Corporate Social Responsibility in the Coca-Cola Company

This article discusses the importance of Corporate Social Responsibility (CSR) in today's global market and analyzes the CSR initiatives of Coca-Cola Company. It provides an overview of the company, its CSR activities, and evaluates its efforts in various areas such as employee development, consumer health, supplier involvement, energy and climate, water stewardship, and packaging and recycling. The article also highlights some of the challenges faced by the company and provides recommendations for improvement.

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CORPORATE SOCIAL RESPONSIBILITY IN THE COCA COLA COMPANY
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Table of Contents
Introduction......................................................................................................................................3
Overview of Coca-Cola Company...................................................................................................4
Analysis of the CSR of Coca-Cola company..................................................................................5
Evaluation of the CSR of Coca-Cola company...............................................................................7
Recommendations............................................................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................12

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Corporate Social Responsibility in the Coca-Cola Company
Introduction
Today Corporate Social Responsibility (CSR) has become a very popular topic in the
global market. With the increase of demand for corporate citizenship and transparency, CSR has
been majorly required to embrace ethical, economic, social, and also environmental
considerations. Through the current globalization changes and approaches, companies are
expected to not only be of commercial value but also good corporate citizens of the world. In
other words, CSR main priorities are to make a close relationship with international community
development and sustainability (Carroll, 2008). Often, most multinational companies such as
coca cola face very significant pressure from most regions which mostly consist of unethical
behavior from emerging markets. Most of concern is mainly directed to the improvement of
standard quality and organization roles in how they to handle or react to some of the challenges
or situations affecting the society.
Also, with the increase of globalization effect, public image and/or reputation is one
greatest concerns in most multinational companies. The reputation of a company in one country
is considered very important as it can cause a significant loss in other markets. Some of the main
public concerns include social impacts and environmental issues which have continuously
become sensitives topics in today’s business world (Flammer, 2013). In the event where
companies have failed to fulfill the social and environmental responsibility, the public has been
empowered with the ability to boycott products and goods of the respective companies. On the
other hand, CSR is also considered as a voluntary initiative but with increasing demand in
standards and competition, the approach of social-economic by multinational companies has

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proved to be one of the competitive advantages that every multination organization must attain in
order to compete effectively (Hopkins, 2012).
Overview of Coca-Cola Company
Coca-cola company is regarded as one of the largest non-alcoholic beverage companies
in the world having its operation in almost every country in the world. The net revenue of coca
cola as per 2017 financial report was estimated to be approximately 35.41 billion dollars. Over
the past decade, the company has reported an increase of its market share which has greatly
contributed by the approach in diversifying its brand portfolio and focusing on making healthier
beverages due to the growing concern of consumer health. The company is one of the few many
that have been able to successfully implement CSR variables. Unlike most companies, coca cola
company has been able to create a “code of ethical business conduct” which is able to align all
shareholders interest and developments. With this, the company has also received a number of
awards such as Golden Peacock Awards for environmental sustenance in India (Suliman, Al-
Khatib, and Thomas, 2016).
Some of the main reasons the company has continued to embrace CSR includes the
competitive labor markets, increasing interest of customers, growing investor pressure, relations
with suppliers, corporate transparency demand, and the shrinking role of government. Some of
the issues such as the relationship with suppliers and customer interests have been contributed by
increasing the change in the supply chain and logistics where the standards of quality have also
continued to increase with the emphasis on effective communication approaches between all the
shareholders (Singh and Kaur, 2016). Also, like most of the multinational companies, coca cola
has impacted the society both positively and negatively in its daily operational activities. Some
of the main issues that the company has faced over the years is the issue of water problems in

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India. Despite the challenges, the company main approach is to creating a sustainable CSR with
a policy of “impacting positively” to the entire world (Van der Heijden, Driessen, and Cramer,
2010).
Analysis of the CSR of Coca-Cola company
As stated earlier, Coca-Cola has managed to successfully implement and embrace CSR in
most of its regional operations. The company engages itself in numerous activities which are all
designed to offer sustainable and development approaches to the community members in
situations which are offered by the respective governments. The Coca-Cola Foundation is one of
the main approaches by the company which has significantly helped in the execution of some of
the major projects that the company has accomplished (Thorne, Ferrell, and Ferrell, 2011). The
Foundation is majorly focused on maintaining and developing a sustainable society with better
living standards for humans. Some of the main features that are involved in the foundation
projects majorly include difficult areas which are hard for the community to tackle or handle.
Some of the major projects include ensuring health standards are observed, providing education
support for needy community children, providing clean and enough water, and many others
(Torres, Bijmolt, Tribó, and Verhoef, 2012).
Education support is one of the major aspects that the Coca-Cola Foundation has
increasingly emphasized in offering sustainable developments in most of the communities. The
education development has been widely achieved through great investments in all possible areas
that would enhance students to perform better i.e. building educational infrastructures and
granting scholarships (Singh and Kaur, 2016). Since 1986 after the establishment of the program,
there have been over 6,000 scholars who have benefited from the Coca-Cola Foundation. The
health of the community is another important feature the foundation has intensively invested in

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assuring healthier life in the community. The company has deployed education initiatives and
research programs for major health issues such as hepatitis, cancer, tuberculosis, polio, and
HIV/AIDS. The program is generally designed to greatly minimize and manage the epidemic
challenges of the community. With enough funding, the company has reported its main focus
will be to increase its initiative in African countries who have widely been affected by most of
the diseases (Idemudia, 2011).
In the event of any calamity in any part of the world, the foundation has strategized
means of offering relief aid to the victims. some of the basic commodities the company supplies
include a vehicle for distribution of aid, bottled water, food, and other basic features. Example,
during the Haiti earthquake, Coca-Cola contributed approximately over 2 million dollars to the
Red Cross team. The response to the water issues is another significant part of the major projects
the Coca-Cola has determined to provide and/or assist. In the approach to the company
sustainability, its committed to ensuring environmental conservation i.e. climate, soil, and water
which are very important elements for any living thing survival on earth. On the same note, the
company has also developed a partnership with World Wildlife Fund in the commitment of
protecting freshwater basins all around the globe (Flammer, 2013).
According to Shamir (2017), through the increase in emphasis on global business ethics,
individual’s rights are very important and thus every organization should be able to undertake the
required approaches for the protection and restoration of the environment. The Coca-Cola
company has been widely perceived by various methods which have been designed for the
improvement of its operational activities. Example, Coca-Cola company has intensely invested
in the improvement of its manufacturing sites in China where a high level of standards is stressed
upon through the improvement technology being used and the type of packing used (Werther Jr

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and Chandler, 2010). Although the green practices of the company may be observed as still
profit-oriented change it still benefits the entire community at large. With the environmental
challenges which affect major of its manufacturing destinations, i.e. India and China, Coca-Cola
company has a very vital role to play as a multinational company in the improvement of
environmental crises with a contribution of the fund, human capital, and technology (Lambooy,
2011).
With the current changes in the global market, labor exploitation has been one of the
major issues that continue to be observed in most of the multinational companies. Example,
unlike in America business where there is a very high guarantee of ensuring the dignity of the
workers and in line promotion of human welfare, markets such as China and India continue to
face labor exploitation and many unethical strategies that which companies utilize to maximize
profits (Burchell, 2008). Through Coca-Cola emphasis on integrating management strategies in
most of its manufacturing points, the company has successfully been able to combine both the
corporate and regional cultures. The cross-cultural initiative has greatly improved the ethical
standards and also its business practices. On the same note, Coca-Cola has increasingly
continued to localize most of its operations thus, on the other hand, enhancing most of the
community’s development by training the locals and encouraging innovation (Udayasankar,
2008). In terms of income generation, Coca-Cola has provided over 61,800 employment
opportunities all around the making it one biggest “social enterprises” in the remedy of
unemployment issue in communities.
Evaluation of the CSR of Coca-Cola company
According to the Coca-Cola CSR main objective in sustainability, this is mainly achieved
through several ways which consist of employee development, consumer health, the involvement

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of suppliers, energy and climate, water stewardship, and packaging and recycling. In regards to
the development of employees, the Coca-Cola company has continued to maintain on the
important employees play in the success of the company (Kotler and Lee, 2008). The CSR of
Coca-Cola is highly focused on special programs help in the development of employee abilities,
skills, and most importantly the retention of talent. The Employee Engagement Survey of Coca-
Cola review showed that the company had received 100% score with significant improvement on
the Corporate Equality Index of the Human Rights Campaign and employee engagement.
Through the current trends in the food and beverage industry, Consumer health is considered one
of the main topics which continued to gain popularity and significant effect on most of the
companies involved in the industry market (Brammer, Jackson, and Matten, 2012). With this,
Coca-Cola emphasized increasing its products brand with healthier products that have reduced
calories and are not fattening.
The value of any organization brand is considered significantly important in the
evaluation of its performance. The value of a brand can be characterized by some of the
approaches which include the level of company CSR and its relation to sustainability issues
(Chen and Delmas, 2011). According to research on customer perception, more 80% of
consumers have positive image of an organization if there some of the observable indicators
showing efforts of the organization making the world a better place (Jay Polonsky, 2008). After
the criticism of pollution on Coca-Cola, its reputation was significantly damaged which even
made worse by the company refusing to accept the responsibility for its mistakes. Due to the
public pressure, Coca-Cola was forced to change its means of operation. through this, the
company was forced to initiate some projects which would enhance some issues such as
underground pollution, water pollution, and irrational use of water. Over the years, the company

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has drastically improved its water usage by over 10% since 2008 where its current water ration
use is 1.76 liters (Suliman, Al-Khatib, and Thomas, 2016).
Apart from all the major effort by the company to enhance its CSR, it cannot also be able
to eliminate all the negative effect it impacts back to the society. It is described that most of the
Coca-Cola products are not so healthy for consumers as they constitute a wide range of
ingredients which can cause diseases such as heart diseases, diabetes, tooth decay, obesity, and
many others (Karnani, 2014). Example, most of the company products contain phosphoric acid
which causes weakening of bone due to leaching of calcium in the body. Due to this, the has
reported cases in the increase of osteoporosis cases which have directly related to the
consumption of coke products (Herrick, 2009). To react to this, the company has also developed
healthier product brands such as the Coke Sugar-free which has been heavily accepted thus also
increasing the annual revenue income.
Despite the company effort in the conservation of natural resources, Coca-Cola has faced
a series of criticism especially the degradation of water sources in most of its manufacturing
areas. In India, Coca-Cola was reported having pesticides which polluted waters sources and also
claims that the company products have also been proven to have traces of pesticides (Karnani,
2014). This wide accusation led to a massive loss of profit by the company and significant
tarnish of the company public image. Example, after the release of the report in 2003, the
company experienced a turnover decrease of about 40% just in two weeks’ time which was later
followed by poor customer relation in India and other parts of the world (Chatterji, Levine, and
Toffel, 2009). Although the company at first refused to acknowledge the claims brought forward
it afterward reacted by admitting to the public that the company had failed in meeting required
operation standards and the plans taken to ensure sustainability of the water resources.

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Recommendations
One of the main recommendation that Coca-Cola should widely focus its concentration
on its shareholder engagement. Shareholder perspective view of CSR, the organization has a
responsibility in offering full satisfaction and failure to this the shareholders have also the power
which can affect the company performance. Since shareholders have various opinions in the
company’s action, operations, and outcome, Coca-Cola should enhance its communication
strategies where it will be able to easily identify problems and opinions on the improvement of
services and products (Culnan, McHugh, and Zubillaga, 2010). Another improvement the
company should be able to implement is the improvement of the working environment. On its
emphasis to integrate its management structure, Coca-Cola should improve its remuneration thus
to eliminate labor exploitation criticism which continues to affect many multinational companies
all around the world. The aspect of the company CSR should be to promote world-class
standards in corporate management by enhancing its human welfare movement and promotion of
employee’s development (Idemudia, 2011).
Also, with continuous changing concerns of the consumer in the market today, Coca-Cola
should also consider the application of cross-culture in respective market sectors. The main of
the approach is to improve the company corporate environment disclosure which will, in turn,
offer significant group membership with the company (Barnea and Rubin, 2010). With this,
Coca-Cola will also be able to improve sustainability rating in all major aspects and in line also
improve its status of legitimacy. Unlike most of the current methods in CSR which majorly
comprise of reacting to social issues, Coca-Cola should implement pro-acting tactics which will
be able to identify and curb challenges before they become major issues in the society.
Conclusion

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In summary, the good relationship of an organization with shareholders can be described
as “win-win” situation for all the parties involved. Thus, for any organization willing to embrace
responsible corporate citizenship and also generating development in the stakeholders and the
society there will be a more positive expectation in the company in the world market position
(Cacioppe, Forster, and Fox, 2008). With this, Coca-Cola company has continued to increase its
effort in improving its CSR wherein most of the markets such as Australia it has received a
considerable acceptance as part of the society with a rating of about 60% in all aspects of CSR
sustainability.
As compared to some of its competitors like Pepsi, Coca-Cola company has significantly
improved in its CSR approaches which have led to the increase of the company income and
improvement of its reactions to some of the challenges facing communities today. With the
increase in demand in social responsibility, shareholder engagement is one of the critical
elements every multinational organization must fully understand and utilize. This means the
company will be able to fully understand customer wants and changes in different regions and
how the issues can be well handled or solved (Carroll, 2008). Therefore, prior to the criticism the
company has faced, it has greatly improved in its CSR which has been reflected in most of the
company projects in improving living standards of the entire global society and participant
shareholders.

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