Case 15: The Coca Cola Company
Struggles with Ethical Issues
1). What role does corporation reputation play within organizational performance and social responsibility? Develop a list of factors or characteristics that different stakeholders may use in assessing corporate reputation. Are these factors consistent across stakeholders? Why or why not?
Corporate reputation plays a very integral part within organizational performance and social responsibility. Either one significant incident or several incidents can influence the perception of a company’s image and reputation held by its stakeholders and customers. This may have a lasting effect for many, many years. Coca-Cola’s (Coke) reputation has been tarnished because of the numerous allegations of unethical behavior and lack of social responsibility mainly in the international market. In 2000, Coke failed to place in Fortune’s top ten “America’s Most Admired Companies”. The following year it vanished from the “100 Best Corporate Citizens” as honored by Business Ethics magazine (p. 409). Along with losing its good standing in the corporate world, Coke has also experienced some instability in its financial performance. While in the early part of 2000 Coke maintained a sound balance sheet (p. 416), its growth proved to be a little more stagnant by 2009 with shares fluctuating between $59 and $37 per share (p. 410). This slow growth was speculated as a result of the various allegations of unethical behavior and illegal practices. The increased turnover in management and the departure of key investors (p. 410) may also have contributed to the problem. Until the company rebuilds its reputation, Coke may continue to experience stagnant growth.
Various factors are involved when measuring corporate reputation. These factors are based on an individual’s level of involvement. A customer’s primary concerns may include product safety and quality, level of customer service, and the...