Ethical Issues on Coca-Cola Code of Conduct - Essay Example

Ethics Essay Part Necessarily Recommendations of the Coca-Cola Company of Conduct A critical look at the Coca-Cola Company of Conduct shows that the code of conduct has many weaknesses and is in need of revision. One of the main weaknesses of the Coca-Cola Company code of conduct is that it does not address many business ethical challenges in the contemporary world that have been occasioned by advances in science and technology. This paper looks at the main weaknesses of the Coca-Cola Company Code of conduct and gives a revised version of the Coca-Cola Company code of Conduct. In giving the weaknesses of the Coca-Cola Company code of Conduct, I have given examples of the ethical challenges that the Coca-Cola Company has faced in the recent past because of the weaknesses in the Company’s code of conduct. To begin with, on integrity, the Coca-Cola Company code of Conduct is ambiguous and does not give the stake-holders of the Company clear guidelines on how to handle some ethical challenges that may arise in the Company. The value of Integrity is one of the key values in the Coca-Company code of conduct, and in the code of conduct, it is clearly stated that the value of Integrity is the pillar of Coca-Cola’s Company vision 2020. But although the Coca-Cola Company requires all its employees to conduct to conduct themselves with maximum integrity, the Coca-Cola Company code of conduct does not give its employees clear guidelines on how to act with integrity in face of some ethical challenges in the business. The Coca-Cola Company code of conduct gives the general guideline that integrity involves “doing what is right”, in line with the laws governing the Coca-Cola Company. This guideline is indeed ambiguous because different people have different conceptions of “what is right”. What may be right to one person may not be so to another (Ferrell & Fraedrich, 2008). This ambiguity in the Coca-Cola Company code of Conduct has led to some ethical challenges in the Coca-Cola Company. The following is an example of unethical problem that the Coca-Cola Company faced due to the erroneous interpretations of “what is right’ by some employees of the Company. In the year 1999, some Coca-Cola Company employees engaged in unfair marketing tactics with the aim of maximizing the profits of the Company (The Coca-Cola Company Struggles with ethical issues, web). Pepsi Company accused the Coca-Cola Company for using rebates and giving huge discounts to their customers, so as to gain market dominance. In response, the Coca-Cola Company denied these claims, although an investigation later by the government of US proved that the allegations of the Pepsi Company against the Coca-Cola Company were based on facts. This unethical marketing tactics had resulted from erroneous interpretation of the ambiguous Coca-Cola Company code of Conduct. The marketing employees of the Coca-Cola Company thought that they were doing what is right, for the benefits of the company, by employing unethical marketing tactics to attract customers to buy the Coca-Cola Company products. If the Coca-Coca Company code of conduct explicitly forbade any form of unethical marketing strategies, this ethical crisis could not have arisen in the Coca-Cola Company. The Coca-Cola Company code of conduct therefore should have details on how the stake-holders of the Company ought to conduct themselves with integrity on various aspect of the Company; the code of conduct should not give a general and ambiguous guideline on how to act with integrity. A good corporate code of conduct should not be ambiguous (Trevino & Nelson, 2011). The Second Major weakness of the Coca-Cola Company code of conduct is that the code of conduct is mainly based on the interest of the Company at the expense of the interests of the stake-holders and the customers of the Company. For instance, in giving guidelines on how to make decisions in the Company, the Code of conduct states that one should be guided by the interest of the Company (Coca-Cola Company Code of Conduct, web). While it is true that the stake-holders of the Coca-Cola Company should take into consideration the interests of the Company in making important ethical decisions, the interests of the Company, however, should not override the interests of the individual stake-holders and customers of the Company. Having the interests of the Company as the main guiding factor in making moral decisions can lead to grave violations of basic human rights of the stake-holders and the customers of the Company (Reicher, 2011). The following is an example of an ethical crisis that arose in the Coca-Cola Company because of the stake-holders of the Company making moral decisions solely guided by the interests of the Company. In the year 1999, the Coca-Cola Company was accused of selling substandard products that were unfit for human consumption; the Coca-Cola Company had sold the “poisonous” products in Belgium, France and Italy (The Coca-Cola Company Struggles with ethical issues, web). This incident affected the reputation of the Coca-Cola Company a great deal. The processing of the “poisonous” products was prompted by the desire to maximize the profits, the benefits, or the interests of the Coca-Cola Company. This fact therefore shows that basing decisions on the interests of the Company can lead to grave violations of human rights. The main guiding factor therefore in making decisions in the Company should not be the interests of the Company but the interests of the shareholders and the customers of the Company. As Emmanuel Kant in states in his categorical imperative, any moral decision made in any area of life should ensure that human beings are treated as ends, but never as means to some ends (Kant, 2002). By stating that the main guiding factor in making moral decisions is the interests of the Company, the Coca-Cola Company is advocating for treating human beings as means to some ends, and this is grossly wrong. The Coca-Cola Company therefore should revise its code of conduct and ensure that the main guiding factor in making moral decisions is the interests of the stake-holders and the customers of the Company. The third major weakness of the Coca-Cola Company code of conduct is that the code of conduct does not mention the need for the Company to ensure that all its activities do not cause any harm to the environment. Coca-Cola Company actually has a very poor environmental record. In India, for instance, there have been concerns about how the Coca-Cola Company processes their products; the Coca-Cola Company in India has been accused of using water that contains high levels of pesticide that may cause harm to the environment. The Coca-Cola Company code of conduct therefore should have a clause, explicitly prohibiting any form of activity that may cause harm to the environment. The forth weakness of the Coca-Cola Company Code of Conduct is that it does not have a clause on fair and equal treatment of all human beings. The Coca-Cola Company code of conduct is based on the values of Integrity, Honesty, adherence to the law, compliance to the law, and accountability. Although it can be argued that the value of fairness and equal treatment of all human beings is subsumed in these five principles of the Coca-Cola Company code of conduct, there is need, however, to include a clause on fairness and equal treatment of all persons in the Coca-Cola Company code of conduct, the cause should explicitly prohibit all the employees of the company from discriminating against anyone on any basis. This would help a great deal in preventing vices of discriminations in the Coca-Cola Company. For lack of clear guideline on fair and equal treatment of all human beings, the Coca-Cola Company has previously been accused of various forms of discriminations. The following is an example of an ethical challenge that the Coca-Cola Company faced due to lack of clear guidelines on fairness and equal treatment of all human beings. In the year 1999, the Coca-Cola Company was sued by 15000 African Americans employees of the Company for discriminating against them in pay and promotions (The Coca-Cola Company Struggles with ethical issues, web). This was obviously a discrimination based on race. The Coca-Cola Company paid the employees $193 Million so as to settle the case. A clause on fairness and equal treatment of all persons in the Coca-Cola Company code of conduct can help a great deal in preventing these kinds of unethical practices. Part 2 A Revised Code of Coca-Cola Company One of the Ethical Problem facing the Coca-Cola Company in the contemporary world is Fraud in market research (Unethical Practices done by the Coca-Cola Company, web). In 2002, the Coca-Cola Company developed new frozen Coke products and the Company wanted to sell the products to Burger King Company. Before purchasing the products, the King Burger Company decided to first carry out a market test of the frozen Coca-Cola products. When the results of the market test started coming in, the Coca-Cola Company realized that sales of the frozen Coke products were not promising. To counter the bad statistics, the Coca-Cola Company bribed a few individuals and asked them to take hundreds of children to the Burger King Company shops to buy the frozen Coke products. The fraudulent alteration of the statistics, however, was revealed by Matthew Whitney, an executive of the Coca-Cola Company, and the Coca-Cola Company was sued and made to pay heavily for the unethical practice. The fraud in the market test was clearly unethical because it is against the ethical principle of honesty and integrity in business (Thiroux & Krasemann, 2012). The above unethical case is clearly against the Coca-Cola Company code of conduct. The Coca- Coca Company code of conduct prohibits any form of dishonesty and upholds the value of integrity in all business activities. However, the Coca-Coca Company Code of conduct provision that in making ethical decisions one should be guided by the interests of the Company might have led to this unethical practice. Besides, the Coca-Cola Company code of conduct does not have a clause, explicitly prohibiting any form of fraudulent market research. The following is an aspect of the revised Coca-Cola Company code of conduct that could have prevented the unethical fraudulent market research. Making Moral decisions: in making any ethical decision on any issue in the company, one should always be guided by the interests of the individuals involved and, also, by the interests of the Company. In an event that the interests of the Company and the interests of the individuals involved conflict, the interests of the individuals involved should take precedence over the interests of the Company. Honesty: The Coca- Cola Company upholds the value of honesty and prohibits any form of fraudulent behaviour including fraudulent dealings with the customers of the Coca-Cola Company. The Second contemporary ethical problem that the Coca-Cola Company is facing is on inflated earnings. In the year, 1999, the Coca-Cola Company was accused of sending extra concentrate to Japanese bottlers in an effort to inflate profits. The main intention of inflating the profits was to create the impression that the Coca-Cola Company was making super-profits, this was meant to attract the investors into the Company. Although the Coca-Cola Company promised not to engage in such unethical practices in the future, the Coca-Cola Company, however, is still involved in some forms of inflating earnings so as to attract the investors. Inflating earnings is against the Coca-Cola code of conduct because it is clearly against the Cola-Cola code of conduct principles of integrity and honesty (Unethical Practices done by the Coca-Cola Company, web). Again, the Coca-Cola Company Code of Conduct upholds the value of truthfulness and accuracy in presentation of data. However, the Coca-Cola Company code of conduct does not explicitly address the issue of inflating earnings. The Coca-Cola Company code of conduct leaves making of such decisions at the discretion of the individual employees, whereby the employees would be guided by the interests of the Company in making the decisions. The Coca-Cola Company, therefore, out to have a clear guideline on the Company’s code of conduct that clearly states that inflation of earning is unethical and should not be practiced. The following is an aspect of the revised code of conduct of the Coca-Cola Company that would address the contemporary ethical problem of earning inflation. Accuracy in reporting the earnings of the Coca-Cola Company. The Coca-Cola Company guided by the principles of integrity and honesty strongly forbades any form of erroneous presentation of information on earnings of the Company. The ethics compliance office of the Coca-Cola Company must verify the information on the earnings of the Company before such information is publicised. The third contemporary ethical problem that the Coca-Cola Company is facing is on bypassing the distribution laws (Unethical Practices done by the Coca-Cola Company, web). In the year 2012, the Coca-Cola Company was sued by forty four of its bottlers for distributing Powerade Sports directly to the Wal-Mart houses. This task was legally supposed to be done by the Powerade bottles. The bypassing of the distribution laws therefore was unethical because it contravened the agreement that the Coca-Cola Company had made with its distributors. The bypassing of the distribution laws by the Coca-Cola Company was against the Coca-Cola Company code of conduct because it contradicts the Coca-Cola Company’s values of integrity and honesty. In the Coca-Cola Company code of conduct, there is no clear provision prohibiting bypassing of the laws of distribution. The following is an aspect of the revised Coca-Cola code of conduct that prohibits bypassing of distribution laws. Abiding by the Law. In order to be able to operate in an orderly manner and to ensure that there is fair play in our manner of doing business, the Coca-Cola Company stake-holders must abide by all the laws and regulations governing the Coca-Cola Company. These laws include laws on production, and distribution. This will ensure that the Coca-Company does not exploit other business partners. The fourth contemporary ethical Challenge that the Coca-Cola Company is facing is data mining (Unethical Practices done by the Coca-Cola Company). Data mining is an ethical challenge that has arisen in the contemporary world and is a major ethical issue that Companies have to give clear guidelines on. The main problem with data mining is that it is an intrusion into personal privacy. This is because data mining involves collecting information online on the purchasing patterns of the consumers. The data is collected on various online sites including social-networks like Facebook and Twitter. The consumer information is collected without the assent of the individual consumers, and this therefore is regarded as an intrusion into personal privacy. In the year 2011, the Coca-Cola Company was accused for data mining and revealing personal information to other people (Unethical Practices done by the Coca-Cola Company, web). In response to these allegations, the Coca-Cola Company denied the allegations, and since there was no concrete evidence of the Coca-Company engaging in the unethical practice, the case was dismissed. The current code of conduct of the Coca-Cola Company does not address any ethical challenge that may arise from the use of internet. However, it can be argued that the Coca-Cola Company code of conduct principles of integrity and honesty addresses these challenges. However, there is need for the Coca-Cola Company code of conduct to have a clause explicitly prohibiting any form of cyber crimes. The following is an aspect of the revised code of conduct of the Coca-Cola Company that addresses the ethical challenges of cyber crimes. Integrity and Honesty in regard to the use of Internet: The Coca-Cola Company, guided by the principles of integrity and honesty, forbades any forms of Cyber crimes. In particular, the Coca-Cola Company prohibits data mining, since data mining is an intrusion into personal privacy. Part Three Slide Power Point Presentation of the report: An Highlights of the Key Points The Coca-Cola Company code of conduct is ambiguous. The Coca-Cola Company code of conduct does not give clear guidelines on how the stake-holders of the Company ought to overcome the ethical dilemmas that may arise in the Company. The Coca-Cola Company code of conduct leaves such decisions at the discretion of the individual stake-holders of the Company. The second major weakness of the Coca-Cola Company code of conduct is that the code of conduct puts the interests of the Company before the interests of the individual shareholders of the company. This is because the Coca-Cola Company code of conduct advices the share-holders of the Company to make ethical decisions based on the interests of the Company. Although, of course, the interests of the Company should be taken into consideration in making ethical considerations, the interests of the Company should not be sought at the expense of the individuals involved. This provision of the Coca-Cola Company code of conduct gives a loophole for the violations of the individual rights of the stake-holders and the customers of the Company. The third major weakness of the Coca-Cola Company code of conduct is that it does not have a provision on environmental preservation. The lack of a clause on environmental preservation in the Coca-Cola Company code of conduct gives a loophole for the environmental degradation. The Coca-Cola Company code of Conduct, therefore, should have a clause on environmental preservation. The fourth major weakness of the Coca-Cola Company code of conduct is that it doesn’t have a clause on fairness and equal treatment of all people. This in turn has led to exploitations of the shareholders and the customers of the company. The Coca-Cola Company code of conduct therefore should have a provision on fairness and equal treatment of all people. Ethical problems faced by the Coca-Cola Company in the Contemporary World The following are the main ethical challenges that the Coca-Cola Company faces in the contemporary world. Fraud in Market Research Inflated earnings, this is done to impress the investors Bypassing of the distribution laws Data mining, this is unethical because it is an intrusion into personal privacy References Coca-Cola Company Code of Conduct. Web. Ferrell, and Fraedrich. (2008). Business Ethics: Ethical Decision making and Cases.USA: Cengage Learning Kant, I. Wood, A.W., trans. (2002). Groundwork for the Metaphysics of Morals. USA: Yale University Press. Reicher, K. (2011).”Ethical Issues and the Institutionalization of Business Ethics”. USA: Cengage The Coca-Cola Company Struggles with ethical issues. Web. Thiroux,J.P.,&krasemann,K.W.(2012).Etichs:theory and practice(11th ed.).Boston:Pearson Trevino, L.K, & Nelson, K.(2011). Managing Business Ethics. USA: John Wiley &Sons. Print. 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