Arab academy for science and technology.

Organizational Analysis and design

Corona Company

To: Dr. passant tantawy

Done by: Nancy samir

Nancy elsherbini
History:

In the year 1919 Corona chocolate company was established, and continued to
be in the public sector until 2002. By the beginning of 2002 corona was bought
and privatized by Mr. sami saad group (SONID), A holding company of diversified
activities started in 1963. The group operates in various fields, including:
construction (Samcrete Egypt); automotive (EGA, automotive industry; Natco,
automotive sales and service); food and beverages: (Sonut, beverages; Corona,
confectionery; Trade Line, sales and distribution).

Mr. sami saad faced a severe resistance and rejection by the labour union, and
his business plan was depressed until 2007 when his son mr. bassel sami saad
decided to make a revolution and to position corona again in the market.

In 2008, corona made an acquisition on Nadler company in order to diversify its

products by adding a candies product line. And it will be introduced in the market
in the middle of 2008.

Corona’s products:

Chocolates
Drinks:

Wafers:
Biscuits:

Candies: coming soon.

Introduction:

Vision:

    To be the leading Egypt chocolate & confectionery company.

Mission:

Continue to develop our unique brand positioning and to making the enjoyment
of Corona an everyday experience.

Corona factory consists of :

A- Chocolate Plant :
·        Chocolate Processing Setup
·        Two Molding Lines ( Automated )
·        Two Molding Lines ( Manual )
·        Extensive Capability of Packaging Machines 

B-  Biscuits Plant :

·        Three Biscuit Lines
·        Two Wafer Lines
·        Chocolate Coating & Treatment
·        Various Packaging Possibilities
 
C-  Cocoa Plant :
·        Cocoa Bean Processing Facility
·        Cocoa Powder Manufacturing
·        Processing and Grinding
·        Packaging
 

D- Candy & Chewing Gum Plant :

·        Auxiliaries & Processing

·        Various chewing gum lines
·        Various lollipop lines
·        Jell-O-Plant
·        Hard Candy Lines
·        Toffee Lines
·        Packaging facilities
 
N.B. ( Total Land : 22,000 sq.m & Buildings : 16,000 sq.m )
Corona’s analysis and design:

Our company can be described by using the machine metaphor as by

questioning one of its managers, we found that corona is a very systematic and
it uses a traditional manner in managing its processes and it is not adapting to
its external environment (closed system) and it apply very systematic and
repetitive procedures.

Structural and contextual environment:

* structural environment*

By analyzing internal characteristics of corona we found that the company has

five hierarchical levels.

Decisions are approved by the top level management and the authority is
centralized at the top level.

The company has high level of specialization as work is divided into small tasks
or number of tasks each to be carried out by a single worker.

Corona’s workers as less qualified and miss a lot of experience as they have
high level of specialization and narrow tasks to perform.

The company have five hierarchical levels so it faces a vertical complexity with
the availability of more departments and spu’s

The company is considered to be a formal organization because the company

has a lot of written documentation and it has a lot of rules and regulations to be
followed.

The organization is a standardized because it is a mass production company and

all its products are the same.

The company have a higher clerical and technical workers than an administrative
workers in its personnel ratios.
*Contextual environment*

The size of the organization is considered to be large because it has a large

number of employees but from the sales perspective it is considered to be small
compared to its competitors.

The company level of technology is considered poor because its tools and
machines are really old and there is no new techniques developed inside the
organization, and also its output is low because there is no increase in demand
levels.

The organization environment includes suppliers, customers, government and

financial community, and the most environmental elements that affects the
organization most is its competitors.

key success factors are:

 An optimum blend of the long years experience in the confectionary

business combined with the most modern technology of today.

 Deliver a perfect service to our customers.

 Our highly qualified personnel and chocolatiers are devoted to maintain

the trust of all consumers by an excellent quality.

The company creates its own culture by enhancing employee commitment,

efficiency and to provide the glue to hold the organization members together by
offering monthly picnics and qualified training courses.

After analyzing the company structural and contextual dimensions we can

conclude that it has a mechanistic environment because it has high levels of
formalization, centralization, specialization, standardization, rigid structure.

The environment:

The organizational environment is all the elements that exists outside the
boundary of the organization and have the potential to affect all or part of the
organization.

Corona’s sectors & domain: The environment have several sectors that must
be within consideration: three sectors must be analyzed with in corona’s
organization: raw materials, financial resources and competitors.
The company is specialized in serving chocolate with different tastes, and it also
serves wafers, chocolate drink, biscuits and candies, which make it diversify its
products in order to be competitive in the market.

Analysis using task and general environment:

The following sectors are the sectors which corona company interacts directly
with and have a direct impact on its performance and its ability to achieve its
goals.

*The industry: Recently corona started to analyze its position in the market
and to give a great care to its competitors size, which it consider it to be:
Cadbury and galaxy, and it now prepares and aggressive strategies to penetrate
the market and gain its old reputation and its loyal Egyptian customers.

*Market sector: Corona company admitted its mistake in ignoring the market
and stayed serving the same products without any modifications or improvement
in taste and quality which in sequence leads to consumers shifts for better
competitors, the company now is looking for growth by changing into an organic
structure and to restructure all its old environment.

*Human resources: Before corona was belonging to a public sector, and it

performed like any public organization, but after mr. sami saad acquisition of the
company he found that labor unions dominating the company and resisting any
new strategies, the situation stayed the same until 2007, we can say by now that
corona is starting to care about human resources and hire qualified employees
and train them for better performance.

*International sector: By questioning corona’s manager we found that corona

do consider the international environment and it did export chocolates to some
countries like: Lebanon, Syria and Libya. And they are preparing a strategy to
not only be competitive in the Egyptian market but also to be competitive
worldwide, the manager also mentioned that with the aid of German
professionals who are experienced in the chocolates industry, they are going to
improve their chocolates tastes in order to be more competitive.

The following sectors are the sectors which doesn’t have a direct impact on
the daily operations of corona but will indirectly influence it.

*Government sector: After corona being totally privatized the government

interactions decreased and the company manager mentioned that they are
following the normal safety and governmental regulations that are applied on all
businesses.
*Economic sector: Economic condition do have an impact in all businesses all
over the world, it often affects the way a company does its business, and
corona's situation is the same as any Egyptian organization, any booms or
recessions will deeply affects its performance.

*Technology sector: Corona used to be a public sector company who

introduces a mass production without any reference to quality or technological
updates or modifying its products to match the changes in customers tastes, for
that it went out of the competition, but recently it has a plans of restructuring its
production process and its products lines.

*Financial resources: By questioning corona's manager he mentioned that in

the past the main obstacle that prevent them from competition and development
is the scarce of its financial resources, he also mentioned that there is a special
budget will be spend on products development.

International context: The growing importance of the international sector

means that the environment for all organizations is becoming extremely complex
and extremely competitive In corona's plans is meeting its first target and win
competition domestically then it can gain the competition globally.

Environmental uncertainty:

What level of environmental uncertainty does corona face?

Corona's environment is characterized by having a stable environmental domain

which is the same over the years ( as it was under public control in the past)
Also there are only a few external elements to contend with , and they tend to
remain simple : so we can conclude that corona's environment is
SIMPLE+STABLE (low uncertainty). Corona being the same in all its
performing year and we are waiting to see if it will make a revolution in the
chocolate industry as they mentioned or not!

Adapting to environmental uncertainty:

*Positions and departments: Corona's manager mentioned that they are now
recruiting a huge numbers of qualified workers and managers to develop the
company's new performance, because they are seeking to take an active part in
the open environment.
*Buffering and boundary spanning: In corona's environment there are no
boundary spanners to keep a link between the organization and the external
environment, as the top managers are not informed about the changes in the
external environment.

*Differentiation and integration: Due to corona's low uncertainty level, it

have low if ever differentiation and integration, corona performed poor for that
there wasn't any need to differentiate or integrate between different
departments.

*Organic versus mechanistic: As in corona the external environment is stable

, and the internal organization is characterized by rules and procedures and a
clear hierarchy of authority: organizations are formalized, they are also
centralized, with most decisions made at the top, tasks are rigidly defined and
communication is vertical. so: corona is a MECHANISTIC organization system.
But it intends to become organic in the future by: dealing with high levels of
uncertainty, decentralizing its authority and responsibility to lower levels
encouraging teamwork and taking an informal approach to assigning tasks and
responsibilities, this is how an organization is more fluid and is able to adapt
continually to changes in the external environment.

How can corona control environmental resources?

After corona's owners decided to not just keep the business in the environment
and to keep its workers to just be operating as a losing business, they decided to
make it for profit and to analyze the external environment and to start to take an
active part in the market. It did an ACQUISITION with naddler company in
order to produce a new type of candies which will be available in the market in
the beginning of the next year.

Corona's organizational and departmental technology:

Corona is a manufacturing organization (mentioned to be GROUPII: Large

patch and mass production in Joan wood wart technical complexity model)
which have the following structural characteristics: high formalization, high
standardization, high written communication and low verbal communication, high
centralization, and low workers skills, which summarizes that the whole
organization structure is MECHANISTIC. also mass production could have large
patch size but offered limited product flexibility.
Non core departmental technology:

Referring to (perrow's model of variety and analyzability)

Variety: the number of expectations in the work, in corona's situation it is
considered to be low as workers with no innovation performs the same tasks.
Analyzability: analyzing the work activities, in corona the analyzability is high as
every workers cant manage problems without referring to his manager, this tell
us that corona uses a ROUTINE TECHNOLOGIES due to its mechanistic
structure which is accompanied by high formalization, high centralization, little
training or experience, wide span of control and high vertical communication.

Corona's work flow interdependence:

Corona has a sequential type of interdependence that influence its organization

structure, in sequential form of interdependence the parts produced in one
department is output to another department and it is associated with the long-
linked technology which refers to the combination in one organization of step
following the other.

Corona's life cycle:

After our analysis we found that till now corona is in a declining stage so it faces
the elaboration stage of the life cycle after corona's managers analyzed its
current situation and try to solve its current situation they found that:
bureaucracy has reached its limits, formal systems needs to be simplified and
replaced by teams.
The focus: Is to try to develop working in teams and stop the bureaucratic
modes that surrounds the organization.

The goal: The need to revitalization, and to restructure.

The problem: The need for renewal, team work development, and
collaboration. Or the need to eliminate departments, products lines.
Corona's culture:

Corona is in a bureaucratic culture: which includes six characteristics and

are all found in corona's environment.

1. High levels of rules and procedures the employees are attached to

which stiffens their innovation.

2. Specialization and division of labor: every worker is responsible for

getting a certain task done without even knowing what the other
departments are doing.

3. Hierarchy of authority: the high hierarchy of authority and high vertical

communication.

4. Technically qualified personnel: corona have high technical and

clerical rates than its administrative, as it needs more technical workers.

5. Separate position from position holder: that the workers doesn't

have an inherent right to the job which enhances efficiency.

6. Written communication and records: which depends a written

documentation for every decision or action to be taken to provide an
organizational memory and continuity over time

All of this factors are supposed to be done to ensure efficiency but in our
daily life and with the technological updates it is hard to still be a
bureaucratic organization, for that corona is working on canceling this old
systems and forming a new working system that can form a synergy between
the internal and the external environment.
Corona's power:

Inside the company a vertical sources of power is found, where the top
management retains a large amount of power , the vertical power includes
four main major sources of power:

1. Formal position: Is the power derived from the formal position that the
top management possess and people through out the organization accept
the legitimate power to set goals, make decisions, and direct activities.

2. Allocation of resources: Top management control the resources:

adding new products, salaries to be paid, and equipment and supplies to
be purchased. Resources can be used as rewards and punishments which
are additional sources of power.

3. Control of decision premises and information: Top managers

making control over decisions done on lower levels by specifying a
decision frames and guidelines. In sense that big decisions are kept for
top management and small decisions are for lower levels.

4. Network centrality: Its that the top management is centrally located

inside the organization, and having access to information and people that
are critical to the company's success.

Politics:

Politics is like power it is difficult to measure but in brief politics is the use of
power to influence decisions in order to achieve the decided outcomes.
 Conclusion

After a long analysis and studies of corona as a company how it was performing
what happens to it leads to all its deterioration in the market and why it went out
of competition, and being a bureaucratic organization for about eighty years
which shaped the whole entire organization processes, which leads the
organization to be very systematic and uses a traditional manner on managing
its processes (closed system). It consists of five hierarchical levels accompanied
with high levels of specialization, formalization, centralization and
standardization. Corona have main environmental sectors that affects its
business: raw materials, financial resources, and competitors. And the main
sectors that affects it is: the industry, market, human resources, international
sector, and the sectors that doesn't have direct impact on the business are:
government, economic, technology, financial resources and international.
The environmental uncertainty is characterized at simple-stable (low
uncertainty)because it is the since 1919, and corona used different strategies to
adapt to this environment. Corona controlled its environmental resources by
making on acquisition with naddler to produce a new type of candies to be
introduced soon in the market. Corona is considered to be a large patch mass
production company which have the following structural characteristics: high
formalization, high standardization, high written communication and low verbal
communication, high centralization, and low workers skills, which summarizes
that the whole organization structure is mechanistic. corona uses a routine
technologies and also it has a sequential type of interdependence that influence
its organization structure, it is associated with the long-linked technology which
refers to the combination in one organization of step following the other.
Concerning the life cycle corona is in a declining stage as it faces the elaboration
stage as bureaucracy has reached its limits, formal systems needs to be
simplified and replaced by teams. In sequence corona faces a bureaucratic
culture and imposes a vertical source of power and politics. That’s all about
corona's environment and it was interesting making this project hope you enjoy
reading it as much as we enjoyed it…
 Recommendations

We studied corona as a company and its defects, the way it deals with the
external environment and the way customers think about it, and we came up
with the following recommendations:
1. Corona should increase its promotional campaigns in order to be available
again in the market.
2. Also it needs to increase its advertising so it can remind its customers about
the company's products and trying to get its old reputation.
3. The company is in vital need to shift to become more organic structure,
because its mechanistic environment stiffens the whole organization, employees
and the external environment as well.
4. The company could also follow a downsizing strategy by eliminating the not
needed or old product lines to use their shares to produce new products.
5. The company has to stop its imitation strategies, because customers are very
sensitive to this issues and can easily recognize the difference and stop buying
the brand: for example: corona produces Kat corona and trik trak which is
obvious way of imitating kit Kat chocolate produced by NESTLE company, which
is not sensible and make the company loses some of its customers.
6. The company has to create its own image depending on its own quality and its
pricing strategies without referring to competitors, so the customers can easily
differentiate corona that its competitors in the market.
7. The company has to rebuild its customers satisfaction, by producing high
quality that satisfies its old customers and captures a new market share.
8. The company need to improve its current quality as it is really poor and many
customers complains about the chocolates tastes, so the company needs to
improve the quality of its products to compete with high quality brands.
9. The company to apply competitive pricing( for example the big corona
chocolate bar is for 3.5 L.E and the big Cadbury's chocolate bar is for 3.5 L.E
also, and there is a real difference between the two products, and the consumer
now will sure buy the Cadbury's bar so, corona has to consider its pricing
strategies in order to be competitive.
10. Finally corona has to be a proactive rather than an active company, it hasto
penetrate the market rather than just wait for competitors to take actions and
then follow them.

If corona applied all this recommendations it can compete widely in the market
and can grasp high market share, that’s our recommendations, and thanks for
reading.
Done by:
Nancy samir
Nancy elsherbini.