HR Restructuring - The Coca Cola & Dabur Way

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Restructuring the Mess

The Coca-Cola Way In 1999, following the merger of Coca-Cola's four bottling operations (Hindustan Coca-Cola Bottling North West, Hindustan Bottling Coca-Cola Bottling South West, Bharat Coca-Cola North East, and Bharat Coca-Cola South East), human resources issues gained significance at the company. Two new companies, Coca-Cola India, the corporate and marketing office, and Coca-Cola Beverages were the result of the merger. The merger brought with it over 10,000 employees to Coca-Cola, doubling the number of employees it had in 1998. Coca-Cola had to go in for a massive restructuring exercise focusing on the company's human resources to ensure a smooth acceptance of the merger. The first task was to put in place a new organizational structure that vested profit and loss accounting at the area level, by renaming each plant-in-charge as a profit center head.

The country was divided into six regions as against the initial three, based on consumer preferences. Each region had a separate head (Regional General Manager), who had the regional functional managers reporting to him. All the Regional General Managers reported to VP (Operations), Sanjiv Gupta, who reported directly to CEO Alexander Von Bohr (Bohr). The 37 bottling plants of Coca-Cola, on an average six in each region, had an Area General Manager as the head, vested with profit-center responsibility. All the functional heads reported to the Area General Manager. Coca-Cola also declared VRS at the bottling plants, which was used by about 1100 employees.

The merger carried forward employees from different work cultures and different value systems. This move towards regionalization caused dilution of several central jobs, with as many as 1500 employees retiring at the bottling plants. The new line of control strengthened entry and middle-level jobs at the regions and downgraded many at the center. This led to unrest among the employees and about 40 junior and middle-level managers and some senior personnel including Ravi Deoi, Head (Capability Services) and Sunil Sawhney, Head (Northen Operations), left the company.

As part of the restructuring plan, Coca-Cola took a strategy level decision to turn itself into a people-driven company. The company introduced a detailed career planning system for over 530 managers in the new setup. The system included talent development meetings at regional and functional levels, following which recommendations were made to the HR Council. The council then approved and implemented the process through a central HR team. Coca-Cola also decided that the regional general managers would meet the top management twice a year to identify fast-track people and train them for more responsible positions. Efficient management trainees were to be sent to the overseas office for a three-week internship. To inculcate a feeling of belonging, the company gave flowers and cards on the birthdays of the employees and major festivals.

Coca-Cola also undertook a cost-reduction drive on the human resources front. Many executives who were provided accommodation in farm-houses were asked to shift to less expensive apartments.

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