Coca-Cola’s Business Practices: Facing the Heat in a Few Countries

Topics: Corporation, Management, Problem solving Pages: 8 (2413 words) Published: February 5, 2012
Coca-Cola’s Business Practices: Facing the Heat in a Few Countries To: Francisco Santo, Vice President Colombia
Atul Singh, President & CEO India

From: Joseph Cain, Nicholas Dabbraccio, Margaret Metz, Johnny Rueda, and Keshma Thomas

Date: October 8, 2011

Identification of Symptoms:
(Internal Management)

Continuously denying accusations of fault
Ignoring problems by switching business strategy/operations •Continuing to pay heavy fines/penalties without a fight
Believing that philanthropy and job creation is the only requirement for consumer acceptance •Having disputes relating to labor relations only being solved in the place of origin •Management not investigating the relationship between plant managers of local bottlers and paramilitary groups •Inability to meet deadline that required agreeing on a protocol of findings of the commission formed by a set of Universities in the US

(External Management)

Accusations of hiring death squads in Colombia to intimidate or kill union leaders •Accused of contaminating water in selling products with pesticide residue in India •Anticompetitive business practices in Mexico; non-conformance with competition laws •Not meeting the terms of applicable laws in various countries •Not making sure that the bottling and canning companies that they partner with are conforming to these laws as well

I think the above symptoms are more like errors that Coke has made. I think this section is meant to be more of what has happened as a result of those errors. I could be wrong, but this is my recommendation. Let me know what you all think. - Margaret

Coca-Cola is gaining poor publicity after several accusations surrounding its foreign plants were made •Accused of distributing improperly treated, toxic sludge disguised as fertilizer to farmers in India •Accused of selling products in India containing harmful pesticide residues •Accused of draining the underground water table in India •Accused of involvement in violence against Colombian union members •Accused of using anti-competitive measures in Mexico in response to competition from another cola company.

Coca-Cola products are being boycotted
Colombian union appealed internationally for the boycott of Coca-Cola products •Trade unions in Colombia, the World Social Forum, student activists, universities, teach unions, and other social organizations around the world are supporting the boycott.

Foreign Coca-Cola business units are conducting business in ways that leave the company vulnerable. •Coca-Cola’s involvement in violent acts against union leaders in Colombia could not be ruled out by an investigative conducted by the New York City Fact-Finding Delegation •The Federal Competition Commission in Mexico charged Coca-Cola with violation of anti-monopoly laws and imposed heavy fines •BBC radio study found high levels of carcinogenic metals in sludge given by Coca-Cola to farmers •Center for Science and Environment report found pesticide levels higher than allowed by the European Economic Commission in Coca-Cola products sold in India.

Problem Statement:

Problem 1: Issues need to be addressed at a higher management level regardless of the implications.

Problem 2: Strategies in managing social issues needs to become more proactive rather than reactive when dealing with a global company/brand.

I think what the above problem statements are getting at is that Coke needs more oversight of the foreign locations, and I totally agree. I just rephrased it so it sounds more like a problem and less like a recommendation of what they should do to fix it. And I added a few more problems. We don’t have to use all of this, or any of these. What do you guys think? - Margaret

Problem 1: Coca-Cola does not maintain enough oversight of its foreign operations.

Problem 2: Coca-Cola’s policies and guidance (TCCQS and the Code of Business Conduct) are no longer effective in managing its...
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