Coca-Cola Company Ethical Crisis Essay Example

style="text-align: justify">
In summary, a company considers shipments as sales even if the items are still in warehouses or returned to the manufacturer. This practice, known as channel stuffing, makes it seem like there is high demand for a product, leading to misleading financial statements and potentially deceiving investors. Back in 1997 to 1999, Coca-Cola faced accusations of sending additional concentrate to Japanese bottlers in order to boost earnings. In 2004, Coca-Cola acknowledged the presence of inflated earnings resulting from the shipment of extra concentrate to Japan.

Coca-Cola acknowledged its involvement in channel stuffing, as discovered by the SEC, and agreed to settle the allegations. The company convinced bottlers to buy extra concentrate in return for substantial credit, a practice that is deemed legal. As part of resolving the issue with the SEC, Coca-Cola committed to refrain from engaging in channel stuffing going forward. Consequently, Coca-Cola established an ethics and compliance office responsible for verifying the absence of any payment modifications or special credit extensions every fiscal quarter.

Furthermore, the amount of concentrate held by international bottlers that Coca-Cola agreed to reduce. Apart from settling with the SEC and the Justice Department, Coca-Cola still has to face a shareholder lawsuit in Japan, North America, Europe, and South Africa. Additionally, in 2006, Coca-Cola encountered issues with its distributors and bottlers when fifty-four bottlers filed lawsuits. The lawsuits were an attempt to prevent Coca-Cola from expanding the delivery of Powerade to Wal-Mart warehouses outside of Texas. The bottlers claimed that the Powerade bottler agreement did not permit warehouse delivery except for commissaries.

The statement ultimately claimed that Coca-Cola had breached the contract by agreeing to

supply Powerade to Wal-Mart through warehouse delivery. The issue arose as Coca-Cola was trying to move away from the traditional method of direct store delivery (DSD). In DSD, bottlers personally deliver goods to individual stores, stock shelves, and set up displays. Coca-Cola and CCE insisted that they were merely accommodating Wal-Mart's request for warehouse delivery, which is the method PepsiCo uses for its Gatorade brand.

CCE had planned to pay bottles for taking over Powerade distribution in their private territories, but the bottlers were concerned that this would violate antitrust laws. They also believed that if Coca-Cola and CCE proceeded with warehouse delivery, it would significantly devalue the bottlers' industry. The negative media coverage of Coca-Cola's problem had a damaging impact on its reputation. When one corporation's reputation within a channel structure is affected, it affects all corporations in the supply chain to some extent.

The implementation of a venture resource system by Coca-Cola has caused the sharing of its confidential information with various partners, leading to a lack of transparency. This lack of transparency can result in increased risks for the partners associated with Coca-Cola and can impact their financial performance.

Coca-Cola has implemented various modifications and enhancements to transform the public's perception of the company. They have even revised their mission statement and updated their website, asserting themselves as the biggest beverage company globally, offering consumers a range of more than 500 sparkling and still brands. Their portfolio now incorporates sixteen billion dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, Georgia, and Del Valle.

As the leading global provider of carbonated beverages, pre-made

coffees, and fruit juices, our products are enjoyed by individuals in over 200 countries. With a staggering 1.8 billion servings consumed daily, we prioritize sustainability and strive to minimize our environmental impact. Furthermore, we actively promote healthy living, foster a secure and inclusive workplace for our staff members, and contribute to economic development within the regions where we operate.

The Coca-Cola Foundation (2013) states that we are among the top 10 private employers worldwide, with over 700,000 system employees and our bottling partners. Our mission at Coca-Cola is to benefit and refresh all those connected to our business. By consistently increasing market share and earnings, we have successfully established Coca-Cola as a globally renowned brand. Additionally, we have implemented social responsibility programs to further strengthen our brand due to our strong market orientation and widespread recognition.

Coke's programs are based on their core beliefs in the marketplace, workplace, society, and environment. They aim to promote moments of hopefulness through their brands and actions. Coca-Cola's vision for sustainable growth is upheld by creating a positive work environment where employees are motivated to excel. They offer a variety of beverage brands that anticipate and fulfill consumer needs, while also being a responsible global citizen that maximizes shareholder returns while maintaining overall responsibilities.

Coca-Cola places great importance on social responsibility, particularly through charitable programs aimed at helping local education and community improvement initiatives. The Coca-Cola foundations are dedicated to improving the lives of individuals and communities. In Singapore, they have implemented the "Education on wheels" initiative, which offers children an interactive way to learn about history. This program encourages creativity and communication skills while offering

fresh insights into urban living.

The company has made another valuable change in their commitment to supporting the community with higher education. Coca-Cola provides grants to numerous colleges and universities across over half of the United States and various international grants as well. Furthermore, Coca-Cola offers scholarships to over 200 colleges and anticipates further growth in the next three years. This encompasses support to 30 tribal colleges through the American Indian College Fund, as well as scholarships for students in the Hispanic Scholarship Fund. These initiatives contribute to enhancing the reputation and trademark of Coca-Cola.

The Coca-Cola Scholars program annually selects 250 new scholars and brings them to Atlanta for individual interviews. Out of these scholars, fifty are designated as National Scholars and receive $20,000 awards for college. The remaining 200 scholars become Regional Scholars and receive $4,000 awards. Since its inception in 1986, this program has provided over $22 million in education assistance to more than 2,500 students sponsored by Coca-Cola. It is open to all high school seniors in the United States. Additionally, Coca-Cola acknowledges its global responsibilities and consistently takes action to fulfill them.

Coca-Cola showcases its dedication to environmental preservation through eco-friendly procurement practices and facility establishment. Additionally, the company collaborates with UNAIDS in Africa to combat the AIDS epidemic, further demonstrating its commitment to addressing local issues. These initiatives have strengthened consumer trust in Coca-Cola's brand loyalty and fostered relationship marketing. With its extensive track record and diverse efforts, Coca-Cola has firmly solidified its reputation as a trustworthy corporation.