Discuss The Concept Of Managing Essay Example

violation of human rights issues, business misconducts and environmental issues. These allegations against TCCC have led to several protest, boycotts and organizations formed to campaign against the misconducts of TCCC. All this criticism against TCCC has resulted in the company’s top selling product, Coca-Cola, to be given the nickname “Killer Coke”(Refer to Exhibit 4. ), which has links to the severe worker's and human rights violations in Columbia, where members and leaders of the Colombian union SINALTRAINAL working at coca-cola bottling factories in Colombia were found to be threatened, intimidated, tortured and killed by paramilitary squads working in collusion with factory managers and the government (Coca-Cola in Columbia, n. d. ) .

The globalexchange. org forum says that TCCC is perhaps the most widely recognized corporate symbol on the planet. The company also leads in the abuse of workers' rights, assassinations, water privatization, and worker discrimination.The forum says that Coca-Cola in India destroys the local agriculture by privatizing the country's water resources.

It also claims that Coca-Cola is one of the most discriminatory employers in the world, as over 2,000 African-American employees in the U. S. sued the company for race-based disparities in pay and promotions (Most Wanted, 2007) . Coca-Cola Reputation In Columbia In 2001, SINALTRAINAL charged that Coca-Cola and its bottlers Panamerican Beverages (Panamaco), Bebidas y Alimentos De Uraba, and Coca-Cola Femsa, were linked to the violence against its union members in Colombia (Labor practices in Columbia, 2006) .

Labor unions have filled suits against Coca-Cola, alleging that in Colombia, workers at Coca-Cola bottling plants have had their safety threatened and even been murdered by Colombian paramilitaries for trying to unionize (Coca-Cola, 2008) .

A total of 8 union leaders have been murdered since 1989, and hundreds of other Coke workers have been reported tortured, kidnapped and/or illegally detained by violent paramilitaries, often working closely with plant managements (Killer Coke Casualties, n. d. ) . Coca-Cola has a terrible record as an employer in Colombia.Of the 100,000 workers employed, around 80% are contractors, earning an average of $120 a month.

These are starvation wages. And contracting out has been the company's policy in other parts of the world as well - including the US (In Columbia, Workers Starve for Justice, 2004) . In January 2004, a New York City Fact-Finding Delegation went to Columbia to verify these allegations. The delegation concluded that Coca-Cola’s involvement in the violation of human rights and labor rights could not be excluded.

The report estimates that there had been 179 major human rights violations of Coca-Cola’s workers including the murders. Union members and their family members had been kidnapped and tortured; workers had been fired for attending union meetings and many had been asked to denounce their legal rights. According to the report, it was said that Coca-Cola’s Colombian managers had admitted that they had never investigated the relationship between the plant managers of their local bottlers and paramilitary groups in spite of so many complaints and allegations.It was concluded that this lack of action on Coca-Cola’s part clearly showed the company’s utter disregard for human rights and the well-being of its labor personnel in Columbia (Labor Practices in Columbia, 2006) . In Mexico Coca-cola has been allegedly charged for violation of anti-monopoly laws and indulging in anti-competitive business practices in Mexico.

On July 4,

2008, Mexico's Federal Competition Commission (FCC) has upheld a fine against Coca-Cola's Mexico subsidiary and some of its bottlers for allegedly pressuring shopkeepers to exclude other cola brands from their stores ($15 mil fine against Coca-Cola upheld, 2005) .It was alleged that Coca-Cola Femsa (CCF) , Coca-Cola’s largest bottler in Mexico, resorted to monopolistic and anti-competitive trade practices to deal with the threat of their competitors. It was reported that small retail operators were warned to sell and stock only Coca-Cola products, or supply would be stopped and they would no longer received freebies and gifts. Operators who did not heed these warnings were lured to exchange their Big Cola stock for Coca-cola goods (Coca-Cola fined for anti-competitive practices in Mexico, 2005) .CCF was also accused of insulting their competitors customers in Mexico with public advertisements like, “You are not ugly, you have personality, drink Coca-Cola. ”(Coca-Cola in Chiapas labor rights, 2005) .

On another hand, CCF was also accused of bribing the local government officials with gifts to get permissions for setting up bottling plants in Mexico. In India In India, Coca-cola has been accused of being involved in some environmental and product issues. The focal point of the environmental accusations in India was the Coca-Cola bottling plant in Kerala. The largest Coca-Cola lant in India is being accused of putting thousands of farmers out of work by draining the water that feeds their wells and poisoning the land with waste sludge that the company claims is fertilizer.

The plant in the southern state of Kerala is designed to satisfy the demand for Coke, by draining an estimated of 15 million liters of ground

water a day. This huge demand for water is causing such damage to the local economy that the village council, which had granted the company a license to operate, is now demanding the plant's closure (Coca-Cola in India accused of leaving farms parched and land poisoned, 2003) .It was also alleged that the bottle-washing operation involved the use of chemicals generation of effluents that lead to the contamination of groundwater. The bottle-washing process was also said to release a foul-smelling dry sediment sludge waste which was said to have been tried to be sold to unsuspecting farmers as fertilizer and dumped on the waysides or on the lands at night (Coca-Cola’s “toxic” India Fertilizer, 2003) .In the same year, a research carried out by the Center for Science and Environment (CSE) showed revealed that soft drinks sold by Coca-Cola contained almost 36 times more pesticide then what was permitted by the European Economic Commission (EEC) .

It was believed that the use of groundwater which had high pesticide residues and which had not been properly treated by the companies was the main reason for such high pesticide levels. The same research concluded that no such residues were found in the same products that were sold in the United States (Environmental and Product Issues in India, 2006) .What it takes to be a “Good Citizen” in a Host country? Multinational corporations (MNCs) have been and – to a lesser extent – continue to be at the center of debate regarding Corporate Social Responsibility (CSR), particularly the benefits versus harm wrought by their operations around the world. The concept of international social responsibility includes the expectation that

MNCs concern themselves with the social economic effects of their decisions. CSR at the basic level as defined by Donaldson T. (2006, 6) states that “corporate activity should be otivated in part by a concern for the welfare of some non-owners, and by an underlying commitment to basic principles such as integrity, fairness and respect for persons” .

A large MNC such as Coca-Cola should create a uniform code of conduct to be used as the need for a moral standard that is accepted by all cultures. As stated by Bowie N. (1987) this term has been called moral universalism . By using moral universalism, the MNC can conduct the same standards of moral and ethical behavior in all the hosts’ countries.

This code of conduct should cover everything from all aspects of the corporations operations from economic and developmental policies, laws and regulations and political involvement. The MNC should also fulfill their responsibilities to the public by sharing their technology transfer and protecting the environment. When dealing with people, the corporation has to protect the consumer’s rights, use appropriate employment practices and abide by the human rights regulations set by the host countries.These codes developed by the International Chamber of Commerce, the Organization for Economic Cooperation and Development, the International Labor Organization and the United Nations Commission on Transnational Corporations . Getz (1990) says that, “as international organizations and institutions (including MNEs themselves) continue to refine the codes, the underlying moral issues will be better identified and appropriate MNE behavior will be more readily apparent.

” Besides following the stated codes of conducts, a good citizen in a host country should also involve themselves in

the social and environmental concerns of the country.When an MNC enters a nation, it would help boost the nation’s economy. MNCs should also concern themselves about providing job opportunities and training to the local residents. Especially in less developed countries (LDCs), this would help the host nation to further equip them with more capable and knowledgeable expertise to improve the development of the country.

Finally a MNC should not resort to questionable payments. These are business payments that raise significant questions of appropriate moral behavior either in the host country or in other nations.Payments in questioned are political payments, extortion, bribes, sales commissions or “grease money” – payments to expedite routine transactions. These payments may be influential in certain decision makings, getting priority over competitors in terms of sales or purchases or in terms of approval of certain requests or applications. Questionable payments are normally in the form of money or “gifts”.

How well has Coca-Cola fared in this regard? According to thecocacola-company. com, TCCC has a uniformed code of business conducts that meets the moral standards stated by Getz.Above that Coca-Cola has also introduced the Coca-Cola Quality System (TCCQS) to achieve the quality objectives of the codes. However, even with the codes of conducts set by the mother company, TCCC still lacks responsibility and ethical conducts in certain countries especially LDCs. Coca-cola states that their practices were aimed at creating value at the marketplace, providing excellent working conditions, protecting the environment and strengthening the communities in the places of operations, have failed to show consistency in developing nations like India and Columbia.

Coca-Cola as a one of the worlds most well-known brands have failed to

review their business practices and partners in their host countries which has led to the allegations of the way the company runs in those nations. With all the allegations and cases against TCCC, it clearly shows that the company is inconsistent in its standards of conducts in different nations. The company puts on a consistent and good image when producing in developed nations, but the company and their partners violates these codes of conduct when operating in less developed nations. The company however defends themselves by opening an exclusive website, www. okefacts. org, to address these allegations, especially those related to Colombia and India.

The company denies most of the allegations and claimed them to be false and stated that most of the allegations were perused without sufficient prove (Coca-Cola’s Response, 2006) . What does the company need to do now? The Coca-Cola Company needs to review their performance of their operations in all the nations. They need to further stress on the importance of the codes of business conducts and create a sense of ownership to the managers, regarding the company’s image.To improve revive their image around the world; the company should take responsibility of the environment and social problems in Colombia and India where most of their allegations revolve around.

In Colombia, the company needs to give sufficient wages and benefits to the employees in the bottling plants. Also the company should enhance the security and provide protection to the staff working for them. In India, Coca-Cola should invest in the environmental issues such as the water shortage and toxic waste disposal. Perhaps the plant can find an alternative source of water to

satisfy the high production rate.And to deal with the high level of pesticide in the products, the company needs to re-review their quality control and water treatment plants.

Coca-cola has to stop its unethical business conducts in Mexico and have to subdue to competing fairly among their competitors. An international corporation must abide by the laws set by the host country and mustn’t conduct their business unethically. The main concern now for coca-cola should be for rebuilding their image and living up to the responsibility of being one of the top and most recognized company in the world.