Good Example Of Research Paper On Contemporary Management Issues
The Coca-Cola Company is a multinational corporation that deals with beverages, nonalcoholic beverage concentrates and also syrup. Its headquarters is in Atlanta, Georgia. It is widely known for its famous product Coca-Cola, which was invented in 1886 by a pharmacist known as John Stith Pemberton in Columbus Georgia. In 1889, the Coca-Cola formula and brand were bought by Asa Griggs Candler. The Coca-Cola was incorporated in 1892. The company markets its beverage products in more than 200 countries internationally.
Corporate social responsibilities initiatives can enhance brand reputation. For example, the Coca-Cola Corporation has been experiencing some conflicts in both India and in the US; there were claims that the corporation was polluting water sources with its waste products. The controversy in India caused major reputational damage to the company. It took a step in implementing some corporate social responsibilities programs and hence retained its customers and reputation. Although conflicts may affect the corporations’ image there is always improvements after a series of CSR initiatives. Coming up with the CSR initiatives the corporation does not only help the society at large but it also improves its reputation and image. There were some concerns that the money used for the CSR would damage their shareholders benefit but after careful considerations it was established that the advantages of the initiatives would overweigh the disadvantages toward the corporation and society in the long-run.
It is believed that corporations should have some corporate social responsibilities. Once it has social responsibility, it must account for its actions. Carroll came up with a four- part model of CSR: economic, legal, ethical and philanthropic responsibilities. True CSR demands satisfaction of all of them consecutively. CSR is inclusive of economic, legal, ethical and philanthropic demands placed on corporations by society at a specific point in time. The Coca-Cola Corporation has always been accountable for its actions as many lawsuits have been brought up against it.
Economic responsibility includes shareholder's demands for a reasonable return on their investments. Workers require safe jobs and fair wages for them. Customers want quality products at fair prices. The Coca-Cola Corporation had a net profit of around 7.5 billion dollars showing that it is indeed making money for its investors. The corporation holds a forum annually for all its stakeholders with an aim of to assess their approaches to sustainability and get encouragement from them in demonstrating leadership and innovation.
On legal responsibility, the law should be adhered to as it is the baseline for a corporation to operate within a society. A corporation should also have its rules and regulation as its guidelines in conducting its business. The Coca-Cola Corporation has been involved in lawsuits and controversies time and again. Some of the lawsuits are related to unethical practices and others human rights violations. A number of the lawsuits filed are in relation to its alleged discriminatory practices, some have been dismissed while others have caused the corporation to change how it does business. Others have been settled through the courts process.
In civil rights, after Martin Luther King Jr. won the Nobel Peace Prize in 1964 plans for interracial dinner to celebrate was segregated and not supported by the business elite in Atlanta until the Coca-Cola intervened. J. Paul Austin the CEO then with the support of the mayor Ivan Allen summoned all the business elites of Atlanta. He said that Coca-Cola Corporation was an international company, and it was embarrassed to be located in a town that did not honor and support its Nobel Peace Prize winner. He stated that the corporation did not need Atlanta, and they had to decide if Atlanta needed the corporation. Within two hours, the dinner tickets were sold out.
Ethical responsibility relates to a corporation doing what is expected of it justly and fairly. That is beyond the above two levels. Corporations cited as ethically upright are rewarded with more customers and that are perceived ethically unsound they are boycotted. Coca-Cola Corporation contributed 1.7 million dollars to 46 million dollars for a political campaign sponsored by farmers and food producers. The campaign opposed a citizen’s initiative that demanded mandatory labeling of foods that contain genetically modified ingredients.
Philanthropic responsibility is the discretionary behavior of improving the lives of others respectfully. It involves a corporation providing the society with recreational facilities and making charitable donations, also the sponsoring of sports and arts events. Workers are more committed and attracted to working for corporations that are socially responsible. Voluntary commitments to social programs and actions may forestall legislation by the government and promote independence. Positive enhancements to society may be a long-term investment in a better educated, safer and more equitable society enhancing creation of a stable environment in which to do future business in.
In sports, the Coca-Cola Corporation sponsored the Coca-Cola football camp held in Pretoria, South Africa during the FIFA world cup in 2010. It has a team in Philippines known as the Powerade Tigers in Philippine basketball association.
Business Ethics and CSR Theories
The classical model
The classical model states that society is considered at its best when served by various institutions. Each of these institutions should serve a specific function. The primary purpose of corporations should be economic and not social. The primary aims of corporations should be to earn as much profit as they can and the primary responsibilities of managers are to act with the interest of their shareholders at forefront without breaking the law.
Classical theorists firmly believe that in order to fulfill institutions obligations to the society, any social activities that increase costs, hence reducing profits carried out by corporations should be limited. The only responsibility is negative: do not break the law. The government should ensure it promotes laws and activities that benefits and protects the public in this model. It is vitally important to note that the classical theorists strongly believe in their model being the most socially responsible since it is the most efficient.
Some of the advantages of this model are, shareholders make a greater return on their investments. Consumers are also advantaged since the prices remain low. Employees are happy since higher profits translate to better wages. Lastly, society in general benefits since successful businesses means government taxes are paid by both the businesses and the workers. The government can, therefore, afford to fulfill social responsibilities of providing education, roads, social services, etc.
There are two major disadvantages for this model. One is that it is common knowledge that no government can be trusted to look out for and protect consumers at all times. Research conducted has also shown that social activity does directly mean decrease in profitability and that some may actually increase the profits. In conclusion, I do agree that self-interest do result in beneficial, efficient exchanges since most of our decisions are driven by it. As we know profitable corporations improve the society through wealth and job creation. Though, it does not mean corporations will not strengthen the economy if they do engage in social activities and promote human rights. As it is clearly indicated in the Coca-Cola Corporation, by being a multinational company it has helped improve the global society at large but it also has the capability of being on the wrong side of humanity. It requires the force of the people in masses to oppose its wrong doings. It has also clearly indicated that its involvement in social activities has actually led to its success.
The stakeholder Model
The supporters of this model argue that a corporation should be guided by the interests of the stakeholders and not the stockholders only. A stakeholder refers to those in the contractual agreement with the corporation and also those directly affected by decisions made by the corporations. Stakeholders include stockholders, employees, consumers, creditors, suppliers, competitors, government officials and residents of local communities.
Proponents argue for its potential to earn more profits based upon better long-term outcomes and the ethical appeal to duty. Although in the very strengths of the model, it exposes some of its weaknesses. Employing the stakeholder model does not guarantee long-term profitability. The second weakness is the collision of stakeholders’ rights. Many are the times the rights of employees do not align with the stockholder's rights. This model is favored over the classical model simply because many are those who believe that decision-making within corporations ought to be guided by ethics that surpasses legal responsibilities.
Corporations who operate within this model make positive changes socially by honoring the communities that support them. The challenge for such a corporation is the articulation and internalization of a framework that results to long-term profitability. The Coca-Cola Corporation is among those companies that do believe in listening to all its stakeholders. It firmly holds that it has grown so successfully due to the incorporation off all its stakeholders. It has always held forums inclusive of all the stakeholders for the purpose of interaction and innovation.
Social Demandingness Model
The model says that the corporation exists to fulfill the demands of the general public. The proponents of this model claim that the managers of the corporation consider the expectations of their stakeholder and the public as a whole. Executives ought to make decisions that see to the welfare of the public. For example, Thornton Bradshaw asserts that corporations should provide clean water and air as a way of promoting the health of the community.
The primary advantage of this model is its fairness. Corporations are judged through the lens of society. Since the public has the authority to consent the operation of the corporation, its legitimacy rests upon its ability to provide social benefits. This model has some pretty glaring disadvantages. One being the idea of the public controlling a corporation is fundamentally problematic as there is no single or unified public. Secondly how does one determine the social benefits a certain corporation is responsible for?
This model assumes that the corporation is responsible for the whole society. Unlike the social demandingness model, social activism assumes there is a universally way of measuring the responsibilities of the corporation to the society. Proponents of this model argue that the executives of the corporation should be leaders of the community both socially and morally. Some theorists (like John Rawls) say that this model is on the basis of ethics while other disagree and conclude that it is on a religious basis. Yet others (like Gewirth) argue that it is grounded metaphysically in human nature aspects. Since the model appeals to a normative basis for decision-making on ethics, it has less potential for confusion and variation than the social demandingness model. Unlike the classical model, it maintains the same standards for individuals involved.
The Coca-Cola Corporation can have the three models to thank for its success as it functions by employing the best out of the three models. As a result, it has become an international corporation that distributes its products to more than 200 countries. It also has dominated the beverage industry. Based on their business magnitude they have a chance of choosing where their resource should focus. It gives them a sense of social responsibility to all who work with them and are determined to return the favor to the society at large because they associate their success to the society at large
In conclusion, this era does not allow for corporations just to be in business for the sake of earning profits anymore. While consumers rely on corporations for provision of goods and services, the level of competition in the markets allows the consumers to make decisions on what to purchase based on various factors, inclusive of how much the corporation is benefiting the society. Most individuals today base their corporate loyalties on how corporations are positively enabling the growth of the community.
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