Coca-Cola: The World’s Largest Beverage Company
Question:
Discuss about the Business Ethics and Corporate Governance Inference.
It is very important for a company to follow the ethical decision making to maintain its position on the top just by working for the profit motive, but rather by maintaining Ethical values.
Coca-Cola is the world?s largest company in providing beverages. It nearly provides more than a billion goods throughout the world. It is the world?s most valuable logo and brand. It is well known for providing its consumers a regular supply of the products without any interruption. Due to all this features the company has been successful in developing long term relations with the consumers and thus providing a huge profit to the organization. Thus all this features has helped this company in reaching this height of success. It has also given a great importance to the overall development of the society by improving both social and economic situation of the society. It has initiated various programs for the betterment of the society.
It has also supported various sustainable development intension based technology that will be helpful to only the present society but even to the coming generation. It has also taken various steps to stop the wastage of water and also has taken various steps to improve its present situation. It has also helped the people by helping the local organization to maintain peace and initiating overall health betterment. Some of these examples are that the company is helping the UNAIDS and is helping in curing the AIDS/HIV epidemics that is prevailing throughout the world. (Douglas R McKay, 2015)
Along with this various scholarship programs and other initiative in the education sector has helped many students of the poor areas to come forward and get successful.
Thus the company has always given importance in marinating the company?s name as one of the most valuable brand by maintain loyalty and sincerity towards the customers throughout the world.
- For this they have got recognition and has also be awarded with various prices at international level.
- But despite this fame the company has also been in the news for various wrong deeds, of which Ethical discrimination is one of the major problems.
- The price of its stocks has remained unchanged for about a decade because the company has been charged several times for racial and other ethical discrimination with its staffs, customers, other officials, etc. (Terblanche, 2015)
The major charges that created the biggest problems for the Coca-Cola company are as follows:-
- Belgium Crises:-
- In 1999 several children fell ill by consuming the company?s products.
- But as no much action was taken post the incident by the company that led to large scale opposition against the company.
- The Belgium stores owners boycotted all the Coca-Cola products that resulted to a great loss to the company.
- Even other countries like Luxemburg and Netherlands followed the steps of the Belgium people. (Freeman & Greenwood, 2015)
- Racial Discrimination charges:-
- After the Belgium crises the problem of the company didn?t improved.
- In the same year the company was charged with racial discrimination allegations by the African American employees.
- The company was criticized for its policy for placing the African American employees at the bottom of the salary scale.
- Thus a huge financial loss was suffered by the company as it had to pay the compensation to the employees to solve the issue. (Bain, 2017)
- Other issues:-
Other issues like problem with the Burger King Market Test, earning through inflationary prices, problems in distribution, etc.
Along with this various scholarship programs and other initiative in the education sector has helped many students of the poor areas to come forward and get successful. Thus the company has always given importance in marinating the company?s name as one of the most valuable brand by maintain loyalty and sincerity towards the customers throughout the world. For this they have got recognition and has also be awarded with various prices at international level. But despite this fame the company has also been in the news for various wrong deeds, of which Ethical discrimination is one of the major problems. The price of its stocks has remained unchanged for about a decade because the company has been charged several times for racial and other ethical discrimination with its staffs, customers, other officials, etc. (Terblanche, 2015)
Thus even after reaching the heights of the success due to several issues internally and externally the resulted in the fall of the company?s reputation. (Clarke, 2014)
- A brief history of the organization:-
- Coca-Cola is one of the most valuable company and foremost in the beverages section.
- It is well known for its varieties of the products.
- Due to its value out of the top five sold beverages of the world, four are a Coca-Cola product.
- These products mainly include the regular Coke, Diet Coke, Fanta and Sprite.
- Thus due to its regular services and plenty of stock it has developed such a relation with the consumers that they will remain intact with the company for a long term and will be benefited to the company throughout their life.
- The major competitor of the Coca-Cola products is the Pepsi products that also hold a large share of global beverages supply. (Goel., 2014)
- Thus both these companies targeted the international market and by providing the demanded goods they are running in a race to capture more market since ages.
- Thus firstly Coca-Cola was just an American company selling its products in all corners of the world but now it is recognized as an international company that also sells its products in America.
- Thus, even Coca-Cola has the same main target of maximum market capturing like all other companies.
- But to make this task possible it has constantly bring new ideas and ways so that other companies doesn?t affects it position.
- The success of Coca-Cola even after all this struggles was possible due to its unique products, its merging strategy with other international firms, its services and quality, its focus on snacks business along with beverages, etc.
- Thus various stats shows that out of its total earnings about 25-30% share comes from America while rest is obtained from the other companies of the world. (Rossouw, 2005)
- Argument:-
- Coca-Cola is considered as a top level company as it survived even after facing many national and international issues that affected the company financially, morally, socially and ethically.
- But one question that arises in the mind is that despite being the top firm why such low level of acts was done by the company.
- It is a known fact that about 3/4th of the company?s sales is in the other countries.
- Many developing company has a large share in the company?s sales.
- So discrimination on the bases of race, skin color, earning profit by manipulating with the price and quality, cheating with its distributors, manipulation in the earnings, etc. should not have taken place.
- Thus you should not cheat with the ones on whom you are dependent for the earnings.
- The more you take care of them the more they will take care of yourselves. (Rossouw G. (., 2015)
- Oppositions Argument or Position:-
- As a company, it has not always been in a clean image and had gone through a lot of ups and down. When we come across the history it carries till date, we witness a series of incidents like the racial discrimination cases; it was accused of, the problems with whistle blowers sharing the incidents of how a frozen coke took a demised turn for a kid due to toxins of stale contents etc.
- There isn?t much to be done by the competitors here as they have been a witness to all the possible cases wherein it not only shows the series of cases of customer dissatisfaction, chances of how many times it has been sued by the customers, multiple layers of agitations files against the company, channel stuffing and inflated profits due to retail investors making a high margin are just another incidents witnesses by the competitors. (Eastern Michigan University, 2015)
- There are a series of observations wherein it even had trouble with the distributors, unions of the employees and retail and whole sale sector, problems with the trade secrets unions of coco-cola, there are enumerate examples wherein the ethical compliances of the company were kept stake and still it could not recover the same.
- The position of the company in the market is in a swing of controversies, series of cases, indemnity cases, health files, union issues reimbursement, customer dissatisfaction, and these are not minor problems for the company and have taken lot more than the reputation and clientele it carried before few years and the same as on date.
- As on date, it is trying to o reduce their ethical cases to negligible and to focus on reaching across the globe. What all we witnessed, are all problems that could be amended and while we gave instances of how they could have handled the problem differently and how efficiently they are trying to come up with a solution altogether.
- It is trying to amend the issues it had witnessed till now and come up with a clearer image with the unions, trade committees, sales, retail and wholesale sector, distribution channels etc. (Governance, 2016)
- Ethical decision making approaches and theories relied upon
Supporting Sustainable Development Initiatives
While coming across the issues wherein it is stuck as on date, the areas which we tried to come across and resolve are with the manner it dealt with the unions, trade committees, sales, retail and wholesale sector, distribution channels etc. shall be in a systematic and better manner, it should have a process flow which only defines how effective the same shall be handled but also signifies that the process should be transparent, have a decentralization which would specify that who is responsible for what and what will be the accountability of the same and how much responsible the SPOC will be for each line item. (Salehi, 2012)
This will give a broader image and set up an ethical process as a whole which will not only signify how much compliances the company is able to comply with but also that the same shall be strived for sustaining in the long run as well.
These practices shall target that the clientele shall be continued with and able to capture more market with the help of its objectives, whether they are in line with the industry ones and gradually there should be a bridge between the decided objectives and achieved ones. (Libraries, 2015)
Summary/Conclusion:Coca-Cola is one of the most valuable companies of the world.
So it should not neglect these above mentioned ethical issues as the impact of these issues is can be responsible for the future fall of the organization.
This in the practice of becoming the top company of the world ethical principles should not be forgotten.
Because forgetting these ethical principles can affect the reputation of the company and also the trust of the global consumers in the company. (Springer, Journal Of Business Ethics)
Thus Coca-Cola has reached this height of success just by the support of the consumers.
- So valuing them along with their employees who has helped the company to maintain this large scale business will lead the company to the greater heights.
- For this the above mentioned ethical and other issues should be solved as soon as possible by implementing the ways that will bring the organization out these problems.
- Because if quick solutions are not brought for these issues than the fall of even such a big global firm is confirmed as one can sustain in the till it has long term consumers, once this support is lost the company can be replaced by its alternatives (Larcker, 2016)
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