Assignment 2: “Coca Cola Company Struggles with Ethical Crisis” DJhonna M. Jones
Dr. James G. Ziegler, Ph.D.
Ethics and Advocacy for HR Professionals
July 28, 2014
During the scope of this paper we will take a look at some of the ethical crisis that Coca Cola has had to deal with in their 100 year history. There will be delineation between the ethical issues and dilemmas that the company faced. This paper will determine which of the issues or dilemmas where the most significant and explain the choices made. A determination of what steps the Coca Cola Company should have made to prevent the issues identified from happening in the first place. An analyzation of how Coca Cola responded to their crisis and whether it was the best possible response or not.
Delineate the ethical issues and dilemmas the company faced.
According to the text book, an ethical issue is a problem, situation, or opportunity that requires an individual, group, or organization to choose among several actions that must be evaluated as right, wrong or unethical actions (Ferrell, 2011). On the other hand an ethical dilemma is a problem, situation, or opportunity that requires an individual, group, or organization to choose among several wrong or unethical actions (Ferrell, 2011). The Coca Cola Company found its self in a number of ethical dilemmas and issues. Among the ethical issues and dilemmas that Coca Cola faced included discrimination, environmental issues, and competitive issues. These ethical issues and dilemmas plagued Coca Cola from 1996 to 2009.
Coca Cola faced discrimination charges in 1999. 1500 African American employees sued Coca cola for racial discrimination (Ferrell, 2011). Four then current and former employees, as representatives of 2200 similarly situated African Americans, alleged that Coca Cola practiced “glass ceiling” policies that African American employees suffered discrimination in pay, promotions, and performance evaluations. During the course of the class action suit statistics showed that the median salary of the average African American employee was one-third less than their Caucasian counterparts. The plaintiffs argued that Coca Cola was aware of the disparity in income and promotion between the two races and failed to prevent or remedy that discrimination. As a response, in 2000, Coca Cola agreed to a 192 million dollar settlement. In addition, as part of the settlement, made changes to its personnel policies and procedures (Business and Human Rights Resource Centre, 2014). As another addition to the settlement an outside panel, jointly selected by Coca Cola and the plaintiff’s lawyers was formed. The members where approved by the court. The Task Force issued its final report in December 2006 finding that it’s “mission has been a success” and that the company had “made significant progress (Business and Human Rights Resource Centre, 2014).”
In 2004 Coca Cola encountered issues involving bottling plants in India. They faced accusations of depleting local water supplies, and pesticides contaminating beverages from using contaminated ground water. In 2003 the Centre for Science and Environment tested soft drinks produced in India by Coca-Cola and other companies, their findings indicated that extreme levels of pesticides from using contaminated ground water (Ferrell, 2011). Residents and farmers of the city of Varanasi India also accused Coca-Cola of dumping waste water in the ground water. Coca Cola also has plants in drought suffering area of India. The residents of these areas blame the bottling plants for major depletions in ground water in the areas. In 2005 University of Michigan students requested that the university discontinue its contracts with the company based on the many issues they are having in India. As a response the University requested that the Energy and Resources Institute of New Delhi research...
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