A good business is also a good citizen. As well as making a profit by supplying products or services that people want to buy, it can be a positive influence on the rest of society, including - in the case of multinationals - local communities spread across the globe. An enlightened business recognises that it is in its own interests to be socially responsible, since an enhanced public image is more likely to be attractive to investors, employees, customers, consumers, suppliers and host governments.
This case study focuses on the approach The Coca-Cola Company (TCCC) takes to social responsibility. The Company is proud of the fact that in addition to being a world-famous global brand it also takes an active, responsible interest in individuals and communities at a local level wherever it operates.
The Company believes it has a duty to contribute to the communities in which it does business, and its Great Britain operations exemplify this approach.
In Great Britain, ‘Coca-Cola’ has been a member of Business in the Community for many years, which works with its partners and The Prince’s Trust to involve corporations, large and small, in their local communities.
‘Coca-Cola’ is also a member of The Per Cent Club, a group of leading national and international companies that are committed to making a significant contribution to the communities in which they operate. To qualify for membership, businesses must contribute not less than 0.5 % of pre-tax profits to the community.
All companies have responsibilities towards a range of people who have a ‘stake’ in what that company does. The various stakeholders may have competing, even conflicting, interests that have to be balanced. Certainly, different groups of stakeholders will place a different emphasis in what they expect from their company stake-holding, as the diagram below illustrates.
Successful business strategies are built around establishing a clear set of realistic objectives for all aspects of a company’s activities. To meet its social responsibilities ‘Coca-Cola’ has identified a range of targeted initiatives likely to have maximum impact in two key areas: the environment and the community.
The environmental management system of TCCC is known as the eKOsystem. The Company ‘conducts its business in ways that protect, preserve and enhance the environment.’ The eKOsystem of TCCC translates this principle into action by establishing a framework for successfully managing the Company’s environmental performance worldwide.
‘Coca-Cola’ sets itself this objective: ‘We cooperate with public, private and governmental organisations in seeking solutions to environmental challenges. We direct our skills, energies and resources to those activities and issues where we can make a positive and effective contribution.’
‘Coca-Cola’ recognises the importance of ‘doing the right thing’ with regard to the local and global environment as the Company builds and nurtures strong brands. The Company takes progressive actions that focus on minimising environmental impact, striving for continuous improvement and seeking to provide leadership in three critical areas - water efficiency and quality, energy efficiency and the elimination or minimisation of solid waste.
It also supports local initiatives that have a positive environmental impact. Taken together, these help promote a sustainable future.
Currently ‘Coca-Cola’ is committed to the following GB environmental initiatives. They are continually reviewed to ensure they fit with ongoing strategy.
For over 30 years the Company has supported the Tidy Britain Group, including the People and Places initiative. This supports local authorities in their efforts to keep the local environment clean, eg in reducing and eliminating litter, graffiti, dog fouling and disposing of abandoned cars. The National Spring Clean initiative, recently renamed Just Bin It, takes place each April and involves schools, business organisations and local authorities in tidying up local ‘grot spots’.
Coca-Cola Great Britain is a founder member of the Environment 21 Club of Going for Green, Britain’s biggest ever campaign to increase and encourage public awareness of environmental issues. The Coca-Cola Youth Foundation is a major sponsor of eco Schools, a Europe-wide project that aims to raise students’ awareness of environmental issues through classroom study. It encourages youngsters to take an active role in how their school and their community can be run to the benefit of the environment. It provides practical steps as to how the environmental impact of schools can be reduced.
‘Coca-Cola’ supports a number of resources for schools on environmental issues including:
• Our World, Our Responsibility - a comprehensive environmental guide for schools, produced by the RSPB under the auspices of the Council for Environmental Education.
• Wise Up To Waste: The Dustbin Pack - explaining aspects of recycling for secondary and primary school pupils respectively, produced in cooperation with Waste Watch.
• Finding Out… About Packaging - covering the history, use and proper disposal of packaging, backed up by a wallchart distributed through INCPEN.
• Finding Out… About Managing Waste - covering all aspects of waste management for GCSE pupils distributed through INCPEN.
In working with education it is important for the Company to ensure that support activities are tied in with the brand. For example, ‘Coca-Cola’ supports the recycling of cans, and has a clear interest in education about issues related to recycling.
This programme is set out to be inclusive. An inclusive programme looks to provide particularly for the social and economic needs of those who might otherwise find themselves excluded from the benefits of the modern society. Social inclusiveness is one of the most important issues in GB today. Inclusiveness (or inclusivity) is concerned with trying to create opportunities for everyone, not just the privileged, to make the maximum possible contribution to the community. The Coca-Cola Valued Youth Programme has been running in the USA for 15 years and the Company has supported the GB arm since 1998.
Secondary school students who are considered to be at risk of dropping out are placed as tutors of primary school pupils, enabling older students to make a difference to the lives of younger ones. Experience has shown that this initiative raises the self-esteem and academic achievement of the student-tutors. The tutors work with a primary school teacher on a specially designed learning package which is flexible so as to best meet the needs of those involved.
The programme has a 7-point philosophy:
1. All students can learn.
2. The school values all students.
3. All students can actively contribute to their own education and the education of others.
4. All students, parents and teachers have the right to participate fully in creating and maintaining excellent schools.
5. Excellence in schools contributes to individual and collective economic growth, stability and advancement.
6. Commitment to educational excellence is performed by including students, parents and teachers in setting goals, making decisions, monitoring progress and evaluating outcomes.
7. Students, parents and teachers must be provided with extensive, consistent support in ways that allow students to learn, teachers to teach, and parents to be involved.
Experience shows that Valued Youth participants are an inspiration to the children they tutor, positive leaders among their peers, motivated learners to their teachers, a source of pride to their parents and contributors to their communities.
The programme has been piloted in 6 local authorities with the intention of launching it in 30 areas by the end of 2001.
Coca-Cola Great Britain also provides support for a number of other initiatives. For example, the Special Olympics UK - a body that seeks to improve the world through sport for people with a learning disability. The National Summer Games was held in Cardiff in 2001 and the World Games are to be held in Dublin in 2003.
In any business activity it is important to be able to measure the success of strategies and operational activities. Measuring performance is the best way of assessing how effective strategies and initiatives have been, with a view to making appropriate adjustments. Organisations need to measure and report performance against stated aims contained in a business plan, eg daily output, employee turnover. The business will tend to measure and evaluate only those aspects of its business over which it has control. Ideally these measurements should also be benchmarked so that everyone can see how performance compares with others.
‘Coca-Cola’ uses detailed sets of performance indicators for many areas of its activities, including its work to promote social responsibility. Community performance indicators include:
· Impact evaluations of community programmes. These include indicators of educational attainment as well as of environmental enhancement and conservation.
· Perception measures of the Company as a good neighbour.
The Company is an equal opportunity employer, committed to fair and effective practices in relation to workplace diversity, work/life balance, health and safety, training and staff development. Support programmes for employees include pension schemes, an independent counselling service covering areas such as bereavement, divorce and alcohol abuse. Our maternity benefits are leading edge which include bonuses to return to work. We operate other methods to accommodate flexible working where possible, and have an in-house gym that runs programmes focussing on life style and general well-being.
The Company uses professional benchmarking and diagnostic tools to evaluate performance, ensuring continuous improvement in these areas and in addition, measures and reports on the outcomes of its impact in the workplace, including employee perception measures.
The Company engages in effective two-way consultation with employees and has in place a team that represents each function and meets fortnightly to raise topics and discuss developments with senior management.
The ‘Coca-Cola’ promise is simple, solid and timeless: The Coca-Cola Company exists to benefit and refresh everyone who is touched by its business. Part of this promise is to continually operate as a model business citizen, consistently shaping business decisions to improve the quality of life in the communities in which it does business. The Company is committed to monitoring performance in the area of social responsibility against benchmarks to make sure that it is, and continues to be, a good citizen as well as the benchmark global brand.
1. Give an example of the way in which a business organization with which you are familiar operates in a socially responsible way.
2. Who benefits from the programs and activities that ‘Coca-Cola’ supports and which are detailed in this case study?
3. Why do you think that ‘Coca-Cola’ supports the Valued Youth Program?
4. Why do you think that ‘Coca-Cola’ is involved in education about recycling?
5. Why is it important for businesses like ‘Coca-Cola’ to measure the impact of their current activities that are concerned with social responsibility?
Business in the Community: An organization dedicated to enabling businesses to play an active part in the life of the wider community.
Global brand: A name or logo that represents an organization and which is used and recognized worldwide.
Impact evaluations: Measuring and weighing up the success of particular initiatives.
Local level: A regionalized and/or more direct response to particular needs either by communities, individuals, groups or areas.
Perception measures: Ways of measuring views and opinions about different initiatives.
Social responsibility: Behaving in a way that actively supports all members of the community.
Stakeholders: People and groups that have a legitimate interest in the running of an organization.
Targeted initiatives: Programs and initiatives set up with a clear focus and a specific purpose.