Corporate Social Responsibility OF COCA COLA

CSR of Coca Cola

Corporate social responsibility refers to the integration of self policing by a corporate in to a business model. Also referred to as social performance or corporate conscience, corporate social responsibility (CSR) aims at encouraging a positive impact via its activities on employees, consumers, stakeholder’s communities and on the environment. Through its policy, CSR assists a business to monitor and ensure that its activities are in compliance with the law. In some cases, CSRs activities may engage in actions that will further the social good of a firm (D’Alessandro, 2001).

An organizations financial performance has been found to correlate to social/environmental performance as found by Rynes, Orlitzky and Scmidt. Therefore, organizations have been urged to embrace measures beyond financial gains and there are lost of literature written of the same perspective. Organizations that implement a CRS based strategy have varying benefits depending on the nature of the enterprise thus can not be easily quantified. Within the organization, the CSR may be based in various departments such as human resource, public relations or business development. In some instances, the CRS may be given a separate unit thus reporting to the CEO or the board. Many organizations will therefore adopt CSR strategies due benefits discussed here in (Coca-cola company, 2000).

A CSR program may be used as a human resource tool considering the highly competitive graduates in the market for hire. A CSR program would be of great value during recruitment or retention. Recruits on the other hand may ask about a company’s CSR policy while being interviewed thus a comprehensive policy would be an advantage to a company. Such a program will also improve the staffs’ perception of the company through activities such as fundraising, community volunteering and payroll giving.

Many organizations want to maintain a good reputation and therefore avoid incidents that may ruin it. This makes risk management a vital part among the corporate society to avoid accidents or scandals involving corruption which may draw unwanted attention from the media, government or regulators. Therefore a CSR program building a culture of doing the right thing helps deter these risks (D’Alessandro, 2001).

With the increasing number of companies producing the same product, the market place has become competitive and thus need for uniqueness. CSR, basing on distinctive ethical values, help build customer loyalty. This is beneficial to businesses as a reputation of integrity and good practice is build.

A CSR team would also plan an organizations objectives and goals with a budget as the highest priority, thus assisting in reaching the desired audience. While planning, the CSR has the duty to: assessing the organizations future, prioritize an organizations projects that are environmental and socially friendly, influence decision making positively where impacts on the society are high yet ensure efforts are within the budget, discuss and analyze new set of risks within the organization, and also represent issues in the corporation that watchdogs and advocates represent within the society (D’Alessandro, 2001).

Businesses rely on suppliers to reduce costs while improving the quality of their goods and services. This has made company’s reduce the number of suppliers they do business with in order t lower operating costs. Thus companies are able to push for price reductions and quality improvements by establishing a strong supply chain and hence benefitting by creating a better value for stakeholders. Companies like Coca-Cola shift suppliers whenever they are offered lower prices arising from competition. This creates greater profits which in turn aid in strengthening the market (Coca-Cola Company, 2000).

This is referred to as supplier relations and it’s therefore important to practice CSR to suppliers and finding out their existing supply chain is important to staying on track of a company’s CSR activities that they have implemented.

Coca cola is among the company’s that have embraced the CSR strategy and considering that CSR is a process aimed at encouraging a positive impact through its activities on the environment, coca cola embarked on a recycling venture between CCE and ECO plastics that opened in May 2012. The plant known as continuum recycling is the largest plastic bottle reprocessing facility in Western Europe. The company pledged to recycle colorless PET plastic bottles disposed at the London 2012 Olympic Games recycling them into 80 million new bottles within six weeks of the closing ceremony. This helped put coca cola in Great Britain’s good books whose main issue is getting people to recycle. This was done in collaboration with WWF-UK to ensure that their sponsorship of the games was sustainably delivered focusing on three key areas: carbon reduction and compensation, delivering a zero-waste game and promoting health wellness (Da Silva, 2010).

This kind of business model has enabled coca cola to engage in community based projects such as the water project in Vietnam. To make such a community based project successful, company’s must engage in these communities thus representatives comprising of CSR, finance, public affairs and NGOs personnel travel to these communities to interact with them and carry out a project design. The company utilizes this to learn about the community’s specific needs and thus targets it assistance where it is most needed (Da Silva, 2010).

The coca Cola Company believes that for their business to be successful, the community within must be successful too. Therefore the company has partnered with organizations such as World Wildlife Fund (WWF), United Nations Development Program (UNDP) and U.S Agency for International Development (USAID) to enable them support sustainable communities while sharing the best practices that allows the company to improve the way they run their business. This has made coca cola invest heavily in monitoring and evaluating its community based projects and participates in the Global Reporting Initiative such as the 2009 report of 2007/2008 that detailed the metrics of its projects demonstrating the gains on investment for its stake holders and share holders (Woods and Baldry, 2012).

Being a business, coca cola invests in these community projects not out of philanthropy or as charity but as part of its business model. Positive results from these projects are a boost to their brand image and definitely positive press coverage. For example, during a press event to launch the clean water project in Lien Chie District in September 2010 generated 13 positive press articles in local papers (Woods and Baldry, 2012).

References

Da Silva, J. 2010. CRS studies: Coca cola.http://www.globalcompactvietnam.org/upload/attach/

Coca-cola.Study.Submitted.27-Oct-2010.pdf

Woods, Baldry.2012.Corporate responsibility and sustainability summary 2011/2012:Reports on

the activities of the Coca-cola system in Great Britain.http://www.cokecorperateresponsibility.

Co.uk/media/70634/coca-cola%corperate20%responsibility%20&20sustainability%20summary

%202011-2012.pdf

D’Alessandro, W. 2001:Corporate leadership in environmental management.Publisher:Arlington, Mass. Cutter Information Corp.

Coca cola Company. 2000.Abhiyan the movement: PET recycling. Publisher: [New Delhi] : Dept. of Environment, Govt. of Delhi : Coca-Cola India