Environmental Pressures Essays Example
This essay presents the organizational and environmental pressures that face Coca-Cola. Despite the fact that Coca-Cola Company is the largest beverage company in the universe, it experiences environmental and organizational pressures. Consequently, the pressures have a large impact on the finances and the employees of the company thus the company has to adopt strategies to deal with the strategies (Porter 76). The organizational and environmental pressures that Coca-Cola faces are presented in the first part of the essay in a tabular format and they are ranked in the order of their influence. The second part of the essay explains the evolvement of the organizational and environmental pressures and the third part describes how the pressures impact on the company from a financial perspective. The impact of the pressures on the company’s employees is presented in the fourth part of the essay and the fifth part offers an assessment of Coca-Cola’s reaction to the organizational and environmental pressures. The last part of the essay proposes strategies that can be used to reduce the pressures identified in the table.
How the organizational and environmental pressures exist at Coca-Cola
The investors’ confidence in Coca-Cola reduced during the global economic down because the global economic downturn caused many organizational setbacks that reduced the investors’ confidence in the company. The economic downturn increased the difficulty of the company’s relationships with its bottling partners. The company realized that it lacked adequate information concerning g the needs and concerns of its customers thus, it was not able to respond to them in due time. Coca-Cola faces pressure because of how it uses water when bottling its beverages. The pressure on the use of water began in the 1990s when the company was accused of depleting water sources and manufacturing water bottles that polluted the environment. Additionally, the company was accused of selling beverages with high amounts of pesticides more especially in India (Metzger 37).
Coca-Cola has been facing legal battles and pressure campaigns dues to allegations of mistreating its employees. For example, the company was sued by trade unionists from Guatemala and they accused the company of failing to stop violence against workers at the Guatemala bottler. The advent of the numerous suits against the company is attributed to the unionization of all the company’s workers. As at 2013, 95% of the company’s employees belonged to trade unions. Additionally, the company has faced human rights issues in the past especially in its Colombia plant. The ILO (International Labor Organization) confirmed the company tortured members of the trade unions and even killed their leaders. Studies indicate that some of the ingredients used in the company’s beverages lead to obesity thus it is a growing concern among its consumers. Besides, the high levels of calories and sugar in the drinks are contributing factors to obesity. The company faces the pressure of producing healthy drinks and the increased awareness concerning health issues may reduce demand for the company’s beverages (Porter 87).
The impact of the pressures on Coca-Cola from a financial perspective
The organizational and environmental pressures have a significant impact on the financial status of the company. The pressures increase the financial volatility of the company’s shares in the market because many investors were not ready to invest their resources in the company. Both the organizational and environmental pressures reduce the company’ profit margins. For example, when Coca-Cola was forced to recall approximately 500000 bottles of water in Britain it lost money in the process. The organizational pressures reduced the company’s ability to access credit because many credit lending agencies were not will to issue loans to the company and due to the volatility of its shares prices. The organizational pressures led to a negative financial coverage of the company in the media. In the case of the legal suits, the company has lost a lot of money because it pays fines and damages, thus affecting its cash position further (Carroll & Ann 199).
The impact of the pressures on the employees
The environmental and organizational pressures reduce the productivity of workers because they cause a disturbance. The workers are demoralized with the pressures thus they cannot concentrate on their workers. In the case of legal battles, some workers lose their job because of taking part in the trade union activities. The workers are de-motivated with organization and environmental pressure because the pressures destabilize both their work and family lives (Metzger 40).
How Coca-Cola has reacted to the pressures
Coca-Cola reacted to the organizational pressures by identifying the barriers and enablers to successfully implement essential operational changes in the company. The company came up with strategies to communicate appropriately to all investors and other stakeholders. Coca-Cola assessed its communication process and benchmarked them against comparable transactions in a bid to deal with its organizational pressures. Additionally, the company developed a comprehensive communication structure in a bid to restore the investors’ confidence in the company. Coca-Cola reacted to the pressure on water usage by recycling water to reduce wastage and to ensure that it is safe before it is released to the environment. The company has reduced the amount of water it uses in its manufacturing processes and it refills communities with water using a special partnership with local networks. The company has established recycling programs that recycle the beverage bottles. The Coca-Cola Company has reduced the amount of sugar in it beverages in a bid to reduce the incidence of obesity in its consumers (Carroll & Ann 200).
Strategies to reduce the pressures
The Coca-Cola Company can deal with the issue of poor investor relations by adopting an Investor relations program that aims at improving communication with investors through Institutional Investor magazines and Investor Relations magazines. The investor relations program will enable the company to mitigate the investors’ concerns concerning the financial health of the company. The investor relations program will improve the company’s ability to deal with financial issues such as share volatility.
The company can deal with water issues by focusing on water stewardship. The company should manage the energy and water it uses in its manufacturing processes and ensure that it contributes to environmental protection in its activities. The recycling programs should help the company in minimizing the wastage of water and reducing the consumption of water in the processes of manufacturing the beverages (Carroll & Ann 210).
In summary, this essay has discussed the organizational and environmental pressures that face Coca-Cola. The organizational pressures facing Coca-Cola include Poor investor relations, labor issues and human rights issues. The environmental pressures facing the company include water usage issues, obesity issues and recycling issues. Coca-Cola has adopted various strategies to mitigate the pressures because they have an impact on its financial performance and the performance of its employees. As such, it is crucial for the company to keep on formulating viable strategies to mitigate the pressures because they can destabilize the company and even ruin its reputation and goodwill.
Carroll, Archie, and Ann Buchholtz. Business and society: Ethics, sustainability, and stakeholder management. Cengage Learning, 2014.Print.
Metzger, Kathrin. "The Import of Culture? The Coca-Cola Company in America and Australia." (2014).Print.
Porter, Michael E. "New opportunities for company performance and purpose: Creating shared value." Discovery Invest Leadership Summit, Johannesburg, South Africa, August 30 (2012).Print.