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Study of Ethical Issues of Coca Cola

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REFERENCES SNOSOURCES 1http://en. wikipedia. org 2http://www. coca-colaindia. com/ 3http://www. coca-cola. com/ 4http://www. wikinvest. com/stock/Coca-Cola_Company_(KO) ABOUT THE COMPANY The Coca-Cola Company is the world’s largest beverage company, refreshing consumers with nearly 500 sparkling and still brands. Along with Coca-Cola, recognized as the world’s most valuable brand, the Company’s portfolio includes 12 other billion dollar brands, including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitamin water, powerade, Minute Maid and Georgia. Globally, they are the No.

provider of sparkling beverages, juices and juice drinks and ready-to-drink teas. Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy the Company’s beverages at a rate of nearly 1. 6 billion servings a day. With an enduring commitment to building sustainable communities, the Company is focused on initiatives that protect the environment, conserve resources and enhance the economic development of the communities where they operate. Few Facts: 1. Established in 1886. 2. Owns 4 of the world’s top 5 nonalcoholic sparkling beverage brands: Coca-Cola, Diet Coke, Sprite and Fanta.

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. Company Associates are 92,400 worldwide (as of December 31, 2008) 4. Operational Reach in 200+ countries 5. Consumer Servings (per day) nearly 1. 6 billion 6. Offer more than 3,000 products including diet and regular sparkling beverages, and still beverages such as 100 percent juices, juice drinks, waters, sports and energy drinks, teas and coffees and milk- and soy-based beverages. 7. New York Stock Exchange Ticker Symbol is KO Mission 1. To refresh the world. 2. To inspire moments of optimism and happiness… 3. To create value and make a difference.

Vision 1. People: Be a great place to work where people are inspired to be the best they can be. 2. Portfolio: Bring to the world a portfolio of quality beverage brands that anticipate and satisfy people’s desires and needs. 3. Partners: Nurture a winning network of customers and suppliers, together we create mutual, enduring value. 4. Planet: Be a responsible citizen that makes a difference by helping build and support sustainable communities. 5. Profit: Maximize long-term return to shareowners while being mindful of our overall responsibilities. 6.

Productivity: Be a highly effective, lean and fast-moving organization. Values 1. Leadership: The courage to shape a better future 2. Collaboration: Leverage collective genius 3. Integrity: Be real 4. Accountability: If it is to be, it’s up to me 5. Passion: Committed in heart and mind 6. Diversity: As inclusive as our brands Focus on the Market 1. Focus on needs of the consumers, customers and franchise partners 2. Get out into the market and listen, observe and learn 3. Possess a world view 4. Focus on execution in the marketplace every day 5. Be insatiably curious Work Smart 1. Act with urgency . Remain responsive to change 3. Have the courage to change course when needed 4. Remain constructively discontent 5. Work efficiently Act Like Owners 1. Be accountable for the actions and inactions 2. Steward system assets and focus on building value 3. Reward the people for taking risks and finding better ways to solve problems 4. Learn from our outcomes — what worked and what didn’t OVER THE YEARS The Beginning: 1886-1892 It was 1886, and in New York Harbor, workers were constructing the Statue of Liberty. Eight hundred miles away, another great American symbol was about to be unveiled.

Like many people who change history, John Pemberton, an Atlanta pharmacist, was inspired by simple curiosity. One afternoon, he stirred up a fragrant, caramel-colored liquid and, when it was done, he carried it a few doors down to Jacobs’ Pharmacy. Here, the mixture was combined with carbonated water and sampled by customers who all agreed — this new drink was something special. Jacobs’ Pharmacy put it on sale for five cents a glass. Pemberton’s bookkeeper, Frank Robinson, named the mixture Coca-Cola, and wrote it out in his distinct script.

To this day, Coca-Cola is written the same way. In the first year, Pemberton sold just 9 glasses of Coca-Cola a day. A century later, The Coca-Cola Company has produced more than 10 billion gallons of syrup. Unfortunately for Pemberton, he died in 1888 without realizing the success of the beverage he had created. Over the course of three years, 1888-1891, Atlanta businessman Asa Griggs Candler secured rights to the business for a total of about $2,300. Candler would become the Company’s first president, and the first to bring real vision to the business and the brand.

Until Recently: 2000-2009 In 1886, Coca-Cola brought refreshment to patrons of a small Atlanta pharmacy. Now well into its second century, the Company’s goal is to provide magic every time someone drinks one of its more than 400 brands. Coca-Cola has fans from Boston to Budapest to Bahrain, drinking brands such as Ambasa, Vegitabeta and Frescolita. In the remotest comers of the globe, you can still find Coca-Cola. Coca-Cola is committed to local markets, paying attention to what people from different cultures and backgrounds like to drink, and where and how they want to drink it.

With its bottling partners, the Company reaches out to the local communities it serves, believing that Coca-Cola exists to benefit and refresh everyone it touches. From the early beginnings when just nine drinks a day were served, Coca-Cola has grown to the world’s most ubiquitous brand, with more than 1. 6 billion beverage servings sold each day. When people choose to reach for one of The Coca-Cola Company brands, the Company wants that choice to be exciting and satisfying, every single time. PRESENCE IN INDIA

Coca-Cola, the corporation nourishing the global community with the world’s largest selling soft drink concentrates since 1886, returned to India in 1993 after a 16 year hiatus, giving new thumbs up to the Indian soft drink market. In the same year, the Company took over ownership of the nation’s top soft-drink brand and bottling network. Ever since, Coca-Cola India has made significant investments to build and continually consolidate its business in the country, including new production facilities, waste water treatment plants, distribution systems, and marketing channels.

Coca-Cola India is among the country’s top international investors, having invested more than US$ 1 billion in India in the first decade, and further pledged another US$100 million in 2003 for its operations. With virtually all the goods and services required to produce and market Coca-Cola being made in India, the business system of the Company directly employs approximately 6,000 people, and indirectly creates employment for more than 125,000 people in related industries through its vast procurement, supply, and distribution system.

The Indian operations comprises of 50 bottling operations, 25 owned by the Company, with another 25 being owned by franchisees. That apart, a network of 21 contract packers manufactures a range of products for the Company. On the distribution front, 10-tonne trucks – open bay three-wheelers that can navigate the narrow alleyways of Indian cities – constantly keep our brands available in every nook and corner of the country’s remotest areas. COMPETITON ACROSS WORLD 1. Pepsi is usually second to Coke in sales but outsells Coca-Cola in some markets. Around the world, some local brands compete with Coke. 2.

In South and Central America Kola Real, known as Big Cola in Mexico, is a fast-growing competitor to Coca-Cola. 3. On the French island of Corsica Corsica Cola, made by brewers of the local Pietra beer, is a growing competitor to Coca-Cola. 4. In the French region of Bretagne Breizh Colais available. 5. In Peru Inca Kola outsells Coca-Cola, which lead The Coca-Cola Company to purchase the brand in 1999. 6. In Sweden Julmust outsells Coca-Cola during the Christmas season. 7. In Scotland the locally-produced Irn-Bru was more popular than Coca-Cola until 2005, when Coca-Cola and Diet Coke began to outpace its sales. . In India Coca-Cola ranked third behind the leader, Pepsi-Cola, and local drink Thums Up. The Coca-Cola Company purchased Thums Up in 1993. As of 2004, Coca-Cola held a 60. 9% market-share in India. 9. Tropicola, a domestic drink, is served in Cuba instead of Coca-Cola due to a United States’ embargo. French brand Mecca Cola and British brand Qibla Cola, popular in the Middle East, are competitors to Coca-Cola. 10. In TurkeyCola Turka is a major competitor to Coca-Cola. 11. In Iran and many countries of Middle East Zam Zam Cola and Parsi Cola are major competitors to Coca-Cola. 12.

In some parts of China Future cola is a competitor. 13. In Slovenia the locally-produced Cockta is a major competitor to Coca-Cola, as is the inexpensive Mercator Cola, which is sold only in the country’s biggest supermarket chain, Mercator. 14. In Israel RC Cola is an inexpensive competitor. 15. In Madagascar Classiko Cola, made by Tiko Group, the largest manufacturing company in the country, is a serious competitor to Coca-Cola in many regions. 16. On the Portuguese island of Madeira Laranjada is the top-selling soft drink. In the UK Coca-Cola has stated that Pepsi was not its main rival, but rather Robinsons drinks.

CODE OF CONDUCT Introduction To operate in 200 countries, coke considers integrity as a fundamental to company. It is given due importance. It is defined as doing what is right. Company defines code as a guideline for employees, addressing responsibilities of employees towards each other, and to customers, suppliers, consumers and government. Company says to comply with code and law of whichever country you work for. Company tells to ask following questions to yourself and if answer is ‘no’, then don’t do it. • Is it consistent with the Code? • Is it ethical? • Is it legal? Will it reflect well on me and the Company? • Would I want to read about it in the newspaper? In case of any uncertainty, employee can contact his management, Company legal counsel or senior finance personnel supporting business, local ethics officer, the ethics and compliance office. Expectations from Managers Manager should ensure that people under his supervision have understood the code properly; work environment should be such that, employees can raise their concerns without any fear. He should not encourage employees to achieve business results at the expense of ethical conduct.

If any subordinate has any doubt, manager should clear his doubt, in case of confusion or where investigation is required manager has to contact Company legal counsel, senior finance personnel or the Ethics & Compliance Office. Application of code Code is applicable to all employees of Coca cola company and its subsidiaries in which coke has majority stake. Code and Law Company operates in different countries; it is subject to laws of different countries. Employees are expected to comply with the code and all applicable Government rules and regulations and in case if there is any conflict between code and law, the law controls.

If employee has any doubt about applicable of law, he can consult company’s legal counsel. Raising Concerns Company considers its ethical standards as obligations and requests its employees, to raise the concern issue promptly, before it becomes a violation of law or a risk to health, security or company’s reputation. Confidentiality and Investigation If any employee raises its concern, his identity remains confidential, in case of investigation, he has to cooperate with investigators team. Instructions are given to employee to not to discuss any issue which he has raised, with other employees.

It may be possible that company may not be able to inform about outcome of investigation to employee. Retaliation Any retaliation against an employee who has raised a concern honestly, is treated as violation of code. Other employees should treat him with courtesy and respect. Making False Accusations If any employee makes a false accusation, then it is treated as violation of code. Business and Financial Records Financial records of company business has to be accurate, It includes financial accounts, quality records, time records, reports and submissions such as benefit claim forms and resumes.

Ensuring accuracy of records is responsibility of everyone not only of finance department. •All the transactions should be recorded and classified in proper accounting period. •Estimates and accruals has to be supported by documentation. •All reports to regulatory authorities should be fair, accurate, timely and understandable. •Any documents should not be •There should not be any tax evading agreement with suppliers, payments to suppliers has to be made in their home country. Employee has to be accurate while preparing information for the company, but honest mistakes occasionally will happen.

Only intentional efforts to misrepresent or improperly record transactions are code violations. Company Assets Company’s assets should be protected and it should not be used for personal benefit. For example, Occasional personal calls and emails are acceptable but excessive personal calls are misuse of company’s assets. Company policy may allow additional personal use of its assets, but it should be used according to local policy as intended. Company treats theft of its asset in same way as theft of employees assets in workplace. Use of company’s assets outside of responsibility of employee requires prior written approval of ocal ethics officer. To continue with asset, this approval should be renewed annually. Examples of Company Assets • Company money • Company product • Employees’ time at work and work product • Computer systems and software • Telephones • Wireless communication devices • Photocopiers • Tickets to concerts or sporting events • Company vehicles • Proprietary information • Company trademarks Loans Loans to executive officers of company is prohibited, loans to other employees must be approved by Board of Directors or its designated committee.

Non-public Information Non-public information includes everything from contracts and pricing information, marketing plans, technical specifications and employee information. It is any information that the Company has not disclosed or made generally available to the public. Examples include information related to: • Employees • Inventions • Contracts • Strategic and business plans • Major management changes • New product launches • Mergers and acquisitions • Technical specifications • Pricing • Proposals • Financial data • Product costs

This information should not be disclosed to anyone, except when disclosure is required for business purposes. Insider Trading Trading in stocks or securities based on any internal information about company is violation of code. Conflict of Interest This section of the Code provides rules for some common conflict of interest situations. The Code does not address every potential conflict of interest, so the company asks the employee to use their conscience and common sense. When they are unsure, they encouraged to seek guidance. Act in the best interest of The Coca-Cola Company while performing your job for the Company. A conflict of interest arises when your personal activities and relationships interfere, or appear to interfere, with your ability to act in the best interest of the Company. ”… The Coca Cola Company, Code of Business Conduct Determining Conflicts of Interest: In any potential conflict of interest situation, ask yourself: •Could my personal interests interfere with those of the Company? •Might it appear that way to others, either inside or outside of the Company?

The following are some instances when there could be a conflict of interest: 1. Outside Investment: The company asks its employees to avoid investments in the ownership of stocks of a competitor, customer or a supplier which might appear to affect decision making. However, investments in mutual funds have been kept outside this purview. 2. Outside Employment, Speeches and Presentations: In general Coca Cola allows its employees to be employed by outside sources provided that this does not interfere with the employee’s ability to perform his job in Coca Cola.

Employment by of a competitor, customer or a supplier is strictly not allowed. Speeches and presentations are allowed provided they are a part of his job or he has been formally identified at the speech or presentation as an employee of the Company. 3. Relatives and Friends This deals with employees whose relatives are either employed by or have invested in a competitor, customer or a supplier. If the relatives deal with Coca Cola then the issue has to be approved by the Ethics Officer.

In addition, personal relationships at work must not influence the ability of the employee to act in the best interest of the Company, and must not affect any employment relationship. Employment related decisions should be based on qualifications, performance, skills and experience. 4. Gifts, Meals and Entertainment: The employees have been suggested not to accept gifts, meals or entertainment, or any other favor, from customers or suppliers if doing so might compromise, or appear to compromise, their ability to make objective business decisions in the best interest of The Coca-Cola Company.

Some guidelines have been set for receiving gifts. •Employees are not supposed to accept gifts in exchange for doing or promising to do anything for a customer or a supplier. •Employees should not accept any cash or cash equivalent gift The following may be accepted: •Logos, pen, T shirts •Gifts of symbolic value, such as trophies and statues •Gifts or discounts offered to a large group of employees as part of an agreement between the Company and a customer or supplier The following guidelines have been set as far as accepting meals and ntertainments are concerned: •Employees are not supposed to accept meals and entertainments in exchange for doing or promising to do anything for a customer or a supplier •The Employees may accept occasional meals and entertainment from customers and suppliers if the event is attended by the customer or supplier, and the costs involved are in line with local custom for business-related meals and entertainment. Refusing Gifts, Meals and Entertainment: Employees are not encouraged to accept gifts which exceed the given limits. They are asked to politely refuse the gift.

If returning the gift would offend the giver, then the gift may be accepted but the case has to be brought within the notice of the Ethics Officer. Integrity in Dealing with Others Dealing with Governments: The company policies state that nothing should be offered to the government officials – directly or indirectly in return of a favor. A prior permission has to be taken from the company’s legal counsel before providing anything of value to a government official. Anti Bribery: A bribe has been defined as “giving or offering to give anything of value to a government official to influence a discretionary decision”.

Bribes have been strictly prohibited. But, there is a clause wherein a payment is allowed to government officials under certain narrow exceptions. In such cases a prior permission has to be taken from the company’s legal counsel and Public Affairs and Communication personnel before providing anything of value to a government official. Improper payments by third party The employees have been cautioned to be doubly sure while dealing with third party agents or consultants because an attempt by them to bribe any government official could trigger a case against The Coca Cola Company. Hiring Govt.

Officials The company may hire government officials for legitimate business purposes like for security purposes. All such hiring decisions have to be pre approved by the company’s legal counsel. Facilitating Payments The U. S. Foreign Corrupt Practices Act allows companies to make facilitating payments, which are small sums paid to non-U. S. government officials to expedite or facilitate non-discretionary actions or services, such as obtaining an ordinary license or phone service. The company’s Code of Business Conduct states that at times, such payments may be necessary to obtain these services.

Nonetheless, the Company discourages facilitating payments. Moreover, such payments may be illegal under local law. Political Activity: The company encourages its employees to get involved in political activities provided that the employees do not use the company’s assets or reputation or their time of work in office. Before accepting a public office a prior approval has to be obtained by the company’s legal counsel. The company may contribute to a political cause but it must be in accordance with the Delegation of Authority, it must be in accordance with the law and it must be properly recorded. Trade Restrictions:

The Code of Business Conduct states that the company would comply with all the trade restrictions imposed by the U. S. government. Such restrictions prohibit the companies to deal with certain countries or outfits. Non compliance with these rules may lead to imprisonment for individuals and it may also bring about restrictions on the company’s operations. Dealing with Customers, Suppliers and Consumers The company states that the company values its relations with Customers, Suppliers and Consumers and they are supposed to be treated in the same manner as the company employees expect themselves to be treated.

The employees have been urged to treat the partners with utmost honesty and respect and the company products have to be presented in an honest manner. Dealing with Competitors The competition law varies in different parts of the world. Coca Cola claims to compete fairly and complies with all the applicable competition laws around the world. The following guidelines have been listed in the Code of Business Conduct: Competitive Intelligence Employees are encouraged to collect, share and use information about our competitors, but only in a legal and ethical manner. The company respects the nonpublic information of other companies.

Acceptable Intelligence Gathering The company finds it acceptable to collect competitive intelligence through publicly available sources. Even third parties may be contacted to collect competitive intelligence provided that the third party is not under any contractual or legal obligation to reveal such information. Prohibited Activities No illegal means are allowed to gather any competitive intelligence. Illegal activities include theft, trespassing, eavesdropping, wiretapping, computer hacking, invasion of privacy, bribery, misrepresentation, coercion, espionage or threats.

Moreover, any information marked ‘Confidential’ or ‘propriety’ must not be disclosed without consulting the company’s legal counsel. Administration of the Code of Business Conduct The responsibility for administering the code of business conduct rests with the Ethics and Compliance Committee. This committee comprises of senior leaders representing the corporate governance functions. Those found violating the code are dealt by the committee. Disciplinary Action The Company strives to impose discipline that fits the nature and circumstances of each Code violation.

The Company uses a system of progressive discipline, issuing letters of reprimand for less significant, first-time offenses. Violations of a more serious nature may result in suspension without pay; loss or reduction of merit increase, bonus or stock option award; or termination of employment. When an employee is found to have violated the Code, notation of the final decision, and a copy of any letter of reprimand, is placed in the employee’s personnel file as part of the employee’s permanent record. Signature and Acknowledgement

All new employees are made to sign an acknowledgement form confirming that they have read the Code of Business Conduct and agree to abide by its provisions. All employees are required to make similar acknowledgements on a periodic basis. Failure to read the Code or sign the acknowledgement form does not excuse an employee from compliance with the Code. Ethics & Compliance Intranet Site The Company maintains an Ethics & Compliance intranet site with additional information about the Code, other policies and guidelines, training, and other ethics and compliance matters. SCANDALS

Matthew Whitley and The Coca-Cola Company One of the first companies to become involved in the new act on Whistle-blowing was the Coca-Cola Company which represents an internationally recognized brand product. In 2003, the Sarbanes-Oxley Act and the Coca-Cola Company came together in Georgia courtroom when former Coca-Cola employee Matthew Whitley’s lawsuits against the company went to trial. Whitley had filed for protection under the whistleblower provision of the Sarbanes-Oxley Act On July 30, 2002; Congress passed the Sarbanes-Oxley Act in response to recent widespread corporate misconduct.

This act was intended “….. to protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws, and for other purposes. ” One of the first filings under the Sarbanes-Oxley Act occurred when Matthew Whitley filed a claim with OSHA stating that he was fired after disclosing accounting irregularities. Whitley was hired by the Coca-Cola Company in 1992 and remained with the company for approximately eleven years. Whitley began his career with Coke as an auditor for the corporation’s Fountain

Division and later became its Finance Director. During his tenure with the Coca-Cola Company, Whitley made a number of discoveries that concerned him. In March 2001, he came across an unusual expense report while conducting a routine audit: a fountain official had claimed reimbursement for $4500 worth of Burger King Value meals. Whitely claimed further that more than 80,000 of the company’s frozen beverage machines nationwide were defective and contaminating slush drinks with metal residue. Coke supposedly knew about the defective machines but did nothing to correct the problem.

Whitley also claimed that Coca-Cola discriminated against minority employees by holding them to a higher standard than white employees. Whitley sent a detailed memo containing the allegations to Coke President Steve Heyer. One week later, Whitley received what he claimed to be the worst performance evaluation of his career. This poor evaluation came just one month after Whitley had been praised by his manager, Brian Hannafy, as being a “role model” for the company and “all about integrity” and “doing the right thing”.

The Trial and Settlement Whitley ultimately settled his claims with the Coca-Cola Company for $540,000, of which $300,000 covered legal fees. He received a payout of $100,000 plus $140,000 in severance benefits. Analysis and Conclusion In light of Whitley’s allegations and lawsuit, it has become apparent that Coke’s procedures for handling internal complaints were inadequate. Business should be vigilant in establishing policies to quickly respond to employee accusations to prevent costly and time-consuming litigation.

Employers may incorporate policies that support the Sarbanes-Oxley Act into their existing ethics programs. Furthermore, they should document examples of the types of activities that should be reported and make it clear that employees have a duty to report questionable activities. Employees who win their cases are left to decide whether they can continue to work in a company where they may be labelled as “troublemakers. ” If they decided they cannot do so, they may be forced to change industries as their reputation may follow them within their given industry and beyond.

In Matthew Whitley’s case, he sent out 150 resumes, networked with approximately 50 people, and worked with six recruiters during his first three months of job searching; he had one interview. The Coke’s Code of Conduct clearly states that “Company considers its ethical standards as obligations and requests its employees, to raise the concern issue promptly, before it becomes a violation of law or a risk to health, security or company’s reputation. ” Also, the Code further states that “Any retaliation against an employee who has raised a concern honestly, is treated as violation of code.

Other employees should treat him with courtesy and respect. ” In the Whitley case, it was extremely opposite. He raised the issue to his Supervisor first and then, the President. What he received in turn, was a low performance rating and also, disrespect from other employees. It was because of the legal sanctions provided by the Oxley act that Whitley could actually sustain himself and brings justice. Dasani Water Bottles The launch of Dasani has highlighted how far Coke has been forced to diversify in recent years.

In a world drenched in colas and crying out for health drinks, notably water, the number one drinks company cannot stay number one by selling Coke alone. Changing tastes have forced the firm to branch out into new market sectors, notably fruit juices, power drinks, iced tea, coffee and, of course, bottled water – the fastest-growing new market of all. In the UK alone the water market is now worth ? 1. 2 billion and it is growing at 20 per cent a year. In little more than a decade Coke has launched more than 300 non-cola drinks in 200 different countries, including dozens of waters.

There are now more non-cola drinks than there are Cokes Coke dumped its new bottled water following a cancer scare and an unprecedented consumer revolt. In spite of Coke’s claims that its ‘NASA-approved reverse osmosis multi-barrier filtration system’ created water so pure it was better than the real thing, consumers thought they were getting little more than Brita filtered water at 95p a bottle. When illegal levels of cancer-causing bromate chemicals were discovered, Coke had no choice but to recall 500,000 bottles and abandon the drink’s launch. The Dasani scandal has left Coke nursing a ? 5 million loss from cancelled production contracts and advertising deals. The damage to the firm’s reputation is 20 times that figure, analysts say. The launch was an extraordinary gaffe for a company which has marketed its way to become the world’s most valuable brand, worth $70 billion. Analysis and Conclusion The Dasani crisis is a case of a giant that is so desperate for growth that it appears things are being overlooked. Coke are master marketeers, they can sell pretty much anything – even tap water in the right market – but sometimes they get so caught up in the marketing that they lose touch with reality. Dasani is a curious brew that is made from mains water at a factory in Sidcup, Kent. Coca-Cola says that after being passed through a “highly sophisticated purification process” the drink is “as pure as bottled water gets”. Bromate, meanwhile, is described by the Food Standards Agency as “a chemical that could cause an increased cancer risk as a result of long-term exposure”. In a statement last week, Coca-Cola said the contamination had been initially caused by its regular practice of adding calcium to Dasani. In this case, the calcium “did not meet our quality standards”, the company admitted.

As a result, bromate went on to be formed during the manufacturing processes. While there were no immediate safety fears, Coca-Cola decided on the recall. The product’s bromate levels were twice the legal limit in the UK – but were below Europe’s higher limit. Thus, Dasani is a special case in which Coca-Cola agreed to the results and withdrew its products from market. If we look at it from Kantian philosophy, if the same water bottle with high bromate content is given for consumption to the concerned Coke Managers, will they drink it? Absolutely Not. Thus, the very act of manufacturing was wrong.

But the way, Coke recognised the ethical issue and decided in ethical terms was quite acceptable. Pesticides Scandal in India A Centre for Science & Environment test found 12 soft-drink brands of Coke and its global rival Pepsi contained pesticides and insecticides in excess of the European Economic Commission’s limit. The Parliament’s immediate reaction: ban on the brands on its premises. In 2003 CSE found pesticide levels in drinks produced by Coca-Cola and Pepsi to be much higher than permitted by EU standards. This summer they found levels to be 24 times higher than is allowed by the Bureau of Indian Standards.

On 8 August, a West Bengal government report said sludge and liquid effluents from Coke’s plants at Dankuni, Taratala and Jalpaiguri and Pepsi’s at Narendrapur contained toxic metals and the carcinogen cadmium. On 6 August, Kerala State Pollution Control Board had confirmed that Coke’s bottling plant had indeed been polluting the groundwater and agricultural land in and around its Palakkad plant. The same happened in 2006 with another allegation Three years ago, Coca-Cola and Pepsi challenged the CSE study and the testing methodologies used, which were later vindicated by a parliamentary commission.

This time around the companies again chose to concentrate on the science rather than the issue. TIMELINE 5 August, 2003 – CSE produces first pesticides report attacking Coke and Pepsi. 4 February, 2004 – Government joint parliamentary commission seconds CSE findings. March 2006 – Indian food standards finalised after three years of consultation. 2 August, 2006 – CSE publishes second report on high-level pesticide content in colas. 9 August, 2006 – Kerala bans total production and sale of Coca-Cola and Pepsi. 14 August, 2006 – UK’s Central Science Laboratory questions CSE’s findings. 6 August, 2006 – Coca-Cola seeks meeting with CSE that the latter denies. 22 August, 2006 – India’s union health ministry rejects CSE study as “inconclusive” Villagers complained of falling groundwater level in the area after Coke had started drawing it in huge quantities. Response by Coke Coke, of course, denies responsibility for all this, and it has the support the local authorities; they argue that the company creates jobs. Politicians even threatened the agitationists with “dire consequences” if they didn’t stop.

Though Coke claims to have carried out the mandatory Environment Impact Assessment report before setting up the plant, none so far has seen the report. Waite’s repeated requests to the company to produce a copy of the report met with failure. Analysis and Conclusion The Coca Cola’s code of standard claims that any issue or concern that can be a violation of law or risk to health, must be immediately reported and taken care of, by an employee. But when such a concern is being raised by an authorised semi-government agency, the Company has gone as far as asking for the CSE’s credibility.

Thus, it is clear that the Indian mangers did not stick to Code of Ethics and thus, in turn damage the long-known reputation of the company. After getting banned from a few states of India, Coca Cola appealed to High Court and won the appeal. Today, people are drinking Coke again. But the question still remains that how justified was the Company in politicising the issue? Shouldn’t Coca-Cola be more transparent and receptive to people in health-related matters. By any theory of ethics, the entire Company stands at stake.

There is no question of ethical dilemma because right to health is a core human value that should not be compromised at any cost. And here, the affected people were in majority that strictly goes against the Utilitarian theory. Also, the means (manufacturing process) and ends (profit at health’s stake) are both unethical. HUMAN RIGHT’S VIOLATIONS OF COCA COLA’S WORKERS Till date there have been a large number of major human right’s violations of Coca Cola’s workers, somewhere around 200 of which approximately 10 are murders. Family members of union activists have been abducted and tortured.

In many cases union members were fired because they had been attending union meetings. The company has pressured workers to resign their union membership and contractual rights, and fired workers who refused to do so. The delegation faced more trouble with the repetitive allegations that the paramilitary violence against the workers was done by the knowledge, or rather at the order of company managers. This was alleged since the amount of physical access that these paramilitaries had to Coca Cola bottling plants would not have been possible without company knowledge and by their tacit approval.

To add to the heaps of trouble, the company officials admitted that they had not at any time tried to probe into the relation between the paramilitary and the plant managers or even tried to look into what ties were there between them. The involvement of Coke in this scandal is further strengthened by its previous reputation of filing criminal charges against all those union workers who had tried to speak about the company’s relation with the paramilitary. All these allegations led to a lawsuit being filed in 2001 by the International Labour Rights Fund and the United Steelworkers of America in US courts against Coke.

This lawsuit represented the Columbian trade union and the workers or union leaders who were victims of the horrendous violence at the bottling factories located in parts of Columbia. However in 2003, one of the federal courts, in which the case was taking place, dismissed the charges against Coke, justifying its decision by giving lame reasons. The reason it gave was that its relation with the owners of those bottling plants where Coke bottles were produced (in Columbia) were quite attenuated to hold the company Coke responsible for all such atrocities.

Considering all the factors like who all workers were victimised and keeping Coke’s previous reputation in mind, it was evident that none other than the management of Coke was involved in all the paramilitary violence activities. COKE’S RESPONSE TO THE SCANDAL However, the management was smart enough to come up with quick and elusive responses. They claimed that Columbia was a dangerous place and that they are very concerned about the safety of workers there. Rather, they even said that they (the Coke Company) along with their bottling partners would take special steps to ensure the safety of all their workers.

They remarked about how these atrocities had touched the company in a personal way. Employees of both, the bottling company and Coke have been threatened, victimised, kidnapped and in some extreme cases even been murdered. Among those murdered was Isidro Gil who was doing his duty in Carepa (at the bottling factory) where he was shot dead (in 1996). In a lawsuit pertaining to this case, the court had concluded that the bottling company played its best role by doing both, that is, taking proper steps to start an investigation by the authorities and also took a few extra steps to ensure the safety of all the workers at the plant.

In the midst of all this violence, Coke and its bottling partners ensured the safety of all its workers both at work and at home. They even claimed that respect for human rights and labour rights were non negotiable and that Coke operated its business all over the world on the basis of these values. However, apart from all that it said, Coke’s actions negated it all. They were unwilling to support an independent investigation into the Columbian issue. The other major issue was the company’s disagreement to the “Seven Points of Settlement” that was put forward by the Columbian Union. MACHINATIONS USED BY COKE

The question that arises is, is that how can Coke continue all this without checks and hindrances. The answer lies in the simple fact that it uses the International Labor Organization for all these purposes. Ed Potter, Coke’s Director of Global Labor Relations, continued to use the of the United Nations ILO to undermine any efforts to hold Coke bottlers in Colombia accountable for widespread labor and human rights abuses, including the systematic intimidation, kidnapping, torture and murder of union leaders. These abuses are highlighted in lawsuits filed against Coca-Cola and its Colombian bottlers in 2001 and 2006.

Through the machinations of Potter, the ILO is being used to serve the interests of Coca-Cola. Rather than working to get an investigation, Ed Potter was working to shield Colombia and Coca-Cola from any real scrutiny at a time when Colombia, President Uribe, and multinational corporations had been under fire for links to paramilitary death squads. Since March 2006 Coke’s CEO, Neville Isdell and Ed Potter had repeatedly lied about the ILO commitment to do an investigation of Coke’s past and present labor practices in Colombia in order to shed light on allegations of widespread human rights abuses by its bottlers.

They had claimed that the ILO is doing an “investigation of past and present labor relations and workers’ rights practices of the Coca-Cola bottling operations in Colombia. ” However, ILO officials completely contradicted Coke’s assertions that it is doing such an investigation – “the ILO is not conducting an investigation, but is doing an assessment of current working conditions,” not of past labor relations practices, according to an official at the ILO. Even if the ILO were doing an investigation into Coke’s past and present labor practices in Colombia, it could not have been considered unbiased.

Ed Potter was himself a member of the ILO’s Applications of Conventions and Recommendations Committee. For many years, he had been the head spokesperson for the entire Employers’ Group, a powerful role within the ILO structure that allowed him to promote the interests of big business and Coca-Cola, in particular. Also, Potter was involved earlier, in 2005, in the creation of a “Commission” consisting of representatives of major universities and prominent worker rights advocacy organizations that were trying to develop a methodology for evaluating how or whether Coca-Cola’s Colombian bottlers worked with paramilitary death squads.

When the commission asserted its independence by kicking Mr. Potter out, so it could then be truly independent, Coca-Cola began backing away from and creating reasons to delay and obstruct any meaningful investigation. Finally, Mr. Potter insisted that Coke couldn’t participate at all in an investigation process unless the attorneys who sued the company agreed that any evidence of Coke’s abuses could not be used in their lawsuits. The lawyers refused this demand since compliance would require them to violate the rules of legal ethics, something Mr.

Potter knew. Whether such a demand by Coke indicates its guilt is a legitimate question. The so-called ILO investigation still hasn’t occurred. If the ILO ever does anything, it will be exactly what Coca-Cola and Potter wanted all along: a blatantly biased evaluation that will ignore past abuses and will not hold the company accountable in any meaningful way. So, this is how Coke edged its way out of all the muck without having much to repay back anything to the victimised workers, families of workers who were murdered etc.

A company which showed its core values and basis of operations to be ethics delved on something which would be categorised as unethical under any circumstance. APPLYING VARIOUS ETHICAL THEORIES TO THE PROBLEM 1)VIRTUE ETHICS Probably, the first and foremost theory that one can apply here is VIRTUE ETHICS for the sheer atrocity of the entire situation. According to virtue ethics, the virtues displayed by Coke were all inclining towards the negative side. Of these, a few noticeable ones are: -Dishonesty -Shrewdness -Fear

Coke as an operating force in Columbia failed to follow the principles of virtue ethics to emerge as a market leader whom people espouse. It may have not faced serious damages as all the lawsuits got quashed; however, it was known by everyone that the culprit for all the mess was none other than Coke itself. 2)DEONTOLOGICAL THEORY According to this theory, it’s not the ends but the means that matter. So, while applying this theory, it can be very easily inferred that Coke’s actions were unethical as the means to reach the end (to let no one speak against Coke) were not correct.

They resorted to violence and ultimately caused many serious injuries and even death in some cases. The same end could have been achieved by means of negotiations or talks with the union members; however, Coke did not care to do so. 3)TELEOLOGICAL THEORY According to the teleological theory, the means don’t matter; the ends do. So, according to this theory also, the acts committed by Coke were unethical. The union members, or rather any employee of the company has a right to express his or her view about what he may feel is right or wrong within the company.

However, Coke ensured that all those who went against the company in some way or the other were treated with severity. This end was not justified. 4)UTILITARIAN APPROACH According to this theory there is maximization of pleasure at the cost of few. Considering this approach Coke tried to sacrifice a few of its employees (the union members) for the sake of the entire company. However, did it really ensure the maximization of pleasure? I believe it was only the top management which was satisfied with such a decision and thus the result was that not many people benefited as such.

There would not have been much loss to the employees per se, the brand would have suffered. So, the acts committed by Coke cannot be jusitifed by this theory as well. ANALYSIS AND CONCLUSION According to the Code of Ethics followed by Coke ‘Raising Concerns’ is one of the main aspects where in the Company considers its ethical standards as obligations and requests its employees, to raise the concern issue promptly, before it becomes a violation of law or a risk to health, security or company’s reputation. However, in this situation the company gave no freedom to its employee to express their concerns over anything.

It was a clear case violation of the Code of Conduct. Another of the important factors considered in the code of ethics is Confidentiality and Investigation where in if any employee raises its concern, his identity remains confidential, in case of investigation, he has to cooperate with investigators team. Instructions are given to employee to not to discuss any issue which he has raised, with other employees. It may be possible that company may not be able to inform about outcome of investigation to employee.

In this case also, Coke violated its own established code of ethics as the people who had raised their concerns were far from being kept confidential. They were threatened, kidnapped and murdered. So, multinationals like Coke, who have an elaborate and descriptive code of ethics are rarely seen to follow it. Whenever however they do follow it, there are media replications of it to bring about the good will of the company. However, when they violate it, all attempts are directed at hiding their atrocities, misdeeds etc. This, in my view clearly shows how unethical practices the company follows.

Cite this Study of Ethical Issues of Coca Cola

Study of Ethical Issues of Coca Cola. (2018, Feb 13). Retrieved from https://graduateway.com/study-of-ethical-issues-of-coca-cola/

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