Henri Fayol five rules of management Essay
Henri Fayol five rules of management
Fayol’s first “rule” is foresight. Coca-Cola “complete[d] a plan of action for the future” (37) by planning to find a leader that could help “Coke recapture its previous growth pace and stock value without Goizueta’s legendary leadership.” (W-7)
Fayol’s second rule is organization. Coca-Cola took care of this rule of management by being “very sensitive to local market conditions.” (W-7) They used bottlers that were local or one’s not entirely owned by the Coca-Cola Company. This allocation of local bottle companies “provide[d] and mobilize[d] resources to implement [Coca-Cola’s] plan.” (37)
The next of Fayol’s rules is command. Coke implemented this rule by selecting Douglas Daft to take over as chairman and CEO in 2000 for Douglas Ivester. After being appointed CEO, Daft constructed a new executive management team consisting of just ten persons. This made management of the company more efficient since there were fewer jobs to worry about and fewer resources needed to do these jobs.
The fourth rule of Fayol’s model is coordination. Coke had a major problem after introducing New Coke. They solved this problem by refraining to put out new products until they were certain that it would prosper. They resisted the temptation to follow the latest trend and used the motto “If it ain’t broke, don’t fix it.” When Coca-Cola finally felt ready to put out a new product they introduced Vanilla Coke and non-carbonated beverages to appeal to a broader range of consumers.
Finally, Fayol’s last rule of management was control. To keep the company on track with the plan, Daft appointed twenty-four division and operations presidents to make sure the aims of the company were being upheld and attained.
2. Consider the following quote from Coca-Cola’s statement on diversity: “We embrace our commitment to diversity in all its forms at The Coca-Cola Company as a core value. Diversity – of race, gender, sexual orientation, ideas, ways of living, cultures and business practices – provides the creativity and innovation essential to our economic well-being. Equally important is a highly motivated, healthy and productive workforce that achieves business success through superior execution and superb customer satisfaction.”
This quote can be related to the Coke case by the way that Coca-Cola selects its type of advertisement based on the target location. Another way they embrace their commitment to diversity is by their release of new products such as Vanilla Coke and non-carbonated beverages to meet the diverse needs of consumers. The quote can be related to the behavioral approaches to management by Daft’s decision to make the company a more entrepreneurial organization and slimming down on the number of executive managers.
3. How does Coca-Cola score on the eight attributes of performance excellence?
On the eight attribute of performance excellence, Coca-Cola scores very well. The eight attributes can clearly be seen in the company:
Bias toward action by making a decision to appoint Daft as the new CEO because they feel he will get things done better than Ivester.
Closeness to the customers by using local companies to bottle and distribute Coke products so that the community is getting back from the products they purchase.
Autonomy and entrepreneurship by coming out with new products like Vanilla Coke, Diet Vanilla Coke, Diet Coke with lemon, and non-carbonated beverages.
Productivity through people by giving responsibility for implementing the company’s six strategic priorities to Coca-Cola employees.
Hands-on and value-driven by seeking to reach the status the company had under Roberto Goizueta.
Sticking to the knitting by not producing new products after the failure of New Coke and sticking with the original product that got them their success until they were truly ready to release new products.
Simple form and lean staff by Daft cutting his executive management team to just ten people. Simultaneous loose-tight properties by broadening their beverages and creative service while maintaining the same image and standards the company conveys.
4. Do you think Douglas Daft will be successful in regaining the growth and value experienced under Roberto Goizueta?
I do not think Douglas Daft will be successful in regaining the growth and value experienced under Roberto Goizueta because there is so much more competition today among carbonated beverages and Pepsi is coming up in status. Another factor is the fact that people are becoming healthier and drinking less carbonated drinks and switching to a healthier choice in water and sports drinks like Gatorade.