Culture and Diversity in the Coca Cola Company: their Impacts on the Corporate Identity
Culture and diversity are some of the factors that immensely affect organizational operations. In any organization, diversity should be taken as the starting point for effectiveness in operations. Multi-national corporations (MNCs) are the most affected by various aspects of culture and diversity, and the ability to take advantage of differences in these aspects across countries accounts for the additional competitive advantage gained by MNCs. In any organization, the key cultural variables that exist across national boundaries include business negotiation styles, gift giving beliefs and cultures, gestures and the use of non- verbal communication among others (Huang 197-198). Other cultural variables that may affect successful business conduct include taboos and work place behaviors. These variables differ across nations and it is crucial for every MNC to consider them and to understand their variance before engaging in business in a particular country. Cultural differences should be a source of sustainable operations rather than hindrance for the same.
Apart from the differences in cultural variables across countries, diversity also brings out implicit differences between countries. Diversity comes in aspects such as religious beliefs, educational levels, political affiliations and military experience as some of the secondary variables. On the other hand, the primary diversity variables include age, sexual orientation, ethnicity and race. The Tertiary diversity variables include beliefs, perceptions, assumptions, values, group norms and attitudes (Mazur and Bialostocka 7). Differences among individuals in the basis of these factors affect their capacity to be aligned to organizational objectives. Similarly, organizational operations depend on the ability to capitalize on these factors for incremental competitive advantage among multinational corporations. As organizations make use of cultural variables to enhance corporate communications, they should also use diversity as a means of enhancing corporate communication. The extent to which an organization does this influences the degree of success of that organization in different countries.
Corporate identity is the key source of organizational differentiations. Companies strive to maintain aspects of identity which include corporate structure, strategy, behavior, design, communication and the industry identity. Like any other company, the Coca Cola Company does a lot just to enhance their corporate identity in the different countries within which they operate. Through features such as advertising, creation of impacting impressions on their potential customers and sustainable expansion, Coca Cola has managed to infiltrate even the most potentially unprofitable business countries. In Germany, Coca Cola has managed to create a great impact over the years. The organizational cultures and practices have enabled the company to take advantage of differences in various aspects of diversity and to grow its business across the country. Corporate identity has enabled the company to distinguish itself from many soft drink and beverage companies both in Germany and across the world. With an organizational structure that takes advantage of the cultural orientation of the people in the country, Coca Cola has managed to take advantage of culture and diversity to enable its sustainability to be enhanced. Despite the presence of many potential competitors in the soft drink industry, Coca Cola has managed to maintain its position as a market leader in the global context.
Although the Coca Cola company is associated with great growth potential and the capacity to expand beyond cultural divides, the company inevitable faces various challenges due to cultural and diversity variations. Such challenges have the potential of impacting the corporate identity negatively. However, the company, through various strategies has been capable of handling these differences to their advantage. The following essay explores the challenges associated with culture and diversity from a general perspective and from the dimensional perspective. This is followed by an evaluation of the practices that has enabled Coca Cola to permeate the volatile cultural conditions and how the company can continue to perform even better.
Challenges to corporate identity
One of the major challenges posed by culture and diversity to the Coca Cola corporate identity is that of internal communication. Language is one of the essential variables in culture which influences communication to a large extent. Coca Cola is not a traditionally German company and it is expected that there are bound to be challenges in communication internally as well as with other Coca Cola companies across the world. The national language of Germany is German and it is expected that nearly all of the employees of Coca Cola in Germany use this language. This makes it challenging to select the most appropriate communication channels since the extent of use of German as an international language is limited in comparison to the use of English. Communications done have to be translated in case they are originally done in English. This, as a challenge, calls for the exclusion of most international employees who may not be capable of using German as their sole communication language. Dissemination of corporate messages throughout the organizational structure requires selection of the most useful channel which can be perceived positively across the entire organization.
In this regard, communication is not limited to the use of written or electronic messages. Internally, application of non- verbal cues can form a very crucial source of information as well as method of disseminating information (Verbal- Verttala and Verttala 27). For communication to achieve its purpose internally, understanding the nonverbal cues and their tradition of use in Germany is crucial since its misinterpretation can result in loss of meaning in communication. Differences across cultures in the use and meaning of non-verbal cues can result in misunderstandings especially in communications involving persons from different cultures.
Apart from internal communication, Versala-Verttala and Verttala assert that team work also comes as a challenge to many multi -national corporations for various reasons (30). In Coca Cola for instance, the key barriers to effective team working would include national stereotyping, confrontational attitudes, non-verbal communication use and cultural taboos and practices. In a multi-national corporation, such as Coca Cola, it is inevitable to have persons from diverse nationalities working as employees. This comes with the mentioned challenges in that within teams containing people from different backgrounds, there are cultural variables that influence inter-personal relationships. Attitudes to confrontation influence the perceptions held about conflict resolution hence can be an impediment to effective team working. Similarly, cultural taboos and practices limit the explorative and innovative potential of the team members while national stereotyping pose a challenge through beliefs that individuals hold about persons from other countries. Such beliefs may result in inferiority feelings as well as in judgmental attitudes during the work process.
In connection with internal communication challenges, external services acquisition is also a challenging concept in Coca Cola Germany. This refers to import of expertise as well as materials for use. Since Coca Cola operates in Germany through a franchising model of operations, it is inevitable that some of the franchises may feel belittled as the company supplies syrup and bases for the production of its soft drinks. The national franchises are only expected to provide water and carbonation in addition to bottling. While the sole objective of Coca Cola in doing, this is to preserve the company production secrets, the franchisees may see this as a domination strategy aimed at preventing them from pursuing their own intentions to expand further.
Dimensional Model to challenges
The challenges experienced by Coca cola in Germany as a result of the diversity and cultural variables in the country can also be explained from a dimensional perspective. Although there are many dimensional models that have explored previously to explain cultural variables and challenges in organizations, the present essay uses the cultural dimensions’ perspective from the work done by Geert Hofstede. According to Hofstede, the first cultural dimension is power distance. Hofstede (par. 2) indicates that Germany has a low score on power distance. This implies than within the country, directly and participative communication is preferred instead of control. As such, there is a high likelihood for leadership to be disliked. This means that in a company like Coca Cola, leadership can pose a challenge in case it is not effectively applied in consideration of the prevalent conditions of the work place. This comes in line with control issue where employees tend to be resistant to organizational changes when the leadership is wanting and they see no rationale for the proposed changes.
Secondly, individualism also poses a challenge to organizational growth in Germany. This is especially due to its potential barrier effect. Team work in any organization requires an attitude that goes contrary to individualism. The need for consideration of the larger organizational objectives in spite of possessing personal objectives makes individualism a barrier to effective team work. As such, an individualistic attitude in Germany can result in low levels of team participation and effectiveness due to resistance. In addition to this, such individualistic attitudes also result in increased resistance to change, lower tolerance for cultural differences and diversity and poor communication among team members. It also has the potential of making national stereotypes appear more adverse than they actually are. Germany’s individualism thus increases the challenge of team work and should be overcome within the context of Coca Cola Company in Germany.
Apart from the two, masculinity is also another feature of the German culture that poses a challenge to corporate identity in Coca Cola. One of the most crucial aspects of corporate culture is an organizational behavior, strategy and design. Behavior is characterized by features such as recruitment practices. In a masculine society, high performance is recognized as a male characteristic and there is the possibility of gendered recruitment tendencies. In addition to this, masculinity in a society also comes with challenges linked to stereotyping and communication practices. In a company like Coca Cola, this can be challenging as individuals tend to view the men as more performing than women. This in turn hampers team work and general organizational reputation. Hiring practices, if masculine can also impact the industry perception of the company as it begins to be recognized as anti-feminist, portraying the impression of a stereotypical company.
Furthermore, Germany also strives on uncertainty avoidance. In a company like Coca Cola, this comes with challenges to external services acquisition. The growth of a company depends on its ability to take advantage of opportunities through innovation and efficiency. Uncertainty avoidance in such an environment may hamper growth through limitation of innovative practices and dependence on confirmed expertise. From this point of view, it may be difficult for the company to bring in leaders from other nationalities as they may not receive the same kind of cooperation that they expect from the German employees. Organizational growth would therefore be limited by the inability to obtain recognition for the work done.
Taking Advantage of Culture and Diversity at Coca Cola
One of the key values held by Coca Cola Company in all the countries within which it operates is collaboration. In this regard, the Coca Cola Company uses its brand name to enhance business capacity of key franchises in every country within which they operate. Through the use of local partnerships, the Coca Cola Company has managed to get into the German market and to be strongly founded therein. Collaboration has effectively been used by Coca Cola to address some of the culture and diversity challenges faced by the company in various ways. For instance, through collaboration, the company gets to have a work place environment where most of the employees are Germans. As such, the challenge of internal communication does not come in as strongly as it would as communication occurs among individuals with a common verbal language as well as with similar non- verbal cues and use of gestures. For the few who may be of other national descents, cultural training plays a crucial role in enhancing collaboration.
The Coca Cola Company has understood the importance of cultural tolerance among its key stakeholders. As such, as part of the company efforts for sustainable growth, cultural training and education takes an essential stage in the company’s organizational structure and plan. Training enables individuals from different cultures to understand the use of different communication skills, verbal and nonverbal as well as the gestures used in a culturally diverse work environment. Because of this, the company has managed to enhance the relations between different employees as well as between employees and their managers. Understanding cultural taboos through training and education has also enhanced the organizational behaviors through building effective business negotiation skills. Not only has training enabled members of other nationalities to understand the German culture but has also enabled the Germans to understand the cultures of other nationalities. This impacts national stereotypes negatively hence improving team work as well. When people from different ethnic backgrounds understand others’ cultural variables and diversity, they are able to do away with the ethnic and national stereotypes hence their collaborative capacity is improved.
From the website of the Coca Cola Company, another value that the company holds dear is that of diversity. Not only does the company train employees and other stakeholders on the value of diversity, but they also use this diversity to advance their competitive advantage. From the footages of different advertisement techniques used by Coca Cola, it is clear that the company thrives on the diversity among its stakeholders for its competitive advantage. For instance, allusions to unified thirst for coolness, or distinctive identities that come from individual names, the company has managed to create an impression of harmony in diversity both in Germany and beyond. The impact of this has been significant growth in the Coca Cola business in Germany and the world. This not only improves team effectiveness but also makes it easy for the Germans to achieve external services acquisition from persons considered most experienced in certain fields. In fact, diversity in Coca Cola Germany assists in accomplishing the company objectives through collaboration among the different functions and different employees in the company.
Leadership in Coca Cola has also aided in sustainable organizational growth and maintenance of corporate identity at Coca Cola. While the limited power distance in Germany implies that there is great dislike for control and challenges to leadership, the mode of leadership used in Coca Cola has created an opportunity for the company to explore expertise rather than maximize on the leadership potential of the management. At Coca Cola, every employee is valued in equal measure. In the use of transformative leadership and participation of all employees, the company manages to make all the stakeholders feel valued while also focusing on the mission and vision of the company. The leadership of the company provides the organizational vision and mission statements and also gives direction to the company employees on the action of different functions towards the achievement of the ultimate organizational goals.
Recommendations for the Coca Cola Company in Germany
The prevalence of challenges to corporate identity at the Coca Cola Company is immense. In this regard, corporate identity is linked to various aspects of culture and diversity in an organizational setting. In order for the Coca Cola Company to maintain its competitive edge over other companies the Coca Cola Company should implement various recommendations that will advance its growth in the soft drinks market. The first recommendation is that the company should advocate for greater tolerance to cultural diversity. In this regard, the company has done a lot through the use of culturally diverse advertisement strategies and training of employees on cultural tolerance. However, there is still need to conduct more training and to target not only the employees but also other individuals. Corporate social responsibilities can also go a long way in enhancing such tolerance.
Apart from this, the company should also foster good relationships with the stakeholders. In Germany and other countries, the key stakeholders of the company are the national partners with whom Coca Cola operates. The ability to have strong links with such stakeholders can enable the company to continue growing effectively. The relationship between the company and the bottlers impacts quality control as it enables the company to monitor quality control measures and principles upheld by the bottlers. From there, the company can be able to provide sufficient guidance towards effective quality control measures and subsequently preserve the corporate identity in terms of strategy and structure.
Flexibility and adaptability are also crucial to corporate identity at Coca Cola Germany. With the diversity and cultural variables prevalent in the country, the company needs to practice high levels of adaptability to be capable of coping with the business environment in the country. It is only by understanding the distinguishing cultural characteristics of the country that Coca Cola can manage to corroborate its practices such as in business negotiation, leadership and team work with the national environment. Adaptability can enable the company to be updated in a challenging cultural environment and to use diversity as a platform for gaining competitive advantage rather than an impediment to corporate identity.
To address the challenge of internal communication, the company needs to set up internal communication channels. These channels can make it easier for communication to be achieved satisfactorily through the management hierarchy. Through participation of all the employees in the decision-making process and fulfilling communication, the Coca Cola Company can take advantage of the diversity in its work environment to establish a corporate identity that includes consideration of the company as an inclusive organization. Communication channels also foster the development of strong identity as a communicative company through the use of advertisement strategies that advocate for unity in diversity.
Corporate identity is an essential part of organizational operations. In Coca Cola Company Germany, various challenges associated with culture and diversity is faced against corporate identity. Challenges are prevalent in areas such as internal communication, team work and acquisition of external services due to variety of cultural variables. These challenges arise mainly due to the cultural dimensions associated with Germany such as low power distance, high masculinity, high uncertainty avoidance and individualistic tendencies. Despite these challenges, the Coca Cola Company has strategically placed itself as capable of maintaining its corporate identity through its values such as collaboration, leadership, diversity and reliance on training and education for cultural tolerance. These values enable the company to pursue its objectives satisfactorily, the result being an improvement in corporate identity. However, the company still needs to implement some recommendations such as enhancing cultural and diversity tolerance and improved flexibility and adaptability.
Hofstede, Geert. What about Germany. Web. Accessed 24 November 2016. Retrieved from https://geert-hofstede.com/germany.html
Huang, Liangguang. Cross- cultural communications in business negotiations. International Journal of Economics and Finance 2, 2(2010): 196- 199.
Versala- Varttala, Tanja and Teppo Verttala. Challenges and successes in multicultural corporate communication. Haaga Helia Discussion, 2010.