FOR RELEASE: IMMEDIATE Jan. 26, 2000
CONTACT:
Megan Galbraith
(518) 276-6050
[email protected]
Coca-Cola Makes Major Management Misstep With Layoffs, says Rensselaer Professor
TROY, N.Y. - Recent announcements of layoffs at Coca-Cola are a major management misstep that show a lack of leadership according to Phillip Phan, an internationally known expert on corporate succession, and mergers and acquisitions at Rensselaer Polytechnic Institute.
"Cutting one fifth of the workforce is a tactical response to a strategic problem," Phan says. "For the most part they're just trying to stem the tide of red ink. This is another in a long series of corporate restructuring and knee-jerk responses to the last 18 months of problems."
"The reason Coke is losing money is because their sales are dropping because they're losing market share and consumer confidence," Phan says. "The problem is more strategic than it is being made out to be. That's due to lack of leadership."
"The major missteps, including the contamination scare in Belgium which resulted in Coke being banned from the shelves of Western Europe, dealt blows to the credibility of the company's brand and signaled a major shift in consumer demand, which has been reflected in its value on the stock market," Phan says.
Phan is the Bruggeman Professor of Entrepreneurship at Rensselaer's Lally School of Management and Technology. He is a consultant to the World Bank and the Organization for Economic Cooperation and Development on corporate governance best practice initiatives, and has been a consultant with Fortune 500 firms and their Asian equivalents.
Phan's book "Taking Back the Boardroom: Better Directing for the New Millennium," will be published by McGraw Hill in February.
Contact: Phillip Phan, (518) 276-2319 (w)/ [email protected] / (518) 235-0077 (h) or cell (518) 506-8500
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