Individual Assignment: IHRM of Coca-Cola
Subject- SIHRM
Submitted by: Kumar Anshuman 12HR-012 E-mail:
[email protected]
About the company The Coca-Cola Company is an American multinational corporate giant which manufactures, markets and retails non-alcoholic beverages and syrups. The company, founded in 1886, is headquartered in Atlanta, Georgia and is best known for its flagship product Coca-Cola; having revenue in excess of US $ 48 billion.
Global Presence The Coca-Cola Company is one of the best examples to demonstrate the concept of a multinational organization. The company operates in nearly 200 countries and about 80% of its operating income is derived from businesses outside the United States. The company operates globally through 25 operating divisions that are organized under 6 regional groups:
North America European Union The Pacific Region The East Europe / Middle East Group Africa Latin America
International HRM The company believes in the philosophy “Think Globally, Act Locally”. It believes in crossborder management and grants national business the freedom to carry out the operations in a way that suits the local market. The role of IHRM, i.e. - International Human Resource Management becomes very critical as the company’s goal is to bind the whole organization as one. The corporate HRM function achieves this objective in two main ways:
By propagating a common HR philosophy within the company By developing a group of internationally minded mid-level executives for future senior management responsibility
The company tries to maintain as much as possible local personnel in its operations. The company believes that local people are better equipped to do business at their home locations and so there should be a limited number of international people in the field. However there are situations which demand for expatriates:
To fill the need for a specific set of skills that might not exist at a particular location To improve the employee’s own skill base
The company believes that being a global organization; its senior managers should have had international exposure. To take care of the employees’ international assignments, the company follows “Global Service Program”, a system that focuses on the development of a core group of workers for international mobility. There are about 500 high-level managers involved in this program. These managers are characterized as people who have knowledge of their particular field along with the knowledge of the company. Of these 500 managers, about 200 move each year. To ease the costs of transfer for these employees, these employees are given a US-based compensation package. They are paid as per the US salary benchmarks and not as per the host country’s benchmark. These employees’ compensation packages also include benefits like housing allowances, cost-of-living differentials and education costs. In case an expat is in a difficult area, he / she would receive a special allowance. Also these employees are entitled to receive home leave which lets them return to their home for a certain period of time. However, for other regular employees the company follows a “common salary philosophy” wherein the total compensation package is supposed to be competitive with the best companies in the local market. The ultimate goal of this program and company’s IHRM as a whole is to build a cadre of internationally minded high-level managers from which the future senior managers will be drawn. Selection process for International Assignments Proper time is spent by the management for assessing employees for such assignments. First of all, applications are invited from the employees who meet the minimum eligibility criteria for such assignments. The next step is a 5 hours assessment to identify the following 9 skills:
Organizing and planning Perception and analysis Decision making Oral communication Decisiveness Adaptability Interpersonal skills Written communication Perseverance
Based on the above mentioned step, the best applicants suitable for the assignments are shortlisted by line managers; who themselves undergo a 3-day training to understand and learn the art of hiring. Finally the shortlisted employees are interviewed to get a final shortlist in a ratio of 3:1.
Comparison with Colgate-Palmolive Being another global giant, Colgate-Palmolive is one of the companies which can be observed to see how International Human Resource Management practices show a great resemblance among these companies. Like Coca-Cola, Colgate-Palmolive also believes in the Global-Local culture wherein the later also believes in adapting to the local cultures and not letting the American culture dominate as a traditional centralized company. Similar to Coca-Cola, Colgate-Palmolive also follows the practice of Expatriates to help the local managers understand the requirements and standard practices. Colgate-Palmolive similar to Coca-Cola believes in the importance of international exposure for grooming the future leaders of the organization. Both companies’ majority of employees in senior leadership have been found to have rich global exposure. However, there are some differences as well. While Coca-Cola Expatriates are allowed to take home leave within their assignment period, Colgate-Palmolive Expatriates generally receive a 2months home leave at the end of their assignment. While Coca-Cola conducts a 2-week HRM orientation session for its HR staff from all the divisions on a regular basis, there is no knowledge of any such regular session by Colgate-Palmolive. On a different note, while ColgatePalmolive aggressively pushes its employees for international assignments as expats, Coca-Cola tries to keep a check on the number of its expats. Also while Colgate-Palmolive has come up with many assistance programs for Expatriates’ Spouses, there have been relatively less such initiatives from Coca-Cola side.
Conclusion The overall analysis makes one thing very clear that for an organization to become a true multinational, handling of international assignments and coming up with strategic human resource management is very critical. Be it Coca-Cola, Colgate-Palmolive or any other such global giant, effective IHRM policies with strategic objectives as guiding path are something which can be seen existing in all of them.
