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CSR Activities Of Coca Cola Add in library

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Question:

Discuss the CSR Activities of Coca Cola.
 
 

Answer:

Introduction:

Although the ulterior objective of any private organization is profit maximization, it also should ensure that its business practice does not create any environmental hazard, but if possible, does contribute to the well-being of the world. Keeping in mind, the responsible act of doing business, even large multinational companies, such as Coca Cola, is engaging much in CSR activities. The involvement in CSR activities, is not only helping Coca Cola in maintaining ecological sustainability and contributing to community well-being, but also in getting competitive advantage. As the CSR activities can easily attract the socially conscious consumers, it directly contributes to the organizational success (Tziner et al. 2013).

Discussion:

In the world of beverages, Coca cola is one of the most reputed names, leading the consumer market through its production of soft drinks, fruit drinks, sport drinks and many other types of beverages. Although Coca Cola is a leading name in the market of beverages, it is not free from close competition from some of the rival giants such as Monster Beverage or Pepsi. Hence, to retain its top position in the market,  Coca Cola has incorporated the idea of CSR in its business strategy (Caplan et al. 2016).

Research Questions:

The research questions of the following research are as follows:

  • What are the CSR activities that Coca Cola follows?
  • How does the CSR activities help coca cola to attain brand value and enjoy competitive advantage in the business world?
  • To what extent does Coca Cola follow the CSR activities in reality?

Literature Review:

According to Hills and Wellford, Coca cola is one of the few beverage companies of the world, which has taken up various initiatives to act like a responsible organization in the business world. The major CSR activities which Coca Cola engages itself in, are as follows:

Figure 1: CSR Activities of Coca Cola

(Caplan et al. 2013)

Hills points out that as Coca cola is a beverage manufacturing organization, Coca Cola, puts much effort for the purpose of water conservation. The company follows a 3R approach to the purpose of water conservation. The company believes in Reducing the total amount of water being used, Reusing the wastewater on plants, and Replenishing the water being consumed in the process. For the purpose of replenishment of the water, the company invests on various initiatives, such as the Rain Water Harvesting Programs (Alabau et al. 2015).

Wellford has pointed out that the company is also investing much energy and money for the sake of water efficient means of beverage production. The official report suggests that back in the year of 2004, the company was using as much as 2.7 Liters of water, for the purpose of producing a 1 Liter of its beverage product. However, by now the company has reduced its total consumption of water, as the company is using only 2.3 Liters for the production of 1 Liter bottle (Gleick & Ajami 2013) . Furthermore, the company is also aiming at reducing the amount to only 1.7 liters, by the year of 2020. The introduction of the idea of water efficiency in the production process in the company was only possible, because the company has invested much money for the acquisition of improved technological devices, and the adoption of water foot printing techniques.

Again, Hess has spoken recently about how Coca cola believes in the idea of shared interest. The CEO of Coca cola, Muhtar Kent, has specifically stated that the company believes in giving back as much as it takes. With this view in mind, the company has adopted the 5by20 scheme, which aims at providing adequate training and financial assistance to 5 million women entrepreneurs of the world (Dorfman et al. 2012) . Since, Coca cola as a beverage brand, promotes well-being and the art of healthy living, the industry invests much money for conducting various physical activity and nutrition programs, across the world. In fact, Coca Cola also invests a huge amount of money for helping children take preventive measures against Obesity. Coca Cola also financially helps the children of the lower strata of the society, by offering scholarship to as many as 1,35,000 children and the total amount of scholarship covered, the expense of fees, stationary, books and every other education related expense of each student (Stead et al. 2013).

Coca cola has been ranked as one of the top 10 most respected brands of the world for its engagement in CSR activities. However, Wright states that Coca Cola’s CSR activities is a part of its effective business strategy. According to him, the company is benefitting much from CSR activities than the community is benefitting from such activities. In several countries, such as India and the US, the image of Coca Cola was nothing short of a corporate villain, a few years back. This was mainly because of the CSE report, claiming that the company is degrading and damaging the water through its production, and the beverage products were containing a huge amount of pesticides. Resultantly, the product was not only banned in many countries, but its sale dropped by 15% during 2003 (Doh et al. 2014). Hence, it became extremely important for the company to create environmental and social value, by saving energy and water, investing for literacy and sustainability programs. The CSR activities helps in creating goodwill in the minds of consumers as well as stakeholders. In 2013, Nielson conducted a research on 29,000 consumers asking them as to what influences their purchasing decision, and the response was incredible. More than half of the consumers claimed that they are influenced to buy even unhealthy products, if the company is a socially responsible one. Here, it is worth mentioning that Coca Cola has already bagged some prestigious awards such as the Golden Peacock Award for its sincere efforts in CSR activities, and this has doubled the annual revenue of the company (Epstein et al. 2014).

It is undeniable that Coca Cola is actively contributing to question of community well-being and environmental sustainability, even if it is ultimately guided by profit-oriented goals. However, according to Frundt, reports suggest that Coca Cola, as a company, largely indulges in employee discrimination activities, based on racial considerations. Further, on various occasions, charges have been brought against the company for polluting soil, poisoning water, causing water shortage in the interior parts of each country (Karnani et al. 2013). 

 

Research Methodology:

The researcher must have a clear idea about the methodology he is going to employ for conducting the research, as this will help in organizing his resources towards a cohesive whole. The research philosophy that the researcher is going to adopt is mainly Interpretivism. Although, the researcher will conduct both qualitative as well as quantitative method of research, he primarily aims to investigate the relation between Coca Cola’s CSR activities and the additional revenue generated by it. For this, Interpretivism will help the researcher in making an in-depth study of the present CSR strategy of Coca Cola, with the help of interview and interactive sessions with the managers and accountants of the company. The biggest advantage of CSR will be that the researcher will be able to have a thorough understanding of what Coca Cola and how is that helping the company in increasing its brand value in the business world (Portac et al. 2014).

The researcher will be going to adopt both qualitative as well as quantitative methods for conducting the research. On the one hand, the researcher aims to investigate the extent to which Coca Cola’s CSR activities influence the purchasing decision of the buyers. On the other hand, the researcher also intends to find out how the different CSR activities are incorporated into the business strategy of the firm. For the former, the researcher will need a statistical data and hence employ a quantitative research method, while for the latter, a qualitative method will do (Creswell et al. 2013).

Data Collection Method:

The researcher will be chiefly collecting and using Secondary Data, as the researcher will be conducting the research by holding interviews and conducting surveys. The researcher will hold the interview with the accountants and the managers of Coca Cola, Australia, to understand the different CSR activities of the organization, and the impact of the same on the annual revenue and brand reputation of the company. The researcher will choose face-to-face as well as telephonic interviews.  Besides, the researcher will conduct a survey on a few consumers and distribute a questionnaire to each one of them, asking them the extent to which CSR activities influence their buying behavior. The survey will be conducted both offline and online. However, the researcher will also use Primary data as he will go through the public records and official documents on Coca Cola company, and other literary articles, before conducting the research (Bryman et al. 2015). The research tools that will be required for conducting the research are- questionnaires, pencil, and telephonic connection. Further, the researcher will also need access to online survey sites, such as SurveyMonkey.

Data Analysis Method:

The sample size of the research for interview is 6. The researcher will conduct the interview on 3 managers and 3 accountants of the Coca Cola company. Again, the sample size of the research for the survey is 50. Here, the sampling method, that the researcher is going to use, is Stratified Sampling Method.  As a result, here, the researcher will be selecting the respondents for the survey on two conditions- (i) they are consumers of beverage products and (ii) they are well aware of the CSR activities of the beverage companies. Based on these criteria, they will be allowed to participate in the survey (Fowler et al. 2013).

Expected Outcome:

The researcher expects that by the end of the research process, he will be able to have a thorough understanding regarding the process by which large multinational organizations, such as Coca Cola, employ CSR strategies to achieve organizational success. Further, the researcher will also be able to make an enquiry into the fact that whether Coca Cola, employs CSR merely as a strategy or it does bring about significant social change (Hansen 2015). 

 

Reference List:

Alabau, G.M.C., Shaw, K.A., Kenney, M.R., Kalloch, S. and Nelson, T., 2015. The Challenge of Positive Water Balance for Multinational Corporations.

Bryman, A. and Bell, E., 2015. Business research methods. Oxford University Press, USA.

Caplan, D., Dutta, S.K. and Lawson, R.A., 2013. Corporate social responsibility initiatives across the value chain. Journal of Corporate Accounting & Finance, 24(3), pp.15-24.’

Caplan, D., Dutta, S.K. and Lawson, R.A., 2016. Corporate Social Responsibility Initiatives Across the Value Chain. Journal of Corporate Accounting & Finance, 27(4), pp.57-66.

Creswell, J.W., 2013. Research design: Qualitative, quantitative, and mixed methods approaches. Sage publications.

Doh, J.P. and Quigley, N.R., 2014. Responsible leadership and stakeholder management: Influence pathways and organizational outcomes. The Academy of Management Perspectives, 28(3), pp.255-274.

Dorfman, L., Cheyne, A., Friedman, L.C., Wadud, A. and Gottlieb, M., 2012. Soda and tobacco industry corporate social responsibility campaigns: how do they compare?. PLoS Med, 9(6), p.e1001241.

Epstein, M.J. and Buhovac, A.R., 2014. Making sustainability work: Best practices in managing and measuring corporate social, environmental, and economic impacts. Berrett-Koehler Publishers.

Fowler Jr, F.J., 2013. Survey research methods. Sage publications.

Gleick, P.H. and Ajami, N., 2014. The World's Water Volume 8: The Biennial Report on Freshwater Resources (Vol. 8). Island press.

Hansen, R.T., 2015. Corporate Social Responsibility and Tax Avoidance in Sub-Saharan Africa-A Case Study of the Beverage Manufacturing Sector(Doctoral dissertation).

Karnani, A.G., 2013. Corporate Social Responsibility Does Not Avert the Tragedy of the Commons--Case Study: Coca-Cola India. Ross School of Business Paper, (1210).

Potrac, P., Jones, R.L. and Nelson, L., 2014. 4 Interpretivism. Research methods in sports coaching, p.31.

Stead, J.G. and Stead, W.E., 2013. The coevolution of sustainable strategic management in the global marketplace. Organization & Environment, p.1086026613489138.

Tziner, A., 2013. Corporative social responsibility (CSR) activities in the workplace: A comment on Aguinis and Glavas (2013). Revista de Psicología del Trabajo y de las Organizaciones, 29(2), pp.91-93.

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