International Human Resource Management Report: Coca-Cola's Strategy

This report provides an in-depth analysis of the international human resource management (IHRM) strategies employed by Coca-Cola. It begins with an executive summary outlining the report's focus on Coca-Cola's global expansion strategies, organizational structure, and workforce management. The report introduces IHRM, emphasizing its role in achieving organizational objectives and competitive advantage, particularly in a global context. It then explores Coca-Cola's organizational structure, identifying its effectiveness in managing its workforce across subsidiaries. The report delves into various HR practices such as recruitment, selection, training, and performance management. It examines Coca-Cola's staffing strategies, including mergers, partnerships, and joint ventures, and their impact on business growth. The report further discusses international reward and compensation programs, including base salaries, allowances, and benefits, and analyzes different approaches such as the going rate and balance sheet approaches. It concludes with recommendations for improving IHRM practices within Coca-Cola, focusing on cultural awareness and compensation strategies. The report also includes a detailed discussion on expatriate management, including expatriate preparation and development programs, compensation, and strategies to minimize expatriate failure.

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Name of the Student
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Author Note

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Executive Summary
In this report, the International human resource management discusses the strategies of Coca
Cola Company to expand its business abroad. It discusses various strategies such as merging,
partnership, acquiring a firm in global market. The organisational structure and its
effectiveness in managing the workforce is determined. It shows the responsibility of a
manager when a company expands its operations. It also discusses about reward and
compensation programmes and adopting different approaches to international compensation.

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Table of Contents
Introduction................................................................................................................................3
Task 1.........................................................................................................................................3
Task 2.........................................................................................................................................6
International reward and compensation approaches..................................................................7
Expatriates at Coca Cola..........................................................................................................11
Recommendations....................................................................................................................11
Conclusion................................................................................................................................12
Reference..................................................................................................................................13

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Introduction
The international human resource management is the set of defined activities of
human resource management at international level. It aims to meet organisational objectives
and to achieve competitive advantage in national and international level. The IHRM includes
the functions such as selection, recruitment, procuring, training and development, allocating
and performance appraisal at international level (Collings, 2007). It also includes some other
activities such as expatriate management and global skills management. The purpose of
IHRM is to achieve competitive advantage by hiring and improving the skills, productivity
and efficiency of employees.
The report discusses about the international human resource management of Coca-
Cola Company. The strategies that Coca Cola Company delivers for competitive advantage.
The IRHM of Coca- cola plays an important role in achieving the organisation’s goal (Fan,
2013). Those companies whose business become globalise adopt the IRHM. As the
employees are the greatest asset for the organisation, it focuses on the staffing strategy for
recruiting and selecting efficient employees (Festing, 2013). It also manages the international
and culturally diverse workforce; manage their talent and reward and compensation system.
Task 1
a. The Coca Cola Company necessitates for competitive drive which results in
effectiveness of brands, products and services. The IHRM have three effectiveness of
international human resource management. In managing the workforce, the measures
of efficiency, effectiveness and the impact used in the organisation to have better
understanding of implementing the changes (Gannon, 2015). Efficiency is the amount
of resources used by HR programs such as cost of hiring an employee. Effectiveness
is the outcome of the HR activities such as learning and skilling through training.

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Impact is the result of the employee growth and organisational development. The
IHRM manages the employee recruitment, when to hire an employee and which
employee best suits at which position (Horwitz, 2017). It ensures the workers are
well- skilled and knowledgeable. This is prior for the company for the success in
competitive market world. It is to achieve the organisational goal effectively and
efficiently. It is important to stay competitive in the global world and deliver excellent
performance based on productivity, leadership and techniques (Jackson, 2014).
The organisational structure of Coca- Cola Company has separate
international division structure due to its international staffs who operates separately.
It has various divisions across the world, which operate and controlled by presidents
(Mahmood, 2015). For developing an effective workforce, different HR practices
used such as –
 Recruitment and selection- they provide the quality to the organisation. It
directs by identifying, reaching and attracting applicants through pool drive.
Selection is by psychometric assessment techniques to determine candidate’s
psychology and attitude to select the applicant with highest job performance
(Pudelko, 2015).
 Training and development – training effectiveness focuses on two critical
issues; the employee must learn and skill themselves through training. The
organisational analysis determines the training solves the problem or not. It
checks whether organisational resources are sufficient to support training as
training needs time and money and managers monitors (Rees, 2017).
Development is a long-term learning and is a combination of formal and
informal learning activities.

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 Performance management and incentives- the high performance work practice
targets the process of improvement of an employee in doing a particular task.
It includes the process of identifying, measuring and developing the
performance of employees to meet the strategic goal of the organisation
(Reiche, 2016). The incentive motivates to achieve the organisational goal
more effectively.
 Work design and teamwork- work design and teamwork are the HRM
practices, which intend to enhance employee involvement and motivates
(Schuler, 2011).
The company focuses on these activities, as they are the strategic HRM
architecture, which have methodologies and practices to determine issues in the
organisation.
b. International human resource management are the activities, which manages
organisational human resource management at international level. This is to achieve
organisational objective and competitive advantage for international competition
(Scroggins, 2010).
c. International service program group that manages the compensation does the sources
of staffing in Coca Cola Company. The specialist have the responsibility for each
international groups. They focus on local division HR people in order to coordinate
the transfer of the international service people (Strandberg, 2017). It also ensures that
the compensation element are at right place. Recruitment and selection is highly
prioritized to select potential candidates to achieve high productivity.
Sources of staffing such as merging, partnerships, acquiring a firm, opening a
wholly owned subsidiary or joint venture have an impact on business growth. The
coca cola and McDonald are now partners. This partnership has led the company to

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succeed in the global market (Tarique, 2008). They have offered with joint expansion
vision, partners aimed for equal footing and have common vision. Market expansion
of both the company has led to add symmetry to the vision in the global expansion.
Coca cola is expanding its business in different regions, which acts as a base for
McDonald to rise high (Yang, 2015). Product development of coca cola benefits
McDonald and offers with business advocacy on the product. The supply chain
integration creates the unique strategic value for Coca Cola Company. It offers with
unique delivery and production, which makes it competent in the global market. The
advertising and corporate social responsibility of coca cola increased the value of the
company.
Task 2
The key elements of international reward and compensation programme are base salary,
allowances and benefits provided to an employee. The going rate approach based on the local
market rates, with additional benefit where the salary structure in host countries are lower
than home countries (Zhang, 2013). The balance sheet approach is a financial statement
consists of company’s assets, liabilities and owners’ equity on specific date. The balance
sheet approach is a limit audit that examines the accounts referring the balance sheet of the
company. The local plus approach where companies pay their foreign employees according
to the local nationals.
The going rate approach delivers the advantage for the company, as it has equality
with local nationals, simplicity and identification with the host country. The balance sheet
approach provides the international employees with the compensation package, which
benefits the employees with equal cost difference between the international assignment and

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assignment of home country. The balance sheet approach design to protect expatriates from
all cost differences between the host and home country. It provides with advantages of equity
between deferent assignments and between assignees of the same nationality. It facilitates
assignee with re-entry opportunity. It provides with an easy access to communicate with the
employees.
International reward and compensation approaches
a. The international reward and compensation approach of Coca Cola Company states
that-
The compensation philosophy of coca cola informs that coca cola has a global compensation
framework that design to ensure high performing culture in the organisation. It develops the
potentiality of employees through training and development programmes. It focuses on
programs that drives for sustainable growth and increases the values by the employees. It has
a common approach for decision making to ensure benefiting employees with better
compensation policies.
The design of the compensation program establishes a clear connection between
individual rewards. It provides with clear performance report of employees and company’s
overall performance. The pay for performance and behaviour increases the values of the
organisation. The growth of the company depends on the following aspects leadership,
integrity, passion, diversity, equality and collaboration. The design is very simple and
transparent. Coca cola’s compensation committee in conjunction with management evaluates

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the risks and rewards in line with overall compensation philosophy. The key components of
IHRM are base salary, benefits, allowances, and Foreign Service inducement.
The reward management system have two types reward system. They are extrinsic
rewards and intrinsic rewards.
1. The extrinsic rewards segregated into two types-
 The direct compensation are the financial remuneration, which are the followings-
The base salary, bonuses, individual and group incentives, profit sharing,
commission, and stock options.
 The indirect compensation are the employer- purchased services and benefits, which
are the followings-
Childcare, gym, EAP, Pension, leave, car, and superannuation.
2. The intrinsic reward are the non-financial rewards are the followings-
Recognition, first choice such as leave holiday, and receipt of valued things
such as office with window.
The intrinsic rewards provides with job satisfaction, if the work is valued then people also
feels valued. It has deeper effect and more long term. It provides the organisation with best
tools to supply goods. Rewards mainly encourages the employees and helps to recognize
good and quality work of the employee.
b. The cultural awareness training programmes to motivate expatriates in international
assignments adopted by Coca Cola Company. The Coca Cola follows Play to Win
strategic framework based on core values and the four strategic key points are-
 Consumer relevance
 Community trust

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 Customer preference
 Cost leadership
The workforce diversity of Coca cola operates across multitude of cultures and geographies.
The company emphasises on diversity-
 Diversity of race
 Gender
 Sexual orientation
 Ideas
 Ways of living
 Cultures
 Business practices
The company has benefited from the various cultural insights and perspectives of the
societies in which they do business.
Coca cola determined to have a diverse culture, from top to bottom, that benefited from
the perspective of each individual.
The diversity training for employees provides an overview of diversity management
strategy and the implementation with an inclusive approach.
The company offers supplier diversity training by creating a pool of supplies that
include minority and women owned businesses.
Expatriate preparation and development program –
Prior to departure: Orientation Training
 Language
 Culture

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 History
 Local customs
 Living condition
During assignment: Continual Development training
 Expanding skills
 Career planning
 Home- country development
Near completion: Repatriation Orientation training
 Lifestyle
 Workplace
 Employees
Expatriate compensation- the individuals assigned for over- seas operation
have different compensation and benefit program than the regular workers at
their local country.
Coca Cola offers a package for employee containing some of the benefits
mentioned below-
 More salary
 Housing, transportation, telephone
 Insurance and security package
 Yearly ticket to home country
 Transfer the family
 Assist the spouse in finding job in any companies
Expatriate failure

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The Coca Cola has well- organised global staffing approaches. The
business faces a risk of expatriate failure. According to the HR
department of Coca Cola the most striking challenge occurred due to
problems of-
 Technical competence
 Adaptability
 Lack of local acceptance
To eliminate some issues, a higher emphasis on cultural awareness
and intercultural communication training need to adopt.
Expatriates at Coca Cola
 The Coca Cola tries to staff their operations with local personnel on
operational level to perform better in home locations.
 Senior managers should have international exposure at strategic level
 Expatriates are needed by the organisation to-
- Fill the need for a specific set of skills that not only exist at a particular
location
- To improve the skills of employee
 Expatriates are paid according to US benchmark
 It prevents the premature return of expatriates that is the cost of living
allowances approach
 Coca Cola’s expatriates move from one international assignment to other but
also maintains strong connections with their mentors at the Atlanta
headquarter.