AIM
The aim of this report is to consider Corporate Social Responsibility and how Coca-Cola conduct their business with regard to this concept. There is consideration of the common causes which may influence the success of the company.
INTRODUCTION
The Coca-Cola Company is established in 1886 by a pharmacist, Dr. John Pemberton. It is the world’s biggest beverage company, refreshing consumers with more than 500 sparkling and still brands. Coca-Cola Enterprises, led by Coca-Cola, refreshments including Coca-Cola, Diet Coke, Schweppes, Fanta and Sprite are distributed to more than 200 countries today. Together with Coca-Cola Enterprises, the Coca-Cola rank among the world’s top 10 private employers with more than 700,000 systems employees. 170 million people are served across eight territories in the Western Europe.
According to the 2014 annual review, the Coca-Cola Company’s turnover was $45,998 million. CCE has 6 manufacturing sites across the United Kingdom to deliver the best refreshments across the United Kingdom.
Coca-Cola has received the 2015 Bonsucro Sustainability Award for Buyers Supporting Transformational Change, which recognizes the Coca-Cola production’s efforts and progressive advancements in the sugarcane industry. The Coca-Cola Company (2016) Through this, Coca-Cola is attempting to reduce the level of sugar and to attempt to make it a healthier drink for people to consume. Coca-Cola has already invested good money into sugarcane milled in Brazil and Australia, as of July 2015 to provide healthier drinks, and also jobs on utilizing drip irrigation techniques and is expecting to benefit 25k farmers and expand to 50k acres.
CORPORATE SOCIAL RESPONSIBILITY AND AT COCA-COLA
The term CSR defines as managing a business which takes responsibility for influence of the organization’s activities in society and the environment and represent due to the consideration for the interests and concerns of all stakeholders. (Corporate Social Responsibility Checklist 242, p. 1)
In general, CSR is a perception for the accountability of businesses in a broad range of stakeholders beyond investors and shareholders. The main focus of CSR is to protect the Earth and the welfare of the employees, community and social both today and tomorrow. Different companies have variety of topics such as improving the residents’ lifestyles by offering more job opportunities, healthcare and some other aspects needed in society. The CSR Team of an organization aims to leave a positive impact in the society.
For example, at Coca-Cola Enterprises, they have set a new commitment to get at least 3 million people moving by 2020. Each country that Coca-Cola operates in have at least one physical program. They have established long-term partners through this program. Through Special Olympics, the world’s largest sport charity for youngsters and adults with disabilities, giving them the chance to get active, adapting to new skills and boost their confidence and courage through sports.
BENEFITS OF CORPORATE SOCIAL RESPONSIBILITY
Forbes (2012) suggests the key benefits of CSR to a business are:
i) Innovation
ii) Cost savings
iii) Employee engagements
iv) Customer engagement
v) Long-term thinking
vi) Brand differentiation
Corporate Social Responsibility will lead a company to act mindfully and also managing suppliers who do likewise. It will develop both consumers’ trust and employees’ loyalty in the brand. Companies apply CSR to help us all to satisfy our trusts by staying away from the mischief or harm to the earth will inevitably benefit from the faith we put in them.
In any case, to acknowledge such advantages, it is vital to promote CSR activities and gains of the company, and make them integral to the marketing and company image.
VALUES OF COCA-COLA ENTERPRISES
According to Coca-Cola Company, they live by these values:
i) Great leadership: The courage to shape a better future.
ii) Collaboration: Leverage collective genius.
iii) Integrity: Be real.
iv) Accountability: If it is to be, it’s up to me.
v) Passion: Committed in heart and mind.
vi) Diversity: As inclusive as our brands.
vii) Quality: What we do, we do well.
Coca-Cola (n.d.)
Farms and lands are left being parched and poisoned in India. This has caused villagers that live nearby to have water issues and their wells are pretty much dried up. Although Coca-Cola sends water tankers around every morning, the company denies the shortages have anything to do with the water shortage. Even though Coca-Cola has made a great economy deal with Kerala, it is not right to drain up the wells of the villagers and poison the and with waste sludge.
Integrity means the quality of being honest and having strong moral principles. As seen in The Guardian (25 July 2003, p.1), there seems to be a discrepancy with Coca-Cola’s value focus upon integrity. This is because the article discusses that farmers and water resources have been severely affected by Coca-Cola’s manufacturing processes. Therefore, this could be seen as not keeping up with the integrity value.
According to the Dailymail Online (24 November 2015, p.1), Coke spent $1.5 million influencing an anti-obesity non-profit organization. There is said to be a leak where the group’s president tells the executive through e-mail that the organization will help to avoid the image of being a problem in peoples’ lives. It is also said that the group would use social media to run a political-style campaign.
Transparency was not reflected on Coca-Cola. Although the company’s name does not have a healthy tag on it, Coca-Cola should not lie or sugar coat its product. Coca-Cola should take the opportunity to lessen it’s sugar and market it with a healthier option instead of letting the consumers view the false theory.
Lastly, a health writer named Wade Meredith posted ‘What Happens One Hour After Drinking a Can of Coke’ on a website and it caught attention of the consumers. The post has showed that in the first 10 minutes, the sugar hits the body system, while after 20 minutes, the blood sugar spikes, causing the insulin to burst. Liver responds to the sugar and it turns the carbohydrate into fat. After 40 minutes, the caffeine absorption is complete causing pupils to dilate, blood pressure to rise and adenosine receptors in the brain to prevent sleepiness. After 60 minutes, the phosphoric acid binds calcium, magnesium and zinc in the lower intestine. This will cause the increasing of urinary excretion of calcium.
This article by Newsmax (5th March 2016, p.1) had stirred up the consumers and causing the consumers to think before consuming this beverage. In the eyes of the consumers, Coca-Cola have go against the quality value. Coca-Cola stated that they will ensure that the quality of the beverage is alright for the consumers to take into their body but the news say otherwise.
PLANNING PROCESS ELEMENTS
MISSION
A company’s mission statement describes what the organization is and going to do in the near future, and the reasons for doing what they do. It is similar to vision statements, but it is more concrete. According to The Coca-Cola Company, they stated that their mission is to refresh the world in mind, body and spirit and to inspire moments of optimism and happiness through our brands and actions. Through this, it has shown that the company will plan to be more improved and expand their business to achieve their vision.
VISION
Just like mission statements, vision statements help to describe the organizations purpose. A vision is a guideline of an organization’s future; the path it is heading and the consumers’ focus. According to Coca-Cola stated that their visions are for the employees to have a comfortable workplace. Besides, by satisfying the consumers’ taste buds and desires by producing refreshing drinks and by being a highly effective, lean and an active organization. Furthermore, by making a difference by building and support sustainable communities. It encourages those connections with organization which connects it to be more aspiration into system.
OBJECTIVES
An objective is a specific and measureable breakthrough that must be accomplished in order to reach a goal. By developing objectives, it creates a pathway for the organization to carry out it’s goal. The Coca-Cola Company states that it’s primary objective is to be globally known as a business that direct business responsibility and business ethics are applied to their values and to quicken sustainable growth to operate both today and tomorrow. By having these objectives, it shapes the foundation for organizations in the choice-making process.
MONITORING & EVALUATION
The role of monitoring is to give an idea of whether the company is heading the right direction. Evaluation is an objective calculation of a completed or uncompleted activity. Monitoring and evaluation are important to track the development of a company. By inspecting the company’s progress, the organizations will have the capacity to outline programs that are proficient and effective.
Today, Coca-Cola is now investing resources with partners such as U.S. Agency for International Development (USAID), World WildLife Fund (WWF) and the United Nations Development Programme (UNDP).
BENEFITS OF EXTERNAL & INTERNAL OPERATING ENVIRONMENTS
PESTLE analysis is to picture the environmental factors of a company in order to understand the risks that the company is risking. PESTLE stands for Political, Economic, Sociological, Technological, Legal and Environmental. This term has been practiced a lot in the market these days including the world largest non-alcoholic organization, Coca-Cola.
There are a couple of episodes that shows the effect of political factors on Coca-Cola performances. Campaigns are dispatched by organizations of the Social Nicaraguan Movement. “One Day without Coca-Cola” was a protest that was driven by Iraq with a negative effect on Coca-Cola revenues in respective markets. In addition, Israeli attacks on Gaza in 2014 have caused some of the businesses in Turkey and more than a hundred hotels in Mumbai stopped offering Coca-Cola products.
Since the technology is advancing, there are new machineries that can increase the number of production. Not only that, the wastes of cans and bottles can be taken care of. Coca-Cola Enterprises ensures that the cans and bottles are recycled and reused in a proper manner to deliver the best quality to the consumers.
Social factors are one of the huge role that impacts the company. Pepsi and Coca-Cola tend to always compete with each other. Coca-Cola needs to communicate its image as a global brand so that the people can associate it with themselves as something that bring everyone together. For example, it is suggested for Coca-Cola to market the festivals of the cultures in order for people to understand the psyche of their market.
SWOT analysis is considered to be an internal analytical source of information for strategic planning which intends to develop full attentiveness of the condition of the company that will help in decision making.
Strengths are internal components that allow the company to operate more effectively. As for The Coca-Cola Company, it’s brand recognition and reputation is consider a strength since it is a globally-known company. Compared to other companies, the beverages of Coca-Cola are well-known and is found everywhere in the world. Moreover, Coca-Cola also has strong marketing and advertisement. Through celebrities and brand ambassadors in the market nowadays, the stars of today are catching the eyes of the media, thus creating a huge impact on it’s development. In addition, Coca-Cola is the official patron of the FIFA World Cup. The beverages produced by Coca-Cola are scientifically viewed negatively as well.
Weaknesses are internal components that place an organization at a disadvantage. According to the Centre for Science and Environment (CSE) in India, high rates of pesticides are found in the beverages. This will prompt to cancer and damage of the nervous and reproductive systems and serious commotion of the immune system. Coca-Cola does not produce any health beverage therefore it results in obesity since the drink itself contains heaps of calories. Plus, it’s competition with Pepsi that out sales Coca-Cola in some business territories. In India and Pakistan, the people much prefer Pepsi. Pepsi is the main sponsor of the cricket squads.
Opportunities are chances which result greater profit in a company by benefiting from the current situation. Firstly, the great demand for greener food and beverages. The advertising of healthy beverages and food is getting the attention of the people globally and it is still in demand. Coca-Cola should attempt to make healthier beverages in the market since individuals in the world are currently paying more attention to their wellbeing. Sales opportunities should always be increasing in developing nations. Countries like India and Croatia do have hot weather, the intake of cold drinks in these places are higher. Thus, it can be a good chance for Coca-Cola to concentrate its market in those developing countries.
Threats are elements that can adversely bring losses to the business. Coca-Cola faces many threats such as intense competition. In countries like India and Tanzania, many manufacturers especially Pepsi, they are leading. Hence the marketing team of the Coca-Cola should approach ways to gain more customer loyalty and grab more customers in the future. Moreover, the shifting health consciousness of the humanity today will affect the sales. If the Coca-Cola Company focus on the soft drinks and do not emphasis on the health beverages, in the near future, the sales will be greatly influenced.
ORGANISATION STRUCTURE AND CULTURE AT COCA-COLA
STAKEHOLDERS
According to Riley (n.d., p.1), stakeholders are defined as groups or individuals that are affected by or have an interest in the operations and objectives of the business.
Stakeholders are divided into 3 groups; internal, connect and the external which links to the positions of the people affected by the company. For the internal group, the individuals that are included are the directors, managers and the employees. As for the connected group, it is participated by the shareholders, customers, suppliers, advisers, consultants and competitors. Lastly, the government, local, community, pressure groups and the media are involved in the external group.
There are many ways stakeholders can influence the company plans. It all depends on what position of stakeholder, and the power of the stakeholder is holding. For instance, shareholders have a huge amount of power to elect the directors of the board, while banks and the lenders can enforce loan covenants. As for the director and managers, the salary, share options will be the main interests and they are also involved in making decisions. Furthermore, suppliers have the power to put the price tag and the quality of the raw product or ingredient.
Below diagram shows a stakeholder mapping.
Source: Johnson and Scholes (2002) Exploring Corporate Strategy, 5th edition, Harlow: England
According to the Coca-Cola Company, many stakeholders are engaged in different ways. The key stakeholders are the bottling partners, consumers, customers, communities, employees, non-governmental organizations (NGO) and governments and regulatory authorities. According to Coca-Cola, Coca-Cola Life is the first lower-calorie cola, sweetened from a blend of sugar and stevia plant extract. There are only 89 calories in one can of 350ml Coca-Cola.
It is important for Coca-Cola to understand where the above stakeholder states, in relations to new product developments of healthy lifestyle products. Potentially, it is important to look at expanding their product range because NGOs which are consumer interest groups will be interested to see that Coca-Cola are offering less sugary products.
CONCLUSION
The Coca-Cola Company has both good and bad activities in the society. Corporate Social Responsibility is an essential concept which needs to be carefully implemented through meticulous planning process to ensure that organizations are taking responsibilities of their stakeholder groups. The values of Coca-Cola is a promise to all consumers and the Coca-Cola team should continue to improve and enhance the quality of the brand.
Coca-Cola must endeavour to lessen its emissions, contribute to establishments and economies, and address the obesity issue more frequently and take this opportunity to expand their business. Certainly, if Coca-Cola spend investments into looking at missions and vision statements and objectives, it is also important for them to recognize how stakeholders make positively impact on those objectives on their success.