Coca-Cola Companys Activity in Terms of Global Citizenship - Case Study Example

Global Citizenship

Nowadays, there are a great amount of different influential companies that operate worldwide and affect society in various ways. These companies can provide humanity with both negative and positive impacts. On the one hand, such organisations ensure people with some goods, services, and workplaces, as well as contribute to the development and prosperity of the environment and world’s community. On the other hand, such companies can act unethically by means of pollution of the environment, bribery and violence of labour standards. In order to understand the nature of an organisation’s impact on the world’s society, it would be appropriate to analyse various sides of its activity, policies, practices, ethos, approach to management, carbon food print and R&D performance. This research would represent the current state of a company’s attitude to Global Citizenship. For instance, Coca-Cola Company is a global corporation, which operates worldwide and presents specific attitude to the production, environmental care, marketing, and research and development. Moreover, the organisation constantly creates new workplaces and different social programs for a population of developing countries. Hence, this paper is aimed at a research and deep analysis with respect to Coca-Cola Company’s activity in terms of Global Citizenship and impact on the world in order to evaluate the organisation and provide some recommendations on how the company can become more responsive to relevant issues.

Primarily, it would be proper to summarise the organisation’s activity. Coca-Cola Company is a tremendous American multinational corporation, headquartered in Atlanta, the United States of America. It was founded, in 1886. The organisation is a producer, distributor, and promoter of different beverage and food. The main brand of the company is non-alcoholic soft drink named Coca-Cola. The company manages a franchised distribution system, which signifies that the company produces the genuine syrup. It is sold to companies that purchased the franchise of Coca-Coal Company, as well as perfectly follow a huge variety of standards. Such companies are called bottling companies. A bottling company is a commercial enterprise whose output is the bottling of beverages for distribution (Johnson, 1987, pp. 112).

The organisation markets its products in more than 200 countries around the world with six geographic operating segments (Narayan, 2010). The list of brand represented by the company consists more than 300 units. According to the official website of the organisation, in the end of 2015, the revenue of the company was $44.3 billion, operating income was $8.7 billion, Net income was $7.3 billion. Total assets of the company cost $90 billion while total equity is $25,5 billion. The company provides workplaces for 130 thousands of people around the world excluding the franchisees co-called bottling companies (Coca-Cola Co., 2016). Coca-Cola system comprises more than 250 major bottling partners worldwide. Nowadays, the organisation possesses 11 major bottling companies that operate on all continents. For example, in the United States of America operates a company called Coca-Cola Enterprises Inc. while in the Europe works Coca-Cola Hellenic Bottling Company. Therefore, it becomes obvious that the corporation vastly influences the world and economies of certain states.

Unconditionally, it would be appropriate to describe the products represented by the corporation and its partners, as well as reveal some features of its marketing activity and strategy. The organisation represents a specific range of products for each region. This range based on the thorough research of customers’ needs in a certain region. Today, there are presented more than 200 kinds of drinks, which are produced by Coca-Cola Company. Three of them owns 80% of the global sales. It signifies drinks called Coca-Cola, Fanta, and Sprite. The world’s capability of Coca-Cola Co. produces approximately 70 varieties of Fanta with a huge variety of flavors such as orange, lemon, mandarin, grapefruit, kiwi, melon, and watermelon (Coca-Cola Co., 2016). Same deal with Coca-Cola and Sprite. The company seeks to satisfy needs of all customers around the modern world; thus, it manufactures different juices, low-calories drinks, and even tea.

In order to sell such an immense amount of products around the world properly and effectively, the company had to create and develop an exceedingly comprehensive and creative marketing strategy, which would ensure the dominant market share and enormous popularity of the brand. Therefore, the company has applied 4P marketing mix, which means Price, Product, Place, and Promotion (Gilhuly, 2014). The Coca-Cola Company’s annual advertising spending was US$3.976 billion, in 2015. Advertising expenses accounted for 6.9% of total revenues each year. In 2015, The Coca-Cola Company was the largest advertiser in the beverage industry in the world (Jurevicius, 2016). The ad of Coca-Cola drink has appeared each season on TV screens in the vast majority of countries. The outdoor advertising is widespread around each city, as well. In addition, the company invented a special approach to the positioning of the drinks. The object of promotion is not a product of the company. It promotes its customers or their lifestyle. To be more specific, the essence of this strategy is to make a customer feel unique or special. The company actively uses Celebrity endorsement in order to maintain this marketing idea. Below is a picture ad with a famous actress and model called Marilyn Monroe. Thus, the company has created and promoted to the community a particular set of values. In these days, the trademark of the corporation is the most well-known in the world. The image of the brand is known by 98% of the total population of the globe.

The management of Coca-Cola Co. is committed to following the highest standards of the company with regard to responsibility for the customers, partners, environment, and competitors. This variety comprises immense attention to private, purchasing, labour and environment policies. To clarify, the company strives to adhere the highest quality in all directions of its activity in order to make a positive contribution to the prosperity of the world’s community. The purchasing policy of the company implies that the organisation “give preference throughout its business to purchasing products and materials made of recycled content if these products and material satisfy current performance, safety, regulatory and cost requirements” (White, 2014). Moreover, the corporation considers substitution of its products and materials with some recyclable items. These items can satisfy the performance, quality, safety, cost and regulatory criteria of the company. Coca-Coal Co. requires a compliance with quality standards from its bottlers and suppliers, as well as encourage them to actively recycle all plant waste so as to minimise a negative impact of these materials on the environment. The standards of the organisation require the suppliers to specify the volume of recycled content in materials and products to be supplied (White, 2014). In addition, according to the company’s website, it strives to create sustainable end markets for recyclate by means of an increase in the volume of recycled content of used materials and products (Coca-Cola Co., 2016). There is conducted a constant interaction with clients in order to prevent them from pollutions, as well as provide them with an access to convenient and effective recycle systems.

According to Ankit Abraham Sinha, the company is exposed to price volatilities while purchasing aluminium, oil, plastic, and sugar. To counter this risk, the company implemented the following changes over 2012–2013 in its commodity risk management practices (Sinha, 2015). It means that the company's treasury department got the primary responsibility of the organisation and managing all heading transactions with the commodity. Likewise, there was implemented a technology solution aimed at an improvement of the visibility of various risks regarding commodity within the organisation. It would identify and perform proper heading transactions, as well as report on risk management. Drawing on Dimitris Papathanasiou, who is Financial Risk Manager of Coca-Cola HBC, “The team now enjoys the multiple benefits of reduced P&L volatility, better pricing, reduced supplier-based risk, enhanced control, better transparency and reporting, and improved environment for effective commodity risk decision-taking” (Sinha, 2015). The European subsidiary is not an only example of this practice. All subsidiaries of Coca-Cola Co around the world comply such standards.

The company strictly follows the privacy policy in order to protect the data about its customers and partners collected by means of websites, mobile apps, widgets and different conducted surveys. The company thoroughly collects and defends the collected information by means of special tools and approach according to the standards agreed by the U.S. Department of Commerce and the EU/Switzerland (Coca-Cola Co., 2015). An individual can become familiar with these rules on the official website of the company.

In addition, the company has implemented a program called “Carbon Challenge”, which aimed at the reduction of the carbon footprint of the company’s and its suppliers' activities. The program has three stages that prioritize efforts and motivate suppliers to do their best at each stage of the carbon management. Drawing on the Coca-Cola Co, “the challenge starts by encouraging each organisation to measure and manage its carbon footprint, then to develop carbon improvement plans and finally to share carbon information” (Coca-Cola Co., 2014). The organisation provides a direction so as to maximally reduce carbon footprint in the world. In general, the company’s sustainable procurement strategy suggests three directions such as employees, procurement process, and suppliers. To be more specific, the company seeks to train its procurement department on sustainability, ensures that the process maintains sustainable purchasing decisions, as well as encourage its suppliers to enhance a sustainability of their performance. Taking into consideration the facts represented above, it can be concluded that the company makes significant efforts in order to ensure sustainable development and prosperity of the world’s community.

No less important factor of the research is the management and labour policies of the company. Taking into consideration the scale of the company’s activity, it is obvious that there must be applied a perfect management system in order to operate successfully. Primarily, the organisation structure of the company is managed by means of a vertical hierarchy. It means that the top management of the organisation is responsible for the major changes, setting goals and defining new directions. However, routine issues are resolved by middle and line managers. It signifies that middle managers are able to make some decisions with regard to the activity of their subsidiary and scale of operation. When any division of Coca-Cola Company plans to implement or launch some action or campaign, the division has to receive an approval from their superiors by means of a direct communication. As Coca-Cola Company’s hierarchy is sufficiently tall, the communication has to travel back to corporate headquarters in Atlanta, the U.S, where the Executive Committee has the final decision-making power for activities the divisions have proposed. Below is an organisational chart of the company (Gilhuly, 2014).

The management style of Coca-Cola Company is aimed at effective leadership and constant personal and professional development of employees. Managers of the company strive to motivate their subordinates efficiently in order they to reach their professional objectives. This system ensures a constant growth of the organisation’s activity by means of employees’ training. In turn, due to such an approach, the company is able to meet customer’s needs and own objectives effectively. According to the fact that employees’ development is the main object of the company’s management, Coca-Cola Company tends to organise various training programs, boot camps, and practical courses. Moreover, a corporate culture of the company signifies mutual support of team members in achieving the personal tasks and goals of each worker. This specific approach helps the company to reach own aims and permanent growth. Therefore, the company always offers new workplaces in different countries that contribute a lot to the growth of the world’s economy and prosperity of certain states.

In addition, the company is profoundly commitment to workplace and human rights due to the large scale of its operations. According to the official website of Coca-Cola Co. “respecting human rights and protecting workplace rights is fundamental to our culture and imperative for a sustainable business. In our Company and across our system, we are working to make sure all people are treated with dignity and respect” (Coca-Cola Co., Human and Workplace Rights, 2012). The organisation follows human and workplace rights with accordance to “United States Universal Declaration of Human Rights” and “International Labour Organisation’s Declaration on Fundamental Principles and Rights at Work”. Coca-Cola Co. runs various exceedingly effective initiatives in order to respect the rights in each subsidiary and workplace of the organisation. Besides, the company promotes to its supply chain, bottling system and communities, in which the organisation works, the own approach to the commitment to the rights.

The high standardised work conditions of the company are conditioned by documents called Supplier Guiding Principles, Workplace Rights Policy, Human Rights Statement. These documents are influenced by the United Nations and International Labour Organisation declarations (Coca-Cola Co., Human and Workplace Rights, 2012). Thus, workers of all levels experience a proper treatment, work conditions, and compensation. The company is an overt opponent of child labour, discrimination, and forced labour. Meanwhile, the management is immensely attentive to freedom associations, health and safety, and hours of work. Nevertheless, bottling partners of the company possess their own labour policies that sometimes causes some obstacles despite the fact that the organisation actively encourages all partners to perfectly ensure decent working conditions for their employees. There is a statement of the company with respect to the encouragement of its partners. “We expect our Company, our bottling partners, and our suppliers to avoid causing, or contributing to, adverse human rights impacts as a result of business actions and to address such impacts when they occur” (Coca-Cola Co., Human and

Workplace Rights, 2012).

The company constantly monitors the latest changes in economy and living standards so as to ensure the employees with reasonable salaries and compensations. The responsible persons seek to identify properly, prevent and mitigating effects in human rights. In addition, it there any issue occurs, the organisation would require its partners to implement a process for remediation of any unfavourable human rights effect. As a result, the promotion of Coca-Cola's approach to human and working rights, Calvert Investments, Inc. announced, in 2011, that the company had met Calvert’s “environmental, social and governance criteria as a result of clear progress in labour and human rights” (Calvert Investments, 2011). Hence, it can be concluded that the company vastly contributes to the workplace safety and respecting of human rights. Moreover, the company encourages its partners and overall community to act in the same fashion.

Nevertheless, it is necessary to investigate ethos of Coca-Cola company in order to evaluate the commitment of the company to own rules and standards. According to Giovanna Ike Coan’s study called “The Ethos of Social Responsibility in a Coca-Cola Advertisement”, Coca-Cola company attempts to represent an outstanding social responsibility in its advertising company in Brasilia for commercial purposes. To clarify, Coan says that “Coca-Cola tries to represent itself as a company that cares about its workers. However, by building an agreeable atmosphere around its name, the ultimate objective of this advertisement is certainly commercial” (Coan, 2011). Another research conducted by Peter Michael represents that the company prompts people to feel happiness, desire, passion, amusement and other positive elements unconsciously (Michael, 2013). It means that the organisation perfectly operates with non-verbal techniques of communication in order to increase the brand awareness among the population, as well as desire to purchase their products. It supports the study of Coan with respect to commercial purposes of the company. Nevertheless, it is difficult to say either it provides the society with negative or positive impact as people experience positive emotions regardless of outcomes for Coca-Cola Co. In addition, it is generally accepted that the main objective of the commercial activity is getting a benefit from its activity.

Research and Development performance is an essential part of the evaluation of Global Citizenship of the company. Coca-Cola Company is exceedingly interested in R&D activity. Drawing on Jay Moye, “Coke’s six R&D centres around the world are linked to external technology assessment and acquisition (ETA) hubs, which connects the company with partners, entrepreneurs, tech start-ups and university researchers “(Moye, 2013). Moreover, a head of Global R&D department called Nancy Quan said that the company is aimed at fuelling innovations across equipment, packing, and product line. In addition, the organisation cooperates with partners in other fields in order to facilitate innovating processes around the world. Coca-Cola Company's global R&D community intend to invent relevant innovations to meet its framework of objectives called “Me, We, World” including the well-being of customers, prosperity of community and development of the world. Furthermore, the department has aimed at “empowering communities through social enterprise, an initiative called “EKOCENTER”, to Plant Bottle Technology and energy-efficient coolers” (Moye, 2013).

Coca-Cola Co. created a special venture in order to ensure a research and development of technologies, as well as the implementation of innovations, on factories of bottling partners of the organisation. It is called The Bottling Investments Group (BIG). The main goal of this organisation is to ensure that the partner’s bottling operations remain a part of Coca-Cola system and obtain appropriate expertise and investments so as to reach a long-term success. “When an operation is stable and thriving, BIG’s goals are to find a qualified bottler to assume operations and continue to grow the business’ (Moye, 2013). The other initiative of the company called “Coca-Cola System Wide Performance” was created in order to find resolutions for the current global issues of Coca-Cola Co. and its partners, as well as come up with new creative ideas.

Undoubtedly, it would be appropriate to summarise the activities of Coca-Cola Co. taking into consideration the conducted investigation and analysis with regard to Coca-Cola Company’s position at present addressing issues relevant to Global Citizenship in order to provide some recommendations on how the organisation can improve its performance in these areas. The company produces high-quality products that perfectly satisfy customers’ needs. Furthermore, the parent company developed a set of special standards for the company’s partners and subsidiaries in order to ensure the quality at each level of the operations and manufacturing. At this point, the company should only find new ways how to make the products less harmful for people’s health. It signifies a reduction of sugar and other adverse substances in the products. Also, the company should look for more organic substitutes for its goods in order reduce overall harmfulness of drinks without deterioration of gustatory quality.

Coca-Cola Co. has represented an outstanding marketing activity that facilitates an increase in overall sales of its products and brand awareness around the planet. Nevertheless, there were investigated some contradictions with respect to ethos of the Coca Cola’s advertising. In advertising campaigns, the company tends to refer to social responsibility and advantages of consuming its products. To be more specific, the company makes use of all possible ways in order prompt people to purchase its goods. The commercial purposes are not a violation of the law; however, it is slightly unethical decision. Thus, the company should revise the approach to the ad campaigns in order to bring to naught dissatisfaction of some individuals and enhance ethos.

In addition, the company presents perfect attitude to respect of human and working rights. The organisation properly protects the data with respect to its customers, which was collected by means of various researchers, apps and widgets. There were investigated a generous amount of Coca Cola’s standards in terms of working conditions, environment protection, and customers’ treatment. Moreover, the company encourage its suppliers, partners and overall community to follow these standards and be conscious in terms of pollution, recycling, environment care, carbon footprint and ethical cooperation. Nevertheless, the company does not always manage to reach these goals as each subject of such an activity has personal responsibility for its actions. Therefore, the company should look for new ways in order to encourage its partners and community to contribute effectively to the sustainability and prosperity of the world. In addition, the company should take a strict measure so as to prevent the unethical attitude of its bottling partners to employees in developing countries.

The corporation focuses on the constant development of its personnel, as well. The corporation culture of the company is aimed at encouragement of employees to personal and professional growth by means of promotion opportunities, different trainings, and educational programs. The mutual support of employees is an unspoken rule within the company’s offices and factories. Such a growth helps Coca Cola to transcend its performance on the regular basis; thereby, expanding its activity and providing new workplaces. R&D activity is in priority of the company’s top management. Therefore, the global R&D department is aimed at a facilitation of development of innovations in different industries around the modern world. The company created special venture in order to support its partners in the innovative performance. Furthermore, Coca Cola Co holds special large scale meetings in order to resolve some actual issues in these areas. Hence, the company should carry on the move in this direction, as well as do its best in order perfect R&D activity in other industries.

Conclusion

The paper represented the investigation and deep analysis with respect the Coca Cola Company’s activity of Global Citizenship. It signifies the organisation’s influence on the community, environment and partners. In other words, there was investigated Coca Cola’s impact on the world. Taking into consideration the overall scale of the organisation’s activity including production, marketing, purchasing policy, management, labour policies, R&D performance, ethos, environment care, recycling, carbon footprint, sustainability practices and ethical profile, it would be appropriate to say that the company represents almost perfect performance. The vast majority of company’s practices properly organised and provide a positive influence on the people, partners, environment and overall community. Eventually, there were represented recommendation with regard to the enhancement of some areas.