The three activities namely (i) partition of decision rights, (ii) measurement of performance, and (iii) reward of performance must be designed in sync to keep the organizational architecture or “three-legged stool” (Zimmerman, 2014) balanced. This will ensure that decision makers within an organisation have the relevant information to maximise firm value, as well as the incentives to use this information productively from the firm’s perspective.
Unfortunately, in reality, this is often not so. Mismatch among these three legs are common occurrences.
Required:
Selected company: Coca-Cola
(a) Suggest possible improvements that the company can adopt.
Coca- Cola can improve its decision making capabilities and delivering value to the stakeholders through following initiatives:
1) Each employees must be categorized or segmented based on rights they have and what they can demand from management. The set of rights must follow the constitution of America and other host country legal environment. Discrimination of any kind must be removed inspite of your constitutional rules allow the same.
2) It should measure both employees as well whole organizational performance in terms of realistic parameters. Coke should utilize the performance of its supply chain partners and improving them should be strategically designed by the top level executives. It will provide it long term sustainable advantage in the soft drink as well as FMCG business operations.
3) Reward should be offered to each stakeholders whether employees or a third party vendors against the contributions made by them to coke as a brand. Both intrinsic as well as extrinsic system of rewards must be considered for the employees. It should reward employees having innovative and green ideas to make it more valuable across the world.
The three activities namely (i) partition of decision rights, (ii) measurement of performance, and (iii) reward...
Managerial Accounting In any organization, it is important that the three activities namely (i) partition of decision rights, (ii) measurement of performance, and (iii) reward of performance must be designed in sync to keep the organizational architecture or “three-legged stool” (Zimmerman, 2014) balanced. This will ensure that decision makers within an organisation have the relevant information to maximise firm value, as well as the incentives to use this information productively from the firm’s perspective. Unfortunately, in reality, this is often...