hsc business studies business management and change case study coca-cola amatil

HSC BUSINESS STUDIESHSC BUSINESS STUDIESBusiness Management and ChangeBusiness Management and Change

Case StudyCase StudyCOCA-COLA AMATILCOCA-COLA AMATIL

Q: What is CCA’s mission statement?

A: CCA is becoming a broader based beverage company by being the supplier of choice for both carbonated and non-carbonated beverages. To achieve the financial targets CCA is focused on the following six goals of future per capita growth:

product and package innovation;

cold drink equipment placement;

outlet expansion;

non-carbonated beverages expansion;

customer service improvement.

introduction of alcoholic beverages

BUSINESS MANAGEMENT and CHANGE AT BUSINESS MANAGEMENT and CHANGE AT CCACCA

Unit 1: The Nature of ManagementUnit 1: The Nature of Management1.1 The Importance of Effective Management1.1 The Importance of Effective Management

Management is the process of coordinating the work of other people to achieve organisational objectives.

John Wartig was appointed Chief Financial Officer in June 2004. Previously, he was Senior Vice President Finance for Cadbury Schweppes Americas Beverages after beverage and confectionary experience in Europe and Asia.He has also held a number of senior financial roles within FMCG companies and has extensive operational and M&A experience.

Terry Davis is the Managing Director of Coca-Cola Amatil. He joined the company in November 2001 after 14 years in the global wine industry and more recently as the Managing Director of Bellinger Blass (the wine division of the Foster’s Group Ltd.He is on the Board of the St. George Bank Limited and also sits on the Board of the Faculty of Commerce Advisory Board at the University of New South Wales.

ManagersManagers are those people who are able to select organisational goals and achieve them through coordinating others.

Management functionsfunctions to do this include:P O L C

EffectiveEffective management is also about making the right decisions at the appropriate time.It is about being proactiveproactive.

Senior Managers include:

John Wartig Chief Financial Officer

Warwick White Managing Director, Australia

George Adams Managing Director, New Zealand & Fiji

John Seward Managing Director, Indonesia

Peter Kelly Director, CCA Asia

Warwick White was appointed Managing Director – Australia in November 2002. With 24 years previous experience in CCA mainly in marketing and general management roles, and overseas experience as Regional Director for Coca-Cola Hellenic Bottling Company in Europe as well as 13 years in Great Britain, Warwick brings a wealth of knowledge to this prestigious position,

David M Gonski, AO Chairman

Jillian R Broadbent, AO Independent

Wal M King, AO Independent

Mel K Ward, AO Independent

Geoffrey J Kelly Non-executive

Irial Finan Non-executive

Terry J Davis Managing Director

David E Meiklejohn Independent

MEMBERS OF THE BOARD OF DIRECTORS

What is the function

of the Board of Directors?

Board Responsibilities

The Board has the ultimate responsibility for managing Coca-Cola Amatil’s business and affairs to the highest standards of corporate governance and business conduct to ensure:

1. The strategic direction of the company

2. Approving budgets and other performance indicators, reviewing performances against them and initiating corrective action when required3. Ensuring compliance with applicable laws

4. Systems and procedures to identify, assess and manage risk

5. Fostering an appropriate corporate culture

6. Effective board structure and remuneration for CEO and senior managers7. Ensuring that there is an appropriate focus on the interest of all stakeholders

1.2 Management Roles - with reference to Terry Davis 1.2 Management Roles - with reference to Terry Davis …..…..

Interpersonal Interpersonal - - FigureheadFigureheadLeadingLeadingLiasingLiasing

Informational – Informational – MonitoringMonitoringDisseminatingDisseminatingSpokespersonSpokesperson

Decisional –Decisional – EntrepreneurEntrepreneurDisturbance handlerDisturbance handlerResource allocatorResource allocatorNegotiatorNegotiator

Behaviours Behaviours displayed by displayed by managers when managers when performing their performing their dutiesduties

Henry Mintzberg

1973

1.2 Management Roles1.2 Management Roles

Interpersonal Interpersonal - - FigureheadFigurehead- Terry Davis CEO- Terry Davis CEO Leading Leading – interacting with his – interacting with his

senior managerssenior managers LiasingLiasing – attending functions – attending functions


InformationalInformational – – Monitoring Monitoring – all aspects of – all aspects of

business performancebusiness performance Disseminating Disseminating – information to – information to

all stakeholders about changes all stakeholders about changes in company’s strategic planin company’s strategic plan

SpokespersonSpokesperson – AGM – AGM (15(15thth.Feb.) ;conducting media .Feb.) ;conducting media interviews e.g Business Sundayinterviews e.g Business Sunday


DecisionalDecisional – – Entrepreneur Entrepreneur – introdution of alcohol – introdution of alcohol

and snack food ; and snack food ; Disturbance handlerDisturbance handler – extortion – extortion

attempt in South Korea 2006attempt in South Korea 2006 Resource allocatorResource allocator – investment in – investment in

state of the art production and state of the art production and distribution facilitiesdistribution facilities

Negotiator Negotiator - acting as chief - acting as chief negotiator with parent company TCCCnegotiator with parent company TCCC

1.3 Management Skills -1.3 Management Skills -Effective and efficient managers possess a range of skills that enable Effective and efficient managers possess a range of skills that enable them them to achieve the organisation’s objectives: to achieve the organisation’s objectives:

1. 1. People skills-People skills- communicating with board, country and line communicating with board, country and line managersmanagers

2. 2. VisionVision- broad based beverage company with 74% - broad based beverage company with 74% marketmarket

3. 3. Strategic thinking- long term goals – continual Strategic thinking- long term goals – continual business expansion and review of business business expansion and review of business peformancepeformance Sth. KoreaSth. Korea

4. Flexibility and adaptability to change-4. Flexibility and adaptability to change- IT brought back in-houseIT brought back in-house 5. Self-management- SPC Ardmona operates as a separate 5. Self-management- SPC Ardmona operates as a separate businessbusiness

6. Teamwork6. Teamwork – Country divisions operate as separate units – Country divisions operate as separate units

7. 7. Complex problem-solving-Complex problem-solving- management of increased resource management of increased resource costs costs and still producing returns for shareholdersand still producing returns for shareholders 8. Ethical and high personal standards- Code of Conduct8. Ethical and high personal standards- Code of Conduct

Fair and reasonable

Code of Practice

To ensureBusinesses

Comply With the

law

To ensure businesses

AreEcologicallysustainable

To promote Social justice

To effectively manage change

Responsibility of management to stakeholders

Applying Management Theories to CCA

©CCA is a company with a long, eventful and ever-changing history – 1904 (The British American Tobacco Pty

Ltd Australia)

© Over the years the company has experienced many changescommunications

technologyglobalization

changing markets (especially overseas)development of the domestic financial market

leadership changes

© As a result, the company has witnessed a number of different management theories at work

Unit 2: Management TheoriesUnit 2: Management Theories

Classical/Scientific Theory

Behavioural Theory

Political Theory

Contingency Theory

CCAmatil

© CCA has not relied on a single © CCA has not relied on a single management but rather picks and management but rather picks and chooses the elements of each chooses the elements of each theory that is most suitable to theory that is most suitable to their company.their company.

© This is a flexible approach that © This is a flexible approach that utilizes all management theories utilizes all management theories in all its business operations in all its business operations dependent on the functions that dependent on the functions that need to be performedneed to be performed

© As a result, the company is © As a result, the company is able to respond quickly to able to respond quickly to changes in its internal and changes in its internal and external environmentexternal environment

Classical/Scientific Management TheoryClassical/Scientific Management Theory

© © CCA’s manufacturing operations continue to operate with a hierarchical CCA’s manufacturing operations continue to operate with a hierarchical management structuremanagement structure

© © Production is task orientated, separating employees according to Production is task orientated, separating employees according to specialization and division of labourspecialization and division of labour

Behavioural Management TheoryBehavioural Management Theory

©In other areas of the business there is an ©In other areas of the business there is an emphasis on workplace teams and a reduction in emphasis on workplace teams and a reduction in hierarchies caused by the shift away from state-hierarchies caused by the shift away from state-based organizational structures.based organizational structures.

©This new teams-based ©This new teams-based organizational structure has reduced organizational structure has reduced middle management within the middle management within the company, allowing it to operate more company, allowing it to operate more efficiently and improving the efficiently and improving the communication chain between communication chain between managers and ordinary employees.managers and ordinary employees.

© Continual development of HR © Continual development of HR competencies and ongoing training competencies and ongoing training and development of workers thus and development of workers thus linking motivation to performancelinking motivation to performance

© Davis’s managerial approach is © Davis’s managerial approach is democratic and interpersonal, democratic and interpersonal, working towards all employees working towards all employees sharing a common goalsharing a common goal

Political Management TheoryPolitical Management TheoryPolitical Management Theory

©©The efforts of CCA’s management to clarify the company’s relationship with TCCC The efforts of CCA’s management to clarify the company’s relationship with TCCC are reminiscent of this theoryare reminiscent of this theory..

© The commercial relationship between © The commercial relationship between CCA and TCCC occurs on three levels:CCA and TCCC occurs on three levels:

1.1. Shareholder – TCCC owns around 35% Shareholder – TCCC owns around 35% of CCAof CCA

2.2. Supplier – TCCC supplies the Supplier – TCCC supplies the ingredients from which CCA ingredients from which CCA manufactures its final products and manufactures its final products and accounts for approximately 20% of accounts for approximately 20% of CCA’s total expensesCCA’s total expenses

3.3. Brand owner – CCA licenses the rights Brand owner – CCA licenses the rights to produce many of its most popular to produce many of its most popular products, including Coca-Cola and products, including Coca-Cola and Sprite, from The Coca-Cola Company.Sprite, from The Coca-Cola Company.

© Shareholders frequently express © Shareholders frequently express concern about the possibility of TCCC concern about the possibility of TCCC overcharging CCA for ingredients as this overcharging CCA for ingredients as this could increase costs and thereby decrease could increase costs and thereby decrease returns to shareholders. Terry Davis returns to shareholders. Terry Davis created a committee to review all created a committee to review all commercial transactions between TCCC commercial transactions between TCCC and CCA to ensure fairness to and CCA to ensure fairness to shareholders.shareholders.

© Creating strategic alliances with other © Creating strategic alliances with other users of common raw materials Eg: users of common raw materials Eg: aluminium, takes hours of careful aluminium, takes hours of careful negotiation and bargaining.negotiation and bargaining.

Contingency approach to ManagementContingency approach to Management

© More recently, CCA has © More recently, CCA has adopted an increasingly adopted an increasingly flexible approach to flexible approach to management allowing the management allowing the business to respond more business to respond more quickly to changes in its quickly to changes in its internal and external business internal and external business environment.environment.

© Terry Davis and his senior © Terry Davis and his senior management team, have not management team, have not relied on any single relied on any single management theory but have, management theory but have, rather, chosen to pick and rather, chosen to pick and choose the elements of each choose the elements of each theory that is most suitable theory that is most suitable for their company at that for their company at that particular timeparticular time

Unit 3: Managing ChangeUnit 3: Managing Change

3.1 Nature and Sources of Change

Coca-Cola Amatil – A Changing Mix p2 – 4

• External Influences

• Internal Influences


External InfluencesNature of marketsNature of markets CCA has continuous history of change. From a small CCA has continuous history of change. From a small

Australian tobacco company it has emerged as the largest Australian tobacco company it has emerged as the largest carbonated beverage manufacturer in South-East Asia carbonated beverage manufacturer in South-East Asia

Fickle consumer – dynamic market e.g. RED BULL, CCA Fickle consumer – dynamic market e.g. RED BULL, CCA responded by introducing Lift-Plus and six new products in responded by introducing Lift-Plus and six new products in 20072007

1998 CCA merged with San Miguel (Phillipines) => cost 1998 CCA merged with San Miguel (Phillipines) => cost savings in materials and distribution.savings in materials and distribution.

2001 Sale of Phillippines to TCCC => poor profits & TCCC 2001 Sale of Phillippines to TCCC => poor profits & TCCC pressurepressure

Globalisation => competition from NZ also expansion into Globalisation => competition from NZ also expansion into Korea, Phillippines, PNG, Fiji, NZKorea, Phillippines, PNG, Fiji, NZ

Markets –HIC – cost of product not significant but in LIC Markets –HIC – cost of product not significant but in LIC incomes low therefore pricing policy adjustedincomes low therefore pricing policy adjusted

Purchase of Neverfail and RIO BEVERAGES in NZPurchase of Neverfail and RIO BEVERAGES in NZ Korea poor – will review in 2006Korea poor – will review in 2006 Introduction of health drinks, water and alcohol( joint Introduction of health drinks, water and alcohol( joint

venture with SABMiller & Maxxium’s)venture with SABMiller & Maxxium’s)

3.1 Nature and Sources of ChangeExternal Influences

EconomicEconomic Variations in Economic Cycle will impact on Variations in Economic Cycle will impact on

the business eg after Sept.11 people the business eg after Sept.11 people stopped going out so out of home stopped going out so out of home consumption dropped significantly. Sales in consumption dropped significantly. Sales in high income countries are less affected than high income countries are less affected than in developing (eg the Asian Economic crisis in developing (eg the Asian Economic crisis of 1997 caused CCA sales to drop by of 1997 caused CCA sales to drop by 23%)countries by changes in the economic 23%)countries by changes in the economic cyclecycle

Varying Economic Cycles affect low income Varying Economic Cycles affect low income countries more than high income countries countries more than high income countries e.g. Indonesia &e.g. Indonesia & FijiFiji


FinancialFinancial Currency fluctuations affect revenue and Currency fluctuations affect revenue and

cost of operations- CCA hedges against cost of operations- CCA hedges against variations in currency ratesvariations in currency rates

Investor confidence impacts on share price Investor confidence impacts on share price eg in 1996 share price was`$17 then in 2000 eg in 1996 share price was`$17 then in 2000 it fell to $2.98 while today it is $9.00.it fell to $2.98 while today it is $9.00.

Interest rate fluctuations will impact on Interest rate fluctuations will impact on financial expenses; but the extent will financial expenses; but the extent will depend on the debt levels at a particular depend on the debt levels at a particular timetime

Monetary Policy – changing interest rates Monetary Policy – changing interest rates will impact on costswill impact on costs


GeographicGeographic CCA produces a low value high volume CCA produces a low value high volume

product therefore it needs to product therefore it needs to establish many production plants so it establish many production plants so it is in close proximity to its markets eg is in close proximity to its markets eg in Indonesia it has more production in Indonesia it has more production plants to reduce transport costs.plants to reduce transport costs.

In Australia it has good transport links In Australia it has good transport links therefore requiring less production therefore requiring less production plantsplants


SocialSocial CCA products must reflect consumer tastes eg in more recent years a CCA products must reflect consumer tastes eg in more recent years a

‘healthy lifestyle’. This change initiated the company to move to non-‘healthy lifestyle’. This change initiated the company to move to non-carbonated beverages which makes up 20% of its current sales.carbonated beverages which makes up 20% of its current sales.

This change also initiated the sale of its Tobacco businessesThis change also initiated the sale of its Tobacco businesses The aging of the population is motivating CCA to research the consumer The aging of the population is motivating CCA to research the consumer

preferences of these older customers.preferences of these older customers. Ethical and responsible behaviour – incorporated into company’s policies & Ethical and responsible behaviour – incorporated into company’s policies &

practices documentpractices document Donations of $105,000 to Parramatta council to clean up Toongabbie CreekDonations of $105,000 to Parramatta council to clean up Toongabbie Creek They operated a PET plant but have sold it to VISY Industries and purchase They operated a PET plant but have sold it to VISY Industries and purchase

from themfrom them Water re-cycling initiatives in production plantsWater re-cycling initiatives in production plants Restrictions on use of child labour in Global operationsRestrictions on use of child labour in Global operations CCA foundation in Australia & new CCA Indonesian Foundation established CCA foundation in Australia & new CCA Indonesian Foundation established

in 2002 ( in 2002 ( They operated a PET plant but have sold it to VISY Industries and continue They operated a PET plant but have sold it to VISY Industries and continue

to purchase from themto purchase from them


LEGALLEGAL The company is influenced by legislation and decisions The company is influenced by legislation and decisions

made by the judiciarymade by the judiciary e.g. In Australia the GST(2000) imposed further legal e.g. In Australia the GST(2000) imposed further legal

compliance on its products except for fruit juice and water compliance on its products except for fruit juice and water which is exempt and consequently became cheaper after which is exempt and consequently became cheaper after July 1, 2000.July 1, 2000.

CCA must constantly monitor and comply with all legal CCA must constantly monitor and comply with all legal changes that affect its businesses in 6 countries.changes that affect its businesses in 6 countries.

GST 2000 ( expensive to implement this legal compliance)GST 2000 ( expensive to implement this legal compliance) Fuel Excise Tax ( now dropped) but in Indonesia the fuel Fuel Excise Tax ( now dropped) but in Indonesia the fuel

subsidy was dropped in 2006 which increased fuel prices by subsidy was dropped in 2006 which increased fuel prices by 160% resulting in 18% inflation=> sales reduced by 20%160% resulting in 18% inflation=> sales reduced by 20%

ACCC rejected the – e.g. merger with Cadbury-Schweppes ACCC rejected the – e.g. merger with Cadbury-Schweppes not well managed not well managed


PoliticalPolitical Bali bombing in 2002 caused sales to Bali bombing in 2002 caused sales to

plummet ( 5% of its market); 2000 coup in Fiji plummet ( 5% of its market); 2000 coup in Fiji created distribution problem plus in 2006 created distribution problem plus in 2006 there was more Political unrest in the Pacific there was more Political unrest in the Pacific

CCA is an anchor bottler for TCCC- a company CCA is an anchor bottler for TCCC- a company that represents an American icon- group of that represents an American icon- group of anti-American sentiment around the world has anti-American sentiment around the world has resulted in alternative companies to coke resulted in alternative companies to coke being established in Muslim countries.being established in Muslim countries.

The ongoing geo-political unrest is a potential The ongoing geo-political unrest is a potential threat to all businesses including CCAthreat to all businesses including CCA


TechnologicalTechnological Technology has imposed on all businesses Technology has imposed on all businesses

greater expectations by its stakeholders of greater expectations by its stakeholders of the level of service that the business should the level of service that the business should provide. Eg the ability to use your mobile provide. Eg the ability to use your mobile phone to purchase a drink at a vending phone to purchase a drink at a vending machinemachine

E-mail/ Internet utilised for communication, E-mail/ Internet utilised for communication, electronic ordering, and point of sale electronic ordering, and point of sale monitoring, daily production figures. This all monitoring, daily production figures. This all enables inventories to be controlled. Fully enables inventories to be controlled. Fully automated warehouse introduced in 2004 in automated warehouse introduced in 2004 in Moorabbin plant in Victoria.Moorabbin plant in Victoria.


INTERNAL DRIVERS OF CHANGEAccelerating technology/e-commerceAccelerating technology/e-commerce

Websites are generally expected to provide Websites are generally expected to provide share price, product, financial and share price, product, financial and employment informationemployment information

e.g. automation of warehousing in Victoria by e.g. automation of warehousing in Victoria by March 2004; if successful then salesMarch 2004; if successful then sales

in 3-5 years all warehousing will be in 3-5 years all warehousing will be automated plus $15 m warehouse in automated plus $15 m warehouse in Shepparton completed in 2006. In 2007 they Shepparton completed in 2006. In 2007 they are rebuilding the production and distribution are rebuilding the production and distribution plants in Northmead and Sheppartonplants in Northmead and Shepparton

Purchasing raw materials on internetPurchasing raw materials on internet New vending machines – use with mobile New vending machines – use with mobile

phonephone


INTERNAL DRIVERS OF CHANGESystems & proceduresSystems & procedures

Increasing automation of factory operations => reducing Increasing automation of factory operations => reducing unkilled staff but multi-skilling existing staffunkilled staff but multi-skilling existing staff

Technology enables CCA to source for cheaper products Technology enables CCA to source for cheaper products worldwideworldwide

The company has recently decided to revert in ‘In-House The company has recently decided to revert in ‘In-House IT’ as opposed to outsourcing this function previouslyIT’ as opposed to outsourcing this function previously

Electronic ordering (JIT)Electronic ordering (JIT) Electronic red eye monitoring in production plant ( quality Electronic red eye monitoring in production plant ( quality

control)control) CCA founded e-market place , CORPROCURE 2000 ( this CCA founded e-market place , CORPROCURE 2000 ( this

links buyers and sellers and enables instant price links buyers and sellers and enables instant price comparisons for raw materials -> lowering costs) . comparisons for raw materials -> lowering costs) . development of B2B and B2C relationships.development of B2B and B2C relationships.

Sale of PET and outsourceSale of PET and outsource Monitoring of future weather forecasts to anticipate Monitoring of future weather forecasts to anticipate

demanddemand


INTERNAL DRIVERS OF CHANGEBusiness culturesBusiness cultures

Sales force restructure and Sales force restructure and consolidation of the australain and consolidation of the australain and New Zealand businessesNew Zealand businesses

New acquisitions such as New acquisitions such as Rio Rio BeveragesBeverages and and NeverfailNeverfail have meant have meant some conflicts in business cultures, some conflicts in business cultures, but in the long-term better practices but in the long-term better practices and improved productivity. The and improved productivity. The acquisitions of smaller companies will acquisitions of smaller companies will in the long term create great greater in the long term create great greater profitability once CCA’s management profitability once CCA’s management expertise.expertise.


3.2 Structural Response to Change

Coca-Cola Amatil – A Changing Mix p4

• Outsourcing

• Flat structures

• Strategic alliances

• Networks

Unit 3:Unit 3:Managing ChangeManaging Change


Coca-Cola Amatil – A Changing Mix p4

• Outsourcing

• Flat structures

• Strategic alliances

• Networks


Outsourcing

• Outsourced its PET bottle requirements by selling to Visy industries. PET bottles not part of core business

• TCCC and CCA working with McKinsey to assess growth and other structural initiatives


Flat structures

• CCA’s management team has also shifted the company’s organisational structure from on based on a hierachical chain-of-command to one with a flatter management structure. This change has improved communication between different levels of management at CCA, resulting in improved workplace productivity.


Strategic alliancesThe formation of strategic alliances

has enabled CCA to diversify its operations geographically through its expansion into global markets. The driving force has been its relationship with its parent company TCCC which is a global company


Networks CCA has joined TCCC’s network

of bottlers. This has allowed CCA to expand into its global markets, focusing on South East Asia


3.3 Reasons for Resistance to ChangeCoca-Cola Amatil – A Changing Mix p4 - 5

• Financial Costs

• Inertia

• Cultural incompatibility

• Staffing

3.3 Reasons for Resistance to Change

CostsCosts Any change incurs costs so there Any change incurs costs so there

will always be apprehension and will always be apprehension and resistance from stakeholdersresistance from stakeholders

new machines introduced in new machines introduced in production and distribution -> production and distribution -> lower ST profits but these have lower ST profits but these have LT benefitsLT benefits


INTERNAL DRIVERS OF CHANGEInertiaInertia

Management at CCA was Management at CCA was complacent until David Kennedy complacent until David Kennedy and Terry Davis. These managers and Terry Davis. These managers made decisions to ensure the made decisions to ensure the company’s survival and growth company’s survival and growth into the futureinto the future


Cultural incompatibility small businesses in recent years

would have highlighted the different skills required to manage different sized businesses

Operations offshore highlight the need for different management skills to adapt to different skills to adapt to different business culturesbusiness cultures


Flat structure -> reducing Flat structure -> reducing employment and promotion employment and promotion opportunities & resistance to opportunities & resistance to learning new skillslearning new skills

CCA paid out $15m in redundancy CCA paid out $15m in redundancy payouts in 2002 as a result of payouts in 2002 as a result of mergers and acquisitionsmergers and acquisitions


3.4 Managing Change Effectively

Coca-Cola Amatil – A Changing Mix p5 & 4

• Identifying the need for change

• Setting SMART goals

• Creating a culture of change

• Change models


Identify the needIdentify the need There has been a need to upgrade facilities and There has been a need to upgrade facilities and

plants in Australia & overseas. Also a need to plants in Australia & overseas. Also a need to streamline processes at several plants such as in streamline processes at several plants such as in Moorabbin.Moorabbin.

Global expansion into SE Asia and de-merger from Global expansion into SE Asia and de-merger from Europe and the sale of PhilippinesEurope and the sale of Philippines

Introducing electronic ordering systems to facilitate Introducing electronic ordering systems to facilitate better inventory controlbetter inventory control

Fast track CCA’s presence in alcoholFast track CCA’s presence in alcohol Review of both Corporate Costs and approach to Review of both Corporate Costs and approach to

managing commodity procurement in an effort to managing commodity procurement in an effort to reduce costreduce cost

Broadening beverage portfolio in 2006 and Broadening beverage portfolio in 2006 and introduction of snack foods through SPCArdmona introduction of snack foods through SPCArdmona


Bali bombing; Asian currency crisis & Bali bombing; Asian currency crisis & Sept.11 forced it to review its sales Sept.11 forced it to review its sales budgetsbudgets

Set Growth at 10-15% pa; Earnings Set Growth at 10-15% pa; Earnings per share 12-15%; increase return on per share 12-15%; increase return on capital 1-1.5% p.a capital 1-1.5% p.a

Profits for 2006 were down due to Profits for 2006 were down due to world price increases inaluminium, world price increases inaluminium, tin, resin and sugar.tin, resin and sugar.


Change ModelsChange Models Terry Davis came in 2001 as a change agent and Terry Davis came in 2001 as a change agent and

with the help of management teams created a with the help of management teams created a culture of change culture of change

Various change models were utilised to bring Various change models were utilised to bring about CCA’sabout CCA’s

-Diversification – products and markets-Diversification – products and markets-Expansion into global markets-Expansion into global markets New business acquisitions; all contributed to the New business acquisitions; all contributed to the

change in organisational structure ( from State change in organisational structure ( from State based Strategic business units to functional based Strategic business units to functional management areas resulting in areas of management areas resulting in areas of management from 6 to 4 -> reduction in the level management from 6 to 4 -> reduction in the level of bureaucracy) of bureaucracy)

Unit 4: Social ResponsibilityUnit 4: Social Responsibility

Social responsibility is how well a business Social responsibility is how well a business manages the social, environmental and human manages the social, environmental and human consequences of its actions (the triple bottom-consequences of its actions (the triple bottom-line) as well as maximising its profits (the bottom line) as well as maximising its profits (the bottom line)line)

• Ecological sustainability

• Quality of working life

• Technology

• Globalisation

• Managing cultural diversity

• E-commerce


Ecological SustainabilityEcological Sustainability Production methods changed to Production methods changed to

minimiseminimise

waste – eg water recycling, PET bottle waste – eg water recycling, PET bottle

re-cycling, improvements in packagingre-cycling, improvements in packaging increasing the number of re-cycling increasing the number of re-cycling

depots including Luna Park and along depots including Luna Park and along the Hume Highwaythe Hume Highway


Quality of working lifeQuality of working life Introduction of family friendly practicesIntroduction of family friendly practices CCA pays above award pay and CCA pays above award pay and

provides better working conditions then provides better working conditions then required by law in each of its countries required by law in each of its countries operations.operations.

Redundancy payments or relocation or Redundancy payments or relocation or re-skilling of staffre-skilling of staff

During Bali bombings- company During Bali bombings- company concerned about keeping its staff safeconcerned about keeping its staff safe


Technology impactsTechnology impacts CCA maintains a marketing site CCA maintains a marketing site

to inform its consumers about to inform its consumers about promotionspromotions

Electronically available news Electronically available news bulletins to shareholdersbulletins to shareholders


Globalisation impactsGlobalisation impacts Extortion in July 2007 in South Extortion in July 2007 in South

Korea resulted in withdrawl of Korea resulted in withdrawl of Coca-Cola and the need to claim Coca-Cola and the need to claim insurance for the losses incurredinsurance for the losses incurred


Cultural DiversityCultural Diversity In manufacturing there is large In manufacturing there is large

staff diversity. They encourage & staff diversity. They encourage & offer English coursesoffer English courses


E-commerce

hsc business studies business management and change case study coca-cola amatil

Documents

regional director

managing director australia

board of directorswhat

effective board structure

financial targets cca

ceffective management

management functions

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