Performance Measurement System
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The need for businesses to employ innovative ways to measure their performance rate cannot be underrated. By doing this, companies are guaranteed of short and long-term sustainability, due to improved levels of investor confidence. This paper will critically evaluate on the performance measurement used by Coca Cola Company. For Coca Cola Company, the largest manufacturer, distributor, and seller of non-alcoholic beverages globally, the firm has adopted Total Quality Management System as part of performance measurement. In Coca Cola Company, this system is known as Total Quality Coca-Cola Management System (TQCCMS).
TCCQS is the Coca Cola quality management system, which guide and coordinate activities to ensure quality of the products and services is attained. The system indicates environment and quality standards, which define the results of manufacturing operations expected to be gained. The TCCQS modular framework is quality, safety, and environmental facets, where the environmental facet is composed of environmental management system. It is notable that the firm employ process model to improve, implement, and develop the effectiveness of the quality management system. To enhance quality, each department in the Coca Cola Company must maintain, implement, document, and establish the quality management system, as prescribed by TQCCMS. Further, management in the entire organizational unit are supposed to develop a quality statement that suit a given operation method.
By employing TQM system, Coca Cola Company have enjoyed various benefits, such as reduced wastages, improved innovation and inventions, reduced operational costs, improved level of customers loyalty among others. The challenges of TQM systems include time wastage during the implementation phase, resistance by employees, high cost of implementation among others. To ensure the effectiveness of TQM approach, the firm has employed various evaluation methods. These include implementation evaluation, impact evaluation, cost-effectiveness and cost-benefit analysis and outcome evaluation. Generally, by using integrated TQM in the recent times, Coca Cola Company has been able to remain profitable, despite the prevailing hard economic times.
In the recent times, the competition between firms operating in the similar field has drastically increased. This is attributable to raised technological knowhow, the improved management, reduced barriers of the entry among other notable factors. Therefore, in order for a business to operate in this competitive market environment, the improvement for better solution and critical processes are the key solutions to ensure sustainability. Kotter & Cohen (2002, p. 53) indicate that performance measurement (PM) ensures that an organization follows the set strategies, a factor that highly promote a short and long-term growth. PM plays a significant role in maintaining attention to customer’s requirements as well as competitor actions. In addition, PM ensures a successful implementation of the organization strategies due to the fact that performance indicators used in organizations are based on a CSF (Critical Success Factor) concept. Performance measurement encourages an approach to evaluating, sharing, retrieving, capturing, and identifying enterprise information assets.
It is notable that the use of information technology has led to the growth of skills, thus exposing handling of the intellectual property collection as well as the distribution of right. To meet the requirements of the society and the customer, performance management is used in line with distribution distributive knowledge management (Li, 2012, p. 1). In most organizations, performance measurement helps in evaluating productivity, efficiency, cycle time, quantity, quality, and costs of services and products in the organization. Similarly, performance measurement is based on quantities analysis where objectives and targets are accessed and established. Another approach for managing and measuring critical processes is the Balance Scorecard (BSC).
The approach covers all aspects of stakeholders and organization behaviors such as growth, customer’s satisfaction, and customer’s expectation among others. To enhance the Balance Scorecard methodology, clear strategies, mission statement, and vision of the organization need to be analyzed (Anderson, Rungtusanatham and Schroeder, 1994, p. 88).
Distributed Knowledgeable Performance Management System (DKPMS) () is the best approach to use in an organization in this era of data and technology. To ensure effectiveness of the development and the evaluation, there are two frameworks that are used, which include implementation and enabling factors. In terms of performance measures, DKPMS has different uses, which include making decisions, reporting, analyzing, and collecting information regarding all the processes. DKPMS is effective in transforming quality management culture in an organization. Additionally, DKPMS has several advantages during the quality information provision. They include continuous improvement, visibility, precise and correct clarity and timeliness (Kotter & Cohen, 2002, p. 50).
The Coca-Cola Company, founded in 1886, is one of the world’s largest manufacturers, distributors, and marketer s of non-alcoholic beverages and has over 300 brands of beverages. The company headquarter is based in Atlanta, Georgia, the U.S.A., and operates in more than 200 countries worldwide. The company mission is to refresh the world, to instigate moments of happiness and confidence and to make a difference and create value. To enhance the growth, the firm has implemented quality assurance to its services and products, thus enhancing customers’ satisfaction. The mission statement of the company declares its purpose and serves as the standard alongside decision and actions. The Coca-Cola Company has several values, which serve as the scope of its actions. The values include quality, diversity, passion, accountability, integrity, collaboration, and leadership. One reason for the sustainable business growth in the Coca-Cola Company is through understanding the customer’s local culture such as relaxation activities, recreation and work activities adopted. Likewise, the company contributes back to the community by assisting them in diversity, environment, wellness, health, and education. To improve the quality of their product, the company has adopted Total Quality Coca-Cola Management System (TQCCMS). This paper will discuss the implementation of Total Quality Management System on business performance in the Coca-Cola Company. The case study will candidly explain how Total Quality Management System was developed, frameworks used, customer strategies, customer’s requirements, performance indicators, as well as the processes used.
Quality Evolution in the Coca Cola Company
Coca Cola introduced its products in glass bottles in 1899. However, the company has unified different designs of the bottle, which has increased its market growth. Likewise, the company has diversified its brands since its evolution. For instance, in the 1980’s, the firm launched a new brand extension, which had different flavors, such as caffeine free coke, cherry coke and diet coke. In the 1990’s, the company expanded its package, processes, and products. Having the best quality of beverage products has helped the company to stay apart with the competitors such as Pepsi among other emerging competitors. The approach to manage quality was developed in the mid-1990s due to change in the market place. The company developed a quality management system in 1995 referred to as TCCQS (The Coca-Cola Quality System) (Kotter & Cohen, 2002, p. 90).
TCCQS is the Coca Cola quality management system that helps to guide and coordinate its activities to ensure quality of the products which is achieved. The system indicates environment and quality standards which define the results of manufacturing operations expected to be gained. To enhance quality, TCCQS must keep pace with the market place conditions, industry practices, quality management methods, as well as new regulations. Food safety is important for the products; hence, there is a need to create awareness to the supply and manufacturing departments in the company. TCCQS must be up to date with manufacturing practices by improving the requirements. The Coca Cola Company is working for a consumer and customer’s satisfaction. Additionally, the company is responsible for the citizens of the world, making TCCQS crucial in providing a framework for environmental, and safety stewardship (Li, 2012, P. 1).
There are different improvements for the managing system quality implementation as TCCQS evolved. One of the improvements is the provision to external resources such as auditing and training when addressing Coca Cola requirements. The second improvement is being in alignment with external recognized standards. The third improvement is the evolvement of a structure which is modular, streamlined, and simplified. Likewise, evolution of this system enabled the improvement of business excellence and performance in several ways. Firstly, it helped in designing tools and methodologies for problem solving to improve continuously. Secondly, it assisted in incorporating Hazard Analysis and Critical Control Point (HACCP) to Quality Management System. Thirdly, it assisted in planning new products and services by including rigorous demands. Fourthly, the evolution has the integrated preventive action for managing. Fifthly, it has demonstrated the active involvement of the top management in managing quality in every department unit. Sixthly, it has helped in aligning and integrating quality and business objectives to the monitor performance with metrics (Neely, 1998, p. 55).
TCCQS Modular Framework
The framework core of the system is quality, safety, and environmental facets. This is due to the fact that the framework allows business units to align with it. The third evolution of the TCCQS model has four layers, which include promise, control, assurance, and policy. The pyramid has the same components parts for facet such that each management system is dependent on one another. For instance, the environmental management system is supported by performance requirements. The diagram below shows the model framework of TCCQS.
(Neely, 1998, P. 53)
The facet has four layers. The first layer is the promise. The Coca Cola Company has promised to refresh and benefit the customer. This is supported by the company mission statement “|To refresh the world” (Li, 2012, P. 1). This layer is supported by the entire three facets in the framework. The second layer is the policy. The layer comprises of a policy statement. The policies found in this layer are the safety policy and the environmental policy. The third layer is as the assurance (Kotter & Cohen, 2002, p. 61). The layer comprises of management systems which are designed to ensure the effective control of activities. Similarly, it ensures that the performance requirements are met. On the quality facet, the system has the Quality Management System. The system meets the requirements needed for the ISO standard certification. The Coca Cola ISO standard is 9001:2000.
The standard embodies the Global Food Safety Initiative (GFSI) management system, which qualifies the food safety standard. This has assisted the company in staying up the market since the system has all the requirements for food safety governing. Additionally, the quality management system features Coca Cola elements like the Crisis resolution and the incident management. The environmental facet has the Environmental management system. The system has a similar focus with the Quality Management System facet. The environmental system has ensured the Coca Cola Company meets the requirements to be awarded ISO Standard 14001:1996. The Safety Management System has the facet for safety and loss prevention. The system meets the necessities for OHSAS 18001:1999 standard. Coca Cola was awarded all these standards by international registrars Lloyd’s Register Quality Assurance (LRQA) and Societe Generale de surveillance- international Certification Services (SGS-ICS) (Kotter & Cohen, 2002, p. 59). The fourth layer is the control. The Coca Cola Company ensures that all the products are controlled, tested, and inspected to ensure quality products. The control services offered by the system include good environmental practices, cleaning, sanitizing methods, and good manufacturing techniques.
The TCCQS scope has benefited from evolution 3. The framework model shows the testing and manufacturing operations. The company organization units and departments are required to adhere to all the regulations of the model despite its size or type. This is to ensure that all the outputs meet the requirements of the customer. Evolution 3 changes the scope of the traditional manufacturing supply chain into three categories. These categories include inbound, transformation, and outbound. Inbound refers to gaining of raw materials. Transformation refers to conversation of raw materials gathered in to usable marketable products. The outbound category refers to how the marketable products are warehoused, distributed, and marketed.
The Coca Cola Company used process the model to improve, implement, and develop the effectiveness of the quality management system. The model controls individuals on how they interact and combine with each other. This increases the ability of the company to satisfy the customers. The diagram below illustrates the Coca Cola quality management process model.
(Kotter & Cohen, 2002, p. 66)
The Coca Cola Company has existed to refresh and benefit everybody. The quality of products should be measured and tasted. This will enhance the quality and keep the business as per the objectives. Consumers of non-alcoholic beverages have always chosen the Coca Cola Company products because of the following reasons. Firstly, the company has a symbol of quality, which attracts the consumers. Secondly, the company product satisfies the. Thirdly, the company is responsible for the citizens by ensuring the products fit for human consumption as well as being healthy products.
Quality Management System
Each department in the Coca Cola Company must maintain, implement, document, and establish the quality management system. In addition, the system must meet all the required standards for implementation. The quality management system was developed by the company to enhance the market hence boost sales. Likewise, the system was introduced to control leadership in the company to ensure effective running of the business across the world (Kotter & Cohen, 2002, p. 63).
Objectives and Goals of the Quality Management System
A business plan must be developed by each organizational unit in the company. The business plan comprises of goals and objectives. These will enhance organization improvement hence good effective of the system. Once the system is implemented, it is monitored to ensure the performance is in line with the objectives. The top management communicates to the employees about the business plans in every organization unit. Likewise, the progress must be communicated to the employees regularly. During business planning, there are procedures to be considered. Firstly, the factors for organizational unit success must be determined. Secondly, safety, environmental, economic, and financial factors on the organizational unit should be assessed. Thirdly, the external and internal risks factors should be accessed as well as ways to manage the risks. Fourthly, the needs and the human resource capabilities should be analyzed. Further, the needs, the availability of resources, and the quality capabilities should be determined. Generally, the metrics and objectives of the organization unit should be distinguished to help in determining the system type to set up. The objectives should be consistent and measurable with a quality statement. The Coca Cola Company top managers in each organizational unit must plan the quality management system and its integrity to ensure it meets the company objectives (The Coca – Cola Company; Kotter & Cohen, 2002, p. 68).
Responsibility of the Management
The management in the organizational unit must develop a quality statement that suit an operations method. There are several ways in which the management shows a support to the development of the system. One way is to ensure appropriate resources for the system which are available. Another way is to establish a quality statement that ensures that metrics and objectives are established. Similarly, they act as a mode of communication to the company on necessity to meet the customer’s satisfaction. Consequently, they ensure HACCP is maintained and implemented in the distribution and manufacturing operations.
Likewise, they conduct management reviews as well as ensuring that the customer’s requirements are met and understood (Neely 1998, p. 53). Resources required to design the system should be determined to ensure a quality system is developed and implemented. This will also assist in improving the quality and effectiveness of the system. The quality statement must be documented and established by the top management. There are different qualities of a good quality statement. Firstly, the statement purpose should be appropriate to the organizational unit. Secondly, the statement should include a commitment to fulfill the requirements hence improve the effectiveness of the Quality management system. Thirdly, it should have a commitment to the food safety. The top management has the role to appoint a supervisor to manage the system development. The supervisor will ensure the system is established, implemented, and maintained as per the processes. Additionally, the supervisor is required to report to the top management on the system performance as well as the need for improvement. Moreover, the supervisor should ensure that promotion awareness is available.
The management of organizational unit must review and analyze the system at different intervals. There are different inputs summarized by the management for analysis. One of the inputs is the HACCP plan validation and the audit result. Another output is the consumer and the customer feedback. This will help in reviewing the system for changes to ensure it meet the customer’s satisfaction. The data product and the performance process are the another outputs that should be reviewed. Another output to be reviewed is corrective and preventive actions as well as follow up actions. Likewise, changes that are applied to the system should be reviewed as well as need for a change to make it better (Kotter & Cohen, 2002, p. 65).
In addition, the recommendations that have been subjected should be reviewed to improve the quality of the system. Decisions concerning the system must be reviewed by the management to avert the risks that might affect the system. The management reviews must document all their findings for reviewing during the system change. Documents used to develop the quality system for the Coca Cola Company must be documented properly as per the standards. The documents should be numbered, approved, reviewed, and updated as well as being distributed properly to the employees in the departments.
Development and Design
To develop the Coca Cola Company quality system, the management planned the design first. The plan had the development stages as well as design of the system. Relevant authorities were designated for the development and the design. There was a clear communication between the developers of the system in all the organizational departments in the Coca Cola Company. This ensures that the designers are up to date with the development progress. The development gathered all the requirements which were required by the developers. The top management in the entire organizational department purchased for the materials required to ensure they were available to the developers. This ensured the system was completed in time hence easier implementation of the system. The management reviewed the system by the end of each stage to ensure that it meets all the requirements and objectives of the Coca Cola Company. The documents of all the stages at which the system was developed were documented properly for the future reference in case of the change need (Neely, 1998, p. 93).
Once the design process was complete, the system was reviewed, validated, and verified before the implementation. This was done in correspondence to the objectives set during system planning. Likewise, the system was approved as per the standard of ISO certification of Quality. Consequently, the system was implemented for the use by the Coca Cola Company. To ensure effective use of the system, the Coca Cola management has developed and designed changes. The changes documentation has been recorded and identified properly for the future reviews. The changes constitute products and parts that have been delivered to the customers and the feedback that has been received from them. This ensures the company stays up of the competitors in the market. The company has also maintained action and changes, hence satisfying the customers. The measures that were taken by the Coca Cola Company were effective. There are several advantages which resulted from the system. One of the advantages is that the system has helped the Coca Cola Company to compete with its competitors (Kotter & Cohen, 2002, p. 49).
The system has helped in the improvement of the quality of their products by ensuring the customers are satisfied. Another advantage is commercialization of products in every department; it has ensured effective merchandising, distribution, and manufacture of new products. Likewise, the system has boosted the advertising of the products, hence making the customers aware of the new products in the market. The feedbacks use from the customers has helped the managers in the organization to review the system and to make changes which increase the sale of the products. In addition, the system has helped the Coca Cola Company to determine its safety problems faster, hence enhancing effectiveness. Another advantage is the evolvement of new brands in the market. This has increased the market of the Coca Cola Company. This has helped the company to produce quality brands of beverages due to the quality and the assurance department model.
Advantages and Disadvantages of the TQM System in the Coca Cola Company
As clearly stated above, the Total Quality Management System is one of the systems which improves continuously all the work force in any business, ranging from managers and directors to those workers who are involved in the production line. The main focus of this improvement programs is to raise the service delivery level to the customers as well as reduce wastes in any given firm. It is notable that TQM requires the management to get everything right from the first time as well as to continuously improve all the business production. This way, the firm is able to deal with all the upcoming challenges, especially those arising from technological changes, hence remaining profitable both in the short and long-run.
Anderson, Rungtusanatham, and Schroeder (1994, p. 34) argue that there are two major characteristics of the TQM. These are focus on delivering quality services to the customers and systematic problem solving, which involves the front line workers. For multinational companies, such as the Coca Cola Company, the implementations of the TQM approach to management have had several advantages and disadvantages. One of the main advantages of the TQM approach adoption in the Coca Cola Company is the ability to reduce the overall cost of production. Neely (1998, p. 10) indicates that since the onset of the global financial crises, most of the global companies have been forced to reduce their operation costs in order to maintain a healthy growth rate. For instance, in 2008, the U.S. government was forced to bail out major firms, such as General Motors among others, due to the failure of these firms to adopt sustainable management systems. It is notable that the TQM programs enormously eliminate wastes and defects, which reduce the overall production costs in any given firm, such as the Coca Cola Company. As a result of adopting the TQM approach in most of its enterprises, the Coca Cola Company is currently seeking to save more than $ 600 million by 2015. To achieve this, the firm will start to streamline all its technology systems, standardize business operations, as well as make all its global supply chain systems more efficient. Further, the firm expects the overall cost of integrating the Coca Cola Refreshment Unit to reduce by approximately 15% to $425 million.
By reducing the operational costs, the firm will be able to reinvest into notable areas, such as marketing as well as offsetting the raised costs of commodities like packaging, corn syrup, juices among others. In the Coca cola Company, the quality improvement teams, headed by Muhtar Kent, the firms CEO, have been able to eliminate defects, to lower lead time and to indentify all the redundancies involved in the production processes. This way, the firm has been able to maintain high profitability levels, despite the raised global market volatility.
The other advantage of the TQM approach is to encourage innovation and invention in any given business. In the recent years, it has become essential for businesses to remain innovative in order to remain relevant, both in the short and long-run. Neely (1998, P. 32) candidly indicates that organizations can tackle innovation and invention by developing or copying their own innovation. The second strategy is useful in those firms which enjoy competitive advantages, like easy access to the required raw materials, low wages, and protected markets among others. However, in order for a firm to obtain the desired competitive advantage, the first strategy should be embraced. For the multinational companies, such as British Airways and the Coca Cola Company, this approach is not only valid for innovations in processes and products but also for innovations in the management. It is extremely notable that multinational companies can easily apply these two strategies if the TQM is adopted. Firms applying the TQM approach are able to assimilate all innovations which are imported from other situations. This is due to the willingness of the employees to adopt new ideas and concepts which are promoted by the TQM approach. As stipulated by Anderson, Rungtusanatham, and Schroeder (1994, p. 37), one of the key elements of the TQM approach is the enormous need for sufficient customer focus. For instance, a company such as Coca Cola has indentified current and future needs of the consumers’ loyalty as well as the satisfaction levels.
It is estimated that the Coca Cola Company is one of the global firms which enjoys the highest customer loyalty, estimated to be over 90%. Other companies, which enjoy such high loyalty levels, include technology companies like Apple Inc., Google inc. and other social media firms, such as Twitter, Facebook and MySpace. As a result of enhancing the customers’ satisfaction levels, the Coca Cola Company has been able to maintain a recommendable net income. This is due to the fact that 20% of the net income generated by the firm is obtained from 80% of the loyal customers. In future, the global consumers will become enormously demanding, especially with the development of quality management approaches in most less-advanced economies, such as China, South-East Asia, and South America countries.
Neely (1998, p. 71) argues that any changes have to be clearly undertaken with the customers’ needs in mind, hence the TQM approach will stimulate the desired business innovations. The other advantage of the total quality management system is to empower the employees. It is notable that one of the philosophies of the TQM approach is to empower all employees in order to seek out quality problems as well as to correct them. Within the old concept of quality, most employees were afraid to identify their problems due to the fear that the senior management might reprimand them. Consequently, productivity levels greatly reduced as the needs and challenges facing the employees were not solved on time (Westin, 1998, p. 55). However, TQM, the new quality concept, offers incentives for all the employees to indentify and solve their problems. This is due to the fact that employees are rewarded due to their ability to uncover quality problems and not punished. For the Coca Cola Company, workers are empowered to make decisions, relative to the quality involved in the production process.
In other words, the firm considers employees as a key element for the company to achieve the desired production quality. Therefore, their contributions to the firm are highly valued, thus their viable suggestions are implemented. To further stress on the role played by employees in enhancing quality, TQM helps to differentiate between the internal and external customers. The internal customers are those employees in the firm who receive services or goods from others in the organization. For instance, the packaging department in the firm, such as the Coca Cola Company, is an internal customer of the transport and assembly department. Just like defective products or services can not be passed to the external customers, they should also not be passed to the internal customers. On the other hand, the external customers are those customers who buy products or services from the given firm. For instance, the Coca Cola Company sells more than 400 brands to customers in over 190 countries. This has enabled the firm to serve more than 1 million customers on daily basis, thus making the firm to be the largest non-alcoholic beverage company globally. By employing a PDSA ((Plan, Do, Study, Act) cycle in its operations, the Coca Cola Company has been able to reap ample benefits out of the TQM system. The diagram below indicates the main elements of the PDSA cycle
(Kotter & Cohen, 2002, p. 58)
As a result of the total quality management system adaptation, the Coca Cola Company has faced various challenges. One of the challenges of the TQM approach is the production disruption. It is clear that the TQM system implementation in any given firm demands an extensive training of all the employees. The training includes instructions in the problem solving methods as well as tools. This is crucial in evaluating processes as well as indentifying weaknesses, like the statistical process control, brainstorming techniques among others. During the training period, productivity levels can highly reduce, thus affecting the profitability levels and the investors’ confidence to the firm. Further, meetings organized by the quality improvement teams take employees from their duties. Generally, it can be noted that while the overall improvements eliminate wastage, reduce lead time as well as improve on productivity, the initial phase of the TQM implementation in organizations, such as Coca Cola, enormously reduces the workers output.
The other disadvantage of the TQM system is the raised level of employee resistance to change. Anderson, Rungtusanatham, and Schroeder (1994, p. 77) argue that the TQM system requires ample changes in altitude, mindset, as well as methods of carrying out the assigned tasks. One of the factors essential in reducing the resistance of employees to change is through the effective communication from the top management, failure to which the employees end up being fearful, hence raising their resistance levels. When the employees resist the TQM program, their productivity, and morale towards the business is reduced significantly. As indicated above, TQM demands for organizational changes, rather than radical organizational reforms. It is evident that the real quality improvements demands for radical structural changes, like flattening organizational structures .Further, employees ought to be liberated from tyranny of functionalisms and stifling control systems, both of which hinder the effective teamwork in most workplaces. Generally, the long-term advantages of the TQM system highly outweigh the shortcomings. Therefore, the system should be implemented by those organizations which yearn for changes, especially the multinational organizations which deal with employees from various cultural backgrounds.
Evaluation of the Total Quality Measurement System
According to Kotter & Cohen (2002, p. 108), evaluation is the systematic determination of the worth, merit or significance of the task being undertaken using given criteria against a certain set of standards. Performance measurement aims to establish on whether a certain program attains its objectives, which is expressed as a measurable performance standard. Program evaluation highly examines on the broader range of information regarding the program performance as well as its context (Kotter & Cohen, 2002, p. 13). Depending on their level of focus, evaluation can examine aspects of program operations, or issues in the program environment, which may contribute or impede to its success. This way, it becomes easy to explain a linkage between the program activities, inputs, outputs, as well as outcomes. Alternatively, the system or program evaluation can assess the effects of the program beyond its set objectives as well as estimate what is likely to happen in the absence of the program. Therefore, leaders and managers can be able to asses the net impact of the system or program. The importance of evaluating the certain performance measurement impact being undertaken by a firm cannot be underrated.
Performance system is a type of measurement for control. Measurement and evaluation are important as they help in assessing performance against the set plans, thus being able to correct any deviation. In this regard, evaluation is concerned with all the past data as well as the current implications. Measurement and evaluation are also crucial for accountability purposes. For instance, in the Coca Cola Company, the raising powers and concerns of customers, suppliers, shareholders among other stakeholders, as well as the ways in which their respective powers continue to drastically change, have resulted to a raised demand for accountability. Therefore, accountability is a field of the performance measurement that has an enormous significance, as it is constantly changing in nature. In this regard, the TQM system evaluation is concerned with accountability as compared to accounting. Performance measurement and evaluation are also crucial in the strategy formulation. Anderson, Rungtusanatham, and Schroeder (1994, p. 41) argue that evaluation for the strategy formulation is basically concerned with predictions. When developing its strategies, the Coca Cola Company should select a range of alternative courses of actions, especially those which are close to the current and future constraints and circumstances facing the firm. In making this selection, the Coca Cola Company must have a well-known means of evaluating all the available alternatives, in whatever terms considered relevant and appropriate. It is notable that a state-of-the-art system for measuring and evaluating performance should monitor all the vital signs of the organization. For instance, in each level, the TQM system adopted by the Coca Cola Company, should translate the high vision of the firm into individual performance measures. This way, TQM will be able to support a competitive spirit, to highlight excellence, to offer a foundation for the continuous improvement.
There are different ways in which the impact of the TQM system adopted by Coca Cola can be evaluated, thus understanding its importance to the company. One of the methods that can be employed is the process evaluation, also known as the implementation evaluation. This is a type of evaluation that accesses the extent which program is operating as initially intended to. By employing this method, it will be able to assess the conformance of TQM to the regulatory and statutory requirements, the customer expectations, as well as the professional standards. The other method of evaluating the performance of the TQM system in the Coca Cola Company is through the outcome evaluation. In this method of evaluation, the extent to which the TQM system has achieved its outcome-oriented targets will be assessed. Anderson, Rungtusanatham, and Schroeder (1994, p. 22) argue that the outcome evaluation focuses on outcomes and outputs, including the unintended effects in judging the effectiveness of the program. Further, it may assess a program process, thus being able to know how outcomes are produced. The impact evaluation is the other way in which the effectiveness of the TQM system in the Coca Cola Company may be assessed. This is a type of the outcome evaluation that assesses the overall effects of the system by comparing outcomes with what would have taken place in the absence of the system or program. It is highly notable that this type of evaluation is mostly employed when all the external factors are known to influence the outcomes of the system, thus isolating the contribution of the system to achievements of its objectives.
The other method that can be used is the cost-effectiveness and cost-benefit analysis. These types of analysis compare the outcomes or outputs with the costs or resources expended, in order to produce them. When these two methods are applied for the existing programs, they also form a part of the system evaluation. The cost-effectiveness analysis measures the cost of meeting a single objective or a goal; thus it can be employed when indentifying the least costly alternatives of meeting the desired goals or objectives. On the other hand, the cost-benefit analysis helps to indentify all the relevant benefits and costs, which are usually expressed in monetary value.
For the Coca Cola Company, there are several techniques employed to evaluate the success of the set performance management technique. In order to enhance quality management of the available resources, every organization unit is supposed to implement audit procedures, thus being able to asses the intent, effectiveness and implementation of the quality system. To measure the effectiveness of the audit procedures, each of the departments is supposed to determine the person who is responsible for carrying out the audit activities, such as the required competency; the auditors are required to be independent and are not supposed to audit their work. Further, every department should have a documented schedule, which defines the auditing frequency. This schedule should take into consideration the results of the former audits. For all internal audits, the auditing schedule should ensure that every element of the quality system is thoroughly reviewed annually.
Improving the Total Quality Management System
The need for improving the management system adopted by the Coca Cola Company cannot be underrated. This is due to the fact that it is a key ingredient to a short and long-term sustainability of the firm; hence, it should be improved from time to time to counter the emerging management challenges. Anderson, Rungtusanatham, and Schroeder (1994, p. 12) argue that the key to any improved performance measurement is the growth of integrated performance measurement systems. The integrated systems revolve around unified themes like a value creation or a business strategy. They are highly concerned with evaluating the critical aspects of structures, which link processes in the firm and activities of the people to the overall intended outcomes for the firm’s stakeholders. In most cases, integrated systems represent the quality concerns during production, the level of customers’ satisfaction, the monetary discipline of accounting among other notable corporate sub-systems.
The sophisticated structure of an integrated performance system is extremely beneficial to the management; though, it does not eliminate various basic difficulties regarding performance measurement. It should be noted that businesses, especially those having international interests, are enormously complex organizations. Therefore, they offer more opportunities for measurements than can be well employed by the management. In spite of all the difficulties, which face integrated performance management, the benefits far outweigh the expected costs. In regard to this, an improved measurement system, such as TQM, helps in aligning the people actions people in the organization, thus ensuring that employees work together in accomplishing the intended goals. Generally, the unified system of measurement helps in creation of a single version of the truth. This way, it becomes possible for the management and leaders to avoid workplace misunderstanding as well as conflicts arising from inappropriate data or inconsistent data.
Further, by establishing the integrated TQM system in the Coca Cola Company, it will be possible to motivate employee by conveying an enormous sense of logic and fairness in the score keeping. Employees will be able to seek to perform their best, bearing in mind that the integrated TQM will impartially and accurately measure the contributions they make to the firm as well as the extent of their respective success levels.
From the above information, it is clear that the importance of an effective performance management system to the overall sustainability of a given firm cannot be underrated. By employing the TQM system in measuring as well as evaluating its performance management, the Coca Cola Company has been able to involve all the stakeholders, thus boosting the firm net profitability over years, despite the prevailing hard economic times globally. In future, companies should adopt the integrated performance measurement as it has more returns as compared to the traditional systems. This way, they will be able to ensure a short and long-term sustainability.
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