Organisational design is a key process for any company. It helps improve how work gets done and can make it easier to attract and keep good employees.
To design an effective organization, it’s important to understand the main parts that make it work. These include the structure of the company, how decisions are made (governance), HR practices, workplace culture, and the technology used.
Each of these areas affects how well the company runs. When you understand how they connect and influence each other, you can build a design that fits your company’s needs and supports its success.
Table of Contents
Assignment
Learning Outcome 1 Understand the concepts and theories underpinning organisational design and development.
Question 1
AC 1.4 In addition to the external drivers for change, it is important that we consider the organisational specific factors that are likely to impact our organisational design and development.
Evaluate three of the key contextual variables, such as the organisation’s existing structure, culture, sector etc outlining how these can impact the organisation’s design and development.
Introduction
Organisational Design and Development (OD&D) is the process of creating the alignment of an organization’s structure, systems, people, and culture by using its long-term vision (Musaigwa, 2023). While external factors like globalisation, technology and regulation all play their role as drivers of change, internal or contextual variables such as culture, leadership and the sector that the organisation is in, play a significant role and influence the initiation and management and embedding of change (CIPD, 2024). This report evaluate the Coca–Cola Company key contextual variables, organisational culture, sector and operating model, and leadership style. Their role in affecting OD&D practices and supports the strategic innovation of the company.
1. Organisational Culture
The term ‘organisational culture’, as stated by Schein (2010) is a powerful contextual force that impacts employee ’s expectations, top leadership behaviours and their capacity to adapt to change (Hogan and Coote, 2014). Coca Cola’s culture is diverse, inclusive, collaborative and supports continuous improvement, which is in line with Coca Cola’s global mission of “refreshing the world and creating a difference” (The Coca-Cola Company, 2024).
According to Schein’s theory of organisational culture, Coca-Cola’s open plan workspaces, global town halls and employee recognition programmes act as artefacts reflecting deeper cultural values of transparency and empowerment, three-level model of organizational culture, artefacts, espoused values, and basic underlying assumptions can help. Support for organisational learning and agile development is espoused through values of integrity, accountability and innovation.
Coca Cola’s transformation from the traditional hierarchical model to a more agile and team-based organisational design is dependent on culture. In 2020, the company had already put in place a networked organisational structure to enhance the responsiveness of its operations and to decentralise the decision-making across its global operations (Coca-Cola, 2023). Notably, this cultural shift towards empowerment and flexibility is consistent with modern OD&D principals of flatter hierarchies and agile processes (Temitope, 2022).
However, culture can also present some challenges. There may be resistance to change that rises from cultural norms when structural redesigns clash with current ways of working (Rajan and Ganesan, 2019). To balance global agreement with local cultural responsiveness, Coca-Cola continually needs to continually balance between standardisation with local responsiveness in international markets.
2. Sector and Operating Model
The fast moving consumer goods (FMCG) industry is marked by high levels of competition, consumer preferences that are rapidly changing, and subject to forces of the regulatory pressure (Kenton, 2024). This makes the sector a key contextual variable influencing Coca Cola’s design and development, and since these drivers would require operational agility, product innovation and cost efficiency.
Coca Cola’s unique operating model is based on a franchised bottling system. The company under control of the company while independent bottlers control the manufacturing, distribution and local marketing. Thus, there is a need of a decentralised organisational design that allows for autonomy especially at a regional level while maintaining global brand consistency (Springer, 2024). Coca-Cola achieves the aforementioned this by using divisional structure, which is integrated with global business units and local operation. The structure of this design enables the organisation to deliver quickly in the local markets, whilst retaining the consistency of strategic alignment. Galbraith (2002) Star model can be a useful framework because it highlights the need for structure to be aligned with the strategy, the processes, the rewards, and the people (Carolina Melecardi Zani, Juliano Denicol and Broyd, 2024).
Coca Cola’s OD&D practices are also affected due to the need for innovation in the FMCG sector. To keep up with rising consumer demands for healthy beverage options and green packaging, Coca-Cola has established cross-functional teams to build healthy items and the inviting climate (Fatin et al., 2024). Flexible design, and agile development processes are required for these teams that operate across functions, regions. Additionally, sector competition necessitates ongoing workforce development. PricewaterhouseCoopers (2022) suggests that in order to both enhance organisational design and capability development, contextual sectoral factors drive both or else.
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