Global Human Resource Management at Coca-Cola

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Global Human Resource Management at Coca-Cola

房伟 MG0902172

1. Perlmutter claimed that it was possible to identify among international executives three primary attitudes—ethnocentric, polycentric and geocentric—toward building a multinational enterprise, based on top management assumptions upon which key product, functional and geographical decisions were made. Next is introduction to definition：

Ethnocentric: Few foreign subsidies have any autonomy and strategic decisions are made at headquarters. Key positions in domestic and foreign operations are held by headquarters’ personnel. Subsidiaries are managed by staff from the home country.

Polycentric: the MNE treat each subsidiary as a distinct national entity with some decision—making autonomy. Subsidiaries are usually managed by local nationals, who are seldom promoted to positions at headquarters, and PCNs are rarely transferred to foreign subsidiary operations.

Geocentric: the MNEs is taking a global approach to its operations, recognizing that each part (subsidiaries and headquarters) make a unique contribution with its unique competence. It is accompanied by a worldwide integrated business, and nationality is ignored in a favor of ability. This is a major goal the European telecommunications company Vodafone would like to achieve. The corporate HRM group in Coca-Cola sees its mission as one of developing and providing the underlying philosophy around which local business can develop their own human resource practices. Such as a common salary philosophy, information sharing, local personnel, expatriates and so on. All these tell us that Coca-Cola’s staffing policy for managerial position is combination of Ethnocentric and Geocentric.

This policy does make sense. The advantages and disadvantages of Ethnocentric and Geocentric can complement each other. So, on the whole, the policy is very useful.

2. The strategic roles of the HRM function are: centralized, decentralized and transition.

The key activities of centralized HRM companies are: planning international assignments and performance management globally, identifying high-potential staff.

The key activities of decentralized HRM companies are: influencing operating units to support international assignments, supporting decentralized HRM.

The key activities of transition HRM companies are: persuading pisional managers to release key staff using informal and subtle strategic staffing.

So the strategic role of the HRM function at Coca-Cola is transition. For example twice a year the

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corporate HRM group also conducts a two-week HRM orientation session for the human resource staff from each of its 25 operating pisions, they share information and strengthen their skills, and all these measures help Coca-Cola to become a more successful international business.

3. It is appropriate to pay expatriates according to U.S. benchmark rates, even when their home operation is not the United States. The problems of this policy are: resulting in great disparities between expatriates of different nationalities and between expatriates and local nationals; quite complex to administer. The benefits of this policy are: equity between assignments and between expatriates of the same nationality; facilitating expatriates re-entry; easy to communicate to employees.

The difference between American and Japanese management

1. Inpidualism and collectivism

American corporate management thought is based on private ownership, free and equal competition is the soul. The core is personal capability to play and the pursuit of personal career development. General speaking, this management can be called human-centered inpidualism. Japanese management thinking is based on private of the family. The soul is to keep the internal coordination, the advantage of playing the whole group and maintaining the interests of whole group is the core. In general Japanese business management thinking can be called collectivism, which centers on group management.

2. The relationship between enterprise and employee

The relationship between American companies and employees is the interest of both sides, which is based on legality and contract. This relationship is very short and the combination enterprise with employee is two-way selection.

Japanese companies emphasize that the employees should be loyal to their company and cooperation should be taken place in employees and corporations. The corporations are seen as not only economic entities to make profit but also as a business life of all members of the community.

3. Accountability management

The major decision-making concentrated in highest level, the other levels of managers and workers also have their clear responsibility. Under normal circumstances all should be beyond the scope of responsibility, which is not allowed vertical interference between the upper and the lower

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of the departments and lateral interference between departments and colleagues. They think highly of exception to the principle.

There are three types of organization in Japanese companies. The first is centralized functions of the system, the second is semi-centralized functions of the system, and the last is hierarchical management, which is typically pided by product and market.

4. Business attitude

The ultimate goal in American companies is pursuing maximize profit. So the American corporations are very concerned with efficiency and they improve the competitiveness by many ways.

Comparing with American companies, the Japanese companies take more attention to social benefits and social responsibility. They emphasize more on industry serving for the country.