Roll no 1159 Facts of the case Coca- Cola Four CEOs within 7 years left Coca-Cola.

-Cola. Coca-Cola reporting a huge loss of US $ 52 million in 1999, attributed largely to the heavy investments in India and Japan. Coca-Cola had to write off its assets in India worth US $ 405 million in 2000. In 1999, following the merger of Coca-Cola's four bottling operations, human resources issues gained significance at the company. Coca-Cola had to go in for a massive restructuring exercise focusing on the company's human resources to ensure a smooth acceptance of the merger. Coca-Cola also declared VRS at the bottling plants, which was used by about 1100 employees.

Dabur

This move towards regionalization caused dilution of several central jobs. Decision to turn itself into a people-driven company. Introduced a detailed career planning system. Undertook a cost-reduction drive on the human resources front.

Dabur's restructuring efforts began in April 1997, when the company hired
consultants McKinsey & Co.

McKinsey's three-fold recommendations were: to concentrate on a few businesses; to

improve the supply chain and procurement processes and to reorganize the appraisal and compensation systems.

Burmans' decision to take a back seat. Revamp the organizational structure and appoint a CEO to head the management. performance appraisals more objective Employee friendly initiatives
The restructuring seemed to have been extremely beneficial for both Coca-Cola and Dabur. Analysis of the case

This case basically tells us the two different reason of restructuring and the circumstances which led to this restructuring considering the focal point as HR. Restructuring of Coca-Cola and Dabur The main reason for Coca Cola to restructure was due to huge loss which the company faced and four CEO left within seven years. There was even additional spending and no proper utilization of the resources was done by the company. To overcome this problem restructuring was very important. Dabur did not have any problem like Coca-Cola but wanted to achieve long term objective of making Dabur Indias best FMCG Company by 2004.Dabur had family oriented work culture which changed after the restructuring. Having a business purpose Restructuring is more likely to be successful when managers first understand the fundamental business/strategic problem or opportunity that their company faces.For Coca-Cola it was a problem and Dabur it was a vision of further growth. Knowing When to Pull the Trigger

Basically Coca-Cola and Dabur had pulled the trigger on the right time and due to this they are very successful today.

Changes under which coca-cola went through The first task was to put in place a new organizational structure that vested profit and loss accounting at the area level, by renaming each plant-in-charge as a profit centre head. Initially the country was divided into three regions based on consumer preference but now the country was divided into six regions.

Coca-Cola also declared VRS at the bottling plants, which was used by about 1100 employees.

Coca-Cola took a strategy level decision to turn itself into a people-driven company.

The company introduced a detailed career planning system for over 530 managers in the new setup. Where talent development meetings were held at regional and functional level, and recommendation were made to HR council.

This strategic decision was one of the best decisions taken by coca-cola. This is the way they could decentralise and give employees sense of right in the decision making process. Du to these decision employees will also be less reluctant to accept the change and when the recommendations are implemented it keep the employee motivated and keep them happy because happy employees make happy organization. Coca-Cola also decided that the regional general managers would meet the top management twice a year to identify fast-track people and train them for more responsible positions. Coca-cola is implementing job enlargement. Where the management is trying to identify potential people who have capabilities and wanted to improve and giving them more responsibility. This act as a motivating factor for the employees to perform better as the

employees will feel that their work and talent is recognised and appreciated by the company. Overseas internship program efficient workers.

This gives employees a chance to exploit new opportunity and learn new skills. This will act as reward for the employees and indirectly improve their productivity to work better and achieve goals of the company. Sending flowers and cards to employees on their birthdays

Doing such small things by the company helps the company to retain their employees as the employee is aware that they are recognised by the company and keep them satisfied. Steps taken by coca-cola for reducing their cost. Employees residing in farm house provided by company were ask to shift to less expensive apartment. Providing employees farm house was increasing the companies cost. Shifting the employees was the wise decision taken by the management to reduce the cost. No buying or hiring of new cars and using the available resources properly.

Salaries were also restructured as part of this cost-reduction drive.

Some jobs are such that which should be performance based rather then tenure for e.g. sales. This will help in identifying the potential employees and the company can fire the employees who are not performing according to the given standard and are in turn increasing the cost of the company. Problem faced by Coca-Cola after restructuring Downgrading of many jobs at the center Resignation of junior level and middle level managers including some senior personnel. Wrong Doings in the North India Operations.

Recommendation There should be proper communication in the organization. Communication of important issues should be face to face. Explain why at every stage to make the employees aware of whats going on, why its happening and what might happen and why restructuring is important. Listen to the employees and understand their concern. This is already happening in Coca-Cola but this should continue in order for organization to succeed. Strategy used by Dabur Structure was redesigned to achieve their objective. Day to day Management was handed over to a group of Professional Managers for the first time. Design (type of restructuring) Dabur hired Mckinsey and co for improving their structure. McKinsey's three-fold
recommendations were: to concentrate on a few businesses; to improve the supply chain and procurement processes and to reorganize the appraisal and compensation systems.

Changes under which Dabur went through

Dabur made performance appraisals more objective by including measureable criteria. Concepts such as customer satisfaction, increased sales and reduced costs, cycle-time efficiency, return on investment and shareholder value were all introduced as yardsticks for performance appraisals.

Including all this measures will help to appraise the employee I all the direction. Basically Dabur is following kind 360 degree appraisal. This kind of appraisal helps the employees evaluate better and perform better. Employee friendly initiatives

When the company take friendly initiative in interest of their employee it motivates the employees at first place which increase their productivity. Rewarding employees after achieving their targets are also important to keep them motivated and making them work with same spirit. Performance appraisal and compensation planning were now based on KPAs.

Recommendations

Should introduce employee enlargement and enrichment. Involve employees in decision making process so they feel that they are part of the organization. Increasing senior management visibility by conducting regular meeting explains the strategy vision mission of the company and helping the employees by answering their questions.

Comparative study Coca-Colas problem led to massive restructuring with HR as focal point. Many changes were implemented. The organization was made people driven organization where peoples view point and recommendation was taken into consideration. Basically the organization was decentralised where people were involved in management decisions. Many other changes were implemented like there was strict evaluation and those who were not performing up to the mark were eliminated from

the organization. This basically reduced cost, the intangible cost which occurred. There was Proper utilization and allocation of resources now. For Coca-Cola it was basically cost cutting strategy but for Dabur it was improvement in process to achieve their goals. For Dabur reason for restructuring was completely different. Dabur restructured itself to achieve better growth and achieve their vision. For coca-cola it was forced changed where they had no option left after the huge losses incurred but to restructure itself again to overcome the problems.