Coca Cola Expansion Strategy in Sudan and Iran
Coca Cola Expansion Strategy in Sudan and Iran
Coca Cola Expansion Strategy in Sudan and Iran
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
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)
Afghanistan, Albania, Algeria, American Samoa, Angola, Antigua & Barbuda, Argentina,
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,
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,
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)
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 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.
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;
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:
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
forming arrangement throughout business units and bottler partners to work effectively
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
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
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
2) 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
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
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
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
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
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
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
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
Iran and Sudan have the same cultural dimensions, so based on the assessment; employee
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
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
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
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.
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
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
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
(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
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
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
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
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
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
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;
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
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
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
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
Association
-How things get done depends on relationships with people and attention to group process.
Interaction
-High use of nonverbal elements; voice tone, facial expression, gestures, and eye movement
-Verbal message is indirect; one talks around the point and embellishes it.
-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.
Since the home country is Individualistic and believes in low-context communication the
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
“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.”
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 plant that will consist of top managers from the company’s home country and 90%
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
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