Corporate Responsibility in Contemporary World of Industrialization - Coca-Cola Case - Essay Example

CORPORATE GOVERNANCE AND SOCIAL RESPONSIBILTY CONTENTS Abstract…..……………………………………………………………………………1 Introduction……………………………………………………………………………1 Corporate Governance of Coca Cola..………………………………………………….2 Corporate Culture of Coca Cola……………………………………………………….2 Significance of Employees…………………………………………………………….3 Coca Cola’s Approach………………………………………………………………...4 Conclusion……………………………………………………………………………..5 Recommendations………………………………………………………………………6 References………………………………………………………………………………7 ABSTRACT The aim of the present study is to estimate the definition and forms of corporate governance and social responsibility with special reference to Coca Cola beverage and food retail industry. Moreover, the study is interested in finding out the significance of corporate responsibility in contemporary world of industrialization and technological advancement. Since it is an ethical duty of an organization to apply corporate governance in its management, thus no special law can bind it to see eye to eye with all the statutes made and incurred upon the corporate sector. Nevertheless, developments in social sectors, strong check and balance system of media and public opinion also support in forcing the companies look into their management, products and staff requirements properly. According to the ethics, it is not only the duty of management to look into the strategy and activities of the organization and eradicate all which can inflict any harm to society and environment, but also every staff member and employee is bound to perform the work of his part to run the company according to the prevailing social and environmental responsibilities. "The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as the board, managers, shareholders and other stakeholders, and spells out the rules and procedures for making decisions on corporate affairs." (Quoted in ccg.uts.edu.au/corporate_governance.htm) INTRODUCTION TO COCA-COLA Coca Cola is one of the most popular brands among all the world-class products and industries at large. Its name, brand and logo are thought to be the sign of quality and trust. The company has made so much achievements during nearly quarter past century that it has not dependent of even an introduction anymore. It serves like a milestone in the history of modern public beverages and food industry that are popular among people belonging to all age-groups and socioeconomic classes alike. Coca-Cola was introduced in May 1886 in Atlanta, Georgia and in the beginning the sale was less than its product. (Quoted in the thecoca-cola company.com). Presently, it is thought to be at the top in respect of sales among the soft drinks, mineral water and food products of the globe. “The Coca-Cola experience”, Lin observes, “offers a fascinating example of the participation of an international business in local and global market development. The pace, accelerated by its preparations for possible accession to the World Trade Organization (WTO), global business systems like Coca-Cola may help stimulate economic growth, employment, and tax revenue and reshape corporate responsibility subsequently.” (12-23-1999). CORPORATE GOVERNANCE OF COCA-COLA The term corporate governance refers to the rules and regulations introduced to regulate the firms, companies and business corporations. In other words, it is a systematic way of managing and controlling the affairs of a corporation. The main purpose behind corporate governance includes the motivation, welfare and growth of both the company and its employees in a systematic and an organized method. In the same way, it urges in presenting a product which is highly beneficial for the customers, clients and public as well. Strategic analyses are inevitable for the smooth running and rapid growth of an organization, which determine and form these rules necessary for the proper growth of an organization. “Western management thinking”, Mair views, “has traditionally assumed trade-offs between products quality, cost and delivery; high quality cost more and took longer; low cost meant low quality too.”(1996:667). Coca Cola Industry has introduced training sessions in its corporate culture in order to make the employees updated and teach them business ethics and corporate responsibilities. Motivational factors are always kept in mind during these training sessions, meetings and seminars. Famous psychologist Abraham H. Maslow has elaborated five levels of motivation in his famous Need Hierarchy Theory (1943). These levels include physiological, safety, social, ego and self- actualizing ones. Maslow opines that as the motivation takes start from the lowest level, so requirements of the employees must be fulfilled in priority to motivate and inspire them towards their work and to develop their interest in the tasks they are to fulfil. He submits that if senior management is interested in patronizing the addressing of most significant motivational factor in the staff of an organization, all these above mentioned levels of motivation should be satisfied. Physiological needs offer an employee happiness and satisfaction and the interesting work is the first and foremost factor of motivation and the part of his concept of self-actualizing factor. In addition, if an employee's salary or wages are not sufficient to obtain basic needs, his motivation level will surely be low. The Coca Cola Beverage Industry keeps this point in view while developing its strategy. They assign the employees targets and tasks according to their aptitudes and talents. Similarly, admiration and appreciation from the management on showing commendable performance raise employee’s self-esteem and he works more arduously in future. The Coca Cola industry announces promotions, souvenirs and salary-increase on showing extraordinary performance in different departments. They learn that hard work and determination win applause and admiration in life. A satisfactory and appreciable environment is created out of this all, and the employees feel secure and envy their work atmosphere. Job security is the fourth one in Maslow's list of motivational factors. If an employee’s job is not secure, he may be involved in searching out some other job, and his energies will not be focused on the tasks he has been assigned with. It is manager who motivates the employees and members of staff regarding the achievement of tasks determined by the top management. All the famous brands of global reputation including Honda automobiles, Coca Cola beverage industry, Microsoft Corporation, Virgin Atlantic Airways, Hitachi automotive production company and others exercise different aspects of motivational factors in their strategic planning in order to increase their market volume as well as widen the canvas of their sales and production consequently. The strategy of a company lays stress upon the services being offered to clients and customers, management and staff. Organizations divide their business units into different sections for proper work performance, among which quality control section serves as the backbone in an organization’s growth; it is therefore, companies pay special attention in recruitment of technical staff because they represent their company while presenting the product before customers. Moreover, production department is the window through which consumers judge the quality and price of products as well as standard of the organization. It is therefore companies make comprehensive recruitment plans and apply various methodologies to hire accurate persons. It can support the management explore the secrets of the unabated accomplishments, sound reputation, overwhelming business activities and corporate culture of the company. CORPORATE CULTURE OF COCA COLA The Coca Cola maintains a unique corporate culture and magnificent business traditions. Though, with the inclusion of various rival beverage companies at international levels, the Coca Cola Industry has to face the situation of perfect competition, yet the product is as popular today as it was in past. Even then there always exists an urgent need of exploring innovative ways to make it more and more attractive for the consumers. The Coca Cola Beverage Industry has successfully combated with the rival mania with the help of its comprehensive strategy and hard efforts of its management and employees to earn far more business than its rivals could only dream. It is therefore the industry has exceedingly been concerned in introducing corporate culture, so that employees can prove themselves not only hardworking and loyal staff members, but also can become productive and useful citizens of society. Its corporate governance strategy is successfully fulfilling its obligations towards the staff and environment alike according to the prescribed rules of law. CORPORATE RESPONSIBILITIES Every organization and individual is responsible to the members of society for the tasks they have been assigned. The Coca Cola Industry is also responsible to both the authorities and public. While examining the corporate responsibilities of an organization, it becomes evident that the long chain of achievements and undertakings demand an elevated level of accomplishments too. Coca Cola is restricted to always present its food and edible products in such a way which is not only hygienic to the health of the public, but also maintains quality and quantity essential for maintaining its level. Secondly, it should never launch any campaign that may cost its good name and fame on the one hand and harm the environment on the other. The managers must examine the whole manufacturing, bottling and measuring processes keeping in view all the instructions and precautions compulsory in this regard. Moreover, pricing, placement and production procedures must also be taken seriously. Negligence from any of such liabilities not only harms the public and environment, but may severely damage the reputation of the organization. The strategic managers are responsible to the state and public while articulating a strategic plan. "Private sector organizations are responsible to stakeholders and shareholders, while the private sector organizations are responsible to politicians, public and parliamentarians." (Johnson & Scholes, 1993:197) Changing in Technologies and Government Policies, and Coca Cola The Coco Cola's learning approach exposes its vision and sharpness on the one hand and its command over the changing scenario on the other. Whenever a new technological invention is introduced in the market, the company arranges an introductory seminar as well as meeting of the management, in which the entire advantages and disadvantages of the invention are discussed. The employees participate in the discussion and elaborate their views and opinions. As soon as the speeches and debates of the employees are over, senior managers and directors come forward to disclose the hidden difficulties due to the inclusion of new invention. After that they brief the staff regarding the utility of the new product and inform them how to take maximum benefits out of it. Moreover, the management trains the staff in respect of evading the disadvantages of the invention. Not only the case is with a new invention, but also same is the case with the new policy announced by the government as well as new socioeconomic change enters the market. The Coca Cola Industry moulds its strategies, revises prices of the products, develops schemes and applies techniques to meet the growing requirements. It is by dint of the foresight and vision of the management that the industry is accomplishing all the targets in a devastating way. CONCLUSION To conclude it is evident that a corporate firm is a public property in the sense because it is working and producing for the best interest of the public. It must be careful while devising methodology and implementing strategy in its set up. No action, activity or policy of a firm can be against the interest of public and environment. A company must be aware of abiding by the prescribed rules to save the environment and do least harm to it during the course of its production procedure as well as destroying its fossils and remnants. The high management and personnel of director or senior managerial levels must adapt themselves in such a way that the junior staff and employees can learn something new while interacting with them for the benefit of the company and public. The great industries like Coca Cola which is the symbol of wonderful achievements and series of triumphs must be more attentive and conscious in respect of corporate governance and responsibilities, which help the industry in respect of making distinction with other companies as well as its unique cultural characteristics will serve as role model for the business community to imitate. RECOMMENDATIONS Professional ethics refers to the rules and regulations, based on moral values, prescribed to define the patterns of professional behavior. This behavior supports to illustrate rights and obligations of individuals to some specific sort of work. As it is a fact beyond doubt that all corporate firms and business organizations outline plans to improve the degree of their sales and production and boost their commercial activities, these plans determine their future way of action as an important ingredient of their strategies. But it does not mean that it should concentrate on profit and sales generation altogether. On the contrary, there always exists the need for a comprehensive and transparent methodology of formulating a corporate approach and revising it according to the changes taking place in corporate sector in a very fast pace. The foundation and methodology of a great organization is always based upon the political, economic, social, technical, legal and environmental demands and requirements. The same is the case with the Coca Cola Beverage and Food Industry. It is proposed to the high authorities of the Coca Cola Industry that it must arrange technical and corporate training workshops not only twice a year to sustain its position as the biggest and most successful beverage brand of the world, but also instruct them work for the betterment of society. The personnel from the head office should be appointed for examining the place and area where the product is being manufactured. They must view that no production process could harm the environment or inflict pains and sufferings to public at large. Further, PESTLE (political, economic, social, technical, legal and environmental variations) and SWOT (strengths, weaknesses, opportunities and threats) analyses should also be the part of all strategic plan. It will help the employees looking into their performances and analyzing them individually and collectively. Many of the matters are settled due to the adaptation of some specific cultural traits, which promote high observance of discipline and co-operation within the boundaries of the industry. REFERENCES Andrews, K. R. (1971) The Concept of Corporate Strategy. Homewood: Dow Jones: Irwin, Inc. USA. Chapter 1 p.2 Johnson, Gerry & Scholes, Kevan. (1993). Exploring Corporate Strategy. Text and Cases. Third Edition. Prentice Hall New York. p 197. Lin, Justin Yifu, Ping Xinqiao, and Young Daiyon. “The Economic Impacts of Coca-Cola System on Chinese Economy.” China Centre for Economic Research (CCER) at Peking University. China. 12-23-1999.(Yergin and Stanislaw, 1998, p. 14). Maslow, Abraham. H. (1943). A Theory of Human Motivation. Psychological Review, July 1943. 370-396.www.Funderstanding.com www.thecoca-colacompany.com Wit, Bob De & Meyer, Ron 2003. Strategy Process, Content, Context Third Edition Newman, William H And Logan, James P. 1976. Strategy, Policy, and Central Management Seventh Edition, South-Western Publishing Company, West Chicago. Health bolt Journal. 12.08.2006. “What Happens To Your Body If You Drink A Coke Right Now?” Corporate Governance. University of Technology Sydney. (Quoted in ccg.uts.edu.au/corporate_governance.htm) Read More