Paper Example on Coca-Cola Struggles with Ethical Crisis

Published: 2021-07-26 02:06:28
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Harvey Mudd College
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Research paper
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What does corporate reputation play within organizational performance and social responsibility? Develop a list of factors or characteristics that different stakeholders may use in assessing corporate reputation. Are these factors consistent across stakeholders? Why and why not

Corporate reputation is particularly vital in relation to the role it plays in organizational performance and social responsibility. Corporate reputation can be defined as the as one of a corporations greatest intangible asset that has tangible value (Ferrell, Fraedrich and Ferrell 41), that is although an organizations reputation may not be written, its value is apparent. The reputation of an organization is a major component in the overall performance of a business as the various stakeholders of the organization transact and interact with the organization on the basis of corporate reputation. The reputation essentially determines the flow of business for a corporation. Customers will prefer dealing with a business that has a positive reputation which additionally translates to customer loyalty (Harrison).

Furthermore, with a positive corporate reputation, a company has a competitive advantage as the business will be in a better position to charge premium prices for their products thus ensuring considerable profits. Various stakeholders of the organization will as well support an organization with a positive reputation through challenging periods or when the organization is experiencing controversial issues. Ultimately, a corporation with a positive corporate reputation is financially sound thus allows it to continually grow in its overall performance. Consequently, a company with a poor reputation will be inclined to negate its negative perceptions from the various stakeholders by engaging and strengthening its social responsibility commitment. In times when an organizations reputation is suffering, the organization will make efforts to distract from the negativity and introduces the organization in a positive light by engaging in more socially responsible activities (Harrison).

There are several factors that various stakeholders utilize in determining the corporate reputation of an organization. Some of the factors include the level of customer service, the product quality and safety, and the marketing strategies employed to entice customers to purchase the businesss products. An organization that produces the best quality and safe products has a positive reputation that attracts more investors and customers. Additionally, in determining corporate reputation, employee relations and the well-being of the workplace are of importance. Stakeholders are not willing to conduct business with an organization that does not respect and ensure the safety and well-being of its workforce (Ferrell, Fraedrich and Ferrell 44).

Other factors include management, that is the managers are able to achieve the values and ideals of the company and are able to implement them to the workforce, the level of profitability, a companys financial status, business ethics and the companys level of social responsibility. The above factors are based on individual level of stakeholder involvement and as such, they are not consistent across all stakeholders. Every stakeholder has his or her own view on what is required to have a strong positive corporate reputation, however, stakeholders who are directly affected by the negative situations in an organization will have a corresponding change in their view of a corporations reputation (Harrison).

Assume you have just become a CEO at Coca-Cola. Outline the strategic steps you would take to remedy the concerns emanating from the companys board of directors, consumers, employees and business partners, government and the media. What elements of the social responsibility would you draw from in responding to these stakeholders issues

Over the years, Coca-Cola has faced several crises in its business operations. The company has encountered various legal and ethical issues that have had an effect on its reputation. For instance, the company has faced issues with the quality and safety of its products, racial discrimination allegations, claims of fraud, channel stuffing leading to inflated earnings, breach of agreement with distributors, and allegations of illegal dealing leading to animosity with labor unions (Ferrell, Fraedrich and Ferrell 47). All these issues have played a role in negatively impacting the companys reputation. As such, there is a need to develop strategies to deal with the stakeholders concerns and restore a positive corporate reputation.

As a newly appointed CEO of the company, there are various policies I would implement in order to address the concerns of the companys various stakeholders. The first step would be to ensure product quality and safety. By developing stringent product quality control, the products shipped to various locations would be guaranteed to be safe for consumption. Furthermore, the establishment of strategies to that would assist in responding quickly to ethical issues ensuring that problems such as those experienced in Belgium due to low quality and unsafe products do not happen in the future. Subsequently, I would establish ethics committees in all branch locations that would aid in ascertaining whether allegations of misconduct originate from employees disregard for the companys mission statement or from everyday business activities.

Furthermore, I would ensure that employees are treated fairly by making sure that all employees are afforded the benefits owed to them by the company while at the same time making sure that select number of employees are included in a committee, comprising of various stakeholders and board members, that is tasked with dealing with current issues. Stakeholder involvement is important to the success of an organization, as such, I would ensure that they are involved by seeking stakeholder engagement, defining objectives, identifying material issues, collaborating to resolve issues, and ensuring that stakeholder involvement is embedded in the organization (Laskin 75).

Another step would be to facilitate training on cultural awareness and ethics in the company as it would significantly improve the companys position in the international market. Also, a committee devoted to the discovery of innovative ways for the company as well as social responsibility would be established in order to ensure a high level of commitment to socially responsible business operations. In the current marketplace, companies are not in business simply for profit maximization. Customer loyalty in many aspects is determined by the consumers' perception of how much an organization is positively impacting the community. As such, strong positive socially responsible business operations are integral in addressing the various concerns of the stakeholders (Oxford). Ultimately, various issues and their resolutions would be posted on the companys website for all stakeholders to see.

What do you think of Coca-Colas environmental initiatives? Are they just window dressing or does the company seem to be sincere in its efforts?

For the past decade, Coca-Cola has been dealing with various allegations. However, the company has begun to take strides and it appears to have rebounded towards restoring its company reputation. This restoration can be attributed to its efforts towards social responsibility both externally and internally and the initiatives it has implemented that are more focused on environmental stewardship. However, there are those that believe such actions by the company has not done enough to resolve their issues and that their initiatives are mere window dressing meant to distract from serious issues such as corruption in the organization.

In my opinion, I believe Coca-Colas environmental initiatives are a sincere effort towards gaining back the consumers and other stakeholders trust thus restoring it strong positive corporate reputation. it is evident that the company is focusing more on areas where they can make a positive significant change such as water stewardship, conservation of natural resources, sustainable packaging, energy management and climate protection (The Coca-Cola Company). For instance, after the allegations that the company is contaminating and depleting groundwater in India, Coca-Cola set up rainwater harvesting facilities that would help renew groundwater. Additionally, the company has embraced recycling and climate change strategies through the development PlantBottle that is partially made from plant material, it is fully recyclable and decreases the use of non-renewable materials (Fernando 23). Such initiatives have a positive impact on the environment as they help reduce carbon emissions.

However, I feel the company can do better. Coca-Cola is a huge corporation with considerable resources and although their initiatives are a step in the right direction, their present initiatives are only a half measure. For instance, launching a clothing line that is manufactured from recycled plastic materials will eventually end up being disposed of in landfill thus, in the long run, will be a detriment to the environment. Furthermore, the Coca-Cola has not taken responsibility for any wrongdoing, which leads many critics to claim that the company is more interested in covering up corruption in the organization as opposed to correcting its mistakes. Also, by not taking responsibility for their actions, present and future initiatives run the risk of being perceived as marketing ploys meant to give the impression that the organization is becoming more environmentally friendly.

Ultimately, although I believe the company is sincere in its initiative and social responsibility, only time will tell whether Coca-Colas environmental initiatives are a marketing ploy meant to distract stakeholders from the real issues or they are sincere strategies meant to restore the companys reputation and trust.

Works cited

Fernando, A C. Business Ethics and Corporate Governance. Pearson Education India: Noida, 2010.

Ferrell, Odies C, John Fraedrich and Linda Ferrell. Business Ethics: Ethical Decision Making & Cases. Boston: Cengage Learning, 2012.

Harrison, Kim. "Why a good corporate reputation is important to your organization." 2013. Cutting Edge PR. Electronic Source. 29 September 2017.

Laskin, Alexander. Managing Investor Relations: Strategies for Effective Communication. New York: Business Expert Press, 2010.

Oxford. "Coca-Cola and Corporate Social Responsibility." 19 October 2017. Oxford Presents. Electronic Source. 29 September 2017.

The Coca-Cola Company. Environmental Initiatives. 1 January 2010. Web. 29 September 2017.

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