ORGANIZATIONAL THEORY

ORGANIZATIONAL THEORY 11

ORGANIZATIONALTHEORY

Organizationtheory involves combination of administrative, scientific managementbureaucratic philosophies. The primary benefit of organizationaltheory is that it provides the best solutions for addressing specificproblems affecting businesses, improves management of employees and,makes it easy to match every worker to a position that suits him orher best. Besides, it provides a comprehensive approach to planningand controlling management tasks. Ontology organization methodfocuses on physical traits that make a product suitable for a givenmarket. It determines suitability of a product through studying thenature of reality, existing or becoming. For example, an ontologicalorganization for a company that specializes in manufacturing softdrinks bottling the beverage in different sizes, using distinctingredients and the packaging method used to the drink. On thecontrary, epistemology organization is based on the technicalknowledge regarding a product’s scope, methods and validity.Epistemological knowledge differentiates beliefs and opinions as itprovides evidence based on facts. The aim of this research isapplying both ontological and epistemological theories in evaluatingand comprehending alternative Coca-Cola Company’s affiliation withits organizational background. The evaluation will be based onmodernist and critical theory analysis. Modernism is a theoreticalmovement involving trends and culture that resulted from far-reachingand vast scale revolution of the Western society (Knudsen &ampTsoukas 2005, p. 19). The changes occurred during the last half ofthe nineteenth century and the first half of the twentieth century.Some of the primary propellers of modernism included fast developmentof contemporary cities, industries and scientific knowledge, which inturn contributed significantly to horrors such as World War I and IIrespectively. Critical theory refers to a reasoning approach thatemphasizes on using reflective review and evaluation of culture andthe society through using knowledge acquired from humanities andsocial sciences.

Accordingto Gopinad and Prasad (2012, p. 223), many researchers claim thatchallenging regulatory and political organization in India forcedCoca-Cola to withdraw its operation in 1970s. In fact, numerous booksthat are used in the American curriculum use the Coca-Cola exit fromIndia as a suitable example of Multinational Enterprises that hasleft market as a result of strict policy regulations (Knudsen &ampTsoukas 2005, p. 19). However, the critical organization perspectivecontends that the protectionist policies The Government of India(GOI) introduced in the 1970s did not cause Coca Cola’s exit fromthe market. Instead, Gopinad and Prasad associate the company’sexit to its inflexible policies. Coca-Cola established its Indiaoperations in 1956. The Indian parliament introduced Foreign ExchangeRegulation Act (FERA) in 1973, which was intended to control foreignexchange flow. The policy also outlined the necessities for usingforeign exchange, the parties that could use the currency andutilization of foreign currency. Besides, businesses that were notusing advanced technologies such as the Coca-Cola were supposed tosell 60% of its stake to the locals. Coca-Cola declined the offerbecause it could have lost majority shareholder advantage. Instead,the management proposed establishing two independent companies. Theorganization specializing in exporting the Coke manufacturing syrupwas to be owned 100% by Americans while the other company responsiblefor bottling and distribution would sell 60% of its shares to thelocals. However, the GOI demanded that the company should provide asample of the Syrup to its chemists to verify whether its ingredientswere safe for human consumption (Knudsen &amp Tsoukas 2005, p. 19).Coke declined to provide the sample, and instead opted to exit themarket. The management could neither sell 60% of its shares to theIndians nor give a sample of the coke syrup for evaluation as thatcould compromise the confidentiality of the formula. Coca Cola’sexit from the market was unnecessary because it could havedistributed the 60% shares to many individuals (Shukla1996, p. 74).This implies that the 40% American shareholding would still have beena major shareholder with capability of guarding its secret syrup.

Inthe 1990s, the GOI started massive liberalization of the market as astrategy for attracting direct investors. Sixteen years afterimplementation of the protective policies, foreign investment inIndia had reduced drastically. Coca-Cola ventured into the marketintending to localize its operations so that it could dominate theindustry (Ciafone 2012, p. 115). Both the state and local governmentwere offering high incentives so that multinational enterprises couldestablish companies in underdeveloped rural regions. For example, thestate had scraped the regulation that prevented foreign directinvestment companies to promote their products using internationallyrecognized brands. Similarly, underdeveloped states permittedCoca-Cola with lands and low tax incentives so that it couldestablish plants in backward and marginalized regions. However,Coca-Cola overlooked the effect of injecting massive capital in theconstruction of bottling plants in underdeveloped regions. In lessthan a decade, the locals were protesting against the companyclaiming that it had depleted their water resources. Indian citizensin various parts of the country formed alliances that wantedCoca-Cola to cease operations in the country because it had depletedunderground water. The standoff between Coca-Cola and local Indiangroups such as National Alliance of People’s Movements (NAPM)attracted international attention that made over two hundred campusesin the USA, UK, India, Italy, Ireland and Canada terminate theexclusivity deals to supply Coke in their campuses (Ciafone 2012, p.127). Coca-Cola could have avoided the problem through nurturing agood relationship with the locals through adopting corporateresponsibility. For example, it was necessary for the company tosupply the locals with drilled water since most them are poor farmersdependent on intensive irrigation farming. Although the company hasventured on investing in programs that aims at supplying the localswith adequate clean water, the investment is inadequate, as theorganization should have collaborated with the national and stategovernment in a joint water investment venture (Ciafone 2012, p.128). Collaboration between Coca-Cola and the governments could raiseadequate capital to supply all the citizens close to the marginalizedregions where the company has established its production plans.Finally, the company should invest in water recycling programs toreduce the amount of underground water, as well as refuse releasedinto the environment. Some of the protesters have been opposing thecompany’s presence and operation in India because of releasingtoxic wastes in the environment (Crane 2008, p. 49).

AlthoughCoca-Cola Company is among the most successful American multinationalenterprises, its operations in Columbia have been rocky since itsestablishment. Employees in all the Coke beverage manufacturingplants in Colombia have a bad relationship with the employers. Infact, the company has faced various lawsuit allegations concerningdiscriminating employees. For example, in 2000 compensated AfricaAmericans a sum close to $200 million for discriminating them.Similarly, the Colombian employees filed a lawsuit against thecompany in 2001 against the organization in the US federal courts tomake the company offer equal employment opportunity (Gill 2014, 237).However, Coca-Cola can end the political violence, rampantassassinations of the employees and avoid costly lawsuits in Colombiathrough supporting permitting the employees to establish one stronglabor union. Presently, the management has exploited Colombian lawthat allows employees in one enterprise to form more than one laborunion as a strategy to divide them (Gill 2014, 239). In addition, thecompany does finance paramilitary groups to protect its interests. Asa result, vocal labor unionists are often assassinated by theparamilitaries that cause political unrest. Other strategiesCoca-Cola can create friendly business atmosphere in Colombia ishiring employees on long term-term contracts, as well as compensatingthem with the recommended benefits from multinational organizations(Gill 2014, 243). For example, it should let employees retire atsixty, provide insurance cover for both employees and their families,as well as establish pension plans for retiring staff. These benefitswould motivate employees to work for the company, as well as reduceactivism against the company operation policies. This implies thatthe paramilitary will no longer need to assassinate either unionleaders or their vulnerable family members to intimidate them torefrain from labor politics (Tsoukas &amp Chia 2011, p. 47).

Mosesand Vest (2010, P.240) asserts that PepsiCo was owned and managed byblacks. The intention of the company was overcoming the longstandingapartheid and racism issues in South Africa. However, the Company hadincurred over $179 in debt. PepsiCo sued the organizers of theventure in South Africa because the failure of the venture alsotainted the brand’ reputation. However, the New Age Beverage (NAB)$15 million investment was enough for establishing a successfulinvestment (Moses &amp Vest 2010, p. 241). However, the venturefailed because NAB’s managers failed to hire the black SouthAfricans. The unemployment rate among the blacks was above 50%. TheAfricans began boycotting and engaging in violent protests againstPepsiCo in its establishment stages since it was poaching experiencedemployees from the Coca-Cola Company (Tsoukas &amp Chia 2011, p.47). In fact, violent protests faced the company such that it had tohide its distribution trucks, as it feared the black South Africanscould have abducted or even destroyed them. The venture failedbecause NAB’s management preferred to poach experienced individualsfrom Coca-Cola instead of hiring the unemployed blacks who flockedthe company in seeking recruitment (Moses &amp Vest 2010, p. 244).Critiques argue that the company NAB and PepsiCo in particularalready had a competitive edge over Coca-Cola. If the organizationhad hired black Africans, it would not have faced riots, boycotts,and massive capital loss. Investors such as Danny Glover argued thatthe PepsiCo pulled out of South African market because of socialinstead of economic reasons.

AsCoca-Cola is an established multinational enterprise, it has faceddiverse oppositions in various locations because it had no efficientcorporate responsibility. For example, Indian locals protestedagainst the company in Rajasthan, Kala Dera village for over miningwater that required for subsistence farming and consumption (Raman2007, 106). Similarly, African Americans sued the company in theUnited States for discriminatory remuneration and promotion. TheColombians have also opposed the Coca-Cola’s operation ethicsbecause it mistreats the employees through underpaying them andpreventing from forming unions. In fact, several reports claim thatemployees who promote unionization of the Coca-Cola staff in Colombiaare often assassinated by the paramilitary (Gill 2014, 243). However,the Company is set to overcome these operation challenges after itreviewed its corporate responsibility to address the problems thathave put it at loggerheads with the locals based in at the vicinityof their industries (Raman 2007, 111). For example, the companyclaimed it will drill near boreholes and recycle water in theirIndian bottling plants to reduce water shortage, as well as the toxicwastes released into the environment (Raman 2007, 106). In SouthAfrica, Colombia and the USA, it will ensure the employees have equalemployment opportunities. The returns of the organization are likelyto increase tremendously after the implementation of the new andfriendly corporate responsibilities.

CorporateSocial Responsibilities are programs undertaken by businesses toprovide benefits such as improving living standards of the communitythey serve and providing employment opportunities. However,Coca-Cola’s CSRs are designed to improved the management andprofitability of the company. For instance, the company labeled theentire field that it constructed and renovated in Israel with itsbrand. While the locals benefit from quality playgrounds, the companybenefits from the popularity it acquires from the establishment(Barkay 2011, 279). CSR is an efficient strategy that multinationalbusinesses such as Coca-Cola can overcome resistance in someoperation zones. For example, the water recycling and distribution inIndia has quelled the resistance against the company concerning therisk of depleting water resources (Barkay 2011, 285). In addition,strategic CSR plan can help the company to suppress assassination ofits labor activists in Colombia. Furthermore, the company can alsoavoid costly law court cases through providing their staff andneighbors with incentives such as scholarship for their children,road construction, free water projects and affordable healthcarefacilities.

Inconclusion, Coca-Cola has numerous unfavorable factors that make itsbusiness environment unsuitable for business. Fortunately, critiquesargue that managers can use ontology and epistemological theories tocreate efficient business goals that can assist them to foster goodrelationship with its customers, employees, and neighboringcommunities. The plans can range from better working conditions toattractive remuneration packages. In the recent past, Coca- Cola hasestablished attractive incentives such as environmental conservation,constructing playgrounds and clean water supplies. The improvedservices have made the company’s management approach acceptable tothe target market.

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