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Posted on April 7th, 2012, by

1. What is Coca-Cola’s staffing policy for managerial position: ethnocentric, polycentric, or geocentric? Does this policy make sense?

“Coca-Cola manages its global operations through 25 operating divisions that are organized under six regional groups; North America, the European Union, the Pacific Region, the East Europe/Middle East Group, Africa, and Latin America.”¯ The staffing policy of Coca-Cola is geocentric. This policy makes sense and it is considered very effective, as the Coca-Cola Company is extremely popular all over the world, and consequently has one of the wisest policies. Implemented strategies and innovative approaches used by the company guarantee the success and uniqueness on the international market.

As a fact, Coca-Cola’s philosophy is best summarized by the phrase “think globally, act locally”¯. This captures the essence of Coca-Cola’s cross-border management mentality. The geocentric policy makes sense and the company grants national businesses the freedom to conduct operations in a manner appropriate to the market. At the same time, the company tries to establish a common mind-set that all its employees share.

2. What is the strategic role of the HRM function at Coca-Cola? How does HRM help Coca-Cola to become a more successful international business?

The corporate HRM function achieves this in two main ways; (1) by propagating a common human resources philosophy within the company, and (2) by developing a group of internationally minded midlevel executives for future senior management responsibility.

HRM helps Coca-Cola to become a more successful international business, as the HRM philosophy and talk about how local businesses can translate that philosophy into human resource policies. The corporate HRM group sees its mission as one of developing and providing the underlying philosophy around which local businesses can develop their own human resource practices.

3. Do you think it is appropriate to pay expatriates according to U.S. benchmark rates, even when their home operation is not the United States? What potential problems might such a policy cause? What are the benefits of the policy?

I think it is appropriate to pay expatriates according to U.S. benchmark rates, even when their home operation is not the United States. As senior executive states: “We strive to have a limited number of international people in the field because generally local people are better equipped to do business at their home locations.”¯

However, expatriates are needed in the system for two main reasons. The first reason is to fill a need for a specific set of skills that might not exist at a particular location. The second reason for using an expatriate is to improve the employee’s own skill base. This happens because the company believes that because it is a global company, senior managers should have had international exposure. There can be potential problems cause by such policy, but there are also considerable benefits of the policy.

Of the 500 participants in the program, about 200 move each year. To ease the costs of transfer for these employees, Coca-Cola gives those in its global service program a U.S. based compensation package. They are paid according to U.S. benchmarks, as opposed to the benchmark prevailing in the country in which they are located. An ultimate goal of this program is to build a cadre of internationally minded executives from which the future senior managers of Coca-Cola will be drawn.

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