Sustainable Organisations: Coca-Cola - Case Study Example

Sustainable Organisations Social and environmental performance are among the key issues in the operations of all the companies today due to an increased focus on the world’s responsible use of resources. Coca Cola India is among the largest companies in India. Such a company therefore has a lot of ways that it could affect the society through how it interacts with the environment and could therefore disrupt the cohesion that existed before its inception in the community. This paper will be detailing some of the activities taken up by the Coca Cola Company to ensure that they promote corporate social responsibility in environment they operate in. In addition, there will be a discussion on some of the issues leading to the criticism the company has faced from its use of resources such as ground water and the response to such issues. Business sustainability is among the most sought after fundamentals of any company. The simplest definition to give for sustainability in relation to the environment is probably the responsible use of resources so that they can meet the needs of the current generation without compromising the future generations’ ability to meet theirs (Turner, 2007). It is the process through which corporations manage their social, environmental risks, financial, and other obligations and opportunities around them (Labuschagne, Brent, & Van Erck, 2005). Sustainability in any business is supposed to be resilient and thus create value economically, healthy or rather ‘green’ ecosystems, and of course a stronger community in terms of the social and economic cohesion. A firm that is intimately connected to strong social, economic, and environmental systems do not suffer from external shocks. Issues that have risen as a result of companies not taking an initiative on the social and environmental aspects of a society include global warming and depletion of natural resources. The fore is a menace every person on the planet is affected by. The main problem, however, is that in spite of all the talk that is going through all forms of media currently, there are less than enough people who feel that it is their responsibility to tackle the problem at hand. Pollution is not a new word. Since the beginning of the industrial revolution, coal and other fossil fuels hit the market and every other organisation needed to have a hold of such resources. While the period is the most celebrated, the fact that it brought the world closer to its self-destruction is not something anyone should celebrate (Candelone et al, 2006). For a clear outline on the environmental and social issues facing the Coca Cola Company, this paper will give the most common hurdles involved in maintaining any business’ sustainability. In other words, why companies choose not to engage in sustainability regardless of the fact that that is what is right for the communities they operate in (Schellenberger & Nordhaus, 2009). In this case, why the Coca Cola Company would choose not to follow a sustainable path. In a recent development, the state government of Kerala in India established a High Power Committee that recommended that the Coca Cola Company be held responsible for US$ 48 million for damages the company had caused on Plachimada through its bottling operations. For about 10 years now, the company has remained closed as a result of campaigns led by the community challenging that the Coca Cola Company leaves due to its abuse of the environment, more specifically, water sources in Plachimada (Burnett & Welford, 2007). First, there are many metrics claiming to measure sustainability yet they are excessively confusing for any corporation to even know what is expected of them. While it is important to have goals such as those of working toward a sustainable organization, it is clear that having hazy metrics can only make matters a little too complicated for an organisation that in reality does not want to use the environment responsibly. Metrics remain confusing to managers since they always relate to certain issue. For instance, there are those that deal with issues of manufacturing. Such as this one of the company in question. Nonetheless, there still a number of the metrics such as the ecological footprint, Global Reporting Initiative, and life-cycle assessment. Although they have been developed to help managers out in sustainability measurement, the standards, metrics, and certification involved are too many and confusing to companies that even those that are leading in the market have difficulty following either. The fact that the firms have the chance to choose those that they feel will be best for them resulting to more problems. Secondly, in most cases, the consumers do not factor sustainability when they are making decisions on purchase (Öberseder, Schlegelmilch, & Gruber, 2011). Normally, there involves a trade-off since the consumers realize that it is a commodity they need that is leading to such levels of pollution. This trade-offs involve decisions such as the type of fuel to use or what food to buy and thus have many impacts on not only the environment but also on the social and economic aspects of our lives. Most consumers would demand clean energy in their homes but none is willing to have windmills installed around their homes. The Coca Cola Company was producing a product that the community needed. While the community later demanded that the company quit using water, it is clear that the community must have ignored the negative impact the Coca Cola Company had on the environment for quite some time (Victor, 2004). Coca Cola Company does not fully understand how much the people were willing to trade-off some of the most important resources in the environment for the products the company produced. If they had, therefore, it would have been easier to develop ways through which they can seed alternative sources of water or move the company way before it had incurred the losses involved with lack of trust from the community and the fine the company paid. At this point, quality leadership is another crucial factor that the company ought to have considered since the relationship between the community and the people would have been promoted and such issues affecting them addressed. Thirdly, being green or ‘good’ is challenging for most companies, as it is not in line with profits. Currently, there are still a lot of them that do not want to engage in being sustainable as that will cut deep in the total profits they make (Salzmann, Ionescu-Somers, & Steger, 2005). While there are very few managers who would question the value of being green, they are usually very active when they defend their activities that are suspected to be detrimental to the environment. Today’s financial decision-making barely captures the value that sustainability-related investments have. Generally, suitability calls for decisions whose impacts are long-term yet the fiscal value they give to the community is low. On the other hand, companies are normally faced by the need to make investments that are based on the short-term impacts. The Coca Cola Company must have known that ground water is a non-renewable resource and that sooner than later, the water was going to be depleted. Nonetheless, the company, like most other companies focused on a short-term investment there was no need to consider whether the water runs dry after a few decades. Such investments are centred on long-standing and insubstantial rewards, where countless investments made are centred on the immediate impact on the bottom line. A certain manager stated that the return period for sustainable investments usually outstrips that necessary to approve the projects themselves (Van de Velde, Vermeir, & Corten, 2005). This way, executives dealing with sustainable projects possibly resort to intangibles so as they can justify social investments and corporate environmental. Taking the above argument into perspective, it is evident that the Coca Cola Company would not have taken the initiative of ensuring that the investment in the first place was sustainable. This is because all that was required at the moment is rake in profits from the available water sources without taking into consideration that the community depends on sustainability of resources and therefore depleting them will be doing the community a disservice. Lastly, companies have a lot to deal with to ensure that they survive in a hostile market. Issues such local land issues, health pandemics, climate change, and financial crises derail a company from meeting their goals and often the firm does not have a clear path to take in relation the first problems to solve (Tukker, 2004). Unfortunately, environmental sustainability is sacrificed as the business feels that the other issues are the most pressing and should be dealt with first. If the managers are informed properly on what opportunities and skills are most material to the firm, it becomes easier for them to prioritize on the material issues, transform them into strategies that are crucial to the internal functioning of the business, and communicate such strategies to the stakeholders. In the case of the Coca Cola Company, it was imperative that the company assesses the ground water situation so that they can understand how well to deal with the issue. Good managers would not have had a hard time figuring out what the community needed most and how well the company was supposed to conduct its businesses so that they maintain rapport between the firm and the community. Ensuring that a firm engages with stakeholders is a good way of ensuring that the company does well, the Coca Cola Company did consider investing on a good relationship with the neighbouring homes. Unfortunately, this did not turn out too well. While there were protests against the Coca Cola Company due to the issue with ground water, it was soon realizes that there we more problems that the company had brought to the community. About the same period that there were protests, the Central Pollution Control Board of India found that the company was disposing sludge from its Uttar Pradesh factory, waste that contained high levels of chromium, cadmium, and lead (Rajaram & Das, 2008). Furthermore, the Coca Cola Company was reportedly offloading cadmium-laden waste as fertiliser to the farmers living around the area. Although this seemed a good effort to appeal to the people or at least make their relationship a little more fulfilling, no one would explain why a company that is focused on depleting the resources would add insult to injury by providing the farmers with another product that can greatly affect their agricultural activities yet they were their livelihood. The Coca Cola Company recently announced that it is planning to invest about $5 billion in India by the year 2020. This money is supposed to boost distribution networks, manufacturing, and to enhance marketing. Between 1993 and 2011, The Coca Cola Company had invested an approximate $2 billion. The Coca Cola Company understands the impact it has on the community and is therefore willing to become more environmental aware. In 1969, the company launched a study that was meant to look into ways through which it can use the most efficient yet cost effective ways of reducing its environmental impacts. Water shortage in communities the company operated in was definitely the main issue affecting the future of the company. Due to this reason, Coca Cola came up with a way to address this situation, and a few others that relate to corporate social responsibility. In case of its operations bringing about water shortages in the community, the Coca Cola Company is currently working with the local government in each and every plant to ensure that its efficiency in use of water is continuously evaluated. The company is also striving to ensure that it returns a 100 percent of the water it uses during manufacturing to the environment. To ensure that this is possible, the company has invested on its own wastewater treatment facilities. Other than water, bottles are a major commodity used by the company during its manufacturing and marketing process. The Coca Cola Company is aiming at using bottles that are fully recyclable and that are lighter, more durable, and most of which are produced from recycled matter. Since dumping of waste plastic is also a major catastrophe facing the world today, such an initiative will be very handy in reducing the amount of waste plastic in the environment. Although those are steps taken to the right direction, there is still a lot to do to ensure that its operations are environmentally friendly. In conclusion, it is becoming more and more important to ensure that sustainability is looked into whenever there are plans to start a certain business. The fact that global warming is having increasingly adverse effects of the planet means that it is every person’s initiative to promote eco-friendly activities so as that natural resources are not exhausted. Considering the case of the Coca Cola Company in India, it is obvious there are a lot more companies out there starting operations compromising the livelihood of the people around the area. While it is clear that sometimes, the consumer is partly responsible for lack of campaigning for programs that are beneficial to the environment. Having to sacrifice something important for another is not a very good idea. While we need cheap energy, it only makes sense shunning those fuels that endanger the environment and us. An example is coal. Since companies feel it remains necessity to focus on the short-term goals and thus forego measures to promote environmental, economic, and social sustainably so as there is a good relationship with the community. Primarily, it is crucial that those dealing with sustainably need to come up with a method through which the companies that decide to engage in sustainability can track the benefits. References Burnett, M., & Welford, R. (2007). 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