Cola Wars Continue: Coke and Pepsi in 2010 Harvard Case Solution & Analysis

 

HR Analysis

As Coke and Pepsi move forward from this point, are there any important human resource issues that should be considered as part of their corporate and business strategies?   Fully Explain answer

Human resource management should definitely be one of the main concerns of both Pepsi and Coke and requires strategic input in the form of strategies designed to take the companies forward in the fast changing business environment.

 

Although the two public limited companies are two of the best examples of an extensive capital intensive industry, yet the human resources make an integral part of the whole setup. Several human resource issues should be looked upon when designing strategies for the future for both the companies.

Organizational culture

With the global expansion there come a number of issues that need to be addressed to make sure that the companies maintain their standards and brand image all across the globe. Pepsi and coke need to address the concern as to how they would maintain an organizational culture all across the globe when they would be setting up production facilities in areas like Asia and the Middle East. The American culture and the overall image of the company would be difficult to be implemented in terms of an organizational culture in such regions in case of both Pepsi and Coke.

Motivation

Such an extensive capital intensive industry should also be concerned about employee demotivation because of monotony as it suggests a typical work environment based on flow production techniques. Human resource strategies should be designed to make use of simple techniques such as job rotation, job enlargement etc. to create a healthy environment. It may get difficult to follow motivational strategies based upon Maslow ‘studies individually for each individual employee but at a broader level, Pepsi and Coke could focus upon making use of Quality Circles and promoting teamwork to balance the capital intensive environment with a strategic human resource plan.

Employee Retention

Another point of concern seems to be the 'Cola War' itself which may create an environment of uncertainty in the minds of the human resources as the companies seem to be too focused on competing with one another rather than on creating their individual identities. This should be a point of concern for both the companies as it could affect employee turnover and retention too. The companies' workforce may take job switching from one company to the other the same as a change in taste or preference for either Coke or Pepsi. A focused approach to strategic human resource management is needed to create loyalty among to the employees and in creating a stronger leadership. So far there seems to be a greater focus on the product itself rather than the strategies which would give both the companies individuality.

Communication issues

There seems to be extensive acquisitions and mergers with other brands in both the companies. The management of both Pepsi and Coke need to make sure that when they bring in other products in the portfolio as part of their diversification strategy, they should also remember to focus on the blending in of the different organizational cultures. With the global growth come further issues of communication especially if the companies have spread worldwide and would need to stay connected with all subsidiaries to achieve uniformity.

Competition/Rivalry

Another point that may be realized is the sense of competition that Pepsi and Coke may be creating amongst each other's human resources. The impact of the Cola Wars may not be limited to market share but may spread across the human resources as well in terms of comparison as to which one of the two companies is better at human resource management.

Global Human Resource Management

Being multinationals, Pepsi and Coke would need to focus on issues such as avoiding exploitation in developing countries since now they have moved into those territories too. Human resource management would need to keep a balance between local recruitment and keeping the essence of the original organization alive in all territories. Along with that comes the major concern of training human resources so that they are aware of the norms and culture being followed in Pepsi and Coke internationally. The management may need to set aside a larger budget for training the human resources especially since now there may be opportunities available globally because of the ease of labor mobility and willingness to relocate internationally.

To sum it up, Pepsi and Coke would need to assess strategic issues such as maintaining a uniform organizational culture, managing communication across the diversified span of control, keeping a balance between developing as a capital intensive industry while keeping the work environment lively, allowing healthy competition to prevail rather than letting the Cola Wars being a sense of rivalry amongst employees, avoiding employee exploitation in their newly entered territories.

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