Case Analysis of the Coca-Cola Company: Then and Now

Case Analysis of The Coca-Cola Company: Then and Now

10/17/2017

MBA 545 People and systems in Organizations

City University of Seattle

Introduction

Coca-Cola is one of the worlds most recognized names and has been for over 40 years, listed as one of Fortune Magazine’s Most Admired Companies in 2010 and has made Forbes list at #15: America’s 25 Most Inspiring Companies.  During the late 1990’s and early 2000-time frame, Coca-Cola was known for losing the largest racial discrimination lawsuit in United States history (Ingram et al. v. The Coca-Cola Company) (Wade, 2001).  The plaintiffs claimed that “glass ceiling” and “glass wall” policies kept African-Americans from rising to top positions and in particular departments within the company.  Few African-Americans had advanced to senior levels in the company, compared to the significant representation of African-Americans among all salaried employees. (Wade, 2001) The plaintiffs argued that Coca-Cola failed to prevent and remedy this discrimination. 

Problem Statement

        At a time when the giant beverage manufacturer had been picking up the pieces from a large European recall, Ivestor, the CEO at the time was served with a lawsuit that accused the company of discriminating against black employees.   Coca-Cola denied the allegations of discrimination from merit pay, promotion that were raised by African Americans employees.   Coca-Cola’s denial of the allegation, and seemingly unrelated sudden appointment of Carl H.  Ware the senior most African American executive in the company to co-chair the diversity advisory council, were keys signs that the company was not taking the allegations seriously.

Justification- review info and describe

Looking at the company as it presented in the original structure in 2009, minorities represented 34% of the exempt workforce (The Coca-Cola Company, 2009). The human resource practices were a main area of focus with an inconsistent structure for the job posting and promotional practices.  With the minority representation at only 20% at the management level and over represented at 47% at the lower support levels, it was clear that changes needed to happen. On a positive note there was the highly successful Carl H. Ware, the highest-ranking black executive in the company, he was credited with working through antiapartheid movements with Nelson Mandela in order to clear a path for future coke sales in South Africa. (Harvey & Allard, 2009) Unfortunately, and in true fashion the current CEO at the time, Ivestor; demoted Ware in 1999 seemingly putting the last nail in his own coffin.  On December 5th, 1999 the board of directors intervened to push Ivestor out and hired the 30-year veteran of the company Douglas Daft.  With a vison of a global diverse company he began with a pretty large goal to make the Coca-Cola company one of the most desired employers in the world, finally the direction of the company was looking better.

Alternative course of action

With more than 2000 plaintiffs the suit grew into a major class-action lawsuit, with the claim that Coca-Cola had systematically discriminated against African Americans by paying them lower salaries than others for the same work, passing over them for promotions, and subjecting them to harassment. (Winter 2017) During the settlement, an agreement was established creating a task force to provide independent oversight of Coca-Cola’s compliance for the period of 4 years. The task force was to evaluate the policies and practices, recommending any necessary improvements to those policies and investigate complaints followed by periodic written reports on the progress toward the terms of the Agreement. The Agreement defined the objective of these changes in a summary statement called; The Statement of Principle: “The Coca-Cola Company commits to excel among Fortune 500 Companies in promoting and fostering equal opportunity in compensation, promotion, and career advancement for all employees in all levels and areas of the business, regardless of race, color, gender, religion, age, national origin, or disability, and to promote and foster an environment of inclusion, respect and freedom from retaliation. (Winter 2017) The Company recognizes that diversity is a fundamental and indispensable value and that the Company, its shareholders and all of its employees will benefit by striving to be a premier "gold standard" company on diversity. The Company will set measurable and lawful business goals to achieve these objectives during the next four years.” (Coca-Cola, 2012) The Agreement applies to all non-hourly U.S.-based employees of The Coca-Cola Company.

Evaluate Alternatives

If the company can follow the agreements intent and turn the culture around from the inside.  In order to change the internal culture in the short run it will be challenging but with the policies and programs presented are launched with the support of leadership and employee then it could bring a huge change to Coca-Cola. It’s unfortunate that a poor leader can corrupt an entire company and cause so much heartache but like most cancers, once removed the company can grow and thrive once again.  In the Settlement Agreement, The Coca-Cola Company committed to conduct a thorough review of its human resources systems, promote and foster a diverse environment within the Company, and take necessary action to ensure fairness and equal employee mentorship opportunities.