ETHICS AND GOVERNANCE
The Coca-Cola Company
TABLE OF CONTENTS
1. Executive Summary
2. Main Issues
3. Ethics Policy and its Development
Proposed Ethics Policy
Rationale of Ethics Policy
Corporate Social Responsibility
4. Implementation, Effectiveness, and Limitations
Implementation of Ethics Policy
Effectiveness of Ethics Policy
Limitations of Ethics Policy
6. Reference List
1) Executive Summary
The Coca-Cola Company was founded in 1892. The company, till date, offers a wide range of products to meet different demands of customers all over the world. Coca-Cola not only produces and sells soft drink and non-carbonated beverages; they also distribute bottled waters around the world. Increasing shareholder values would be any major company’s target, likewise Coca-Cola’s, having to keep costs low but yet selling the customers their trusted quality products.
Coca-Cola operates in a very competitive environment being in the beverages industry. In 1893, Coca-Cola’s greatest competitor, Pepsi-Cola, came into the market, and rivalry has been going on from then till now. Competition leads to the necessity of continual upgrading and innovation of both the staffs and technology in the company. As Coca-Cola sells and distribute drinks worldwide, every increase or decrease in the selling price of their products will have a major effect on their net income.
2) Main Issues
From the case study of “Coke Sued for ‘Deceptive’ Vitamin Water Claims”, our group has identified and worked on the following ethical issues.
The Coca-Cola Company did not take into account the stakeholders’ interest, upon the launch of their new product- VitaminWater. First off, the consumers were being misled that the VitaminWater was a healthier alternative, but in real, due to the ingredients contained in the drink, it is not. Upon investigation, the truth in the content of the VitaminWater would be released, and hence consumers worldwide would know the truth of contents. With the act of misleading consumers, there would be extreme negative effects on trustworthiness towards the source of information and the future willingness to buy their products. When this happens, it would be very tough job to gain the consumers’ trust again, in order to have the major market control in the drinks industry.
Further to this issue, the label was not clearly communicative due to the fact that the content or ingredients of the drink were not fully stated. Although VitaminWater offered more vitamins for the human body, it was unhealthy due to the fact that the amount of sugar in the water will result in the consumer having a higher chance of getting sugar related health problems. The sugar content, which could be easily and clearly labeled on the drinks, could well be printed on the label of VitaminWater to let known the amount of sugar used to make the drink. Upon probed on whether the sugar content of VitaminWater will contribute more to obesity, the company became defensive, stating that the allegations made were ridiculous and wanted to defend the lawsuit.
Another issue that is very unethical would be the over-pricing for VitaminWater. It costs USD 1.50 for 590ml, which is a very high price compared to the average price of the other drinks that Coca-Cola produces. The fact that not only the drink is costly, but it also harms the body more than it helps the body; it has greatly shown that the Coca-Cola Company overlooked the ethical issues in the company. 3.) Ethics Policy and its Development
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