Characteristics of Coca-Cola Amatil
Coca-Cola Amatil is one of the best distributors and bottlers of alcoholic and nonalcoholic ready to drink beverages in Asia along with one of the largest bottlers for the Coco-cola company. The company was founded in the year 1904 and has its headquarters at Coca-Cola place north Sydney, NSW, Australia. The managing director if the company is Mr. Alison Watkins whereas Mr. David Gonski is the chairperson. The operating income of the company as estimated in the year 207 is around A$768 million and the company has a revenue of 6.2 billion in the year 2017. The company had been initially listed in the Australian stock exchange in the year 1972. The company initiated as a tobacco company but snacks and soft drinks became the main focus of the company. The Coca-Cola Company presently owns 29% of the total shares of the Coca-Cola Amatil company. The company has around 14000 employees working for them in Indonesia, New Zealand, Australia, Papua New Guinea, Samoa and Fiji. The company relies on teamwork to provide the best services to its customer along with the community, partner, stakeholders and creditors. The company works across six countries over diverse group of business and because of world class sales and manufacturing capabilities along with fruitful relationships, execution and reach, millions of customers are delighted by the company daily with the leading range of products.
As the company is both a brand owner and a brand partner it operates across a dynamic combination of markets with each of them being unique and all of them being different. The company believes in being local at heart although it is international in presence. The company seeks to make the nations favorite food and beverages brand a reality. The company also invest firmly in the local community and economy and focuses on developing portfolios known by choice and relevance. The company focuses on the present in the future while addressing a vast 270 million customer base out of which 700000 being active. The company seeks to develop and grow along with its partners in order to ensure sustainable returns for the shareholders.
The company is proud of its Australian heritage along with its record of realizing and creating possibilities. The company does not believe in standing still and is subjected to a constant process of evolution and adaptation in relation to market changes, technology and consumer needs and taste. The company deals in products such as spring water, carbonated soft drinks, energy and sports drinks, iced tea, coffee, flavored juices, cider, beer, spirits, ready to eat fruits, vegetable snacks and fruit juice products.
Legal Governance, Management, and Relationship Issues
A business organization is subjected to various legal provisions with respect to its operations. The provisions although having the same fundamental principles vary according to the nation in which the organization operates. A corporation is a body which has a different identity than its owners. The owners of the corporation cannot directly participate in relation to its managements and is controlled by the directors of the company. In order to protect the interest of the community, shareholders, creditors and consumers it is essential to provide the directors which guidelines they must abide with while discharging their duties. These guidelines are provided to the organization in statutory form so that they are given the utmost importance. Legal compliance is one of the most essential factors an organization must take into account in order to ensure smith functioning. The functions of an organization not only effect its shareholders but also its employees, consumers and the community as a whole. Thus the legal compliance with respect to an organization is vast. Various sectors of the organization are subjected to different rules and regulations as provided by statues, common law and authorities which have been delegated the power to frame regulations and watch over the operations of an organization. Firstly and primarily an organizations have to abide by the provisions set forward in relation to corporate governance. Corporate governance is a system in which an organization is governed by its officers, directors and shareholders. The rights and responsibilities of all participates are specified through the structure of the organization. Although corporate governance is merely a system it is also a tem which seeks to monitor and observe the decisions making and functioning of an organization in relation to its directors, officers and shareholders. The directors are bound to a few duties both common law and by statutes in relation to corporate governance. The directors and officers of the company must confine their decision towards the best interest of the company and all such decisions must be taken in good faith by the directors. The directors have the duty to observe care and skill towards the decisions taken by them in relation to the organization. The directors should forbid themselves from creating any situation of conflict between the company and personal interest. The directors must also never use the position and information provided to them by the company for making personal gains at the expenses of the company (Boyle, 2015).
Legislation Governing the Organization
When it comes to employments the organizations have to abide by the employment law of the nation. Employment law seeks to promote a healthy and fruitful relationship between the organization and employees. Thus it is the duty of the organization not to discriminate between its employees and provide them with all the rights they have been entitled to by law. The employee relationship is one of the key aspects for the growth and development of an organization. The organization must ensure the health and safety of employees in all circumstances. The organization must also comply with competition law as well as consumer law provisions to avoid legal consequences and ensure development (Bromiley et al., 2015).
The primary legislation which governs the functioning of organizations in Australia is the Corporation Act 2001 which is administrated by the Australian Investment and Securities Commission. The legislation provides provision related to the issue of shares, insolvent trading, and identification of directors, incorporation of a company, fines and penalties for civil and criminal breach and all that which is related to corporate governance of an organization. The Fair Work Act 2009 and Workplace Relations Act 1996 governs the relationship between an employee and the organization. The legislations provides for provisions which must be complied by the employees and the employers to benefit each other in the course of business. The Work health and Safety Act and regulation 2011 governs the environment of the workplace in an organization. The legislation proves provisions which ensures that the employees are given a safe and healthy working environment for their development. The Competition and Consumer Act 2010 ensures that consumer rights are provided by the organizations and they do not indulge in any anti-competitive activities. Australian securities and investments commission ACT 2001 also operates to watch over the operations of an organization in Australia. Various anti-discrimination legislations such as the Age Discrimination Act 2004, Disability Discrimination Act 1992 and the Australian Human Rights Commission Act 1986 operate to abolish discriminatory activities by the organizations.
An organization is a large body which may be subjected to various risks while operating its business. An organization faces risks in form of legal risk, strategic risk, finance risk and operational risk. Legal risk in relation to an organization is also known as compliance risk. Risk in relation to compliance arises which an organization fails to abide or comply by the provisions and regulations imposed on them by the government. The failure to comply with legal risks results in criminal and civil penalties for the organization and its officers and directors (Drennan, McConnell & Stark, 2014). The key areas of legal risk which an organization may be subjected to are discussed in this section of the paper.
Areas of Legal Risk for the Organization
As discussed above the business of an organization is run through the process of corporate governance. It is the duty of the directors to act for the benefit of the organization along with its shareholders and creditors. The powers provided to the directors of an organization in relation to its management is supreme. Thus they may be indulging in practices which be more for personal interest as compared to the organizational interest. They may use the position provided to them by the organization or the information gained through it to bring detriment to the organization. Various situations have been seen in Australia where the directors have been found guilty of not abiding by the duties. The directors are also found to indulge in activities on behalf of the organization which are illegal or fraudulent taking protection from the concept of corporate veil. The directors may also use the concept of corporate veil to bring detriment to the creditors through the concept of dividends, bonus shares and share buyback. Thus various legal principles have been incorporated to prevent the directors from indulging in any such activities. If the directors do not comply with the legal principles related to corporate governance they are made liable to civil and criminal penalties and sometimes the corporate veil is also lifted to punish them personally canceling thee limited liability provisions of the company. Insolvent trading is also a major risk while a company may be subjected to. The directors of the company are forbidden through the provisions of the CA to indulge in any form of insolvent trading by the organization. A big organization like the Coca-Cola Amatil Ltd is always prone to corporate governance risk. The huge structure of the organization provides scope of corruption even if slightest of complacency is observed by the governance. Any breach in relation to corporate governance no only hampers the goodwill of the organization but also subjects to financial losses.
With the advent of industrialization environmental protection has become one of the major agendas in relation to an organization. All operations of the organization in relation to supply and manufactures have been subjected to the provisions of environmental law. The organizations need to go through an environmental impact assessment before they can initiate any project which has the potential to effect the environment. In Australia compliance with the environmental law is mandatory. Organization have to pay huge amount of compensation to the government in case their activities are against the principles of sustainable development and cause harm to the environment. The Environment Protection and Biodiversity Conservation Act 1999 provides rue and regulations along with fines and penalties for business organizations. Various cases have been identified in Australia where the organizations have been found to breach their environmental duties and have been subjected to penalties and fines. An organization like the Coca-Cola Amatil Ltd who engages in manufacturing and supply has to abide by the provisions of environmental law. There are several guidelines which organization indulging into a manufacturing process ha to comply with such as carbon emission reduction, treatment of toxic waste and minimizing noise occurring from the production process.
Strategic Options for Managing Legal Risk
Competition law is dealt with very strictly in Australia to ensure the proper function of the market. On the other hand consumer law has been initiated to balance the bargaining power of the consumers with the sellers. The organizations must not indulge in any activity which may be regarded as anti-competitive under the provisions of the Competition and consumer Act 2010 (CCA). Anti-competitive provisions may be breached through activities like abuse of market power, notification and authorizations, illegal joint ventures, merges and accusations and unfair trade practices. Price fixing, exclusive dealing, dividing territories, limiting price, refusal to deal, resale price abuse and dumpling are simple examples of anti-competitive activities which pose a high risk to an organization. Thus Coca-Cola Amatil Ltd would be subjected to these risks if they do not comply with the above discussed provisions.
Consumer law protects the rights of the consumers against the discretion of the organization. The increased bargaining power which the selling or manufacturing organizations have in relation to the consumer contract often provides them scope of misusing their powers to deprive the consumers from their rights. The provision in relation to the consumer protection in Australia are provided through the schedule 2 of the CAA in form of Australian consumer law. It is the duty of all large and small scale organizations to comply with the consumer law. The failure to comply with such laws results in penalties which re different for individuals and body corporates. The organizations must ensure that they provide safe goods to the consumers in the place which do not cause any harm to the property of the consumers. The organizations must also provide goods which are of a standards reasonable expected by the consumer. No false and misleading conduct must be engaged in by the organization along with provisions related to unconscionable conduct. Thus the organization may be subjected to the above mentioned risk if they do not observe care and diligence towards manufacturing. The risks are applicable irrespective of the intentions of the organization.
An organization cannot function on its own and therefore its needs employees who provide services to the organization in return of remuneration. The bargaining power in relation to a contract of employment is much more in the hands of the management as they have the powers to change the terms to a large extent according to the organizational needs. It is the duty of the organization to protect the rights of its employees. The employees have the right to be treated equally without any discrimination, given adequate leaves and provisions for rest, appropriate remuneration for their services and a healthy working environment where they can strive for personal development. In case the company fails to provide these basic rights to the employees they are subjected to legal risks which might be in form of claims made by the employees. A company also has to keep in mind that an employee cannot be dismissed unfairly by the company. The organizations has also been provided the responsibility to safeguard the health and safety of the employees within the workplace. All measures to ensure a safe workplace has to be provided by the organization or else they may be liable for legal claims against any loss or damages suffered by the employees. Coca-Cola Amatil Ltd employs around 14000 employees and the responsibility of protecting them and their rights is on the organization and a failure to comply with the provisions would result in legal consequences.
Recommendations for Coca-Cola Amatil
This section of the paper will analyze employment risk a company may be subjected to with respect to its operations. The section will explore the implication and reasons of the risk arising out of bad employee management in both long and short term of the organization. The main purpose for which an organization is created is to make profit. The creditors invest in the organizations to get appropriate returns for their investment and the shareholders want the organizations to earn profit so that they can get proper dividends and the value of their shares may rise. The purpose of the directors is to manage the organization in such a way so that it can generate maximum revenue. In order to ensure that an organization is making profit it has to cut down its cost and maximize the revenue.
The relationship between the activities of the employees and the revenue earned by the organization has an undisputed fact. The more an employee puts effort towards the organization the more the organization benefits from his services and gains increased revenue. For instance if an employee is providing an increased effort towards the treatment of customers than the organization would benefit from increased customer loyalty and will eventually gain more revenue. On the other hand an organization has to spend significant sum on the wellbeing of its employees. This expenditure may be regarded as a loss of revenue and thus some organizations opt not to provide the employee their basic rights in order to achieve maximum profits. They make the employees provide their best for the organization and do not address their needs. This is one of the main reason why risks related to employment law arise within an organization.
Another reason for employment law related risks is discrimination. As human beings it is quite natural for an employer to favor an employee over another. This favor may be a result of personal choice, merit or discrimination based on any trait of the employees. An employer who does not like a particular religion may discriminate with the employees based on religion. In the same way such discrimination may arise out of age, gender or disability and even matrimonial status. This kind of discrimination often expose the organization to the risk of noncompliance with employment laws which are strictly against any kind of discrimination with the work place along with selection and recruitment.
The implications of not complying with employment law provisions is vast. It not makes the organization subjected to legal actions but also demotivates the employees resulting in further loss of productivity and revenue. The employee may not want to provide effort for an organization which only seeks to make profit and has no interest in their development. The employees would only be looking for an opportunity to leave the organization. In the long term a negative employee relation may turn out to be fatal for the growth of n organization. If the organization does not comply with the employment law provisions they may be subjected to various penalties and losses which may hamper the growth of an organization in short term. The main purpose of the organization to make profit would also be subjected to danger as experience employees would leave and make the organization bear increased cost for training new employees. The organization has to pay damages to the employees according to legislations if any right provided to the employee by law is breached by the organization. Noncompliance with employment law may also make the organizations employees to join the competitors and such results may be cause detriment to the organization.
A risk management framework within the organization in relation to managing legal risk should be simple and not simplistic, scalable and not overbearing, adaptable accompanied by clear guidelines and lastly practical without being regimented. Risks can subject an organization to unexpected cost and reduce its capabilities to take up opportunities. The commitment of the organization has to be obtained before the implementation of any risk management system. A risk management system in relation to the employees can be implemented in their own domain by the line managers, human resources managers and team leader, two benefits can be obtained through a focus on employment law risk firstly it would benefit the enterprise as a whole with respect to clarity and transparency. Secondly it will make the managers more accountable for their actions. The primary step for addressing employment risk is identifying hem in the first place. Identifying employment law risks can be a costly affair. It would require investment of time and money to form a committee which could detect any possibilities of contravention of the legal principles. Once risks have been identified that must be noted and recorded in the risk registers for future reference and analysis. For the purpose of analyzing legal risks arise out of employment a close observation related to employee behavior has to be maintained.
Three stems must be taken towards identifying risk which may arise out of employment law. The primary step is to find out the source of origin for the risk. In relation to employment law the primary source of risks may be internal regulations, terms of the employment contract, litigations and organization culture. The next step which has to be taken towards an effective risk management is to differentiate between potential and actual risks. The differentiation can be made through uncertainties with legal provisions, events, scenarios and situations. Finally the identified potential and acute risks have to be recorded in a risk register. Attributes of risks are captured by the risk registers. The likelihood, the implications and a combined risk rating has to be recorded in the register for an effective management. Analyzing a risk is all about understand the risks which have been identified. Assessment of control is a good way to address an identified risk. The chances of adverse decisions and the chances of discovery combined provide the probability of the risk.
A risk arising out of employment law provisions has to be evaluated once it has been identified and analyzed. The process or evaluating a legal risk is quite different than the process of analyzing. The response with respect to the risk is prioritized in order to evaluate it. Similar to the diverse nature of risks the options available towards the treatment are also diverse. Few examples which can be used towards the treatment of risks are avoiding the risk by not initiating the activity in the first place, in case the consequences are beneficial increasing the activity causing the risk, removing the actual source of the risk, changing the consequence and likely hood of the risk and sharing the risk through insurance and contracting. The character of the risk arising out of employment law can be changed through the application of each of the risks.
The process of providing roles and responsibilities to the line managers and human resource managers in terms of risk can be very cost effective for the organization as no extra cost would be involved in this process. It will not only minimize employment law risk but will also increase transparency and accountability.
Working together to address the risks may help the management gain increased ideas about how to address the legal risks. The useful feedback provided by the employees and line managers on addressing risk will provide the management wider options to address them. This might however slow down the work of the organization and reduce productivity as more emphasis could be provided on risk management.
Implementation of a risk analysis committee which would identify, record, analyze and evaluate it could be a costly affair. Similarly providing risk awareness campaigns in the organization can also increase the cost of the organization. Although tis cost may affect the organization in the short term but would have a significant positive effect in the long run as risks would be minimized and employee relations would be enhanced.
Conclusion
This it can be concluded through the above discussion that there are various legal risks which an organization is subjected to. The relationship between the activities of the employees and the revenue earned by the organization has an undisputed fact. The more an employee puts effort towards the organization the more the organization benefits from his services and gains increased revenue. A risk management framework within the organization in relation to managing legal risk should be simple and not simplistic, scalable and not overbearing, adaptable accompanied by clear guidelines and lastly practical without being regimented. A risk management system in relation to the employees can be implemented in their own domain by the line managers, human resources managers and team leader, two benefits can be obtained through a focus on employment law risk which are it would benefit the enterprise as a whole with respect to clarity and transparency and promote accountability.
- The company should create an anti-discrimination policy within the organization so that no employee is discriminated based on protected characteristics within the workplace and selection and recruitment procedure.
- The company should provide responsibilities to the line mangers so that any suspicious activity giving rise to employment law risk may be detected initially and acted upon.
- The company must work together with the employees so that they can know what possible situations may lead to breach of situations. A healthy relationship with the employees would also make them talk to the managers in base they feel their rights have been violated.
- Training should be provided to the mangers and they should be made aware about the possible situations which might lead to employment law risks.
- Risk registers has to be maintained by the organization so that they can address any risks which arises and record them for future reference
References
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Drennan, L. T., McConnell, A., & Stark, A. (2014). Risk and crisis management in the public sector. Routledge.
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