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Corporate Social Responsibility has become a pressing agenda item over the last few years. Different stakeholders in a business entity are growing ethical expectations of the social responsibility of a company. The company expectations have resulted in companies reshaping and expanding their (CRS) activities in a favorable position for stakeholders. A company that is involved in CSR gets positive opinions and increases its reputation. The standard representation of past actions and achievements of an entity describes its ability to deliver value-added results to different stakeholders. Engaging in CSR has a positive effect on stakeholders’ behaviors and attitudes such as purchase, employment, and investment in the company as well as facilitating the increase in economic performance. The social responsibilities of a business entity encompass various aspects such as economic, legal, ethical and philanthropic expectations of the society at a given time.
This paper conducts corporate social responsibility of the Soda Industry. There is a growing need for a business entity to communicate its CRS initiative effectively. Corporate reputation and legitimacy refer to the belief that the actions of a business organization are desirable, proper and appropriate within the values, beliefs, and definitions of a society that it operates. A corporation should align its agenda with the expectation of the community and communicate how they are meeting the expectation of corporate affair by the member of the society. The consumers to judge whether the enterprise is good or bad use information about the CSR of a company. This papers further delve into the analysis of Coca-Cola Company as a representative of the company as well as comparing it with other enterprises in the same industry such as Pepsi. It is not easy to match the perception of the stakeholders of what amounts to a good company since the intentions of CSR are met with criticism and skeptic. The analysis of soda industry is compared with the Tobacco industry to identify the issues each is trying to resolve.
The Industry Analysis
There is an increased blame of soda in what has become a war on sugar. Sugary drinks are faulted by most of the stakeholders with a blame game existing between the company and the consumers. The corporate social responsibility campaigns are shifting the responsibility for healthfulness onto the consumers and away from its products. Corporate social responsibility campaigns that advocates for a construction of parks for the young people at the risk of diet-related illness have been criticized for focusing on physical activity rather than on the unhealthy foods produced by the entity. The move by the soda industry to put campaign advertisement shifting the blame to consumers is akin to that used by the tobacco industry. The beverage companies are engaging in corporate social responsibility campaigns that appear to be an attempt to raise public awareness of the health concern of a product, say a sugary, beverage. However, in the end, the companies shift the onus of responsibility to the consumer who is blamed for bad behavior of consuming sugary drinks. The companies use all means possible to reach the stomachs and wallets of the consumers
Soda manufacturers have employed elaborate and expensive multinational corporate social responsibility. Apart from Coca-Cola Company, there are other companies involved in the production of soda. The producers include Pepsi, their campaigns and use of CRS as a means of focusing responsibility on the consumer rather than on the corporation aims at bolstering the products of the company and prevent regulations. In the year 2010, PepsiCo engaged in Pepsi Refresh Project, a social media marketing campaign to spread word-of-mouth buzz and elicit a nomination for some community-based projects. In the same year, its rival, Coca-Cola, initiated CSR campaign that offers the customers with free healthy lifestyle advice as well as touting the firm's philanthropic and sustainability effort. In essence, this indicates the efforts put by the industry to convince the clients that the products are safe consumption and that the companies do care for their health (Dorfman, n.p). The CRS campaigns arose after an outcry over an increase in obesity and an attempt by the government to introduce legislative measures such as food tax to curb the crisis.
Comparison with Other Industries
Just like Big Tobacco industries, the soda industry corporate social responsibility aims at positioning itself and their products as socially acceptable rather than contributing to the social ill. A sugary drink is blamed for causing obesity and other body complications while on the other hand Tobacco companies produce the cigarette that is responsible for causing various body diseases including cancer. There is a move by the soda company to targets the youth in their advertisement. The young people are already feeling obesity epidemic, and they argue that soda is addictive especially if it is combined with caffeine
According to a report released by the WHO in 2011, obesity is the fifth leading mortality in the whole of the world; while, tobacco-related diseases are the highest public health threat worldwide. Just like the tobacco industries, when faced with crises, the Soda industry attempts to thwart the regulation by the introduction of CSR. Big Tobacco companies have influenced the decision of the policy makers, a strategy adopted by the companies in the soda industry. They achieve this by distorting science, shaping the legal and regulatory frameworks as well as promotions of their products. The companies are also employing CSR tactics such as businesses’ economics, legal, ethical and philanthropic responsibilities in the community. Both tobacco and soda industries use CSR as a public relations strategy aimed at achieving innocence by association as the company protects its image and at the same time banishing public image. CSR is used to improve the standing of the enterprises in the eyes of the consumers, regulators and the governments who make the policy decision about the production of these products.
Addressing the CSR Issue
The companies in the soda industries have deviced ways of addressing the corporate social responsibility. Advertising campaigns have been adopted as the most effective means through which they pass the information. Pepsi, for instance, initiated a Refresh Project and Change4Life marketing campaigns through the social media to identify philanthropic venture. Under that platform, any person was allowed to submit an idea online on a project they need Pepsi to fund; the company would sponsor the most voted project. Some of the activities financed by the firm include community-refreshing parklands. The youths who bought Pepsi products, received sponsorship to fund ideas that would make the world fun and exciting.
Pepsi Co directly involves the young people in its CSR campaign by donating Pepsi branded items to activities such as band uniforms and children's ball field. The Refresh Project is not just a philanthropic exercise, but it is concerned with putting the consumers first and letting them feel the goods of the core brands of the company. Pepsi Co has funded so many projects from its marketing funds in line with its aim of aligning the Pepsi brand and supporting organizations that support the society by associating the brand with all the community projects they fund.
All in all the Soda industry is using CSR as a marketing tool to influence Millennial by reinforcing the views that the company is a good corporate citizen. The partnership with health organizations by the company has contributed to its marketing components, its campaign includes promotion of physical activities and healthy eating. The company sponsored major print advertisement campaign aimed at reducing obesity rates. The industry is engaging in construction and upgrading of parks to encourage physical activities. The tactics employed by the sector are to redirect the responsibility for health outcomes from the company to the consumers as well as reduction of obesity.
The rate of achievement of corporate social responsibility depends on the angle of perception of each stakeholder in the industry. The companies in the soda industry view the CSR as successful since they have managed to shift the responsibility to the consumers. They hide under the disguise of requiring the customers to exercise healthy choices as opposed to its mandate of making healthy products. Just like the tobacco industry, the beverage industry advocates for balanced living, they emphasize on personal responsibility and not corporate responsibility. For instance, the Coca-Cola Company claims that it is only responsible for the provision of health information to the consumers and not makes a choice for them of the products they consume. The labels on the bottle of the soda indicating the calories is aimed at informing the customer about the ingredients of the soft drink they are taking, thereby allowing them to make an informed decision before purchase.
The companies in the industry consider their tactics of evading or preventing regulation a success. They achieve this by its vigorous CSR campaigns that improve the standing of the company in the eyes of the policy makers. The community has benefited from the parks erected or renovated by the companies. Environmental management and conservation measure employed by the corporation has been cited as a success. However, there are many negative sides which are apparent from the consumption of the soda, and there is an increase condemnation of obesity and sugary products. Public health advocates fault the companies for seeking to expand their market base through CSR at the expense of the health of its clients. The tactic used by the corporate entices the youth to become brand-loyal lifetime consumer of the beverage that at long-run cause health problems to the customer.
Analysis of Coca-Cola Company
Coca-Cola Company was started in 1886 as a local soda producer in Atlanta, Georgia. It later expanded internationally over the decades and its presence is felt in almost all countries in the world. The company launched its sustainability framework, live positively in 2007 as its corporate social responsibility policy. The system established areas that the company needs to concentrate to improve its sustainability practices. The areas determined includes environment, ethics, technology, healthy living among others. The company has developed a code of conduct that guides its employees on issues such as anti-corruption and competition (Hayran and Gürhan-Canli 136). Coca-Cola Company has integrated the United Nation global compact principles in its annual sustainability reviews.
Coca-Cola Company has formed partnerships with various organizations in the world to address the issues of environment such as water and wildlife. In 2007, the company collaborated with World Wildlife Fund. The company indicates its corporate social responsibility publishes an annual report, the report should include a brief description of the initiative in the community development and water preservation measures undertaken by the company. Coca-Cola Company is dedicated to the management of water, which is its core raw material, through its water stewardship program. There is an outcry about the pollution of water by Coca-Cola Company, and use of unsafe water to prepare the beverage, for instance, there was demonstrations in India following a report in 2003 by an NGO, Centre for Science Environment (CSE) that there was a presence of pesticide on the drinks. The NGO recommended that the Government take legislative measures to enforce water standards. The allegation led to a formation of a joint committee of the Government of India to investigate the matter. Although Coke was exonerated from the charge, the committee found that the company needs to adopt appropriate and enforceable standards for carbonated beverages.
The company has been blamed for over extraction of ground water. The allegation leveled against the product by the consumers caused reputational damage to the enterprise. The engaged in a damage control measure, but it had little influence; the company changed its CSR strategy to include publication of environmental performance report on operations in India. The company created the Coca-Cola Indian Foundation to work with the local communities in conjunction with the NGO's in an attempt to address various water projects in India. The social responsibility undertaken by the company includes rainwater-harvesting programs that address water scarcity. The program is based on the technique of collecting and storing rainwater and at the same time prevents its evaporation and runoff for efficient utilization and conservation.
Coca-Cola Company has adopted a more proactive CSR policy on the global scale on environmental preservation and water management. The company is engaged in a funding drive to the organizations and projects the support the conservation of the environment. Its objectives to this end include reducing water use by improving water efficiency, recycling of water through wastewater management and returning all the used water in the manufacturing process to the environment at the level that supports aquatic and agricultural activities. The company also aims at offsetting the liters of water used in the finished beverages.
Coca-Cola Company continue to invest in process innovation and energy-efficient technologies to conserve energy. The company has developed centrally led projects to address local opportunities. Technological advancement is observed in the production process of the company whereby it has adopted bottle blower optimization technology. Coca-cola has installed latest technology with the aim of reducing energy used to blow the bottle as well as lessen the standard of air pressure necessary for installing air recovery system. The company is also concerned with the energy consumed and has adopted a new technology of installing ceramic reflectors to optimize the heat generated within its ovens. LED energy efficient the company installs lighting. The packaging has improved where the company has installed the converting electric packer ovens to use gas as a heating source to shrink films of the bottle or can packs. CSR employed by the company to preserve energy includes harnessing of wind to provide an alternative power source. It has also used solar photovoltaic as well use of combined heat and power technology to produce both electricity and heat from energy sources. In its effort to deal with energy conservation, the company has also adopted the approach of turning waste heat into energy.
Coca-Cola Company is committed to collaborating with other industries in a promotion of alternative technologies to emit less carbon. It also aims at reducing the emission of the carbon dioxide gas by the vehicles by reducing the kilometers covered by its logistics network (Kleine 195). The company has adopted the mechanism of driving a greener environment through working with the customers and suppliers through the backhauling mechanism. The alternative technology and fuels advanced by the company in its attempt to ensure the environment is saved collaboration with third party haulers to promote the use of new carbon reduction technologies and fuels. The company reviewed its types of the vehicles it offers to its employees by increasing the range of hybrid cars that had highest fuel efficiency to reduce carbon dioxide emission. Other technological advancement employed by the company in an attempt to deal with environment conservation includes the improvement of vehicle capabilities, use of the electric vehicle for transport, use of eco-Combis, bio and dual-fuel trucks as well as engaging the community in decision making and projects that support environmental conservation.
Coca-cola Company has an established code of conduct that binds all the employees. The system guides how the employee should relate amongst themselves and other stakeholders. The company prohibits corruption in any form. The main ethical issues that are addressed by the code of conduct are respect, integrity, good judgment, honesty, and trust. The company is engaging in training of the employees undertaken to ensure that there are compliance and creation of a culture of trust. Every employee has to comply with the code that gives guidelines on issues such as insider trading, hospitality, entrainment, and anti-corruption (Skenderi 38). The employees of the company have been allowed the freedom to speak up. They can raise any complaint or suggestion without fear of victimization or retaliation. If any other stakeholder suspects violation of any policy, are encouraged to use confidential hotline provided by the company to report the abuse.
In its line of duty, the company has a moral obligation to produce high-quality products suitable for human consumption. Coca-Cola Company has engaged in the process of training its employees on the hygiene, and the suppliers are encouraged to supply high-quality raw materials. The CSR activities undertaken by the company determines how the brand is perceived by the society and the reputation it receives. Coca-cola Company has engaged in advertising, marketing of its brand on print media, and online. The approach advanced by the company is fair competition and informing the clients about the ingredients of the product. The inclusion of elements by the group is aimed at giving the consumer insight to make an informed decision whether to consume the drink or not.
The company should enhance and expand its energy conservation measures. The approach taken by the headquarter should extend to other regions of the world. The reliance of electricity has been dealt with by the introduction of alternative fuels. In future, the company should expand the effort to conserve the energy by an installation of solar panels in the tropical countries or countries that enjoy the presence of sun for more than ten hours. In this way, the company will be conserving water that is used to generate electricity
The issue of obesity and sugary drink has haunted the company. The company has responded introducing products without sugar such as coke-Zero. The company should be ethical and stop producing sugary sodas.
The firm deals with environmental issues such as emission of carbon dioxide by reduction of vehicles that produce the gas. This is not the case in third world countries and developing countries in Africa and India. The company should employ the same measures in these countries to reduce and cut the level of greenhouse gas emission
The issue of water has affected the company over the recent years. Water is an important raw material to the enterprise, and it is an emotive resource which the community needed conserved and utilized effectively. The company has been blamed for using water laced with pesticides or overusing water thereby depriving the inhabitant their right to clean water. The effort of the company to recycle water and harvest rainwater is not adequate.
The company should establish massive ways of collecting and storing water. There should be research to identify mechanism that can be used to make salt lake water palatable by human being and the company
Implementation of the Goals
The industry should involve the community in water management and environmental conservation.
Rainwater harvesting and storage, as well as recycling, is a mean of conserving water. Reduction of cars that produce carbon dioxide is aimed at reducing the concentration of carbon dioxide.
Alternative fuel such as the installation of solar panels is used in harnessing solar energy. The companies should lessen the amount of sugar they put in their products.
They can achieve the objective of fighting obesity through educating the consumers on the effect of eating or drinking beverages with a lot of sugar
The recommendations are informed by the fact that the developing and third world countries in Africa and the India have not adopted the measure to prevent the emission of carbon dioxide.
There are increased complaints about obesity this, therefore, nictitates the company to take steps that reduce the amount of sugar in the soda.
The issue of inadequacy of water for production of soda and human consumption arises from the claims raised about the use of water laced with pesticide.
Reaction and Definition of success
The customers and the government will receive the recommendations positively as they will increase the level of accountability of the soda industry companies. The investors may receive the changes negatively because it will reduce sales and cause the company to incur extra cost in installing the solar panel. The customers consider the success of the fight against obesity and production of the sugary product when the company stops producing sodas with sugar. Government view success as alleviation of adverse effects that affect citizens such as infected water, adequate water, and conserve ation of the environment. The company considers success to be the increase in sales and increased customer base coupled with the reduction in the cost of production.
Application of the recommendation will increase the cost of operation of the companies. However, there will be an increased loyalty to the brand's of the company due to an improvement of its reputation. The demand for the business product increases due to CSR campaigns.
Dorfman, Lori. "Soda And Tobacco Industry Corporate Social Responsibility Campaigns: How Do They Compare?". N.p., 2017. Print. Available http://journals.plos.org/plosmedicine/article?id=10.1371/journal.pmed.1001241 Accessed 15 April 2017.
Hayran, Ceren, and Zeynep Gürhan-Canli. "Brand extensions." The Routledge Companion to Contemporary Brand Management (2016): 136.
Kleine, Dorothea. "Corporate social responsibility and development." The Companion to Development Studies 7.1 (2014): 195.
Skenderi, Besnik Skenderi1 Diamanta. "Ethical relationship between stakeholders and stockholders and their moral rights on the corporation Differences." in business, innovation and technology (2013): 38.
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