Question

describe how coca cola leverages equity financing at the international level and the impact this has on organizational decision making.

Answer 1

Coca-Cola is truly global, and its main product is recognized and consumed worldwide. The Company organises and structures itself in a way that reflects that fact. At the same time, the Company looks to meet the particular needs of regional markets sensitively and its structure also needs to reflect that fact.

Coca-Cola has built flexible structures which, wherever possible, encourage teamwork. For example, at Coca-Cola Great Britain any new product development (e.g. Coca-Cola Vanilla) brings together teams of employees with different specialisms.

At such team meetings, marketing specialists clarify the results of their market research and testing, food technologists describe what changes to a product are feasible, financial experts report on the cost implications of change.

Key strategic decisions at The Coca-Cola Company are made by an Executive Committee of 12 Company Officers. This Committee helped to shape the six strategic priorities set out earlier. The Chair of the Executive Committee acts as a figurehead for the Company and chairs the board meetings. He is also the Chief Executive Officer (CEO) and as such he is the senior decision maker. Other executives are responsible either for the major regions (e.g. Africa) or have an important business specialism e.g. the Chief Financial Officer.

As a company whose success rests on its ability to connect with local consumers, it makes sense for The Coca-Cola Company to be organised into a regional structure which combines centralisation and localisation. The Company operates six geographic operating segments - also called Strategic Business Units (SBUs) - as well as the corporate (Head Office) segment.

Each of these regional SBUs is sub-divided into divisions. Take the European union, SBU, for example. The UK fits into the Northwest Europe division.

The Coca-Cola Company has a Separate International Division Structure because its international staffs operate separately and in isolation from head office. It has various divisions in all continents around the world with presidents that control each continental division. Coca-Cola has 5 continental divisions.

• Eurasia & Africa Group
• Europe Group
• Latin America Group
• North America Group
• Pacific Group

Each Continental division has vice presidents that control sub-divisions based on regions or countries. This structure is efficient for Coca-Cola since it is a very large company.

The Coca-Cola Company has built internal and external structures to support the delivery of its business goals. The regional structure is the best way of supporting this growth, allowing attention to local requirements while at the same time building on a clear strategic direction from the centre.

A culture of innovation, teamwork and partnership means that the Company has a firm foundation of relationships and open communication channels on which to build its growth.