You are on page 1of 2

coca cola company applied henri fayol principle

1. Apply Henri Fayol s five rules of management to the Coca-Cola case.


Henri Fayol five rules of management can be applied to the Coca-Cola case quite
simply:
Fayol s first rule is foresight. Coca-Cola complete[d] a plan of action for the futur
e (37) by planning to find a leader that could help Coke recapture its previous gr
owth pace and stock value without Goizueta s legendary leadership. (W-7)
Fayol s second rule is organization. Coca-Cola took care of this rule of managemen
t by being very sensitive to local market conditions. (W-7) They used bottlers tha
t were local or one s not entirely owned by the Coca-Cola Company. This allocation
of local bottle companies provide[d] and mobilize[d] resources to implement [Coc
a-Cola s] plan. (37)
The next of Fayol s rules is command. Coke implemented this rule by selecting Doug
las Daft to take over as chairman and CEO in 2000 for Douglas Ivester. After bei
ng appointed CEO, Daft constructed a new executive management team consisting of
just ten persons. This made management of the company more efficient since ther
e were fewer jobs to worry about and fewer resources needed to do these jobs.
The fourth rule of Fayol s model is coordination. Coke had a major problem after i
ntroducing New Coke. They solved this problem by refraining to put out new produ
cts until they were certain that it would prosper. They resisted the temptation
to follow the latest trend and used the motto If it ain t broke, don t fix it. When Co
ca-Cola finally felt ready to put out a new product they introduced Vanilla Coke
and non-carbonated beverages to appeal to a broader range of consumers.
Finally, Fayol s last rule of management was control. To keep the company on track
with the plan, Daft appointed twenty-four division and operations presidents to
make sure the aims of the company were being upheld and attained.

2. Consider the following quote from Coca-Cola s statement on diversity: We embrace


our commitment to diversity in all its forms at The Coca-Cola Company as a core
value. Diversity of race, gender, sexual orientation, ideas, ways of living, cu
ltures and business practices provides the creativity and innovation essential t
o our economic well-being. Equally important is a highly motivated, healthy and
productive workforce that achieves business success through superior execution a
nd superb customer satisfaction.
This quote can be related to the Coke case by the way that Coca-Cola selects its
type of advertisement based on the target location. Another way they embrace th
eir commitment to diversity is by their release of new products such as Vanilla
Coke and non-carbonated beverages to meet the diverse needs of consumers. The qu
ote can be related to the behavioral approaches to management by Daft s decision t
o make the company a more entrepreneurial organization and slimming down on the
number of executive managers.

3. How does Coca-Cola score on the eight attributes of performance excellence?


On the eight attribute of performance excellence, Coca-Cola scores very well. Th
e eight attributes can clearly be seen in the company:
Bias toward action by making a decision to appoint Daft as the new CEO because t
hey feel he will get things done better than Ivester.
Closeness to the customers by using local companies to bottle and distribute Cok
e products so that the community is getting back from the products they purchase
.
Autonomy and entrepreneurship by coming out with new products like Vanilla Coke,
Diet Vanilla Coke, Diet Coke with lemon, and non-carbonated beverages.
Productivity through people by giving responsibility for implementing the compan
y s six strategic priorities to Coca-Cola employees.
Hands-on and value-driven by seeking to reach the status the company had under R
oberto Goizueta.
Sticking to the knitting by not producing new products after the failure of New
Coke and sticking with the original product that got them their success until th
ey were truly ready to release new products.
Simple form and lean staff by Daft cutting his executive management team to just
ten people.
Simultaneous loose-tight properties by broadening their beverages and creative s
ervice while maintaining the same image and standards the company conveys.

4. Do you think Douglas Daft will be successful in regaining the growth and valu
e experienced under Roberto Goizueta?
I do not think Douglas Daft will be successful in regaining the growth and value
experienced under Roberto Goizueta because there is so much more competition to
day among carbonated beverages and Pepsi is coming up in status. Another factor
is the fact that people are becoming healthier and drinking less carbonated drin
ks and switching to a healthier choice in water and sports drinks like Gatorade.

You might also like