Free Case Study On Coca-Cola Case
What was this CEO's leadership style?
The person who influenced the history of the company more than anyone else was Robert Goizueta. He had been the Coca-Cola’s CEO for 16 years and during this period of time the company raised its stock price on 5,800 per cent. Goizueta’s leadership style can be characterized as visionary. He possessed risk-taking ability. Goizueta reputed that a calculated risk-taking was a necessary condition for the Coca-Cola trademark world conquest. He also was an innovator. The first thing that Goizueta did on his CEO position was the rejection of the diversification strategy in favor of the specialization. Before Goizueta the Coca-Cola Company was engaged in wild range of activities. Goizueta decided that a company’s specialization on carbonated soft drinks was the only way to success. He stated that there should be a clear goal for every employee but a freedom of actions on how to archive this goal. He also was against speed ranking. He believed that in order to find out what a person was really worth for it was necessary for him to work at one place for a long period of time. Later, his recipients Ivester and Daft, would criticize this approach as one that lead to a company’s stagnation and prosperity of corruption. Goizueta’s leadership style is also characterized as “less hands-on and more intellectual” (Riaz, 2008). He preferred to role the company from his headquarters’ office and rare visited remote offices. He considered that a high profit motivation and a freedom of actions for managers would intellectualize the process of company’s effective existence.
Next Coca-Cola CEO was Douglas Ivester. His leadership style was much different from Goizueta’s. It can be characterized as “micromanaging” because Ivester wanted to be involved in every step his company took. He was against employee’s freedom of actions and preferred to make decisions for them. His leadership style was managerial. He kept contacts with managers all over the world and knew the work at every level. But during his role the company was stuck.
Douglas Daft came next. His leadership style is difficult to define. He did not have any clear strategy. He made decisions spontaneously and often without considering the consequences. He related on his intuition and Asian experience without taking into consideration other regions’’ special markets features.
Daft’s successor was Edward Neville Isdell. He was a very experienced Coca-Cola worker and knew exactly what was needed to be a good CEO. I would characterize his leadership style as strategic. He was able both to improve day-to-day activities as well as planning for the future. During his role the company improved its positions on old markets and won new ones: India and Soviet Union. Under Isdell’s leadership Coke’s stock price increased 12.9 percent (Riaz, 2008).
And finally, the recent Coca-Cola CEO is Muhtar Kent. His leading is named “leading with a global mindset”. He states that every action has the impact not only on the place where it was taken but for the whole company. Kent’s leadership style is strategic. According to Bhasin, he personally named it "constructively discontent - not fast enough, not innovative enough, not entrepreneurial enough”.
How effective was this leadership style in navigating Coca-Cola trough the strategic challenges it faced?
Goizueta’s 16 years leading “the company’s revenue increased from $4.8 billion to $18.5 billion, net income from $0.5 billion to $3.5 billion, and return on equity from 20 per cent to 60 per cent from 1981 to 1996” (Riaz, 2008). It means that Goizueta’s leadership style was as effective as it could be. Goizueta’s desire to specialization allowed releasing resources and focusing on distribution. A high-developed distribution network is a fundamental necessity of a prosperous multinational business. And Goizueta understood this fact very well.
Next two CEO, Douglas Ivester and Douglas Daft, were less useful for the company. Ivester with his meticulousness to details was not able to concentrate on the most important sides of the company’s activity. His desire to control everything and everybody lead to the reduction of Coca-Cola’s stock price on 8% for three years. Ivester was the less effective CEO for the company’s history from 80s till nowadays. What concerns Daft’s activity, the company’s stock price increased on 6% for 4 years. But Daft’s leadership style was unstable and too unpredictably. Shareholders did not want to risk and decided to replace him.
E. Neville Isdel was rather effective on his post. During his 4-years headship, the company’s stock price increased on 12%. His strategic planning and clear vision of company’s main goals helped him to overcome the negative consequences of his precedencies.
The results of Muhtar Kent’s headship are too early to analyze. But it goes without saying that his innovative approach may lead the company to new pinnacles of success.
Riaz, S. (2008). Strategic Leadership At Coca-Cola: The Real Thing. Ivey Management Services.
Swart, G. (1997, Oct.23). Roberto Goizueta. The Economist.
Fink, J. (2010, July 12). Book Review: The Life and Leadership of Coca-Cola’s Roberto Goizueta. Investing Daily.
Bhasin,K. ( 2012, May 10). Coca-Cola CEO Muhtar Kent Explains Why Everything's All About Cash. Business Insider.
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