Coca Cola - Growth, Employment, Business Cycle and Inflation

Introduction

Fiscal Policy affects The Coca-Cola Company as it does many other businesses. The four components of Fiscal Policy are employment, growth, business cycle and inflation. The following discusses the different aspects of Fiscal Policy as related to The Coca-Cola Company.

Employment

One of the Coca-Cola Company’s strongest strengths lies in its ability to conduct business on a global scale while maintaining a local approach, one of the most intelligent strategies thought up by the human resource department of Coca-Cola.

Coca-Cola manages its human resource department through a decentralized human resource system, which means that not only management can have an input in decision-making but employees can as well. Coca Cola’s decentralized system ties together shared visions of the employees and management, but Coca-Cola also realizes the complexities of managing operations in different locations that the company has established an International Advisory Council (IAC) to help senior managers make effective decisions for the company.

For example, in January 2005 leader in the Coca-Cola Company human resource department around the world decided to decided to improve Coca-Cola overall mission after an honest assessment was made by the company top company officials. These improvements sought to improve the success, growth and structure of Coca-Cola and to better deal with the task and people of today and their relationship with independent bottlers. After following the same mission statement over a hundred years, recent concerns led to improvements to Coca-Cola mission statement called the Manifesto for Growth. The Manifesto is an overall vision of the company made up of several components, and these components are will help achieve the Coca-Cola overall mission in current times. The components are as follows, people, portfolio, profit, partners and planet. Introduction and implementation of the manifesto happened during training sessions and multi-day workshops. In these training sessions, employees around the world learned about the manifesto and the need for it. Employees also discussed strategies on how to implement the Manifesto’s principles into their daily work schedule.

Due to Coca Cola’s global presence, each element of Coca Cola’s employment process varies with location. Human resource departments strive to involve employees in many of the decisions made throughout the company. Many differences exist among the different employee groups throughout the company because of geographic location, but Coca Cola’s human resources system uses employee satisfaction surveys in an effort to meet the needs of the various groups. Acknowledging these differences has improved the Coca-Cola human resource department. The company understands the need to use decentralized strategies to tie together the shared visions of the employees and management. Coca-Cola also embraces the idea of their employees joining labor unions and has always tried to promote employee organizations. Coca-Cola also has recently launched a new workers policy called the “Workplace Rights Policy,” which is a comprehensive policy on workplace rights for all employees.

Growth

Sales of Glaceau drinks contributed two percentage points of volume growth. Without those brands, Coke’s North American volume would have slid 1%. Operating income for the North American unit fell 4%. (B. McKay and A. Cordeiro, 2008, A.13). Muhtar Kent, president and chief operating officer, said that while he expected Glaceau to be “a very important catalyst for sustainable growth in North America,” Coca-Cola was continuing its focus on the sparking drinks category, where sales have fallen as customer switch to juice, energy and water drinks. “(J.Birchall, 2007, 22)

The picture was much brighter outside North America, where sales were strong enough to push the company to 5% global volume growth. (B. McKay and A. Cordeiro, 2008, A.13) Cola-Cola Company’s international sales helped the global beverage giant weather the weakening U.S. economy to post a stronger than expected 79% increase in the fourth-quarter profit. (B. McKay and A. Cordeiro, 2008, A.13). “Growth in our emergent markets remains robust even as headwinds are developing in the US economy.” Kent said. “We don’t see there being a major impact on emerging economies… there will be one or two countries in the developed world where there have been housing bubbles where we think there will be some pull back.” (J. Birchall, 2008, 25) According to Neville Isdell, CEO of Coca-Cola, “Globally, Coke’s trademark had seen its highest growth since 1998, with strong growth in emerging markets such as China.” (J. Birchall, 2008,