Corporate Social Responsibility Strategies of The Coca-Cola Company - Essay Example

Corporate Social Responsibility strategies: The Coca-Cola Company The corporate social responsibility approach employed by the Coca Cola Company is in line with the organization’s quest to implement various initiatives that go beyond requirement by laws governing its operation. The initiatives such as Taking Care of the Community and water management developed by the community are supported by the perspectives developed by scholars such a McWilliams and Siegel (2001) who claim sustainable businesses should go beyond compliance by engaging in activities that further social good and should not necessarily be based on the organizational interests or requirement by law. This essay explores giving back to the Community and water management corporate social responsibility strategies used by The Coca-Cola Company based on a number of theoretical perspectives that inform the application of the strategies. Giving back to the Community The Coca-Cola Company (TCCC) prides itself as an organization that cares about the needs of communities in which it operates as seen in a number of support solutions undertaken by the organization aimed at responding to the needs. Having it operations in many countries, the first goal for TCCC is to ensure the economic empowerment of various community where it operations are located. To achieve this end the organization has a policy of creating employment opportunities for the local populations based on the available positions and the qualifications of potential employees from the community. Additionally, there is a supply policy, which ensures locals are given an upper hand in provision of important service to the organization. Additionally, TCCC has corporate social responsibility programmes aimed at improving the community by fighting poverty. This is realized through distribution of funds to a number of charitable organizations working with the poor in various communities around the world. To achieve this ambitious plan, the organization has developed a framework where about one percent of the annual operating income goes to the foundations as a way of giving back to society (Coombs and Sherry, 2011). These employment policies have also been implemented while acknowledging the disparities in access to job opportunities based on the need to create gender balance in the workplace. Consequently, the organization recognizes that in most of the communities, opportunities for women have been low leading to a conscious effort to gradually increase the recruitment of women. Various bottlers for TCCC have therefore been tasked with developing their own frameworks to archive this end with the Coca-Cola İçecek operating in countries such as Turkey, Azerbaijan, Kazakhstan, Iraq, Syria, Kyrgyzstan, Pakistan, Jordan, Tajikistan and Turkmenistan pledging to double the number of female employment by the year 2020. Coca-Cola İçecek has also joined hands with the larger TCCC to initiate female entrepreneurship training as well as providing grant in order to improve female employment and entrepreneurship levels within the communities it operates (Coca-Cola İçecek, 2011). This acts as part of the wider recognition of the need to facilitate skill acquisition and creation of employment where it is expected that the organization will create a forum for empowerment and it is expected about 5 million women entrepreneurs will benefit by the year 2020. The company encourages entrepreneurial activities among the women through provision of funds for capital, and educating and training the women to become better managers of their businesses. Apart from the corporate social responsibility, programs initiated at the employee levels there are also other efforts that improve the welfare of the community in which Coca Cola operates. Such programs include relief programs during times of need such as natural disasters as seen during the October 23, 2011 earthquake in Van where water, clothes and blankets was supplied to residents affected by the 7.2 earthquake as measured on the Richter scale (Coca-Cola İçecek, 2011). By initiating projects such as giving a portion of revenue back to society through funding of programs against poverty, TCCC aims to go against the agency theory perspective. TCCC does not hold the same views as the proponents of agency theory perspective whose argument is that corporate social responsibility usurps the role of the government and that corporate social responsibility is a waste of resources that should be spent on valued-added internal initiatives or given back to shareholders as dividends (McWilliams, Siegel and Wright, 2006). The TCCC can therefore be perceived in terms of stakeholder theory where mangers of an organization are seen as satisfying a range of constituents that might include employees, customers, local community organizations and suppliers. It is important that an organization focuses its attention on other stakeholders apart from those who own shares since there are other people who can influence organizational outcomes (Steurer, Langer, Konrad and Martinuzzi, 2005). Consequently, TCCC takes care of special interest groups such as women based on the belief that this is not wastage of resources but acts as a measure to develop community resources. In areas were such approaches have been used, TCCC has been able to reduce the problem of forced labour as the community is empowered with skills for gainful employment as well as self-employment options. Water Management Strategies TCCC acknowledges the importance of water management practices in its sustainability plan. The organization realizes the competition that exists between plant consumption and other needs of the population and therefore implements a number of approaches to ensure the limited resources does not face intensive pressure. The risk on water supply is even great considering the continued global warming and rapid population growth rates which increases competition for available water resources. TCCC strategy for water protection relies on the implementation of a number of strategy which will see the output for the various international plants increase while water consumption decrease. There are a number of strategies that have been recognize as essential in meeting organizational growth and water management needs among them replenishing, reducing water consumption through reuse, reclamation and safe discharge. In addition, providing support to research dedicated to water basins improvement and preservation as well as providing support to research that improve community, public institutions and non-governmental organization awareness about water management. This approach by TCCC can be assessed based on the resource-based-view-of-the-firm (RBV) which defies the role of scarce resources in creating competitive advantage for any firm that undertakes initiatives that will create a perception among the consumers that an organization cares in terms of resource management (McWilliams, Siegel and Wright, 2006). Jones and Bartlett (2009) add that organizations that introduce production or operating methods that emphasizes environmental protection are more likely to influence a number of stakeholders especially the consumer. Therefore, the application of water management by TCCC has two implications where firstly it ensures the organization maintains a high level of efficiency in production process and secondly, it acts as a public relations move. A public relations approach, consumers will most likely want to be associated with TCCC and its products since they will want to support an organization that cares for the scarce resources. These water management programs are made possible through the organization’s water stewardship program where is targeted that the organization should be able to increase water efficiency by up to 20 percent in the operations of different manufacturing plants (Hall and Lobina, 2012). The water stewardship program Coca Cola has seen water usage drop over the years while wastewater management has also improved. These programs have been implemented globally with bottlers of Coca cola beverages coming up with different strategies for water management. The Coca-Cola İçecek has developed its own water management programmes where for instance there are strategies such as the “zero wastewater generation” and reclamation,” whose main aim is to cut down on the organizational impact on the environment through measures that ensure wastewater is discharged after purification. These efforts ensure water basins are protected from harmful substances that might be released with the wastewater therefore help protect aquatic life and consumption by people and animals. These water management programs are important since they create a positive perception among the local communities, as TCCC is perceived as return safe water back to the community. Research Findings and Implications for the Growth of International Business The approach taken by TCCC in corporate social responsibility strategies such as giving back to the community and water management emphasizes the belief that business organizations can remain profitable while also taking care of the needs of various stakeholders. This view is supported by the stakeholder theory that highlights the needs for organizations to involve other groups in planning for revenues part from the shareholders. Given that TCCC continues to be recognized among the most profitable global brands, international organizations whose aim is to attract more customers should implement policies that gives back to the community while also conserving the available resources. These measures will act as a marketing tool, which helps create a consumer positive perception about the organization. In this regard, corporate social responsibility acts as a move to create a competitive advantage where firms such as TCCC, which have policies that protect scarce resources, are able to attract more customers. Consequently, it is safe to conclude that organizations that invest in the protection of scarce resources as well as building capacity within the community have a high likelihood of improving its image as perceived by customers and can therefore create successful brands. References Coca-Cola İçecek (2011). Corporate Social Responsibility Report. Retrieved from http://assets.coca-colacompany.com/51/be/fa1c9a664de5bb38e0304d6ce2af/CCI_CSR_2011.pdf Coombs, W., and Sherry, J., 2011. Managing Corporate Social Responsibility. A communication approach. London: John Wiley and Sons. Hall, D., & Lobina, E. (2012). Conflicts, companies, human rights and water-A critical review of local corporate practices and global corporate initiatives. Public Services International Research Unit report for Public Services International (PSI) for the 6th World Water Forum at Marseille. Jones, K. & Bartlett, J.L. (2009). The strategic value of corporate social responsibility: A relationship management framework for public relations practice. PRism 6(1) 1-16. McWilliams, A. and Siegel, D. 2001. Corporate social responsibility: A theory of the firm perspective. Academy of Management Review, 26: 117-127. McWilliams, A., Siegel, D. S., & Wright, P. M. (2006). Corporate social responsibility: Strategic implications. Journal of management studies, 43(1), 1-18. Steurer, R., Langer, M. E., Konrad, A., & Martinuzzi, A. (2005). Corporations, stakeholders and sustainable development I: a theoretical exploration of business–society relations. Journal of Business Ethics, 61(3), 263-281. Read More