Corporate social responsibility (CSR), refers to enterprises espousing
accountability for their movements and taking part in undertakings that convey
constructive lasting outcomes to the environment where they work, the clients,
employees, societies, and all the stakeholders (Caramela). However, at times
the consequences of some activities of an company may additionally be
negative. These bad outcomes may also include, water contamination, era of
unsafe products to human our bodies and many more.
Coca-Cola Company is an example of agencies whose operations have had
both tremendous and negative results in their place of operations and will be
used in an analysis of these two faces for a better understanding of this
concept.
Based in the United States of America, with its headquarters in Atlanta, Coca
Cola was incepted in 1986 as a local manufacturer of soda, indicates Coca
Cola, 2010. Since then, the company has continued to grow and in 1920s it
began selling its products in the Caribbean and Canadian markets. Further,
the corporation has continued to grow internationally and now operates in
more than 200 countries across the world according to the
[Link]. A Coca cola report, 2010, explains that in 2005 Coca-
Cola became the largest manufacturer, distributor and marketer of non-
alcoholic drinks in the world.
The coca cola company take part in activities designed to assist the populace
of its areas of operation to lead a better and get services in addition to what
governments offer. Over time, Coca-Cola has been able to establish
Corporate Social Responsibility strategy with the concept of ‘Live Positively’,
which has seven core components: the community, water stewardship,
beverage benefits, active healthy living, sustainable packaging, the work
place, energy and climate.
This CSR, is based on the 1984 established Coca Cola Foundation’s agenda
of developing and maintaining vibrant, sustainable communities to make the
society a better home for man. Consequently, Coca Cola has gone ahead and
subscribed to international CSR guidelines such as, narrates Torres et. al
(2012) The foundation has since participated in different areas such as
providing clean and enough water to the community, ensuring health
standards are observed, as well as supporting children from disadvantaged
families complete their school.
According to the Coca Cola CSR, 2010, the company introduced Plant Bottle,
which is a “fully recyclable PET bottle made from a blend of petroleum –
based materials and up to 30 per cent of plant-based materials. This has also
been replicated where the company has achieved 99 and 92 per cent
recycling rates in Europe and North America. In India, Coca-Cola became a
member of CEO water Mandate and collaborated with World Wildlife Fund
(WWF), concerning the water issues of firm and the control measure after the
environmental conflict in India,
In 2015, as per the Coca-Cola Company 2015/2016 sustainability report,
through the 5by20TM initiative the organization had empowered more than
1.2 million women entrepreneurs across its global value chain. Further the
report indicates that roughly 372,000 women participated in 5by20 in 2015,
increasing the cumulative number of participants by 43 percent over 2014.
In 2003, a report by Centre for Science and Environment (SCE) in India
indicated that samples of Coco Cola products had been found to have
amounts of pesticides way above the allowable standards. As Torres et. al
(2012), narrates, the pesticides were deemed to contaminate ground water
and other sources of water. Burnett and Welford, (2007), also indicate that in
2006, (CSE) published the second test on Coca-Cola products which were
also found to contain high level of pesticide.
Conversely, an analysis in the year 2008 by The Energy and Resources
Institute (TERI) concluded that the water used in Coca-Cola in India was
found to be is free of pesticides. TERI argued that because the final products
did not be tested, other ingredients could contain pesticides in process (Torres
[Link]).
Vedwan, (2007) writes that Coca-Cola has also been accused of causing
water shortages and pollution. This not only culminated in lengthy legal battles
with the India government, but it also led to the company losing consumer
trust in India though it’s damaged trademark image. A point in case as Pirson
and Malhotra, 2008 writes is the 40% drop in turnover within two weeks in
India after the release of the 2003 CSE report, and the subsequent 15%
decrease in annual turnover 2003.
The damaged trademark reputation not only impacted customers in India, but
also had a ripple effect on consumer behaviour in US. This, as the New York
Times, 2005, resulted in Ten American Universities discontinuing selling
Coca-Cola products at campus facilities.
The reason why these lengthy legal battles negatively affected the reputation
of Coca-Cola is pegged on the response the company gave to the issue,
indicates Pirson and Malhotra (2008). From the onset of the battle, Coca-Cola
refused to accept that their products contained pesticides as well as refuted
that its production process led to contamination of water sources, both
underground and otherwise. However, with time as the Times magazine,
(2008) indicates, the company became aware of its mistake on battle and
consequently the company vice president of environment and water
resources, admitted that the organization had not satisfactorily handled the
issues.
Analysis
Corporate social responsibility is believed to stimulate a vision for the
accountability of businesses in a wide range of stakeholders beyond
shareholders and investors. This is meant to boost a positive image important
for a company’s successful business operations. In the case of Coca Cola
India, poor performance was brought to the fore though the media and
consumers
A report published in 2007 by Business in the Community, indicated that 86
per cent of consumers, will have a positive image of an establishment if its
activities protect the environment and welfare of workers, community and
society at large, both today and tomorrow (Pandey). This is something Coca-
Cola ignored in the case of India. In order to boost the company image when it
had deteriorated in India and the United States, it was imperative to consider
how its activities could contribute to sustainable environment to get out of the
wrangles it had entered into.
For instance, according to the Coca-Cola India report (2012), the company
adopted projects which could ensure the firm does not use groundwater by
2009. These projects mainly considered environment area, such as water
shortage, underground pollution and irrational water use.
Subsequently, in the 2012 Water Stewardship and Replenish Report, the
company pointed out that its operation had achieved full balance between
groundwater used in drink production and that restocked to nature and
communities. The experiences of controversy in India, it motivated the firm to
grow and take corporation social responsibility policy on a global that focuses
on water management.
At the time when Coca-Cola’s positive image got damaged in India and United
States of America, the company experienced retrogressive development in
two spheres, economic development and public image. The company had to
be cognizant that cultivating its reputation and handling public and
environmental glitches were important for the success of the organization. For
this to be successful, Coca Cola had to make Corporate Social Responsibility
part of its long-term strategies.
To bring this strategy into fruition, the company has carried out a number of
measures. After 2001, Coca-Cola put CSR a major part of the company
development strategy. The challenges the company experienced in India and
United States of America was a wakeup call and henceforth has been
determined to protect its public image. In the same spirit, in the year 2007
entered into a partnership with WWF.
Its primary objectives as Lambooy, (2011) narrates are increasing
understanding on watersheds and water cycles to improve Coca-Cola’s water
usage, working with local communities in various places in the world, and
developing a common framework to preserve water which could then be offset
against the manufacture costs in a long time period.
From the time when Coca-Cola implemented the above processes in the
business operation, its CSR is becoming greater and this has led to boosting
its brand. Subsequently, the company has preferred to invest in
comprehensive and long term methods to reflect the company corporation
social responsibility. This will eventually stimulate the growth of company and
society.
According to Raynard and Forstater (2002), corporation social responsibility
cab be categorized into three: Value creation, Compliance, Harm
minimization. Value creation is meant to raise the positive image and create
worth of company, for example, invention, investment. A point in case is when
Coca-Cola made a partnership in World Wide Fund for Nature. Compliance
category involves some enactment of industry principles and legal
responsibilities, such as, environmental regulations, the rights of workers,
consumer rights.
The third category entails reduction of the negative impacts of establishments
on society. According to the company sustainable report of 2007, Coca-Cola
tried to minimizing the negative effect on environmental pollution issues in
India, to take full advantage of the benefit for its brand. The company is still
committed to improve its brand public image by other corporation social
responsibility measures,
Recommendations
Coca Cola was based on the 6 pillars of business ethics i.e. creation and
preservation of jobs, protection of the natural environment contribution to
economic growth, contribution to training, contribution to the fight against
social rejection and contribution to the development of the region. So as to
realize these goals, Coca Cola should involve all stakeholders i.e. consumers,
employees, shareholders, NGOs and local administrative organs, in the
following ways:
For consumers, the company should pay attention to different ethos of various
people and races in the world. Moreover, it should pay special attention to the
moral and sustainable consumption by producing environment-friendly
produces. This should also involve having in place recycling plans for their
products as well as educate its clientele to recycle its products.
On the part of its employees, Coca Cola should create safe and a fit working
conditions, void of discrimination race, nationality and gender. It should also
entail offering reasonable compensation to employees. The company should
also encourage innovation through encouraging employees to come forward
with ideas about how to improve the organization’s corporate social
responsibility. By including their ideas and inspiring their active participation,
the organization ensures that social responsibility is a major input in the
organization operations and not just a public relations exercise.
Coca Cola should also come up with long term program which should adhere
to the CSR theory. Among others, the strategy should involve engaging
stakeholders, taking care of the environment where it runs its activities. On the
part of local authorities, Coca Cola should pay taxes. Finally, the organization
should support the local communities in its area of operation by offering them
jobs and directly supporting the local communities’ businesses.
In order for Coca Cola to achieve sustainable development, it employ
strategies such as
social accounting, where it will disclosure its non-financial data on the
company operations in environmental, social and ethical issues. The social
accounting information can be gotten through annual audits carried out by
external stakeholders. This information can be shared through the annual
Corporate Social Responsibility & Sustainability Report.
Work Cited
Burnett, M. and Welford, R. (2007). Case study: Coca-Cola and water in India:
episode 2. Corporate Social Responsibility and Environmental Management,
Centre for Science and Environment, (2003). Analysis of Pesticide Residues
in Soft Drinks, August 5, 2003.
Cedillo Torres, C.A. et al., (2012). Four Case Studies on Corporate Social
Responsibility: Do Conflicts Affect a Company’s Corporate Social
Responsibility Policy?
Raynard, P., & Forstater, M. (2002). Corporate social responsibility:
Implications for small and medium enterprises in developing countries.
Caramela, Sammi. What is Corporate Social Responsibility? 27 June 2016.
Online. 24 March 2017.
Pandey, Ritesh. CSR Activities Coca Cola India . 9 December 2012. online.
24 March 2017.
The Coca-Cola Company, ‘CEO Water Mandate’ retrieved from
[Link] [Link]/citizenship/water_mandate.html
