Coca-Cola Company and Corporate Social Responsibility: A Case Study

This case study analyzes the conflicts faced by Coca-Cola Company in India regarding corporate social responsibility. The conflicts involved the violation of environmental and human health policies, discharge of waste water, and over-extraction of groundwater. The company was losing customers and experiencing a decrease in sales due to loss of customer loyalty. The study suggests effective strategies to deal with such conflicts, including implementing legally enforceable standards, launching water projects, and prioritizing community goodwill.

COVERPAGE
NAME
COURSE
LECTURER
DATE

DESCRIPTION OF THE
SITUATION IN COCA-COLA
COMPANY• C O C A - C O L A I S O N E O F T H E O L D E S T C O M P A N I E S W I T H O V E R 1 0 0 0 Y E A R S S I N C E I T S
E S T A B L I S H M E N T I N 1 8 8 6 .
• S I N C E T H E N , T H E C O M P A N Y H A S G R O W N A N D E X P A N D E D I T S S E R V I C E S I N T E R N A T I O N A L L Y
W H E R E I N I N 2 0 0 5 ; I T W A S G L O B A L L Y R E C O G N I Z E D A S T H E L A R G E S T M A N U F A C T U R E R ,
D I S T R I B U T O R A N D M A R K E T E R O F N O N - A L C O H O L I C B E V E R A G E S A N D S Y R U P S A S W E L L

• Due to its publicity, the company has been in the spotlight regarding
the issue of corporates social responsibility.
• The company noted to have been involved in a conflict with the
Indian government with what is termed to be lack of abidance to the
business code of conduct.
• Although the company corporate responsibly policy lives positively in
the establishment of seven core practices that range from beverage
profits, active living, the community welfare , energy and climate ,
sustainable packaging and water stewardship and workplace code of
conduct.
• The Indian government raised a claim back in n2007 accusing the
Coca-Cola company for breaching the world wildlife fund terms by
producing commodities evidenced presence of pesticides that
exceeded the set European standards as well as violating national
laws.

THE CONFLICTS INVOLVED
• The coca cola conflicts were sphere headed by the campaigns and
demonstrations that occurred after the issuance of a report and publication by
the Indian NGO Centre for science and Environment in 2003.
• The provided had the evidence of the pesticides whose
levels exceeded the set European standards.
• The Indian government was claiming the Coca-Cola company
was extracting large amounts of ground water contributing
to draught condition
• The coca cola company was also accused of polluting water
sources
• The Coca-Cola company was breaking the following policies
1. Policies regarding discharge of waste water
2. Environmental and human health policies

REMEDIES FOR CONFLICTS
• In the year 2003, Centre for science and environment called upon the Indian government to implement legally
enforceable standards
• Between 2003 and 2004, the Indian government prohibited the coca cola company from extracting underground
water which was source for draught season
• Despite the being warned for the first time, the company did not adhere to the set beverage standards in relation
to carbonated beverage and still produced more drinks which were termed to be polluting water as well as over-
extraction of the groundwater.
• The company was losing more customers for their goods due to loss of customer loyalty. The sales were also
decreasing by 15% by 2003.

ANALYSIS OF THE APPROACH GIVEN BY COCA-COLA COMPANY
• At the first instance, the coca cola company denied the
allegation that their products had high levels of pesticides
than the European nations had permitted despite evidence
and tested samples being provided to them.
• After being banned from the production of underground
water, it’s time the company’s management noted that the
company was not faring well and tried to seek and renew its
license to carry out its productions operations

EFFECT OF CONFLICT ON PEOPLE AND ENVIRONMENT
• Although the company regained its license, its productions
activities were limited and experienced long legal
procedures together with the great loss of consumer trust
and brand loss of reputation.
• The people lost their trust on the coca cola company and its
sales dropped with 40% in a period of two weeks. (Coca-Cola
company, 2012)
• People were living in draught conditions due to extraction of
large amounts of water by the company

HOW TO DEAL WITH THESE CONFLICT EFFECTIVELY
TODAY
• Due to this the company management can come up with policies and guidelines that are in
line with Indian government policies and in line with principles of corporate social
responsibility.
• The Coca-Cola vice president, of environment and water resources after recognizing the
mistake they were making, he acknowledged the communities perception towards the
company’s operation matters and decided to have goodwill for the community which
involved prioritizing what is termed important by the community. The same he can do
today. Respect for the community perception today is the best way to deal with such a
conflict
• The company can employ strategies that include the damage control measures that
address the Indian community grievances.
• The company can came up with foundations like Coca-Cola Indian foundations which aims
at working with local communities and NGOs as a way of addressing water-related
problems.
• The company can tale the initiative of launching water projects in India to compensate for
the allegations alleged to them.
• These strategies will greatly helped the company regain its market position and even
start publishing reports regarding its operations and adherence to corporates social
responsibility. If applied today (Coca-cola india, 2012)

SUGGESTION AND RECOMMENDATIONS
• It would be better that, when the top management received
claim and complain from the government and non-
governmental organization concerning the water pollution
and their contribution to drought condition, they would
have come up with resolutions instead of tussling with the
relevant bodies.
• They would not have incurred losses from being banned
and lose of customer trust.
• The company should consider new marketing strategies to
regain customers trust

REREFENCES
Coca-cola company, 2012. The water stewardship and replenish report. [Online]
Available at:
http://www.thecoca-colacompany.com/citizenship/pdf/TCCC_WSRR_2012_FINAL.pd
f
[Accessed 25 Sep 2018].
Coca-cola India, 2012. Towards sustainability. [Online] Available at:
http://www.thecoca-colacompany.com/citizenship/pdf/india_env_rpt.pdf [Accessed 25
Sep 2018].