Coca Cola’s

Organizational Culture
By Virginia Varela
 What is Organizational Culture?

• “Organization culture” is a common

perception held by the organization’s
members that distinguishes the organization
from other organizations, i.e. “personality.”
• Because organization culture represents common
perceptions shared by the organization’s members,
though individuals may have different backgrounds
or levels in an organization, they will tend to
describe in similar terms the organization’s
dominant culture shared by the majority of the
organization’s members.
 Coca Cola’s Organizational Culture
Beginnings
• In 1886 - Atlanta, GA, pharmacist John Pemberton,
searching for a quick cure for headaches creates a caramel-
colored liquid formula mixes it with carbonated water at
Jacob’s Pharmacy, & invents Coca Cola.

• Between 1888-1891, Pemberton sold the Coca Cola

Company to Atlanta businessman to Asa Griggs
Candler, a natural born salesman, who transformed
Coca-Cola from an invention into a business by
distributing clock, urns, calendars, and apothecary
INTERESTING
scales bearing the Coca Cola brand toFACT #1:
his distributors.

Until 1905, the soft drink,

• 1899 two Chattanooga
INTERESTING FACT
lawyers,
marketed as#2:
Benjamin F.
a tonic,
Thomas and Joseph [Link]
Whitehead,extracts
began bottling
of
Coca Cola, and made the drink
John Pemberton portable.
was a as the
cocaine as well
morphine addict and
caffeine-rich kola nut, hence
advertised
theCoca
nameColaCoca Cola.
• 1916 - the invention of distinctive contoured bottle
"temperance drink."
was created to assure its consumers they were
getting the genuine article from copy-cat beverages.
 Coca Cola’s Organizational Culture
Beginnings
• In 1923, Ernest Woodruff purchased the company
from Asa Candler, his son Robert Woodruff, a
marketing genius who captivated foreign markets
with innovative campaigns: Coca-Cola traveled with
the U.S. team to the 1928 Amsterdam Olympics, the
logo was emblazoned on racing dog sleds in Canada
and the walls of bullfighting arenas in Spain.

• Woodruff pushed development and distribution of

– the six-pack
– the open top cooler
– and all innovations that made it easier for
people to drink Coca-Cola.
– When it became clear to the company that
housewives would be more inclined to buy six-
packs they could open easily at home, women
were sent door to door, installing branded
Coca-Cola openers.
 Coca Cola’s Organizational Culture
Beginnings

2 key points of the founders’ philosophy

Innovative Spirit:
– Pemberton’s idea for a quick fix to the common headache
– Robert Woodruff Use of the Olympics as global marketing forum,
across the world.

Marketing Prowess
– Asa Candler aggressive promotion of Coca Cola with commonly used objects
used in businesses as marketing materials containing the Coca Cola logo
– Invention of immensely recognizable contoured bottle shape
– The six-pack
– The open top cooler
 How is Culture Created?

Culture creation occurs 3 ways:

1 - founders hire and keep only employees who think and feel
the same way they do

2 - they indoctrinate and socialize theses employees to their way

of thinking and feeling

3 - the founder’s own behavior acts as a role model that

encourages employees to identify with them and thereby
internalize their beliefs, values, and assumptions.
 Organizational Culture &
Dependent Variables

A strong organizational culture is:

• a “control mechanism that guides & shapes the attitudes and behavior of
employees
• it enhances organization commitment
• increases consistency of employee behavior
• and advantageously promotes low turnover.

Understanding the importance of the organizational cultural is a means for

an organization and its managers to control the dependent variables of:
• Productivity
• Absenteeism
• Turnover
• Job satisfaction.
 Coca Cola’s Functions &
Dysfunctions
Benefits of understanding organization cultures
• Eliminating the dysfunctions when the core values are not in agreement with
those that will further an organization’s effectiveness.
• When cultural compatibility inhibits mergers and acquisitions.
• Paradox when the existing core values become barriers to diversity and when
diversity inhibits core values.

Diversity Advantages
• Competitive Advantage - cost, resource acquisition, marketing, creativity, problem
solving, and systems flexibility arguments

Diversity Disadvantages
• Conflict in an organization: stereotyping, prejudice, racism, sexism, etc.
• Must be maintained by both individuals and the organization itself : understanding,
empathy, tolerance, and willingness to communicate.
• Organizational approaches: policies, practices, diversity training, and culture.
 Coca Cola’s Sustaining of
Organizational Culture

Coca Cola Employs Strategic Workplace Programs

• INTERESTING
Diversity programs: Cultural Sensations Program FACT cultures
(learn about different #3: and
regions of the world in which they do business with art, music, dance, food and special
events.) The diversity of an
international cast
• was functions
The Diversity Advisory Council (representatives from all levels, displayedandby
business
units of the organization, which develops recommendations for senior Coca’s Cola’s on
management
advancing the company's efforts towards achieving our diversity
1971 objectives.)
commercial,
who’s song
• Employee Forums in the United States (connect “I’demployees
Like to who
Buyshare
thesimilar
Worldinterests
a
and backgrounds) Coke”
– The Coca-Cola Company Administrative Professionals became a Top 10 hit.
– African-American Employee Forum
– Asian Pacific American Employee Forum
– Latin Employee Forum
– Gay & Lesbian Employee Forum
– Women's Forum
 Coca Cola’s Sustaining of
Organizational Culture

Employment Practices

• The selection criteria - identify and hire individuals who have knowledge,
skills, and abilities to perform the jobs successfully, but the decision as to
who is hired is significantly influenced by the decision-makers judgment
of how will the candidates will fit into the organization.

• The result is hiring people who have values is socially consistent with
those of the organization.

• In addition, the selection process provides information to applicants

about the organization. Candidates learn about the organization and can
choose for themselves whether or not they will fit into the organization.
Selection therefore becomes a two-way street.
 Coca Cola’s Sustaining of
Organizational Culture

Strong emphasis on the well being of its employees, including respect and
openness to diversity, as seen in Coca Cola’s employee benefits package.

Immediately from the date of hire employees, spouses, and dependents,

including same-sex domestic partners, are eligible for:

• Medical, dental, vision, life and disability insurance programs, 401(k),

Tuition Aid Program, Flextime, Summer Hours, Adoption Assistance
Program, Employee Assistance Program (confidential counseling
services) Active Living Program (reimbursement for employees to join a
health club), and Matching Gifts Program (employees donate monies to
education, arts or cultural institutions, which The Coca-Cola Company
matches up to $4,000 per calendar year.)
 Coca Cola’s Sustaining of
Organizational Culture
Top management behavior (what they say in how they behave senior executives
establish times that filter down to the organization)
Socialization ( the process that adapts employees to the organization’s culture, helps
sustain a strong organizational culture.)
Philosophy, company jargon, orientation, and socialization.
• 3 stages: INTERESTING FACT #4:
1. pre-arrival (all the learning that occurs before a new member joins the organization)
2. encounter (when the newJohn Pemberton's
employee Bookkeeper,
sees what the organization is really like and
confronts the possibilityFrank Robinson,
that expectations andhad
realityexcellent
may diverge)
3. metamorphosis (whenpenmanship, and it
the new employee was the
masters heskills
whorequired
first for his or her job,
successfully performs new roles, and makes adjustments to workgroup values and
norms.
scripted "Coca Cola" into the
flowing letters which has become
the famous logo of today.
Rituals (repetitive sequences of activities that express and reinforce the key values of the
organization such as chants, songs, etc.),
Material Symbols (the company headquarters, company car, corporate jet, sizes of
offices, elegance of furnishings, executive perks, etc.)
Terminology, acronyms (descriptions of equipment, key personnel, suppliers, customers,
or products that relate to the business)
 Coca Cola’s Sustaining of
Organizational Culture

• Stories are meant to convey what an organization is about, i.e. spirit of

innovation, commitment, mistakes, etc.

Coca-Cola’s advertising helping create the modern image of Santa Claus with
the commission of famous painter Haddon Sundblom.

Norman Rockwell created a time-less vision of mid-century American life.

 Coca Cola’s Sustaining of
Organizational Culture
The Story of New Coke
• April 23, 1985, "marketing blunder of the century," when
The Coca-Cola Company changed the formula.

• Why? Reality is that they had a continual 15-year decline in

share lead over its chief competitor, Pepsi. The fabled secret
formula for Coca-Cola was changed for a formula preferred
in taste tests of nearly 200,000 consumers.

• Consequences? Consumers panicked; protest groups popped

up around the country; Songs were written to honor the old •Moral: What these tastes
taste. INTERESTING FACT #5: tests didn't show, of course,
was the bond consumers felt
• Message Sent: Chairman & CEO Roberto Goizueta "…the with their Coca-Cola -
In 1985 Coca Cola was
most significant result of 'new Coke' -- by far, was that it something they didn't want
the first soft drink ever anyone, including The Coca-
sent an incredibly powerful signal ... a signal that we really
in outer-space.
were ready to do whatever was necessary to build value for Cola Company, tampering
the owners of our business."  with. The original formula,
now called Coca-Cola
classic®, returned a few
months later.
 Conclusion

Coca Cola’s core values:

• Innovation
• Entrepreneurship
• Respect for diversity

• Coca has not only managed to create a strong organizational

culture, but has successfully imprinted its mark on the minds
of its consumers all over the world. It is not only a part of the
culture, but has created culture, from the vision of Santa
Clause, to a time-less vision of mid-century American life.