10pg Case Analysis
Running head: COKE - IVESTER Coke -Ivester: Individual Case Analysis Exam Texas A&M University Central Texas Submitted in l Fulfillment of MGMT 501 - Organizational Behavior Due Dat e- June 28, 2015 Submitted - June 28, 2015 Dr. Barbara W. Altman Spring 2015 COKE - IVESTER 2 Coke -Ivester: Individual Case Analysis Exam Situation Analysis Ivester’s lack of self -awareness, controlling behavior, data -driven leadership style resulted in his untimely, forced resignation from his position as the chairman and CEO of Coca - Cola. As the CEO of Coca -Cola, Ivester was expected to move his subordinates by giving them a sense of purpose or direction, as leaders are expected to. Instead, he acted as a manager by tightly controlling every detail of operations. Ivester’s weight of componen t over style and failure to see the big picture ultimately led to a marketing failure. During his tenure as the COE of Coke, Ivester was results driven. Under his management, Coke’s earning decli ned, the market value was flat, the highest -ranking African -American at the company resigned, and the diplomatic relationship with the bottlers wa s ruined. Additionally, Iveste r was heavily involved in every detail of operations, that he often missed the bottom -line. Prior to his resignation, Ivester was called in by two of Coke’s directors and informed that Coke needed a change and that he was not the man who should be running the company. Although the gentlemen did not come up with ‘the way forward’, Ivester le ft the meeting, having chose flight over fi ght. This speaks volumes about his leadership ability, or lack there of. He could have taken the meeting with the directors as an opportunity to change, grow, and improve. Vision Statement The leading supplier of delicious, superior quality beverages that quenches the thirst of the human race. Purpose Statement To deliver global value to customers by facilitating hope, togetherness, happiness, and inspiration for generations to come. COKE - IVESTER 3 Mission Statement Our superb and proficient family provides beverage drinkers globally superiority , categorically through our proficient team of bottlers and distributors. Organizational Values Doug Ivester was appointed as the CEO of Coca -Cola following the untimely death of his predecessor and mentor, Roberto Goiz ueta, a man who has had a successful tenure as CEO and groome d Ivester for the position through an emphasis on marketing, international relations, interpersonal relations, and public speaking . Ivester did not exemplify all seven of the values that Coca -Cola represented: leadership, collaboration, integrity, accountability, passion, diversity and quality. Cola -Cola was defined leadership as the courage to shape a better future. Ivester was not able to shape a future in which he created value for the company going forward so that the company would experience growth rather than loss. This is apparent in the fact that Coke’s earning declined for two years straight under his leadership. Another o ne of Coke’s values that Ivester did not embody was collaboration. Ivester was unable to maintain political relationships with those companies with which they did business and/or had a role in the facilitation of Coke’s business. Additionally, Ivester ha d a difficult time maintaining relationships with and accepting help from those internal to the company. Coca -Cola did not hold Ivester accountable for his actions until it was too late. From Ivester’s first day, he too a bold, aggressive and progressiv e approach that was viewed as offensive to some other employees and/ or board members; however, it was not addressed until the meeting in which Buffet and Allen informed him that they had lost ability in his leadership. Rather than putting him on probatio n or giving him a course of action going forward, they stated that they had lost confidence in him. This was not something that happened over night, so issues COKE - IVESTER 4 should have been addressed as they arose. Ivester did not value diversity. This was apparent in his actions with Ware, in which he put the senior ranking African - American (senior vice president) in a position to report to his peer. I vester was not living up to Coca Cola’s expectations ; he did not follow Coke’s traditional values. Stakeholder Anal ysis Ivester , as the center of the Stakeholder Analysis, is ineffective because he cannot meet the needs or exceeds the expectations of key stakeholders. The stakeholders are bottlers/distributers customers, Keough, Board of directors (Buffet & Allen), e mployees, and shareholders. Issues arise to the extent that Ivester is not meeting stakeholder expectations. These stakeholders stood to benefit from any success that Ivester brought to the organization during his time leading up to the CEO position. Subs equently, these stakeholders are negatively affected by any failure. Stakeholder Expectations Ivester expects to bring something new to Coca -Cola that will result in more sales, more customers, and the growth of the company. He believes that he can achi eve this through disciplined employees and by knowing the details of the entire company. Ivester’s goal was to change Coca -Cola by bringing them out of the “technological dark ages”. The customers are high power, high importance stakeholders in the sense that the perceived brand was a driver of sales. If the customers did not see value in the company, they company would not be successful. The bottlers and distributers are low power, high importance stakeholders. They are not being given the respect tha t they deserve. Since 90% of Coke’s business was in the hands of the bottler, it was essential that maintain political relationships with them. The bottling company provided a service that facilitated the sales of Coca Cola. They expected Ivester to stay in his COKE - IVESTER 5 lane, instead of crossing over into the bottling company industry, which included vending machines. Last - and probably most important - they expected to have constant profit that was not affected Coke’s problems or increased concentrate prices. Sh areholders are low importance, low power stakeholders. They expect the company to have positive cells and profit, as well as growth in customers. The stockholders expected Ivester to maximize profit and to incre ase their return on investment; however, pr ofits have declined since Ivester became CEO. They expected Ivester to lead the company in such a manner that the cash flows over time to the company would cause the value of a company’s stoc k to be maximized, rather than minimized. They also expect Ive ster to maintain the company’s mission statement and values. The board of directors expects that Ivester inc reases the return on investment and raise the market value. Additionally, they expected him to behave as a leader by motivating employees to perfo rm by giving them purpose Coca -Cola employees expected to contribute to the success of the company without every detail of their department operations being micromanaged by Ivester. Senior company leadership expected not to have to report to leaders that were in lateral positions. Board members expectations of “Good CEO skills” that can expertly handle crisis management are not being met. Cus tomers, employees, and bottlers all have complaints ar e not being addressed. Strengths, Weakness, Opportunities, and Threats (SWOT) Analysis The most effective tool that Ivester and the board of directors could have used in analyzing Ivest er and exploiting his gifts would be an examination of his strengths, weaknesses, opportunities, and the threats. Strengths COKE - IVESTER 6 The strengths that Coca -Cola had were its brand recognition , reputation, and good working relationship with the bottling companies. Ivester was hardworking and determined to be successful. Weaknesses The weaknesses faced by Coca -Cola under Investor were micromanagement of all aspects of operations, decreased revenue, and poor relationships with business facilitators. Ivester’s weak nesses are his arrogance and rigidness. Opportunities Coca -Cola has the opportunity to continue to grow by introducing additional flavors/ variations to the market. They also had the opportunity to use technology to creatively advertise and expand its customer base. Threats The threats faced by Coca -Cola under Ivester were the broken relationship between the bottling companies and the perpetual downward trend of Coca -Cola in the stock market. In order to get Coca -Cola back on track, they need to be have in a manner in which there is collaboration between themselves, the bottlers and distributors. Issue Statements Under the leadership of Ivester , Coke’s return on investment significantly decreased. The board of directors has lost faith in his abili ty to run Coca -Cola. Major issues between Ivester and the Board of Directors are as follows: There has been a decline in revenue that began when Ivester took control of Coca -Cola. Working relationship with senior leaders and the bottling company has been disrupted since Ivester took over. COKE - IVESTER 7 The Board of Directors realizes that Ivester is not the person that should be running Coca -Cola . Ivester resigned from Coca -Cola instead of fighting for his place in the organization. Management Question What indivi dual and organizational modifications should Ivester assum e to rebuild the confidence of the shareholders and continue to support Coke as a profitable company that delivers superior beverages? Organizational Behavior Analysis Dynamics of Organizational C ulture Coca -Cola’s organization culture is outlined by its strong relationships with the business facilitators. The bottling company provided 90% of Coca Cola’s business. A poor working relationship with them would be detrimental in the continuance of p roduction going forward. Ivester’s motto of “be different or be damned” is in contradistinction with the organizational culture. The relationship between the bottling company and Coca Cola was effective; there was no reason to change it. According to t he value -percept theory, job satisfaction is contingent upon whether an individual perceives that their work supplies things of significance (Colquitt, LePine, & Wesson, 2015) . Ivester fostered an environment in which others in the organization or with wo rking relationship in the organization did not view their contributions as essential. This is due to the fact that the CEO was involved in the day -to-day operations of the company, rather than in goal setting and delegation to carry out the mission of the company. The works itself, followed by supervision are the main drivers of job satisfaction. Employees were not satisfied because they did not have the creative freedom to run their departments and they were micromanaged by the CEO. COKE - IVESTER 8 Competencies for I ndividual, Team, and Organizational Effectiveness Ivester forced a military style of strict discipline on his subordinates in order to control his subordinates. His subordinates knew that details and planning in advance were important to him. They also know that the consequences of failing to do so would result in scolding. Ivester was interested in data analysis and wanted an environment in which his employees could learn. Ivester’s individual competencies were disadvantageous to the organization and often led to Ivester making decisions that were in contradistinction with team effectiveness. Coca -Cola’s collaboration played a huge role in their competency of teamwork and relationship building. The board of directors and the bottling company had trouble adjusting to Ivester’s conflict resolution style. Their perception of him is that his need to be involved in every detail of the company was harmful. This behavior alienated the bottling companies and offended the board of directors. When a director attempted to provide constructive feedback to Ivester, he disregarded it. Rather than trying to collaborate, to find an integrative solution and gain insight from other perspectives, Ivester took the competing conflict resolution approach in which “he was always right” and he took advantage of subordinate or lateral relationships. Basis of Pers onality Ivester’s lack of self -awareness was apparent in the fact that he could not understand his effect on others. He lacked empathy - understanding of the emotional make up of others; this was apparent in his decision to have a senior vice president r eport to a lateral leader. Ivester did not realize that this was a problem. Ivester had poor social skill; this was apparent in his actions that alienated the bottling companies. His high level of emotional stability made him appear to be too composed. He projected confidence, even while under extreme pressure. This made him appear to be uninspiring or lacking urgency. He also lacked openness. This was apparent in his COKE - IVESTER 9 failure to accept advice from others. He also lacked the moral intelligence of r esponsibility. Even after his resignation, Ivester failed to acknowledge that he did anything wrong. Ivester needs to look at the big picture rather than task related goals. This will help with his need to personally oversee small tasks. If Ivester was more agreeable, bottlers/ distributers would understand the importance of their working relationships and would possibly put aside differences for better working relationships. Ivester came into the organization striving for status and trying to build hi s personal brand by distinguishing himself from his predecessor. In doing so, he trivialized the efforts of others and refused to accept help or constructive criticism. Identification and Evaluation of Alternatives Three alternatives should be evaluate d to address how Coca -Cola should reorganize the company in order to increase revenue and improve relations with the bottling companies. 1) Work on emotional Intelligence. This can be achieved through the help of a management - consulting firm. Pro : This would have provided Ivester feedback details of his performance from a disinterested third party. Ivester could have taken this information change his behavior and improve the organization. Con: This feedback could be ignored, just like feedback p rovided in the past. Based on the leadership characteristics that Ivester displayed, he may continue on the path that he had previously displayed - lacking regard for criticism. 2) Coca -Cola’s board of directors could have put Ivester on probation and coa ched him into becoming the leader that the company needed. COKE - IVESTER 10 Pro: Ivester would have clearly understood his shortcomings as well as the expectations of his superiors. They could have helped him to get back on track and to move the company in the directio n that it needed to move. Con: Ivester may have gotten offended by the criticism or the participative leadership style from his superiors and resigned. 3) Hire a second in command and delegate Pro: Ivester would have someone to assist him with the da ily management and operations of the company. Con: Ivester may have a difficult time delegating to this person, just as he does with his senior vice presidents. Recommended Alternatives I recommend bringing in a consulting firm to evaluate Ivester and the senior leadership of the company. In evaluating all of the senior leadership, Ivestor may think that the Board is interested in looking at the company and systems as a whole, rather than just him. This may make him more open to change. Coca -Cola has already given Ivester an abundance of chances, but his arrogance prevents him from satisfying the needs of the organization. Perhaps a consultant firm, as a disinterested party, would give him honest feedback that will be well received and he can move for ward with new expectations, duties and standards of maintaining relationships with essential stakeholders. Implementation and Timelines Coca -Cola call in a consultant firm and give Ivester new direction in order to restore the company to a thriving organ ization and to mend its broken relationship with the bottling COKE - IVESTER 11 companies. Upon receipt of the final report, Coca -Cola must take steps and adhere to the following timeline that will prevent further injury to the company’s reputation and brand: Within 7 day s: Call Ivester in for a counseling and inform him that a leadership consulting firm is coming in to assess the health of the organization. 7-9 days: Ivester address subordinates with the aforementioned information 10 -40 days: Leadership consulting assessm ent 45 days: Consultant results 46 -48 days: Review with directors to discuss continue path forward 50 -56 day: Leadership retreat with Board, CEO, Senior VPs 60 days: Meeting with Bottler/ Distributors to negotiate/ reestablishes business rules 90 days: Quarterly review with Ivester Conclusion In conclusion, a consultant company may prove to be beneficial to restore the working relationships between Coke and its business partners, if Ivester is opened to change. The challenges to the aforementioned plan are Ivester’s reluctance to receive feedback and to let others perform. If Ivester continues down this path, the only choice will be forced resignation.