Managerial Economics and Organizational Architecture



Managerial Economics and Organizational Architecture

Introduction

Currently, I am working in the marketing department of the international beverage company, Coca Cola. The company enjoys the largest market share in the international economy. This paper discusses the organizational structure and managerial strategies of the company.

Discussion

Organizational Structure

Coca cola is a global, and one of the leading manufacturers and distributors of non alcoholic soft drinks and beverages (Annual Report, 2011). The company’s market is expanded in around 200 countries and in addition to coke, it owns over 500 different brands. It has the headquarters located in Atlanta, Georgia, USA.

Assignment of Decision Rights

The strategic decision making process is the most important for the firm, as it has a long term impact on the firm. The decision making authority at the Coca Cola Company are the directors and the members of executive committee. The impact of strategic decisions spreads across multiple functional areas including production, accounting, distribution and sales departments

The three important teams and team leaders for the company’s strategic decision making process are the manufacturing or production team, the bottling teams and the marketing teams.

The teams all around the world collaborate and communicate with the team leaders and executives through efficient computer based information systems. These information systems classify into the various levels such as transaction processing systems (TPS), management information systems (MIS), and at the highest level are the strategic information (SIS) and decision support systems (DSS).

Method of Rewarding individuals

The company has efficient programs for evaluating the employee performance (such as red tag). Normally, the company offers 10% yearly increment to all employees, but unusual performance based appraisals are also evident. Thus, the company adds to the employee working experience value by offering various reward and recognition programs.

Structure for Evaluating Individuals and Business Units

As discussed in the previous section, the company relies heavily on the advanced information and communication technologies, and the information systems. The information systems such as MIS and DSS help the company to generate customized reports and evaluate the performance of subunits and individuals.

Architecture of the Market

The architecture of beverage market has been significantly advanced due to changing attitudes of customers, pricing and new entrants. In order to survive well, the beverage company has to be well equipped with advanced business strategies.

Architecture of the Firm

The company only manufactures the concentrates, bases of beverages and syrups. After manufacturing, these products are sold to the bottling companies. After being returned in a bottled and packaged form, the company distributes the brands all over the world. In addition to that, company itself is responsible for handling all marketing processes and strategic decision making.

Decision Rights and Decision Control

Decision rights are with the executive committee members of the company, however the employees have significant control over the decisions, as they are always welcome to collaborate and bring ideas into the decision making process.

External Business Environment

Over the period of past few years, it has become immensely difficult for the beverage companies to retain their market leadership positions ...