A determination of what steps the Coca Cola Company would have made to prevent the issues identified from happening in the first place. An annihilation 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 (Farrell, 2011).
On the other hand an ethical dilemma is a problem, situation, or several wrong or unethical actions (Farrell, 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 (Farrell, 2011).
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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 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 ND Human Rights Resource Centre, 2014). As another addition to the settlement an outside panel, jointly selected by Coca Cola and the plaintiffs 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 (Farrell, 2011). Residents and farmers of the city of Variants 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 and verify the issue. Their report indicated that there were no higher than normal level of pesticides within the ground water, yet they believed that the company should do a more thorough job in research new places to build their plants (Farrell, 2011).
As office 2014 the Coca-Cola plant in Attar Pradesh India was closed due to ground water levels have dropped dangerously low (Kiloton, 2014). Coca-Cola has controlled a large portion of the market for almost 120 years. However in 1 999, questions arose about their market dominance leading to European government inquiries into their marketing tactics (Farrell, 2011). During the summer of 1999, Coca-Cola began to make an aggressive push into the French market. The French response was to denied Coca-Cola’s bid to purchase French beverage company Ranging.
In turn Italy was able to win a court case against Coca-Cola over anticompetitive prices. These issues resulted in the European Commission launching a full scale inquiry into the company’s competitive practices (Farrell, 2011). The sum of these issues gave, and continues to give, Coca-Cola ethical problems in their business dealings. There are issues with Distributors, inflated earnings from channel stuffing the various markets Coca-Cola deals with. The previous issues that where stated, where just a touch of what the Coca-Cola Company has had to deal with since 1999 to the present day.
The most significant issue was the discrimination crisis. As an old company, many minorities may feel that the company will continue to operate in a discriminatory manner based on their historic standing and the methods that they have used in he past that had historical race basis will continue to be used. It is easy for Coca Cola to denied any wrong doing by simply turning a blind eye to the “status quo” mentality establish during the reconstruction era. As President Lincoln stated “a house divided against itself cannot stand”, a company delivered by race cannot stand in today’s twenty first century market place.
Determine what steps Coca-Cola should have taken to prevent the issues you identified from arising in the first place. First Coca-Cola should have evaluated their ethics code and considered whether it addressed the issue or racial discrimination. It was stated that the difference in the way African Americans, as far as evaluations, pay, and promotion possibilities, was known to the Coca Cola Company and was not handled when reported. This was a chance for Coca Cola to prevent an ethics issue before it became a major public issue.
This was a chance for them to implement preventative medicine as far as stopping a problem before it becomes an absolute catastrophe. Their negligence of an issue resulted in them settling a lawsuit with 193 million dollars as well as forming a task force to oversee any race discrimination that ay be about. At the same time they stated they were not guilty of any wrong doing. The question is, if there was no wrong doing, why admit guilt by paying a settlement. It should not have taken a class action lawsuit to convince Coca-Cola to look at their equal opportunity policies and practices.
A continuous evaluation of the companies EYE policies as well as the current company climate survey will enable to the company to prevent future issues with discrimination. In addition they must realize that since they employ people of all walks of life, not all discrimination can be eliminated. Discrimination, can however, be discouraged and educated against for future interactions. Making sure that within the company policy there is a definite outline of what the company will not tolerate as far as discrimination, how to report any discrimination that may have been witnessed and the repercussions of discriminatory behavior.
Analyze how Coca- Cola responded to the crisis and determine if this was the best possible response or not. Coca-Cola’s response to discrimination allegations was lack luster. It was a wise move to settle the class action lawsuit and agree to whatever terms where levied against them. The issue is that they claimed to have done no wrong doing. However, the question remains, why would you settle and give an accuser everything plus what they ask for yet denied that your company has had no hand in any wrong doing.
As far as blatant corporal issues of discrimination, they were not guilty of. On the other hand, they were guilty of business ethics policies that did not address the fair treatment of all employees without regard to race, religion, or national origin. By establishing formalized policies through their Workplace Rights Policy, their Code of Business Conduct and environment governance and management yester, Coca-Cola has tried to demonstrate a commitment to Equal Employment Opportunities (Coca-Cola, 2006).
Their continued renewal of focus on equal opportunity has made the company one of enduring historical value to the United States. By adapting to the society and economic changes around them the Coca-Cola Company is able to review and renew how they ensure each and every employee is given fair treatment. Conclusion: Because of the volatile nature of business, where one day could be up and the next a struggle, Coca-Cola has dealt with a number of ethical issues in its 120 year life span, especially in recent decades.