HR Restructuring - The Coca Cola & Dabur Way

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The After Effects

Both Coca-Cola and Dabur had to accept the fact that a major change on the human resources front was inevitable, although the changes in the two were necessitated by radically different circumstances. More importantly, the restructuring seemed to have been extremely beneficial for them. Besides improved morale and reduced employee turnover figures, the strategic, structural and operational changes on the HR front led to an overall 'feel-good' sentiment in the companies. In 1999, Coca-Cola reported an increase in case-volume by 9% after restructuring. Volumes increased by 14% and marketshare increased by 1% after the regionalization drive. The company's improving prospects were further reflected with the 18% rise in sales in the second quarter of 2000. However, in spite of all the moves, Coca-Cola's workforce was still large. Given the scale of its investments, the future was far from 'smooth sailing' for the company. With the new found focus and a streamlined human resources front, Coca-Cola hoped to break even by the end of fiscal 2001.

At Dabur, with the restructuring moves in place by the late 1990s, the company's future business prospects were termed excellent by analysts. The new structure, the performance-oriented compensation, and the new performance appraisal system increased employee efficiency and morale. The annual sales conferences and cash incentives to junior level sales officers helped in meeting higher sales targets. Dabur's sales increased to Rs 10.37 billion in 1999-00 from Rs 9.14 billion in 1998-99 - an increase of 13.5%. Dabur's profits also increased by 53% from 501 million to Rs 770 million.

The year was a milestone in Dabur's history as the company crossed the Rs 10 billion mark in sales turnover for the first time. Even in early 2001, Dabur's efforts towards emerging as a competitive and professionally managed company were yet to be completely reflected in its financials. Analysts commented that given its track record and the restructuring initiatives, Dabur was all set to reach its target of becoming an FMCG major.