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Stakeholders of Coca Cola Company in Australia

Discuss about the Ethics and Sustainability for Coca Cola Company. 

This report is about Coca Cola Company. It focuses on explaining some of the effects of the company on the environment and the surrounding communities of Australia. In this report, I have focused on two main stakeholders which are the consumers and the local communities of Australia (Rao, 2012). These are the major stakeholders affected by the operations of the company. Some of the problems experienced include the following: water shortage, toxic waste distribution, pollution and pesticides distribution (Yu, 2012). The pesticide regulation and its effects have been highlighted. Several recommendations have been discussed on how to minimize the unethical practices of the company on the people of Australia.

Coca-Cola Company was invented in the late 1800s by Pemberton in Georgia U.S. It is the largest company of soft drinks with over one million bottles per day (Petty, 2012). Some of its products include Fanta, Sprite, and Coca-Cola. It is the most recognized brand in the entire world. It manages its operations in all the continents of the world. It reaches over 200 countries in the world.

Coca Cola has invested a lot in the Australian market and it is one of its largest investors in the country’s economic sector. Several people have been employed by this company. This company has had to face some challenges such as water shortages, population and toxic waste distribution (Barkay, 2013). This has led to confrontations with the government and the non-governmental organizations. It also, led to the closure of some factories in Australia.

In this context, stakeholders are the people, groups of people or institutions that are directly or indirectly affected by the operations of the company (Biedenweg, 2013). Here in Australia, the stakeholders of the coca cola company include the consumers, local communities, employees, shareholders, suppliers and the government. In my study, I have only highlighted how this company affects the local communities and the consumers in Australia.

Just from a point of view, most of the factories owned by Coca cola need a lot of water since this is a beverage company (Górriz, 2001). Most of the people in need of water have been disadvantaged due to the water shortages. For instance, out of , 2.8 liters of water, the factory uses only 1 liter of it is produced as the finished drink. This shows that the company definitely consumes a lot of water.

Impact of Coca Cola on environment and communities

Toxic wastes have become a menace in the cities of Australia. This is because of the dumping of soda bottles from the factories. This has led to pollution of the environment especially soil and air pollution. Many non-governmental organizations have confronted coca cola over this issue but it has declined to take the responsibility (Krishna, 2011). They do not at all show any commitments towards solving the problems. Though Coca cola has hosted many events in Australia, this shows that their operations are unethical and should be corrected. Therefore, I recommend that the company takes charge of the situation and try to sort it out.  

Since the day the organizations started addressing the problems Coca Cola Company was causing, there has been a drastic decrease in their sales volume (Babakus, 2004). Though there are these challenges, the company there is still some consumers who would rather still to this brand because of its reputation. The company has a good marketing strategy that can easily hide this information and win over the loyalty of consumers. From my research, some people have pointed out that the products of Coca cola contain some chemicals which may be harmful to people (Chen, 2012). For instance, in 1999, 100 school children in Belgian had been poisoned after taking drinks. This led to protests all over the world. People started declaring that all Coca Cola products should be banned.

Additionally, consumers have adoption of inappropriate social norms. The Coca Cola company in Australia imported ideas used by other countries and which derailed the social norms of the consumers. They organize events such as music concerts that derail the morals of our youth. There are some critics who have organized campaigns claiming that the company has a negative effect on people. 

The Non- governmental organizations in Australia, were able to highlight some of the problems due to the bottling operations of the Coca. Some of these challenges have been mentioned before (Kum-Lung, 2009). Water shortage was the major challenge this company experienced. Some of the factories in the different cities were accused of water draining, land pollution, and air pollution. Samples of soil near the factories indicated that there was the presence of lead in the waste sludge which the company claimed to be artificial fertilizers. Presence of Lead in the waste sludge makes the soil very toxic and leads to health problems (Petty, 2012). A report from the CSE also indicated that the products from Coca Cola contained pesticides. It was found that out of 12 brands of Coca Cola, three were found to have 36 times of pesticide residue.

Repercussions of unethical practices

These situations made the government ban most of the Coke products. This led to a drastic decrease in the sales volume of the company. It was hard for the manager of the Coca Cola Company in Australia to gain customer loyalty (Rao, 2012). The reputation of the company had been seriously tarnished.  When compared to the U.S, corporate social responsibility reputation was not a success. 

These are the laws imposed by the government. (Rao, 2012) In the processing industries, these are the standard rules of safety that any company dealing with drinks should adhere to.

During the crisis, the manager started asking the people in charge of the CSE reports questions. He started inquiring what methodology they used to test the products and so many things (Barkay, 2013). This shows that this manager did not adhere to the laws set by the government. The pesticide regulation showed some of the flaws in the company and how the products were not good to the people. The test showed that these products could not meet the standards set by the government and had to be prohibited (Krishna, 2011). The government should reduce their rules and not impose huge product restrictions. 

At first, when the company was launched in Australia, the main goal was to achieve maximum profits and this has always been the case (Chen, 2012). As per now, the company is moving to become an ethical brand in the entire world. The effects of the company on the environment, consumers and local communities indicate unethical business practices are very high (Babakus, 2004). Thus, there is the need for the company to improve its corporate social responsibility so as to earn loyalty and trust of the people.

The following are some of the key things that I would recommend the company should do:

  • The company should fully collaborate with the government in ensuring that center for science and environment is properly done.
  • The company should create and maintain a more sustainable and social environment.
  • The company should increase its interaction with the stakeholders especially the communities around it so that it can improve ethical branding (Rao, 2012).

Conclusion

Coca Cola is among the most recognized and successful soda brands in the world. Several ethical problems have come up due to the negative impacts of company's operations on the environment. People feel that the activities of the company are polluting the environment and leading to waste dumping. This has ruined the corporate reputation of the company. The company has a low ethical branding, and the manager’s information on the company’s activities is not honest. The manager at one time disrespects the CSE saying their results are not validated. It is always clear that ethical branding enhances the reputation of a firm as at the product and corporate levels. In our context, ethical branding of the company is low and thus the reputation of the company is bad.

Anupam Krishna, G. a. R., 2011. Business Ethics: A Sustainability Approach. Procedia - Social and Behavioral Sciences, Volume 25, pp. 284-289.

Babakus, E., 2004. Reactions to unethical consumer behavior across six countries. Journal of Consumer Marketing, 21(4), pp. 260-265.

Barkay, T., 2013. When Business and Community Meet: A Case Study of Coca-Cola. SAGE Journals, 39(2), pp. 14-23.

Chen, B., 2012. Moral and Ethical Foundations for Sustainability: A Multidisciplinary Approach. Journal of Global Citizenship & Equity Education, 2(2), pp. 4-10.

Górriz, C. G. A. a. C. G., 2001. The Effects of Environmental Regulations on the Productivity of Large Companies: An Empirical Analysis of the Spanish Case. Journal of Management and Governance, 5(2), pp. 130-143.

Kelly Biedenweg, M. C. M. a. A. O., 2013. The importance of teaching ethics of sustainability. International Journal of Sustainabilty in Higher Education, 14(1), p. 6.

Kum-Lung, L. T.-C. &. C., 2009. Consumers’ Acceptance of Unethical Consumption Activities: Implications for the Youth Market. International Journal of Marketing Studies, 1(2), pp. 58-60.

Petty, R. D., 2012. Coca?Cola brand protection before World War II – it's the real thing!. Journal of Historical Research in Marketing, 4(2), pp. 224-244.

Rao, K. K., 2012. Corporate governance and environmental reporting: an Australian study. Corporate governance: The International Journal of Business in Society, 12(2), pp. 143-163.

Yu, W., 2012. Effects of business environment on international retail operations: case study evidence from China. International Journal of Retail and Distribution, 40(3), pp. 218-234.

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