Organizational Structure and System Acquisition Method of Coca Cola

This report provides a literature review on the organizational structure, operational problems, system acquisition method, and accounting software of Coca Cola. It also identifies the market leaders and their competitive advantages.

Running head: MPA
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Name of the Student
Name of the University
Author Note

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Table of Content
Introduction of the organization.................................................................................................2
Organizational Structure........................................................................................................2
Literature Review.......................................................................................................................3
Part-1..........................................................................................................................................3
Current organizational structure.............................................................................................3
Operational Problems caused by the structure.......................................................................4
System acquisition method....................................................................................................5
Describing and drawing the system flowchart of sales procedures for Coca Cola................6
Identifying any control problems in the system and sorts of fraud possible in the system....7
Part 2:.........................................................................................................................................7
Development and adoption of the accounting software.........................................................7
Current market size................................................................................................................9
Identifying the leaders in the market size and what provides them the competitive advantages
..................................................................................................................................................10
Identifying the current gaps or challenges encountered by the users or customer of accounting
software package......................................................................................................................11
Recommendation..................................................................................................................11
Conclusion................................................................................................................................12
References................................................................................................................................13

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Introduction of the organization
This report provides a detailed literature review revolving around the organizational
structure, its impact on the operation and system acquisition method. The purpose of the
report is to review how organizational structure and operational methods can influence the
overall performance of the business. In order to conduct the review with real-world
evidences, the report include Coca Cola, which is soft drink and beverage items
manufacturer. The firm was established in 1886 but now has become a global leader in non-
alcoholic beverage industry. Coca Cola employed 92,800 employees in 200 nations.
However, the current operational scenario indicate that net revenue of Coca Cola has declined
by 20% for the first quarter as well as 15% for the full year (coca-colaglobal.com).
Nonetheless, the recent data also indicates that Coca Cola delivered an increasing fourth
quarter operating results. It is particularly identified that the organization delivered broad-
based organic revenue growth while the overall revenue may continue to be impacted largely
due to the ongoing refreshing initiatives. The following paragraph defines the organizational
structure of Coca Cola.
Organizational Structure
It has been identified that Coca Cola Company presently employs approximately
94,800 employees. As per the general organizational structure gained from company’
website, there are almost more than five different hierarchical level at the corporate level.
The head of the Canadian division report to the president as well as COO of the North
America Group. The president reports to the CFO, who further reports to the general level.
Because of its tall structure, Coca Cola has experienced communication issues. One of the
major problem found through a survey conducted by Irefin et al. (pp. 33-41), is the people
and the organization lacked a clear goals. In this context, Crifo et al. (pp. 405-416)

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commented that tall hierarchies also remains as motivation problem and due to which the
organization is seeking to get employees more engaged.
Figure 1: Organizational Structure
(Source: Sadraoui et al. pp53-76)
Literature Review
Part-1
Current organizational structure
A brief of the organizational structure has been provided above in the introductory
section and it is found that organization observes a major communication problems such as
lack of understanding about the gaols between the people and the organization. It is also
found that due to tall hierarchies, the organization faces motivational issues. Moodie, Rob, et

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al. (pp. 670-679) conducted analytical report and found that increased usefulness of
company’s intranet may largely increase the communication in the each level of Coca Cola.
This also allows the upper management to appropriately communicate to the front line
employees of the organization.
In addition to this, organization realizes that a divisional structure provides the
company with the opportunity to respond to the changes in its uncertain environment but the
firm allows divisional structure to maintain a range of stability. On the other side, Fletcher et
al. (pp. 967-974) mentioned that multidivisional structure remains beneficial for the
company for a multiple reasons. Hence, Khan et al. (p.5) also mentioned that the division
based on the geographic regions permits particular range of elements of organization’s
operation to be implemented to the individual market. For instance, one advertising campaign
might not be perfect for another market; thereby, the decision regarding particular
advertisement are usually made closer to the individual markets. Thereby, it is worth
mentioning that divisional manager of the organization finds it easy to deal with regular
operation due to multi-divisional structure while the corporate managers have the scope for
long-term planning.
Operational Problems caused by the structure
Alexander et al. (pp.26) mentioned that there are some issues associated with the
organisational structure; for example, if the organization generates a divisional competition,
the coordination may decrease as each division may want to have an advantage over every
entity. On the other side, Gaba, Vibha, and John Joseph (pp.1102-1119) also added that
communication may exist as the information become distorted when it is supposed to travel
throughout the tall hierarchies. Therefore, the author has also mentioned that a
multidivisional matrix structure could be effective for the Coca Cola Company.

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Furthermore, it is estimated that due to tall organizational structure, the employees at
each level may find it difficult to communicate with both upper and lower level of
management. Moreover, as the organization is performing in an internal environment, the
approval of managerial decisions take a lot of time. For example, if a branch in Asian market
needs to implement an action of digital media implementation, it has to wait for the approval
of the decision for the executives and president to respond. Consequently, the overall
operational performance may delay. On the contrary, Wilden, Ralf, et al. (72-96) performed a
research and found that the organization with vast operation and tall structure may find it
difficult to stand the purpose of using technology because, for example, implementing
custom software or any accounting software may high guidance and monitoring. The
employees must have proper knowledge about the software and its use and without training
and guidance from the management, the employees may not be able to use it properly.
However, providing required guidance to all managerial levels employees require time and
strategic planning and this entire process could slow the operation due to tall dimensional
structure.
System acquisition method
The effective system acquisition method that Coca Cola uses is “Enterprise Resource
Planning”, which works as the corporate or enterprise—wide information system which is
highly complex but helps to derive information from the entire organization and even from
the outside of the firm. In addition, Tripodi, and Joe (p.9) conducted research on Coca Cola
and found that ERP system helps to automate the process from all functions and provides a
modular information system. For example, the iconic cans of sugar water is the presentation
of Coca Cola’s executives based on the initiative of global SAP ERP initiative the
organization has embedded with operation. Furthermore, it is also identified that Coca Cola
tends to standardize on the general IT backbone (SAP’s ERP in 2009) but Sheth, Jagdish

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(p166-182) mentioned that there is a much more to go because ERP implementation at all
level of operations require careful attention, knowledge management in the internal
environment, which is difficult under tall organizational structure.
Describing and drawing the system flowchart of sales procedures for Coca Cola
The following system flowchart indicates that how Coca Cola process the sales of its
products items. The diagram particularly indicates that how both traditional and ERP
marketing process have been used to guide and lead the overall sales.
Figure 2: Sales flow chart of Coca Cola
Two way
Communication
Sales distribution process
Sales through Traditional
Marketing
ERP marketing
Sales through Cloud marketing
platform
Distributors
Products to Target Audience

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(Source: Made by Student)
The organization uses a two way communication which party involves in the selling process
will inform or update the parties sitting at the top or at the bottom. On the other side, the
organization also uses the ERP system to process the sales, which certainly increases the
speed of processing the sales. Likewise, the cloud platform works as the storage device which
stores all information of sales and updates provided by the distributor and selling channels
authority. According to (), the most effective part of sales system of Coca Cola is it uses both
traditional and ERP based selling practices. However, Culnan et al. (p.12) argued that two
way communication in the selling process is not effective because the distance between
involved entities are large; thereby, the communication gets delayed in the middle.
Identifying any control problems in the system and sorts of fraud possible in the system
The sale procedures system of Coca Cola certainly has issues related to control of the
operation due to multiple reasons. Firstly, although the ERP is implemented in selling but the
people in the organization are not accustomed to the system and the major flow of operation
is usually done through the traditional channels of selling while the organizations invested a
large amount on the ERP implementation to speed up the selling process. In this context,
Adeyemi, and Salami (p. 135-142) commented that ERP plays a great role in maintaining and
processing the online selling but improper use and lack of attention to ERP with respect to
selling at Coca Cola causes delay in selling process. Moreover, Granlund and Markus (pp. 3-
19) also mentioned that due to two way communication in the selling system, not always the
information each the respective entity on time.

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Part 2:
Development and adoption of the accounting software
As put forward by Jadhav et al. (pp. 1394-1407), accounting software is probably the first
application to come up in organization with the entry of software and hardware. The author
has also mentioned that the reason is the money as the first concern when the organization
think of the control. Wagner et al. (pp. 181-197) conducted a research and found that there
are several type of accounting software such as day care accounting software, pay roll
accounting software –oracle financial but most of the organization prefers payroll accounting
software. Nonetheless, the scholars have mentioned that it is yet difficult for the marketers to
understand which particular accounting software fits for their environment. As put forward
by Jadhav (p.1399), accounting software remains mandatory for organizations of all size as
well as in any sector.
Such software provides a series of benefits to the organization such as faster
accounting, decreased cost and error free-taxation. To be more specific, accounting software
could offer a range of relevant features and organizations usually choose a solution that
include an attractive interface, which becomes easy to use. For example, the organization
Dell uses SaaS, SAP to process their employee payroll and control the distribution network.
On the other side, the large software manufacturer Microsoft uses Financial Force
Accounting software and NetSuit ERP to control and manage its overall operation. Hence,
Granlund and Markus (p.17) mentioned that as the technology is rapidly developing due to
force of dynamic market environment, the organizations are heading towards the adoption of
technology in the form of an application software such as the accounting one. Understanding
this need of application software in accounting and in other areas of operation, Coca Cola
implements two different information system (IS) which is further working under one more
IS- CCBL

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Figure 3: Accounting software
(Source: Granlund and Markus, p.17)
Current market size
According to the recent statistics provided in the annual report, Coca Cola holds a
leading position in the soft drink and beverage industry. Sadraoui et al. (pp. 53-76)
particularly, mentioned that during the period 2000 to 2017, the organization has increased
earnings per share from $0.74 to $2.00, which remains equivalent to a CAGR of 6.9%. The
organization has compounded EPS at a rate of 10.2% which is an increasing rate of earning
growth. Conversely, Khan et al. (pp.122) mentioned that even though the earnings growth is
high, in the field of juice, nectars and still drink, the share of Coca Cola’s largest fruit-based
Mazza decreased 223 basis points to 34.4%. Hence, Gaba, Vibha, and John Joseph (pp. 1102-
1119) argued that Pepsi’s Slice dropped to 4.3 basis points to 9.6% during the period June to
September in 2017.

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Identifying the leaders in the market size and what provides them the competitive
advantages
It has been identified that even though the share of Coca Cola has declined to a certain range
but the organization is still leading the market with 48.6% of market share, while PepsiCo
holds 20.5% and 30.9% is acquired by other brands in the industry such as Nestle, Starbucks
Corp, Diageo and others (Ogola et al. pp. 2234).
Figure: Market Share and the leaders in the beverage industry
(Source: Ogola et al. pp. 2234)
A conducted a research and found that presently in the Asian market such as India,
Bangladesh, and Pakistan Coca Cola is losing market share to the regional rivals such as
Parle, Dabur and ITC because the global soft drink giants launched more fruit-based and
more healthier products to minimize their reliance and sugary sodas. However, the market

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leaders such as PepsiCo have strengthened their market position and PepsiCo gains
competitive advantage by applying cost leadership strategy, in which, to compete against
Coca Cola products, PepsiCo sets low price for the product. This happens because the firm
minimize the operation cost. On the other side, PepsiCo uses broad differentiation as their
second generic competitive strategy. This generic strategy helps the firm to gain competitive
advantages by attracting customers to find the unique features. For example, Lays and potato
chips of PepsiCo are sold and marketed as the healthiest snack item due to low of amount of
saturated fat content. Hence, Pepsi’s strategic objective for the broad differentiation generic
strategy is to innovate products to identify the concern about the health effects.
Identifying the current gaps or challenges encountered by the users or customer of
accounting software package
As argued by Wagner et al. (pp. 181-197) accounting issues are natural amongst against those
who are currently using the accounting software. Granlund and Markus (pp.15) mentioned
that non user-friendliness is probably the major problem.
Lack of security: The user of accounting software tend to face the security threats of their
information become they are usually accessible by foreign entities. Although, the firewalls
are considered to have the capacity to resolve this problem.
Weak reporting service: It is identified that some accounting software solutions remain
powerless in guiding users who want to get their business data out. The users are irritated
with the fact that it is easy to put information in yet impossible to receive them later.
Recommendation
It is identified that most of the users when using accounting software tend to make the
common mistakes such as not baking up the financial record storage. The organizations or its
employees can resolve these issues by following the instruction of using the software. The

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organization needs to provide proper training and development program with respect to the
use of accounting software; this would help them to avoid the common mistakes in the
software. However, the issues of security can be avoided by availing the updated version of
the software.
Conclusion
This report provides a detailed literature review of the organizational structure and its
impact on the operation, employees and other parties. From the review, it has been identified
that due to tall and dimensional organization structure, the organization Coca Cola observed a
significant communication issue which further delaying the decision-making process of the
organisation. In addition, the review of literature also helps to find out that due to lack of
training and development programs, the organisational members often find it difficult to use
accounting software.

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References
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2018, https://www.coca-colaglobal.com/. Accessed 24 Apr 2018.
Adeyemi, S. L., and A. O. Salami. "Inventory management: A tool of optimizing resources in
a manufacturing industry a case study of coca-cola bottling company, Ilorin Plant." Journal
of social Sciences 23.2 (2010): 135-142.
Alexander, Eleanore, Derek Yach, and George A. Mensah. "Major multinational food and
beverage companies and informal sector contributions to global food consumption:
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Crifo, Patricia, Marc-Arthur Diaye, and Sanja Pekovic. "CSR related management practices
and firm performance: An empirical analysis of the quantity–quality trade-off on French
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Culnan, Mary J., Patrick J. McHugh, and Jesus I. Zubillaga. "How large US companies can
use Twitter and other social media to gain business value." MIS Quarterly Executive 9.4
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Fletcher, Jason M., David E. Frisvold, and Nathan Tefft. "The effects of soft drink taxes on
child and adolescent consumption and weight outcomes." Journal of Public
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Gaba, Vibha, and John Joseph. "Corporate structure and performance feedback: Aspirations
and adaptation in M-form firms." Organization Science 24.4 (2013): 1102-1119.
Granlund, Markus. "Extending AIS research to management accounting and control issues: A
research note." International Journal of Accounting Information Systems 12.1 (2011): 3-19.

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Irefin, Peace, and Mohammed Ali Mechanic. "Effect of employee commitment on
organizational performance in Coca Cola Nigeria Limited Maiduguri, Borno state." Journal
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Tripodi, Joe. "Coca cola marketing shifts from impressions to expressions." Harvard
Business Review. Retrieved, August(2013).

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Wagner, Erica L., Jodie Moll, and Sue Newell. "Accounting logics, reconfiguration of ERP
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