Balancing Tomorrow’s Sustainability and Today’s Profitability, Essay Example

Background

Coca-Cola is a multinational company of America with its headquarters based in Atlanta in Georgia. The company deals in the manufacturing, marketing, distribution and retailing of nonalcoholic beverages, syrups as well as concentrates. The company was founded on the basis of curiosity by Dr. J.S. Pemberton, a pharmacist at Atlanta who first created flavored syrup that was consumable as a soft drink. The company is the largest beverage producer in the world and has been documented to serve their customers with an estimated 500 different brands. The customers of Coca-Cola are widely dispersed in about 200 different countries across the globe and the company has therefore to use a very efficient distribution network so as the serve all the clients effectively (Ferrell, Ferrell & Fraedrich, 2008). The company has recorded a service delivery of over 1.8 million each day around the countries that it has established its distribution network. Although the company can be said to have achieved some high degree of success in the business, some challenges coupled with opportunities cannot be avoided which increases the vulnerability of Coca-Cola to issues of corporate social responsibility (Hawkins, 2006).

Description of CSR Issue

The CSR that is evident at Coca Cola Company involves the changes that have been implemented with significant implications to leadership and has made the corporation to become vulnerable to ethics decisions and issues. This has given an edge to the competitors since they embraced that opportunity for their benefit because the unethical practice had made consumers switch to other companies that were rivals of the company (Ferrell, Ferrell & Fraedrich, 2008).

The Coca-Cola CSR Issue has significant impact on the organizational stakeholders including the employees, the executives as well as the board of directors. The issue entails the constant changes in the top level management from 1999 to 2004 that left the company in a vulnerable situation. This has consequently involved the inconsistencies in leadership directly affected principal stakeholders (Ferrell, Ferrell & Fraedrich, 2008).

The Coca-Cola CSR Issue also has significant impact on the economic stakeholders such as customers, competitors, creditors, distributors, or suppliers. Economic stakeholders suffered because of the changes in leadership that forced them to experienced negative consequences due to the company’s manufacturing practices (Mangos, 2014).

The Coca-Cola CSR Issue also has significant impact on the societal stakeholders such as community, environment, government, or regulators. The company entered in to a vulnerable situation, where the inconsistencies in leadership directly affected principal societal stakeholders. During this period, because of the changes in leadership consumers’ experienced negative consequence due to the company’s manufacturing practices (Mangos, 2014).

CSR Filter Failure

The CSR Filter Failure involved the failure of the management to evaluate the planned action. This is achieved through a critical appraisal of daily tactical decision together with the long term strategies on the constituents of the organization (Ferrell, Ferrell & Fraedrich, 2008).

Corporation’s Current Situation

The changes in leadership in Coca Cola Company have significantly affected the current situation in the business. This has been associated with some affects on the performance of the company where some employees have been retrenched or laid-off, thus creating a  hard economic times for some people. In addition, the consumers have also been affected after taking contaminated products which has arisen due to disruptions in the normal procedures of production, distribution and sale of the company products. The company had to reduce the number of suppliers as well as distributors. The competitors took the advantage of the situation and highly benefited at that time because of the unethical practice in the company that had made consumers go to other companies that are the rivals as well as competitors of the company (Hawkins, 2006).

Strategic CSR

It was prudent for the company to strive towards identification of an amicable solution to that situation. In this regard therefore, the company reacted to these issues by developing programs as well as policies that were thought to have the necessary aptitude in addressing any potential future occurrences (Mangos, 2014). Furthermore, it was also prudent for the company to develop some constructive policies that aim at enhancing the processes of production as well as distribution together with valuable quality management and assurance programs.

The Chosen Driving Force of CSR

The five driving forces that are responsible for pushing the CSR agenda in the company include affluence, sustainability, globalization, media, and brands. Out of the five forces, sustainability, globalization has made immense contribution in facilitating for the achievement of corporate social responsibility at Coca Cola Company (Ferrell, Ferrell & Fraedrich, 2008). In this regard, the company has made the necessary efforts in soliciting for assistance of an outside agency to maintain a diverse labor force. The two corporate social responsibilities at Coca Cola Company that have driven the corporation towards embracing effective CSR practices are sustainability and globalization (Ferrell et al, 2008). Coca-Cola has been engaging in some important programs that are intended at increasing its corporate social responsibility initiatives. These programs include energy efficiency and climate protection, education on HIV/AIDS, and water stewardship. These initiatives have been able to receive full green light from the main stakeholders because they were involved in every aspect of decision-making process (Mangos, 2014).

Conscious Capitalism

As part of corporate social responsibility at Coca-Cola, the company is determined to fulfill the “conscious capitalism” through raising the awareness of the people around the world on the potential opportunities in the world that can create substantial benefits to their life through sustainable, entrepreneurial as well as social commitments (Mangos, 2014). The implementation of this initiative has prompted the company to make the best use the available resources that they accrue from the business to make the relevant changes in the lives of the people around the world in many ways (Hopkins, 2003).

CSR Now and in the Future, the CSR Initiatives and Stakeholder Priority

It was necessary for the company to take proactive measures to address the pertinent issues. In this regard, the company reacted to the issues through the development of some programs as well as implementation of some policies that were intended to deal the future occurrences. The relevant policies that were developed were supposed to focus on the processes of production and distribution. To make sure that the initiatives were constructive, the company further considered the implementation of an effective quality management together with some assurance programs and also prompted for gathering some assistance of an outside agency to maintenance of  a diverse labor force (Mangos, 2014). The two CSR forces that have driven the corporation towards embracing effective CSR practices are sustainability and globalization.

The Lessons Learned and CSR Filter

The company gathered a lot of helpful information from the corporate social responsibility issues at the time that they were passing through the corporate social responsibility initiatives. The lessons that were associated with the corporate social responsibility issues had an important implication for the sustainability and profitability of the business (Hopkins, 2003). The company also clearly understood the need for embracing the responsibility that was before the team of the business managers in an effort of upholding the interests of the shareholders as they undertake their corporate social responsibility practices in the course of addressing the social demands, as well as fashioning accountability to all their shareholders (Hawkins, 2006).

CSR Filter action for the future

In an effort to strengthen the corporate social responsibility filter that will ultimately ensure that the company does not encounter a repeated corporate social responsibility issues in the future, it was prudent that the management first acknowledge the course of their failure

(Hopkins, 2003). In this regard, the management is well aware that, their corporate social responsibility Filter Failure was attributed to the failure of their team of management professionals to articulately evaluate the planned action (Mangos, 2014). In this regard therefore, such a situation can be avoided in the future through a critical appraisal of the day to day tactical decision making processes coupled  with implementation of  the long term strategies in consideration of the entire constituents of the organization.

References

Ferrell, O., Ferrell, L. & Fraedrich, J. (2008). Business Ethics: Ethical Decision Making and Cases, 7th Edition.

Hawkins, D. E. (2006). Corporate Social Responsibility: Balancing Tomorrow’s Sustainability and Today’s Profitability.NY: Palgrave MacMillan.

Hopkins, M. (2003). The Planetary Bargain: Corporate Social Responsibility Matters. London: Earthscan Publication.

Mangos, S. (2014). Coca Cola Hellenic Inc. Corporate Social responsibility Report and GRI statements. Flinders University, Adelaide, Australia, viewed on 2014.