ATLANTA: A reorganization within the Coca-Cola executive hierarchy has moved the head of PR one step farther away from the chairman within the company’s hierarchy.
ATLANTA: A reorganization within the Coca-Cola executive hierarchy
has moved the head of PR one step farther away from the chairman within
the company’s hierarchy.
Coke announced late last month that it was cutting the number of direct
reports to chairman M. Douglas Ivester from 16 to six people. As a
result, VP of communications Randy Donaldson’s global communications
group will now report to CFO/SVP James Chestnut instead.
While Donaldson said the change will not decrease his access to Ivester
- an assessment with which one industry observer close to Coke agreed -
questions have been raised about Chestnut’s ability to deal with his new
’(Chestnut) is purely financial,’ said the observer. ’You wouldn’t
imagine him being in the same building as the communications group, let
alone managing it.’
The source views the shuffle as an attempt by Ivester to quell market
concerns about the soft drink giant’s recent poor performance, rather
than as a vote of no-confidence in Donaldson’s abilities.
Coke reported an 11% profit decline (to dollars 787 million) in its
third quarter, down from dollars 888 million the prior year. While the
company’s stock promptly rose on hopes that the worst was over after
several rough quarters, some stock analysts have expressed concerns
about Coke’s ongoing prospects.
Part of Coke’s recent problems stemmed from its poorly handled product
recall in Belgium earlier this year. ’People will be looking back on
that as a classic example of what not to do in terms of crisis
management,’ said the observer.
Yet Donaldson survived the incident and is still close to Ivester.
That’s likely because Ivester remains comfortable with the way the
company handled the situation, even though most outsiders said Coke
should have responded sooner and showed more concern about the safety of
At the time, Ivester said, ’We’ll spend whatever is necessary to regain
the confidence of Belgian consumers.’
Speaking of his working relationship with Ivester, Donaldson predicted
’communications won’t change’ under the new structure. He added that
Coke’s senior staff does ’a lot of management by hallway,’ discussing
communications issues informally.
’I sit here on the same floor with Mr. Ivester,’ Donaldson noted.
’Whenever I have PR issues, I’ll talk to him.’