T h i s P a p e r i s d o n e b y I m a d A g h a

The Coca Cola Company

This paper overview The Coca Cola Company and its business strategy, and introduces possible expansion for the company eith
C o u r s e : I n t e r n a t i o n a l C r o s s - C u l t

1 1 - J u n - 0 9
Outline
I. The Company
A. Introducing Coca Cola
B. Coca Cola Business Locations
C. Coca Cola Major Product Lines
D. Coca Cola Business Strategy
II. Country Choice
A. Location Strategy
B. Economic Profile
1. Iran
i. Advantages
ii. Disadvantages
2. Sudan
i. Advantages
ii. Disadvantages
C. Political Risk
1. Iran
i. Advantages
ii. Disadvantages
2. Sudan
i. Advantages
ii. Disadvantages
D. Legal Issues
1. Iran
2. Sudan
E. Cultural Profile
1. Iran and Sudan
2. Role of culture in international management
F. Labor Relations
1. Iran
2. Sudan
G. Mode of entry
1. Iran
2. Sudan
H. Recommended Location for Expansion
III. Implications for International HRM
A. Staffing
B. Compensation
C. Employee Relations
D. Management Philosophy
 IV. Conclusions and Recommendations
V. Reference List
I. The Company

A) Introducing Coca Cola

Coca Cola or Coke is one of the leading companies in carbonated soft drinks; headquarter

originally in Atlanta, Georgia, where it produces the concentrate and sell it to various licensed

bottlers around the world. Coca Cola operates in five continents; Asia, Europe, Africa, Latin

America and North America and more than 200 countries. (The Coca Cola Company, 2006)

B) Coca Cola Business Locations

Coca Cola does business in the following locations:

Afghanistan, Albania, Algeria, American Samoa, Angola, Antigua & Barbuda, Argentina,

Armenia, Aruba, Australia, Austria, Azerbaijan, Bahamas, Bahrain, Bangladesh, Barbados,

Belarus, Belgium, Belize, Benin, Bermuda, Bolivia, Bosnia & Herzegovina, Botswana, Brazil,

British Virgin Islands, Bulgaria, Burkina Faso, Burundi, Cambodia, Cameroon, Canada, Cape

Verde, Cayman Islands, Central African Republic, Chad, Chile, China, Colombia, Comoros,

Costa Rica, Croatia, Curacao, Cyprus, Czech Republic, Democratic Republic of Congo,

Denmark, Djibouti, Dominica, Dominican Republic, Ecuador, Egypt, El Salvador, Equatorial

Guinea, Eritrea, Estonia, Ethiopia, Fiji, Finland, France, French Guiana, French Polynesia,

Gabon, Georgia, Germany, Ghana, Great Britain, Greece, Grenada, Guadeloupe, Guam,

Guatemala, Guinea, Guinea-Bissau, Guyana, Haiti, Honduras, Hong Kong, Hungary, Iceland,

India, Indonesia, Israel, Italy, Ivory Coast, Jamaica, Japan, Jordan, Kazakhstan, Kenya, Kuwait,

Kyrgyzstan, Latvia, Lebanon, Lesotho, Liberia, Lithuania, Luxembourg, Macau (Macao),

Macedonia, Madagascar, Malawi, Malaysia, Maldives, Mali, Malta, Mariana Islands, Martinique,
Mauritania, Mauritius, Mayotte, Mexico, Moldova, Mongolia, Montserrat, Morocco,

Mozambique, Namibia, Nauru, Nepal, Netherlands, New Caledonia, New Zealand, Nicaragua,

Niger, Nigeria, Northern Ireland, Norway, Oman, Pakistan, Panama, Papua New Guinea,

Paraguay, Peru, Philippines, Poland, Portugal, Puerto Rico, Qatar, Republic of Congo, Republic

of Ireland, Republic of Korea, Reunion, Romania, Russia, Rwanda, Saint Helena, Saint Kitts and

Nevis, Saint Lucia, Saint Maarteen, Saint Vincent & the Grenadines, Samoa, Sao Tome &

Principe, Saudi Arabia, Senegal, Serbia & Montenegro, Seychelles, Sierra Leone, Singapore,

Slovakia, Slovenia, Solomon Islands, South Africa, Spain, Sri Lanka, Suriname, Swaziland,

Sweden, Switzerland, Taiwan, Tanzania, Thailand, The Gambia, Togo, Tonga, Trinidad &

Tobago, Tunisia, Turkey, Turkmenistan, Turks & Caicos Islands, U.S. Virgin Islands, Uganda,

Ukraine, United Arab Emirates, United States, Uruguay, Uzbekistan, Vanuatu, Venezuela,

Vietnam, West Bank-Gaza, Yemen, Zambia and Zimbabwe. (The Coca Cola Company, 2006)

C) Coca Cola Major Product Lines

The major product lines consist six categories which is branched to more than 2800 brands, they

are:

Energy drinks; ‘Burn, Buzz, Full Throttle…’ Juice drinks; ‘Fruitopia, Five Alive, Cappy…’ Soft

drinks; ‘Fanta, CITRA, Cherry Coke…’ Tea and Coffee; ‘Earth & Sky, GEORGIA, Nestea…’

Water; ‘Spring!, Toppur, VIVA…’ and Sport drinks; ‘ Powerrade, Aquarius, Aguana…’. (The

Coca Cola Company, 2006)

D) Coca Cola Business Strategy

Coca Cola long term business strategy focuses of six main beliefs;
 1) Speed up carbonated soft-drinks development led by coca cola; Since Carbonated soft

drinks is their most profitable business, Coca Cola is the most popular brand in the world.

This strategy initiates the way for growth.

2) Broaden beverage brands carefully to drive profitable growth; Coca cola believes that

there exist huge prospects in other type of drinks other than carbonated drinks, such as;

bottled water, teas, energy drinks.

3) Develop the system with bottling partners to increase profitability and capabilities; their

business depends on relationships, especially with their partners, that is why it highlights:

Think globally Act locally.

4) Supply clients with creativity and reliability to generate expansion across all channels; by

making a framework for the company's growth and expanding customer's business.

5) Direct investments to the highest possible areas across markets where it can make a

chance; Coca Cola modifies business approach to specific marketplace based on the

country's phase of development, in order not to hold back investments.

6) Consider efficiency and cost-effectiveness among partners; By enhancing technology and

forming arrangement throughout business units and bottler partners to work effectively

worldwide. The Coca Cola Company (2006).

II. Country Choice

A) Location Strategy

For the coca cola company expansion, we chose Iran and Sudan since these two countries are not

enlisted under the list that the company operates in. in addition, Iran and Sudan each exist in
different continents thus varying in cultures which in addition is in contrast with the company

headquarter culture placed in US. Also as stated by (Dahl and Heavens, 2008) “local companies

export the base syrup to independent companies in Sudan and Iran which then produce the fizzy

drinks in their own factories, selling them in bottles and cans identical to Coke and Pepsi's

branded containers”, that is why “Coca-Cola spokesperson Dana Bolden said the primary motive

for operating in Sudan and Iran was quality control” (Dahl and Heavens, 2008).

Coca Cola global strategy fit into Iran and Sudan for several reasons; 1) since coca cola first and

second strategy is to Speed up carbonated soft-drinks development and Broaden beverage brands

carefully to drive profitable growth, Iran and Sudan might be an attractive marketplace since

Iran’s population is 65,875,224 million with a grow rate of 0.792% and 40,218,456 million with

a 2.134% growth rate for Sudan (CIA, 2008). 2) Since Coca Cola third and sixth strategy is to

develop the system with bottling partners to increase profitability and capabilities and Consider

efficiency and cost-effectiveness among partners, it must interfere to control the quality of

products that is produced by independent companies in Iran and Sudan to ensure that they

maintain their reputation worldwide and provide new technologies and marketing support to

reduce costs. 3) Since its fourth and fifth strategy is to direct investments to the highest possible

areas across markets and to supply clients with creativity and reliability to generate expansion

across all channels, it should adjust business approach to expanding customer's business growth

because independent companies in Iran and Sudan are manufacturing alone, so coca cola can

assist them by providing creativity and development that will generate more profit.

B) Economic Profile

1) Iran
 Iran economy profile

estimations 2006 2007 2008 2009 2010

GDP (purchasing $733.2 $790.6 $842 - -

power parity) billion billion billion

GDP - real growth rate 5.8% 7.8% 6.5% - -

GDP - per capita (PPP) $11,300 $12,100 $12,800

Consumer Price

Inflation - - 28% 19.1% 16.5%

Source: CIA, The World Fact Book, 2009

Exports $106.4 billion

Imports $67.79 billion

Public debt 25% of GDP

Unemployment rate 12.5%

Source: CIA, The World Fact Book, 2009

Iran's economy is marked by an ineffective state sector, because it only relies on oil to produce

most of its revenues. Economic activities are controlled by the government. Private sector

activity has bounded actions. Price controls are what evaluate the economy, discouragement the

prospective for private-sector in order to grow. Fraud and supply shortages are common. But

reform plans were adopted in order to address price control and financial support for food and
energy. The increase in oil prices has elevated Iran’s export, what led to an overall development

to it economy.

i) Advantages

Noticing that the exports are higher than imports, this means that Iran is self sufficient and is not

in need for external resources in order to operate. In addition, the increase GDP (purchasing

power parity) means that Iran is managing and benefiting from the use of resources across

countries and it also indicates that living conditions are getting better. GDP per capita is

experiencing an increase; this shows that the purchasing power is increasing which is a sign for a

promising market for Coca Cola.

ii) Disadvantages

Even though Iran is expecting a decrease in inflation, this doesn’t mean that it will be a good

indication; it will still hold a high degree of inflation which is 16%. A high inflation will result in

an increase in goods and services prices, in addition to slow infrastructure growth which will

increase taxes. Knowing that public debt is 25% from of GDP it would also increase the taxes

which will affect the budget of Coca Cola entering cost.

2) Sudan

Sudan economy profile

estimations 2006 2007 2008 2009 2010

GDP (purchasing power $75.06 $82.72 $87.27

parity): billion billion billion - -

GDP - real growth rate: 11.3% 10.2% 5.5% - -

 GDP - per capita (PPP): $1,900 $2,100 $2,200 - -
Consumer Price

Inflation (%) - - 16.01 12.10 8.10

Source: CIA, the World Fact book Sudan

Exports: $13.62 billion

Imports: $7.757 billion
Public debt: 86.1% of GDP
Unemployment rate: 18.7%
Source: CIA, the World Fact book Sudan

We can realize that Sudan is getting high economy and is upgrading in mostly all businesses. The

continuous flow of petrodollar is promising a flourish business sector in that country. The

consequent growing in liquidity is offering high attractive market for investments.

i) Advantage

Considering these data we can notice that Sudan due to the oil present in its fields give a soul for

the trading aspect in Sudan. Also we have to know that Sudan is in a serious problem since it has

a public debt of 86.1% of GDP. And the GDP growth is decreasing for three years. Therefore this

issue raises a question concerning the way of resolving the public debt.

From an economic point of view the advantages of operating in Sudan is that if Coca-Cola were

strong in its marketing and attracted people, it can found echoes because citizens due to their

growth in purchasing power they can afford to buy Coca-Cola. In addition Coca-Cola can profit

from the high unemployment rate. It can open industries for bottling and promoting and hire

Sudanese employees, this issue can have many positive points such as helping the citizens, and at

the same time letting the citizens accept foreigners by hiring their people. The Differences
between exports and imports show an advantage to the country since the exports are higher than

imports, Which shows that the country in a way have strong relation with foreigners and at the

same time it’s gaining money.

ii) Disadvantages

On the other hand also from an economic point of view there are disadvantages. The GDP real

growth rate is decreasing, which means that the country is producing less goods and services.

This issue can affect any investment in Sudan since companies will be discouraged. Moreover

we can notice a high inflation rate for the goods, which is 12.10% in 2009. Even if it is expected

to decrease it still high. Any inflation above 2% is a serious problem. Without forgetting that

there the most serious problem and disadvantage in working in Sudan is that Sudan’s government

is one of the highest corrupted government. Sudan is a promising country even if it one of the

poorest country in the world due to the oil discovery. But the issue is in the high corruption.

C) Political Risk

1. Iran

i) Advantages

Investing in a country where its interests is opposed by the international community is hard, so

advantages are few. Development taking place by the government in Iran pose promising results

in the market. Foreign investments can benefit a great deal in Iran. It can take advantage of

natural resources that are available, like; gas and oil.

ii) Disadvantages
Iran is committed to the development of uranium and nuclear power, and their persistent has

aggravated the international community, knowing that the community is against their plans. This

proves instability in the region because this may cause war for keeping Iran from developing its

program. In addition, the reduced strikes from the U.S and the American Intelligence reports

over Iran nuclear program can still cause political ruling over Iran. These sanctions are what

made Iran more confident with its system. (Bremmer, 2008)

In addition, Iran is subject to international sanctions since 1980, and will be subject to further

sanctions through imposing more economic hardship in order to slow nuclear power

development and to cut down the help of terrorists. The U.S. government imposed sanctions on

an Iranian bank on September 2006, barring it from dealing with U.S. financial institutions, even

indirectly; this will also affect the nationalizing of the company. Latest U.S sanction on Iran

included “Effective November 10, 2008, the authorization for "U-turn" transfers involving Iran

was revoked. As of that date, U.S. depository institutions are no longer authorized to process

transfers involving Iran that originate and end with non-Iranian foreign banks” as stated by U.S.

Department of the Treasury (2009). This sanction would impose difficulties for transferring

money to the headquarters company.

2) Sudan

The political risks that are mainly considered in Sudan can be divided to three general parts.

First, the changes in government policy, second the economic instability and third the acts of

terrorism. We can add a political risk which is the sanctions of the American government on the

companies that are working in Sudan.

i) Advantages
The advantages from those political risks are not several. One from the advantages is that there is

less competition with the Companies other than oil Companies. This issue can ease the operation

for Coca-Cola in a country where people are suffering from war. The Coca-Cola Company can

offer entertainments and health care for those poor people to attract and help them. Artunet

(2008) illustrated “Bolden (spokesperson of Coca-Cola) also said the company was reinvesting

all the proceeds from its sales in Sudan into programs that benefit the country. We have

committed more than $5 million over the next three years for programs aimed at building

communities in Sudan.” Sanctions can help in a way the company since this issue might prove to

the citizens that the United States is careful of their rights and healthy practice of foreign

investments in Sudan.

ii) Disadvantages

The disadvantage is that there is mostly no stability in that country since there is always war and

conflicts due to the differences in ethnic, religion and race. Another disadvantage is the currency

is not stable due to the conflicts with the west. Moreover the experience of the foreign businesses

in Sudan did not encourage investment since there is politics in that issue. The government is

trying to buy weapons from the benefits gets from the foreign investments. And this issue is

fueling the war in Sudan against those companies.

D) Legal Issues

1) Iran

There are few legal issues that make foreign investors think twice before they consider in

investing in Iran. Iranian Labor markets are nonflexible that firing employees are very easy. The

government is the one that set prices for most of the manufactured goods. Governments also rule
the financial market, which are state-owned bank. There is no continues policies to be regulated,

decision making in Iran is paralyzed. The policies are only changed when a turnover in the

government occur, this is also know in court systems. Iranian government officials are troubled

to approve on any new plan unless their superiors commend. The subsidies supported by

government had failed to address economic growth instead of approving active and productive

private sectors, because government is afraid of the short-run employment. In order to enter the

Iranian market, only long term investments are welcomed, in addition, the foreign company must

transfer the pursued technology as an obligation to share the market (Askari, 2007).

In addition, Iran is subject to countless economic, trade, scientific and military sanctions from

U.S., Europe and U.N which makes it difficult and confusing for companies thinking to start

business in Iran so they could be able to work without violating any law imposed.

2) Sudan

Many obstacles are facing the foreign investments in Sudan. Those obstacles are put by the

government of Omar Al Bachir. One of those laws or legal issues are the taxations policy. The

taxation policies of the government are always obscure and unstable. This issue might hardly

affect any operation in Sudan. Because the company will not have a stable taxation on which it

might make some future plans. At any time the company might be surprised by any change.

Moreover the maladministration and governmental policy also affect adversely our company,

since there is corruption on a high level. Also the government has a dominant role on all sectors

of the economy in the country. The authorities control mostly all key sectors despite some

exceptions such as agriculture and small activities. Scarcity of foreign currencies is also a barrier

toward our company since it is an obstacle for importation of raw materials that are important for

the industry. Ahfad University for Women (2007) illustrated “Unavailability of the needed
energy, absence of encouragement of local and foreign capital to invest in industry, failure in

persuasion of foreign investment due to political instability in the Sudan, taxation policies,

governmental policies and maladministration, unavailability of the necessary local raw materials

and scarcity of foreign currency for the importation of raw materials that are vital inputs for

many industries. This is in addition to financing problems that have negatively affected many

industries.”

E) Cultural Profile

CULTURAL DIFFERENCES
Home
Country
Host country Host country
Cultural Profile:Profile: Profile:
Dimensions Headquarters Country Cultural Distance Country Cultural Distance
Option 1 Option 2
country
Iran Sudan
The host country The host country
which is Harmony which is Harmony
with the with the
Relationship
environment is environment is
with the Mastery Harmony Harmony
Passive and Passive and
Environment
reactive, cautious, reactive, cautious,
and doubtful of and doubtful of
change change
The host country The host country
which is which is
collectivistic collectivistic
Social
Individualist Collectivist believes in high- Collectivist believes in high-
Organization
context context
communicating, communicating,
focus on group goal focus on group goal
The host country is The host country is
hierarchical, which hierarchical, which
Power
Hierarchical has an autocratic, Hierarchical has an autocratic,
Distribution Egalitarian
chain of command, chain of command,
centralized centralized decision,
 decision, and high and high authority
authority style style
The host country is
The host country is
relationship based.
relationship based.
which implies that
which implies that
relationship is very
Rule Relationship- Relationship- relationship is very
Rule-based important, rule
Orientation based based important, rule
enforcement relies
enforcement relies
largely on control
largely on control
by influential
by influential people
people
The host country is The host country is
polychromic which polychromic which
Time have non linear have non linear
Monochronic Polychronic Polychronic
Orientation approach to work, approach to work,
and they usually and they usually
impatient impatient

1. Iran and Sudan

Iran and Sudan have the same cultural dimensions, so based on the assessment; employee

behavior is categorized as the following in the two cultures:

Concerning the social organization the home country believe in individualistic since the host

country believe in collectivistic. This can create big conflicts because Individualistic person

believe in low-context communication, individual accountability and low trust in others. On the

other hand the host country which is collectivistic believes in high-context communicating, focus

on group goal. (Steers & Nardon 2005)

Then on the time orientation basis, the home country is monochromic which have linear

approach to work, impatient. The host country is polychromic which have non linear approach to

work, and they usually impatient. (Steers & Nardon 2005)

The managerial styles are categorized as the following in the two cultures:
The home country will be more proactive and assertive. He prefers to reward based on

performance, the norms encourage competition, and change-oriented. Since they are Mastery

oriented concerning the relationship with the environment. On the other hand, the host country is

Passive and reactive, cautious, and doubtful of change. (Steers & Nardon 2005)

Other factor that affects the managerial style is the way of power distribution which is egalitarian

in the home country. Egalitarian is democratic and resistance to autocratic practices,

Decentralized decision making, employee empowerment. The host country is hierarchical, which

has an autocratic, chain of command, centralized decision, and high authority style. (Steers &

Nardon 2005)

The rule orientation issue showed also differences in management styles. The home country is

rule based. The rule based tolerate rule breaking, objective decision making, to issues by book,

legal contracts and record keeping. The host country is relationship based, which implies that

relationship is very important, rule enforcement relies largely on control by influential people.

(Steers & Nardon 2005)

As we saw there are several differences on the cultural basis of both countries. Since there are

big differences between the host and home countries, there are too many difficulties that will

confront the managers and employees, it will be hard to adapt. This will affect the performance

and the affectivity of both employees and managers.

2. Role of Culture in International Management

The role of culture in international management is very important. Since the economic barriers

are decreasing there are cultural barriers that are facing the international management. From this

point we can notice the importance of culture and the big role that culture plays toward the
success or failure of any business. Culture determine how international business is transacted,

and also determine how companies are organized and how they manage their work. At first in the

international management the most important issue is to understand the home country culture in

order to understand the differences with the host country. At first the Power Distance issue is

very important since the management will understand how the bosses act in the host country or

the home country. Then the Uncertainty Avoidance which is based on rules or common sense

also shows some important characteristics for some countries that follow its rules.

Masculine/Feminine is material rewards or quality of life; here the management will be able to

understand on what the rewards are based. Individualism/Collectivism which is I versus we. This

issue shows a difference in behavior between two different cultures. Universalistic/Particularistic

is treat all equally versus do favors for friends. Achievement/Ascription is respect for what you

do or respect for who you are. Locus of Control is I am in control of my destiny versus outside

forces are in control. Neutral/Affective is hiding versus display emotions. Diffuse/Specific

(high/low context) is indirect versus direct communication. Finally, those dimensions describe

the cultural differences in countries. So it is important to be able to understand how to deal with

those dimensions and understand each country dimensions.

F) Labor Relations

1. Iran

Iran’s labor force is estimated for 24.35 million in 2008 and is in shortage for skilled workers. It

is divided as follows; 1/4 is employed in constructing and manufacturing, 1/5 is employed in

agriculture, and the rest is divided approximately even to services, transportation,

communication and finance (CIA, 2009). There are no labor unions in Iran, but workers are

represented by the Workers' House, a state-sponsored institution. Even though, Iranian Labor
Law is employee friendly and it is very difficult to layoff staff. But employment of foreign

nationals is miss leaded because; the employed person should acquire expertise that is lacked in

Iran and the expertise of the foreign national will be used for training of, and later replacement

by, Iranian individuals, which is a disadvantage for people foreign people coming to Iran

(CBSNews, 2009).

2. Sudan

Labor practices in Sudan could benefit and provide obstacle to success in Sudan. At first labor

practices in Sudan can mostly provide obstacles to success since they are habituated on bribery

and corruption. Sudanese government contains big practices of bribery and corruptions. Index of

economic freedom (2009) “mentioned Sudan's economy is hindered by instability, poor

infrastructure, economic mismanagement, and corruption.” Therefore the labors have an idea that

these unethical practices are somehow legal. Practices of foreign businesses in Sudan doesn’t

show practices for the benefits of Sudanese labors. Sudanese labors tend to act in a way that

focuses on their personal benefits because there are in need of money since they live in a poor

country and they don’t have healthy and ethical example of practices from the foreign businesses

neither from their government. This issue can be a very big obstacle for the success of the

company. On the other hand it is known that the Sudanese labors are heavy workers so if there is

good controlling over them with providing them their rights they should work for the benefit of

the company.

G. Mode of Entry

1. Iran
In entering Iran, I would initiate business using long-term supply agreement as a part of

nonequity alliance, by providing Iranian local bottlers “ZamZam Cola” with concentrate syrup in

return for market share, since; it is more informal alliance, each party enters the alliance as a

separate legal unit and tolerate its own legal responsibility, it provides freedom to structure

assets, organize production processes, and manage operations because in Iran, the government is

the dominant sector and is capable of imposing harsh restrictions on foreign companies that will

cause disadvantages, like; long-term contracts and a transfer of technology is an obligatory to

receive a market share is the main reason. And another reason for the nonequity alliance is that

sanctions are imposed on Iran for developing nuclear weapon and terrorist aid, so breaking up

the contract will be easier when needed, because it would be a loss investment in acquiring assets

to build production facilities if future plans force the new company to shut down according to

international sanctions.

2. Sudan

Especially in Sudan it not smart to enter the country with a joint venture company or in another

way. The best way for entering Sudan market is by the company itself. At first in Sudan there are

very slim chances to find a wealthy local business company to deal with. So joint venture in

Sudan is cannot be successful. “There is an imbalance in levels of expertise, investment or assets

brought into the venture by the different partners.

Different cultures and management styles result in poor integration and co-operation.

The partners don't provide enough leadership and support in the early stages.

Success in a joint venture depends on thorough research and analysis of the objectives” (Emery,

2007). All these issues are applicable and explain why it’s impossible to do any kind of merge
with other company in Sudan. Entering and recruiting Sudanese citizens will be very healthy for

the company since it will be accepted by the citizens.

H. Recommended Location for Expansion

After the following study of Iran and Sudan, we recommend expansion in Sudan. Sudan's

economy is flourishing and is expected to grow 13% this year, and according to the Ministry of

investment in Sudan; investments have has quadrupled since 1996 to about $2.3 billion last year,

faster than most African nations. Even though the 1997 sanctions imposed by U.S concerning

suspected support of terrorism and attacks against southern rebels, they found a way to dodge

these sanctions, thus encouraging Asian nations to invest heavy in Sudan. In addition U.S

Chevron Corp. has invested heavily in Sudan by discovering its oil and helping the government

in exports of oil that generate more than $4 billion a year, thus having foreign investments

investing money mostly in oil projects, roads, bridges, dams and other infrastructure projects.

U.S companies have retreated their contracts from Sudan after U.S sanctions were imposed, but

Chinese, Malaysian and Indian companies came to fill the gap. Sudanese officials is hoping that

sanctions would be lifted, after they signed a peace agreement with southern rebels, and with

this, they would also begin collaborate with U.S. security agencies like CIA, in fighting

terrorism, by this expecting American companies to come back. (Los Angeles Times, 2007).

“The Coca-Cola Company has no foreign direct investment in Sudan, nor does it do any business

with the Government of Sudan. The Company sells beverage base to a private company, DAL

Foods Industries, Ltd. (DFI), under a license approved by the U.S. Government's Office of

Foreign Assets Control (OFAC)” as stated by The Coca Cola Company (2007). Even though, the

company is engaged in actions that promote sustainable development through the African
 continent, it is aiming to produce a positive impact, especially in Darfur by providing funds to

help in;

“* Primary healthcare, including immunizations and malaria prevention

* Children’s healthcare, including feeding centers

* Food and supplies such as blankets, tarpaulins and kitchen sets

* Water and sanitation facilities” (The Coca Cola Company, 2007).

According to reports of regional and international organizations, Sudan is ranked second on the

list of the world’s most attractive countries for investment (Republic of Sudan, 2006). Sudan has

abundant areas of landscape that provides various climates, in addition to oil extraction that gave

Sudan a new economic dimension, besides it geographical location that is considered as passage

to other African countries.

III. Implications for International HRM

A. Staffing

First of all top managers are preferred to be from the home country of company. Then 90% of the

subordinates are suggested to be Sudanese workers. In order to not show differences we have to

recruit Sudanese supervisors and middle managers. Therefore good relation will be executed in

all levels of the company. Concentrating on middle managers will take big part of the work since

they have important role. The most important roles of middle manager are:” Provide a motivation

environment for managers and staff, deal with underperforming managers and staff.” (Inutsikt

2003) Recruiting will be based on qualifications. Training will take the big part in the decision of

recruiting since there are big numbers of illiteracy in that country.

B. Compensation

The compensation method in Sudan will be based on money. Even if some countries consider

this method outdated but still in Sudan it is applicable. No other way will be successful since the

basic need is not affordable in Sudan. Incentive methods will be the best. Increasing wages,

offering bonuses, are ideas for compensation. All these issues will be based on efforts and

performance of employees and managers. Churchill (2007) said “When designed and

implemented effectively, employee incentive programs can be an excellent strategic human

resources tool to promote employee confidence and boost measurable performance. In fact,

employee incentive programs have become an integral part of any company's competitiveness

and desirability.”

C. Employee Relations

Employee relation will be very special in Sudan. The host country Sudan believes in

collectivistic culture. Therefore the relation with the employees should be based on their belief

and their culture since they believe in these issues. Our aim is to be productive, so coming with

another culture for the company and treating employees in the same way of the home country

would create problems. Sudanese employees are collectivistic and believe in high-context

communicating, and focus on group goal. Therefore our work will be based on these

characteristics. The strategy followed will be based on these characteristics:

“-Knowledge is situational, relational

-Less is verbally explicit or written or formally expressed

-More internalized understandings of what is communicated (ex: "in-jokes")

-Often used in long term, well-established relationships

-Decisions and activities focus around personal face-to-face communication, often around a

central, authoritative figure

-Strong awareness of who is accepted/belongs vs. "outsiders"

Association

-Relationships depend on trust, build up slowly, and are stable.

-How things get done depends on relationships with people and attention to group process.

-One's identity is rooted in groups (family, culture, work).

Interaction

-High use of nonverbal elements; voice tone, facial expression, gestures, and eye movement

carry significant parts of conversation.

-Verbal message is indirect; one talks around the point and embellishes it.

-Communication is seen as an art form-a way of engaging someone.

-Disagreement is personalized. One is sensitive to conflict expressed in another's nonverbal

-communication. Conflict either must be solved before work can progress or must be avoided.

Learning

-Multiple sources of information are used. Thinking is deductive, proceeds from general to

specific.

-Learning occurs by first observing others as they model or demonstrate and then practicing.

-Groups are preferred for learning and problem solving.

 -Accuracy is valued. How well something is learned is important.”(Mqjeffrey, 2009)

Since the home country is Individualistic and believes in low-context communication the

strategy of employee relation will be different in Sudan.

D) Management Philosophy

The approach that we are likely able to use concerning Sudan is the Contingency approach. This

approach does not set specific rules to manage the organization. This approach can be called

situational approach. Generally this approach is used in places where there are individual

differences, environmental uncertainty, routines on task technology. Those variables are found in

Sudan. Therefore applying this philosophy in Sudan can be beneficial since there are difference

in cultures, risk of war, and uncertainty. Conceptual model of the contingency approach

developed by Kieser and Kubicek (1983)

“According to this model, the formal structure of an organization defines the roles of its

members in a specific way and thereby directs their behaviour to a certain degree. The

performance of the organization depends on the degree to which these role definitions enable

members to cope with the requirements resulting from the context of the organization.”

IV. Conclusions and Recommendations

After introducing Coca Cola’s background and its global strategy, and suggesting Iran and Sudan

as possible location for the company expansion, and after studying each country economic

profile, revealing their political risks, demonstrating their legal issues, presenting their cultural

profile, illustrating their labor relations, indicating mode of entry, we recommended Sudan as the

country for expansion behind the given analysis. In addition, further indications were studied for

the expansion in Sudan, including;

  Staffing plan which is intended recruit and hire the workers and managers needed to start

the plant that will consist of top managers from the company’s home country and 90%

Sudanese subordinates to help in managerial decisions because they are locals.

 Compensation strategy that is based on local customs which include compensation,

incentives, and rewards for both managers and workers based on money since it is

pertinent in Sudan.

 Employee relations that will establish understanding of the local workers since Sudan is a

collectivist culture.

 Management philosophy that will pursue contingency approach in order to manage the

new company since this strategy is valuable in the presence of difference in cultures, risk

of war, and uncertainty.

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