Coca Cola Issues and Solving Problems - Case Study Example

? Labor Relations of the of the Introduction The Coca Cola Company values employee relationship and maintains a strong commitment towards the laborers of the company. They aim at developing a work place that has a free and inclusive environment. The labor laws of the company take care of the basic human rights of the workers and values the interests and opinions of all employees. These laws would be a guide line for the employees in a dual way; it would restrain them from any wrong decision making and would also protect their rights and ensure they that are not deprived of proper benefits they are eligible to owing to their employment at the company. Based on this premise the company maintains good relationship with its employees and this is the basic fact behind the success that the company enjoys at the international level. Every employee of the company, irrespective of the level at which he or she operates, make noticeable contribution to the overall performance of the company. This value is reflected in the activities and policies made at the managerial level of the company, which ensures that the employees are encouraged to put their best efforts so that they might help the company maximize its performance. The organizational leaders have developed the Workplace Rights Policy of the Coca Cola Company by strictly following the international standards for human rights, the Universal Declaration of Human Rights, the Declaration on Fundamental Principles and Rights at Work proposed by the International Labor Organization's and also the United Nations Global Compact. This policy is equally applicable to all the members, irrespective of the proportion of stake it holds in the company. In all the countries in which the Coca Cola Company operates, it makes sure that the principles strictly abided by the bottling partners of the company, although these companies might operate independently as separate organizations. The company also encourages them to adopt these policies so that these partner organizations might work in a more synchronized manner with the Coca Cola Company. The labor employment policy of the company includes the following major components; freedom of Association, campaign against forced labor, campaign against child labor, freedom of collective bargaining, discrimination among laborers on the basis of cast, race or social status, working hours, proper wage rate, healthy and safe Workplace, security at the workplace and engagement of the stakeholders of the company as well as the entire community (Coca-Cola India, 2010). Labor-related issues Racial discrimination Racial discrimination is a serious problem for the multinational corporations. Since they operate in different countries they are required to maintain the traditions and cultures of the regions. Since they utilize the labor force of the relevant country, the management has to be conscious about the about the rights and the demands of the local labor force and make policies that would not hurt the interests of these laborers. In 2000, Coca Cola paid $192.5 million for settling a lawsuit against racial discrimination in the US segment of the company. This was aimed at changing and managing the way minority employees are treated in the country. An allegation made against the company in 2003 said that black skinned population is underrepresented in the top management of the company and they also receive less payment than their white skinned counterparts (Business-Human rights, 2013). Issues with Coca Cola Although the Coca Cola Company has a strong employee policy and believes in maintaining good relationship with labor unions in all the operating segments in the world, the company has faced strict criticism from the public, the media and other international watchdogs. In some of the countries in which the company operates, it has been charged of providing degraded working conditions to the workers and also accused of inhuman behavior with the labor union leaders. Particularly, in the developing countries, such as, India, Turkey, China, Guatemala, Mexico, Colombia and El Salvador, the Coca Cola Company has been involved in cases of violence against the workers (Killer coke, 2004). In Colombia and Guatemala, the presence of the labor unions is very strong. These unions are being engaged in a rife with the managers of the company due to violence of the rights of the workers in terms of wage rate and as well as working conditions. There have been reports that many workers and union leaders of the Coca Cola Company in these two countries have been murdered. Family members of these workers have been kidnapped and tortured and many others have been intimidated. It has been revealed that the company takes help of the paramilitary forces illegally in order to accomplish these activities under cover (Killer coke, n.d.). According to reports by the National Food Industry Workers Union (Sinaltrainal), the body that organizes the laborers of Coca Cola in Colombia, the multinational organization is engaged in practices that hamper the normal workings of labor unions in Colombia over a period of 20 years (Gill, 2004). In the two countries, the result of the fight of the labor union against the company implicates the ultimate outcome; life or death of the employees. Strategy for negotiating a labor agreement The company has to formulate a successful strategy for negotiation of a good agreement with its laborers. This strategy must have four definite folds, each of which should be catered to. At the first step, the company has to align the labor agreement with the business objectives and the strategy adopted to accomplish these objectives. The negotiations have to be made according to the particular priorities of the work place. Labor management relations should be negotiated so as to develop good labor agreement policies. Finally, all these policies should be aligned with the ultimate bottom line of the organization, i.e., maximization of profitability (Coca-Cola Company, 2011). Freedom of Association and Collective Bargaining The coca cola company respects the rights of the employees to form a labor union, to take decisions about joining one such union or not join any union. Yet it faces some administrative and economic issues while addressing collective bargaining. This problem is most distinctly vivid in the regions like Guatemala and Colombia. The company has allegedly suppressed the labor unions and intimidated the company laborers. In order to develop a healthy bargaining position, the leaders have to listen to the opinions of the employees and also encourage them to express their ideas without apprehension and also take decisions about joining labor unions without any fear of harassment, reprisal or intimidation. Employees must be able to choose their leader that would legally represent the members of the union collectively. This helps in establishing a constructive exchange of ideas between the organization and the labor group. This enables in the bargaining process between the organization and the laborers regarding the demands of the laborers regarding wage rate and other such issues. Policies and procedures to administer a labor contract Contract administration is a process that helps to solve disputes that arise during collective bargaining. It prepares the situation for making the negotiation experience satisfactory. The company has to manage the grievances and arrive to substantive resolutions. The union would file grievances which would have to be taken care of by the administration. However, the administration has to ensure that the union itself serves as the check on the conditions that are mentioned on the labor contract (Antonellis, 2012). The terms and conditions should be written down and preserved as a document for use during any time of dispute. This agreement has to be abided strictly by both the managers of the organization and the union and no discretionary practices should be entertained. Interest dispute and its resolution Interest disputes occur when collective bargaining negotiations fail. The most common dispute arises on account of the workplace conditions and also payment and living standards of the workers. As in case of Canada, the company has desired to cut cost by removing pension scheme for new hires and also make a condition in the employment contract by which temporary workers would always remain as temporary and would not be made permanent. While these ignite flames between the labor union and the company, the organizational leaders would have to provide alternative benefits to the employees against the benefits that they have been deprived of (Raines, 2012). Instead to pension scheme the workers might be given with a onetime lump sum amount of money at the time of their retirement. Also, miscellaneous benefits for the temporary workers might be increased while they continue to receive salary at a lower scale than permanent workers. If polices regarding temporary benefits, such as food coupons and bonus facilities, are made separately from the permanent workers, problems of temporary workers can be dealt with more responsibility and they would gain confidence on the company. Evolution in labor-management relationships The relationship between the management of the companies and their employees has been evolving over time. At present, the position of workers has improved than the situation 100 years back. While workers put efforts and their efforts are recognized in the performance of the company as a whole, laws have been made to protect these laborers from exploitation. This position is further going to change and the difference between the laborer and the managers would shrink further. There would be representatives of the employees in the management committee (the number of representatives would be a certain percentage of the number of employees of the organization). This would reduce friction between the management and the labor union. References Antonellis, P. J. (2012). Labor relations for the fire service. Oklahoma: Fire Engineering Books. Business-Human rights. (2013). Case profile: Coca-Cola lawsuit (re racial discrimination in USA). Retrieved from http://www.business-humanrights.org/Categories/Lawlawsuits/Lawsuitsregulatoryaction/LawsuitsSelectedcases/Coca-ColalawsuitreracialdiscriminationinUSA . Coca-Cola Company. (2011). Global workplace rights workplace rights implementation guide. Retrieved from http://assets.coca-colacompany.com/55/b5/5dcc88f044faa9e56bf0d0f72a17/SupplierSGPImplementationGuideENGLISH.pdf . Coca-Cola India. (2010). Workplace rights policy. Retrieved from http://www.coca-colaindia.com/sustainability/workplace_rights_policy.html . Gill, L. (2004). Coca-Cola in Colombia: Increased profits, downsized workforce. Retrieved from http://colombiajournal.org/coca-cola-in-colombia-increased-profits-downsized-workforce.htm . Killer coke. (2004). Tell Coca Cola to stop the violence. Retrieved from http://www.killercoke.org/ . Killer coke. (n.d.). Cokes crimes in Colombia. Retrieved from http://killercoke.org/crimes_colombia.php . Raines, S. S. (2012). Conflict management for managers: Resolving workplace, client, and policy disputes. New Jersey: John Wiley & Sons. Read More