Discuss about the Professional Ethics for Social and Financial Condition.
The stakeholders of the company are not simply investors in a company rather they have the ability to vote that can impact the social and financial condition of a company. There are two kinds of stakeholders such as internal stakeholder and external stakeholders that help in developing the business. The main aim of this paper is to elaborate the importance of stakeholders in the organization for the purpose of increasing the revenues of the company (Covin, Garrett, Kuratko & Shepherd, 2015). The stakeholders are the key drivers who push the organization towards sustainability.
The Coca-Cola Company is the well known and biggest-selling soft drink in history, along with one of the greatest familiar brands in the world. It was built in 1886 in Atlanta, Georgia by John Syth Pemberton. The employees in the company are around 62k all over the world that provides good products to its million customers. Employees for the company are most valuable assets as internal stakeholders because they help in making the existence of operation of the company. Moreover, the system of Coca-Cola in Vietnam helps around 2,000 people, of which the maximum people are local hires, at its three companies in Ho Chi Minh City, Da Nang and Hanoi. The company is able to fulfill the requirements of the employees by giving them proper opportunities. The revenue of the company is around $74 billion in a year (Coca-Cola, 2018). The vision of the company is to refresh the world and to inspire moments of optimism and happiness. The organization chart of the company is based on the hierarchical structure.
Figure 1: Organizational Structure
Source: (Coca-cola, 2018).
Market stakeholders are those that connect in economic transitions with the company as it handles out is the primary aim of giving society with goods and services. The market stakeholders are directly involved in the activities related to the company’s sales, revenues and expenses. Market strategies are considered as those activities that a company links in to encourage sales, amplifies brand awareness, position its services and products planned to develop products might be a market strategy. On the other hand, market stakeholders are entailed in the strategies of the market and other transactions of the economics of the business. These generally encompass financial institutions, customers and other service providers who dedicate time, efforts and money towards making the operation of the company (Fehrnstorm & Rich, 2009). the market stakeholders of Coca-Cola company are customers, suppliers, employee and shareholders.
Customers are falling under external stakeholders and in the context of the coca-cola company, the value of the customers are significant because they have a noteworthy value over the strategy of the business. The trust of the customers is amplified if they get proper services from the company (Cheung, Shen, Lee & Chan, 2015). There is a number of consumers fascinated in the direction of the diversity of products of the company because of its lower rate strategy. Along with that the regular visits, joint business planning, customer care centers, surveys and social media engagement are an effective way of the company that helps them in engaging with the company for a long period.
The company is applied the Golden triangle partnership approach for the purpose of spanning the public, civil society sectors and private sectors (Coca-Cola, 2017). The company has identified the way that the collaborative power of partnerships can attain an effective collective influence than would be likely by any one sector working in isolation (Tripod, 2018). The golden triangle partnership approach is deemed as the business strategy and can encourage sustainable business development, environmental stewardship and the progress of the social.
The success of the company entirely relies on the suppliers and the business partners. They are able to complete the vision of the company which is to refresh the world. The range of the supplier's raw materials of Coca-Cola Company is packaging, ingredients and goods and services to the company that is able to diversify the products for the consumers. Alongside, these suppliers must make sure provide raw materials with high rate quality as well quantities with affordable price in a long time (Hitt, Ireland & Hoskisson, 2009). The good payment systems are applied by the company for the purpose of making a good reputation in the market in which company is working on flexible forms of credit and business agreement.
Employees are deemed as the external as well as internal stakeholders of the company. In case of buying the products of Coca-Cola Company, the employees become the external stakeholders whereas the workers in an organization are valuable assets as they facilitate in producing the products that involve in the market for the aim of selling. It has been analyzed that the company keeps good care of its employees by having an effective engagement (Veloutsou, 2015). Moreover, the system of Coca-Cola Company in Vietnam facilitates around 2,000 people in which the maximum rate of employees is local hires. However, this large number of employees have the desire to get good opportunities and remuneration from the company. The system of the company put goals of sustainability at the central of its business so that they can provide healthy as well as safe workplaces development (Babin & Zikmund, 2015).
The company has its owners who fall under market stakeholder of the company; hence they are deemed as the primary stakeholders. Likewise, shareholders of the company are a direct stake of the company because all their activities are evolving around their money that funds the company. The decision-making process of the company can be influenced due to the shareholders (Krzywoszynska, 2015). The company held four stakeholder engagement sessions in Mexico and the US between September and October 2016 systematic ongoing conversations with a group of diverse stakeholders, involving representatives across NGO sectors as well as investors.
Non-market stakeholders have encompassed the community, non-governmental organizations, different levels of government, the media and the general public who are not connected or influenced by the economic exchange of the organization directly.
Generally, non-market or secondary stakeholders are an external source. These stakeholders include sources or people who are not directly involved in any act of the business operation in terms of finance. These include like, political, legislative, and social forces that can drive the business towards success as well as failure. In this context, four non-market stakeholders are identified in the case of coca cola which is, Law/Legislation, Political environment, Activists and Organized Interests.
In terms of law or legislation, coca cola does not support any legislation that may discriminate, in-home state or anywhere else throughout the organization networking countries. In this context of law and legislation company’s stakeholders take care to maintain its policies that celebrate the diversity of states in which it is operating. In this way, company policies are made with the belief that the company would refuse to provide its services to an individual based on any kind of discrimination. The company believes that discrimination based on any kind would not only violet its key values but also affect its customers, suppliers, consumers, and associates negatively. Company’s legislative stakeholders also consider diversity, respect, and unity as an advantage for their business (Mandal, 2017).
In the context of typical legislation, company’s legal stakeholders advocate for equality, diversity, and inclusion through both the company’s policies and practices across the whole network of operating states or countries. The company does not excuse any kind of intolerance or discrimination anywhere across the global network of the company.
The political environment is considered as a non-market stakeholder for the company and in this context the company has good political environment across the global market of the organization. Political environment of the company considers the as its duty and responsibility to make each and every point of the business to all the political entities which have a potential to affect the company’s business in any manner. These political entities include NGOs and Companies operating in the market. For example, in the United States, the company uses political contribution of candidates to participate in any of the political processes of the country (Wang, 2015). To connect with the political environment of respective country company mainly uses three ways that are, Lobbying, Political Contribution of Candidates, and Trade Associations. Company’s chief public affairs and communication & Sustainability Officers look after all the political activities across the globe. These political activities of the company areas, Legal Compliance, Board and Management Oversight, Public Policy Agenda Alignment, and Political Contribution & Trade Association Membership. The political contribution of the company is implemented in compliance with all appropriate US laws, corresponding legal reporting needs (Pleaders, 2015). The political contribution has assured by senior government relations leaders and senior legal counsel review. It has been found that the company does not create any independent political expenditures, encompassing electioneering communication in the relation of the election of a specific candidate independent of that campaign committee.
Activists are stakeholders have significant potential to affect the business of any organization in their locality. In this manner, the company has to maintain its sustainable relationships with all social activists of the company. In 2003, the company has experienced one major issue when social activists in India have reported to the government against the high level use of pesticides in its products. The company is an illustration that demonstrates the initial theatre of CSR’s priority which is developing environmental and social value. It is not decided something which can build an economic return for the company. The company constantly come up with strategic philanthropy by which they get remarkable advantages in the term of improving social capital as well as brand awareness which eventually translate into the profits of the business but it would not be the goals of CSR. In fact, philanthropic CSR is deemed to be effective that essentially the company requires spending so that corporate would establish charity as their precedence (Harvey, 2018).
Organized interest or groups are responsible to influence the public policies in the favour of their own business in international market. Company’s interest groups organize lobbying efforts of the company in order to persuade political leaders to support or oppose a piece of legislation or policy of running government. In this context, since 2005, the company have a regular meeting twice in a year with the International Union of Food-workers and several of its affiliated members. This makes company’s business much stronger in any target country (Doh & Quigley, 2014).
The role of the stakeholder in increasing the revenue of the company is great as they impact the decision-making process of the company. It is required for the company to maintain good bonding with stakeholders. There should be an effective relationship with the stakeholders so that the issue of the company could be resolved. The market and non-market stakeholders of the company keep huge importance in the decision-making process as they directly or indirectly connected with the company’s growth. It is required for the Coca-Cola Company to keep the focus on the bonding with stakeholders. There are three suggestions mentioned below which would be helpful for the company to develop and maintain a relationship with recognized stakeholders.
It has been suggested to the company to get engaged in one to one conversation with stakeholders so that they can connect with each stakeholder in an efficient manner. Creating an effective relationship is not about the amount of time the company spend with someone, but about the quality of that time. Great relationships are made through one to one conversations where they can search out more regarding what makes each person tick. It is essential for the company to respect the time of the stakeholders as they are busy that is why the discussion with stakeholders of the company should be as short as possible. There should be early communication to protect services so that the issues could not arise. The stakeholder needs regular communication, however, their entity uniqueness needs that this communication should be targeted (Kant, Jacks & Aantjes, 2008).
Coca-Cola Company should meet up with the stakeholders who are resistant to change, it is important to demonstrate the project scope. There are many things which cannot be negotiable and it is vital to show stakeholders what impacts they do require to shape the project. Satisfaction is considered as vital in maintaining the good relationship because when one is not content with the services, they would try to find a place where they would be satisfied. There is a little face in engagement with the stakeholders if it is apparent to be taken. Change is required in every company and the involvement of stakeholders in that condition is required. It is vital to monitor the efforts and measure the response to them. The company should conduct the surveys if require and create who thinks what and why. There is a number of suppliers of coca-cola company like indirect spend supplier, direct spend supplier, tactic supplier and country strategic supplier (Bonny, 2014). The approach of different suppliers is to provide the products and services to the company like consultancy services, designing, and packaging.
It has been suggested by the company to build a good relationship with project stakeholders is not a one-off exercise or something that occurs at the initiating of the project. The relationship with the stakeholders can be built stronger if the company is constantly delivering the promises. It can be completed by signifying that the company is reliable and competent project manager. The market and non-market stakeholders can be influenced by the company constantly signifies the competences. The company should make sure that the company performs well and attain its targets. The core competencies of the company should be elaborated to the stakeholders of the company and it should be described as a franchise network, distribution network, strong brand value and the administrative control. However, the main focus of the company is on driving revenue and profit growth. The company should involve the creditors, customers, employees and other market and non-market stakeholders in investment in the brands and business.
It can be summarized that the stakeholders of the company are important because when the company has long-term relationship with its stakeholders, it runs more effectively and builds the better chance to produce profits. Stakeholders are capable to provide feedback at the time of entire product development process, which can affirmatively impact the success or growth of the company. There are various elements of market stakeholders and non-market stakeholders that can affect the entire structure of the company. The elements of market stakeholders are customers, suppliers, contracts and markets which can be improved by minimizing the costs, innovation, differentiation and operational effectiveness. The elements of non-market stakeholders are law, political environment, activists and organized interests. There are some strategies which can be developed by the company for the purpose of making improvements in the company such as collective action, lobbying, media relations and litigation. These strategies would be helpful for the company to maintain the effective relationship with stakeholders for a long time.
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