For a company established in 1999 by three Cambridge university graduates “after selling out smoothies at a festival” to being owned by Coca-Cola in 2013 (Innocent Drinks, 2018), the growing business of Innocent Drinks also transformed its structure over the years. When the company first started off, the co-founder of the company Richard Reeds said that everyone told them that the company would not be successful (Featherstone, 2017). But that did not stop the company from moving forward and being where it is in today’s business environment and having a diversified portfolio of producing smoothies, smoothies for children, juice and vegetable pots.
The main purpose of the company is to make drinks with 100% natural fruit as the promise “Everything we make will always be natural, delicious, healthy and sustainable” (Innocent Drinks, 2018). This links in with their mission which proposes to provide health-conscious adults and children all over the world with 100% natural fruit drinks. Being sustainable is a crucial to the company as shared by Douglas, the CEO of the company (2018), “it’s part of our core values to leave things better than we found them. It’s not about ticking boxes, it’s a key part of any business that wants to do good”. This therefore shows to company’s dedication to being ethically responsible and environmentally friendly. Even though being accused of “making misleading claims about its environmental credentials” (Phelvin and Wallop, 2008) about the transportation of its fruits. According to the Telegraph (2008), “Sam Chase, of the environmental campaign group Rising Tide… said “These drinks are supposed to be fresh but they’re not. You pay a premium for feeling good about yourself””. This suggests that even though the company is highly sustainable but due to expansion overseas, might be over-looking ethical issues to enhance its company’s reputation.
Furthermore, the company has five core values; be natural, to be entrepreneurial, commercial and generous as they give back to the community and are highly charitable as the company gives at least 10% of its profits to charity (Innocent Drinks, 2018). The “Big Knit” also was a charitable strategy of knitting bottle hats by Age UK and donating 25p to the foundation per bottled sold. The company also issued a gender pay gap report that addresses an important issue of equality within the workplace as the company’s gender pay gap is half of what the national average is whilst sticking to their ethical moto of “leaving things better than we find them” which is why they were third in the Sunday Times Best Companies 100 to work for (The Sunday Times, 2018). The company was in all concluded of being a place people love working whilst having a Male to Female ratio of 40:60.
Overall, Looking at Innocent Drinks as a company which stands out due to the structure in which it operates in. The company adopts an informal and comfortable structure like big companies such as Google, this means that unlike traditional companies like its competitors such as Tropicana, Innocent Drinks stands out by making the business fun and innocent by leaving fun messages on their juice and smoothie bottles. Analysing the company SWOT and Stakeholder Analysis was taken out in order to determine the strengths and weakness of the company and also how different stakeholders impact the company’s structure.
1.0 STRUCTURE
Structure is based on the organisational design of any company, this is “more than boxes on a chart; it is a pattern of interactions and coordination that links the technology, tasks, and human components of the organization to ensure that the organization accomplishes it purpose” (Duncan, 1979). This means for a company like Innocent Drinks, its structure is crucial as it simplifies the flow of communication within the company in order to reduce uncertainty of decision making within the firm and to achieve effective integration and coordination within Innocent Drinks.
An entrepreneurial structure is more centralised around 1-2 people who make decisions for the other employees who all answer to them. This type of structure is suitable for small organisations like Innocent drinks when it first started out as it was a small firm. This type of structure usually easily capable of adapting to changes that might occur within the growing business environment. However, this structure causes workload issues for decision-making due to having no proper chain of command and is only suited for small companies and in order to survive they have to transform into another structure as with an entrepreneurial structure there is no career paths for all the employees working within Innocent drinks and so in order to satisfy them as main stakeholders of the company as seen in figure 2, a new structure has to be adopted.
As Innocent Drinks grew and expanded the company decided to adopt a more complex hierarchical structure. Even though unlike traditional structures, Innocent Drinks proposes an informal working environment for its employees and encourages interaction and inspiration which further makes the company more unique within the market and makes the brand image stand out. This helped the firm with faster decision making and better communication throughout the organisation, also, with the emergence of different departments it encourages rivalry thus motivating employees to become more creative however, this could also result in the departments putting their own self-interest first instead of the company’s values (Parnas, 1978). Furthermore, communication tends to be less effective within the organisation which could result in employees not being able to feel a part of the firm as this could result in the centralisation of power within the firm and could encourage lack of delegation amongst subordinates.
Overall, adopting a hierarchical structure helps the company set out a clear chain of command and helps with the flow of communication/ commands within the firm which helps resulting in a more efficient company.
1.1 GLOBALISATION
From three friends selling smoothies at a music festival to being owned by Coca-Cola and owning about 78% of UK’s market share of smoothies (Mintel, 2011) whilst dominating the market, the evolution of Innocent Drinks has impacted on the whole company including its structure. Thinking globally, it can be seen as a potential opportunity as seen in figure 1 for Innocent Drinks to enter the European market through Coca-Cola and globalise. Globalisation is “the international flow of ideas and knowledge, the sharing of cultures, global civil society, and the global environmental movement” (Stiglitz, 2007). This suggests that globalisation would allow for diversity of knowledge and culture within the firm.
As being owned by Coca-Cola, the company has an advantage of gaining access to existing customer base all around the world. This would lead to the company potentially being successful globally as well. With regards to structure, the company’s main objective is to create jobs (Innocent Drinks, 2018) and expanding globally will help bring new talent and skill in the company. This will result in diversity of knowledge and thus add-value to satisfying the shareholders in figure 2 by encouraging innovation and creative thinking and thus being successful. However, at the same time this could be a potential threat as seen in figure 1 due to the uncertainty of BREXIT. This could lead higher labour costs from supplying farmers (O’Carroll, 2016) as seen in figure 2 as they have high power within the matrix as the company relies on its farmers for fresh fruits for the smoothies. Furthermore, Brexit could restrict the free movement of the EU workers which is cheaper, could pose as potential threats for the company as it may lead to increased prices of its smoothies which could potentially cause a decline in the demand and consumers going to other competitors of the firm.
Overall, globalisation helps the firm expand into foreign markets and encourage innovation. However, with the uncertainty of BREXIT Innocent Drinks could be at potential risk of losing its consumers and suppliers.
1.2 STRATEGY
Strategy can be interpreted in different ways as it has a variety of definitions in many different fields, According to Mintzberg (1987) strategy meant a plan as a means of how a company like Innocent Drinks can get from here to there, a pattern as to a detailed plan of actions the company would have to take over time, position which would reflect Innocent drink’s products in particular markets and perspectives which would refer to the vision of the company. The vision of the company like Innocent Drinks is to become market leader and to continue creating jobs and to become more sustainable with regards to ethics which is also a strength for the company as seen in figure 1. This vision has to be carefully crafted into a plan by upper management which is then replicated into a pattern of decisions and actions taken throughout the firm over time, in which communication is key with the information flowing through the hierarchy. When implementing the five P’s of Strategy, Innocent drinks has to gather data and analyse it whilst considering that everything is relevant. The firm also needs to have initial ideas to test that the strategy is realistic and robust and finally eliminate any contradictions which may have not been well-thought-out.
According to Steiner (1979) strategy had to do with the structure of the company as the top management held the greater importance within the company and so referred to the directional decisions made within a firm like Innocent drinks and the important actions that were necessary to be taken. It also meant to set out a plan as to what the company should be doing and what the firm like Innocent Drinks hopes to gain at the end. Having a hierarchical structure this helps Innocent Drinks as a company to make strong decision at the top level of management and helps the firm communicate down the hierarchy to lower levels of management about their visions and goals. However, there is little or no agreement that the meaning of strategy in the business world is correct in Steiner’ notes which can be argued as he declared “If an organization is managed by intuitive geniuses there is no need for formal strategic planning” (Mintzberg, 1994) which means that the pitfalls of planning is the way to diminish power over planning, meaning it would create a more severe problem for lower levels of the hierarchy within Innocent Drinks as they want more commitment to the firm’s strategies and want to feel more a part of the firm.
Overall, strategic planning is important as it gives a firm like Innocent Drinks competitive edge over firms like Tropicana Drinks which could be threatening to the company as seen in figure 1. A strategy of the firm should also be in sync with the structure as communication between all levels of the hierarchy is important when making important decisions about the firm.
1.3 CULTURE
Schein (1999) prominently states “Culture matters because it is a powerful, latent, and often unconscious set of forces that determine both our individual and collective behaviour, ways of perceiving, thought patterns, and values. Organizational culture in particular matters because cultural elements determine strategy, goals, and modes of operating” which emphasises the importance of culture within the structure of Innocent Drinks as it links in with the strategy of the firm and its core values and beliefs. Having a culture helps a firm like Innocent Drinks by ensuring a greater level of collaboration between different levels of the hierarchy, it also simplifies the decision-making process and the implementation of strategies as everyone within the firm has shared values. It further initiates effective communication within the hierarchical structure of the company thus making “clan” control easier for the firm (Pearce and Robinson, 1997). As the company has adopted a hierarchical structure everyone has to follow the rules of the company as well as its procedures, however, if a problem is to arise it would take a long time to fix it during operations.
The culture of a company like Innocent Drinks is quite informal and creative as their employees are free to share their views and ideas whilst being comfortable and having fun. “We add little touches our products and our packaging to show drinkers there’s a human being behind them,’ says Dan Germain, Head of Creative” (Groves, 2011). This culture helped the company create a unique product and brand identity within the marketplace which is one of the strengths for the company as seen in figure 1. However, “organizations often face different problems related to informational uncertainty and lack of clarity caused by today’s turbulent and unpredictable environment” (Delic and Nuhanovic, 2010) which could be challenging for innocent drinks. This means that organisational structure and culture in today’s world are not mutually exclusive even though they are important factors for a company like innocent drinks.
Overall, the culture of the firm ties in closely with the structure as it helps determine the core values and goals of the company. A unique culture helps differentiate the company in the market which can help enhance brand reputation and loyalty. Also, it brings about diversity of knowledge within the structure that helps in decision-making.
To conclude, Innocent Drinks has implemented a hierarchical structure which helps with the flow of communication within the firm. With regards to structure and globalisation, Innocent drinks is gaining the diversity of culture and knowledge which will be beneficial in finding solutions to different problems. The diversity of knowledge, people who think differently could be brought together to share their different opinions, thus encouraging creativity and innovation.
Structure through strategy refers to two theories by Mintzberg and Steiner, as strategic planning gives a firm competitive edge over its competitors and helps with the chain of command and the sharing of company core values and objectives. Finally, structure and organisational culture and crucial to brand’s image as this represents its core values and beliefs. Diversity helps bring about innovation and encourages creativity within the organisation, it also, allows to enhance brand image whilst maintaining loyalty within the firm.
However, on the other hand, with the uncertainty of BREXIT measure must be taken for the security of labour within the EU so that the company doesn’t lose its suppliers or incur high costs which could as a result force its customers to go to competitors. Also, the firm, even though to represent exclusivity should not use premium pricing as this restricts the firm to gain full advantage of Coca-Cola’s consumer base and should use other measures such as competitive pricing as a strategy to remain a market leader in the UK.