers, non-governmental organizations and the media. The consistent use of the colours red and white, the lettering and the model-wave over time is an integral part of the companys corporate visual identity and is important to all stakeholder groups.If managed effectively corporate reputation can be a valuable asset that makes an organization more resilient in todays competitive environment. Corporate reputation is influenced by the wa y in which the company projects its image via behaviour, communication and symbolism (Gotsi and Wilson, 2001, p. 30).It is a multi-stakeholder construct that can be used to measure how effective an organizations communication system is (Fombrun and van Riel, 2006). When information that stakeholders need to make a decision about a company is insufficient, they will sometimes turn to the reputation of that company to seal the decision.2.2 Crisis management and cultureAccording to Jones (2000), a good reputation acts as a caramel brown to companies in times of crisis. After over 200 people, including school children reported feeling unwell in 1999 Coca-Cola was forced to issue recall of its soft drinks in countries in Western Europe including Belgium, France, the Netherlands and Luxembourg (Taylor, 2000).Taylor (2000) explained in his case study that a companys public relations and communication strategy should be executed on a global scale. He did this using Hofstedes (1980) theory of cultural dimension, which explained how values are influenced by culture in differing nations. Taylor (2000) proposed that in countries with high uncertainty evasion and high power distance, citizens reacted more strongly to this tainting crisis, by forcing the government to place bans on the sale of Coca-Cola related products, while the governments of countries with low uncertainty avoidance and low power distance did not really react to the crisis.Culture management was also needed to accurately understand the environment they were embarking on. Cultureconsists in those patterns relative to behaviour and the products of human action which may be inherited, that is, passed on from generation to generation independently of the biological genes (Parson, 1949 p. 8).Under the guidance of the new CEO, the company adopted a think local, act local approach to marketing, which highlighted the importance of addressing the cultural needs of customers in the local market. Daft maintained the view that although Coca-Cola is a global brand, customers do not drink Coca-Cola globally. As a result, Coca-Cola has been adopting a localized strategy in marketing, advertising, and public relations by carrying out extensive stakeholder analysis as seen in Figure 3. The company also adopted a risk management approach that includes financial, operational, social, environmental and ethical considerations and are of the view that by identifying these risks and the strength consequences they could have on the business, they can proactively focus on these areas and identify ways to more effectively manage their impact on their operations.2.3 Community relations and corporate ethicsCoca-Cola is now working to become a model citizen by reaching out to local communities and getting involved in civic and harmonic activities. Like reputation, corporate ethics and relationship with the external stakeholders is very important for building a positive image. Coca-Colas social responsibili ty and corporate ethics helps build company integrity. In 1960, Keith Davis suggested that corporate social responsibility refers to business decisions and actions taken for reasons at least partially beyond the firms direct economic or good interest. Stakeholder management is important here as it reconciles the companys objectives with the claims and expectations being made by them of various stakeholder groups.2.4 Employee relations and Human Resource ManagementHuman Resource Management (HRM) is one of the most important forms of management within an organization and effective communication is essential for HRM to be successful. HRM is as defined by Bratton and Gold (1999)that part of the management process that specializes in the management of people in work organizations. HRM emphasizes that employees are critical to achieving sustainable competitive advantage, that human resources practices need to be integrated with the corporate strategy, and that human resource specialists help organizational controllers to meet both efficiency and equity objectives.The Coca-Cola Company links employee (internal) communications and employee relations and believe that they are integral components needed for the success of the organization. Employee Relations, according to Heery and Noon (2001), involves the body of work concerned with maintaining employer-employee relationships that contribute to satisfactory productivity, motivation, and morale. Essentially, Employee Relations is concerned with preventing and resolving problems involving individuals, which arise out of or affect work situations. The employees are the most valued internal stakeholders, as they communicate the product to the companys external stakeholders. Internal Corporate Communication waterfall under the organizational management department, as seen in van Riel (1995) model of integrated corporate communication. It is defined, according to Welch and Jackson (2007) as communication between an organis ations strategic managers and its internal stakeholders, in the case of Coca-Cola, its employees designed to promote commitment to the organisation a sense of belonging to it sentiency of its changing environment and understanding of its evolving aims. The Coca-Cola Company follows a similar structure regarding internal communication as depicted in Welch and Jacksons (2007) model (Figure 2). Within the company, corporate messages relayed directly to employees aid in reinforcing employee commitment towards the boilers suit organizational objectives. On the same take, direct communication between managers and their employees helps create a sense of belonging to the organization. This sense of belonging then motivates employees to promote awareness and understanding of the corporate brand to the external stakeholders.Guest (1990), in his approach to strategic HRM draws on the Harvard model (proposed by Beer et al., 1984), which was associated with the softer side HRM and the Michiga n model (proposed by Fombrun, Tichy and Devanna, 1984), which proposes the hard HRM approach. Hard HRM see human resources as mainly a factor of production, an expense of doing business rather than the only resource capable of routine inanimate factors of production in to wealth. In contrast, soft HRM places an emphasis on human side of things. The soft model focuses on treating employees as valued assets and a source of competitive advantage through their commitment, adaptability and high quality skill and performance (Legge, 1995).The Coca-Cola Company incorporates both hard HRM and soft HRM within their organization reflected in the Choice Model adapted by Analoui (2002, p. 30). This model depicts a more holistic approach to HRM as seen in Figure 5 below.The Input floor of HRM policies and frameworksThis model represents the communication strategy with emphasis on HRM, being used by global organizations like Cola-Cola. It explains how the input stages of HRM policies are formula ted at ranking(prenominal) management levels based on the knowledge and information attained from internal, personal and external sources. These policies are then passed on to the functional and line management level where they are implemented, and finally ends at an output level that affects the individual, organisation and society bringing about, improved performance and effectiveness and quality of work life. This model proves effective as it takes into consideration the culture of the organization, as well as individual and stakeholders perception of the company and can be interpreted on an international floor for a company such as Coca-Cola.CONCLUSIONThis report critically reviews the corporate communication strategies being utilized within the Coca-Cola Company. It reflects on the nature, scope and focus of corporate communication, with emphasis on Human Resource Management and Employee Relations. It describes how corporate communication is essential for corporate image, ide ntity and reputation to be understood by stakeholders. It explained how under the corporate communication strategy, Cola-Cola is able to formulate a more holistic approach to HR management, linking the needs of the internal stakeholders with those of its external stakeholders to achieve a more effective organization. Finally it concludes that company performance and efficiency is linked to the corporate communication strategy of an organization and how successful its implementation is.BibliographyAnaloui, F (2002) The ever-changing Patterns of HRM. UK Ashgate.Argenti, P.A. (1998) Corporate Communication. 2nd ed. Boston, MAIrwin McGraw-Hill.Beer, M. et al. (1984) Managing human assets. New York The Free PressBratton, J. and Gold, J. (1999) Human Resource Management Theory and Practice. 2nd ed. capital of the United Kingdom MacMillan Press.Christensen, L.T., Cornelissen, J.P. and Morsing, M. 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