A Paradox on Corporate Social Responsibility - Case Study on Coca Cola
Posted: 11 Dec 2008
Date Written: December 11, 2008
World Business Council for Sustainable Development defines Corporate Social Responsibility (CSR) as "The continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large." The European Commission advocates CSR as "Being socially responsible means not only fulfilling legal expectations, but also going beyond compliance and investing more into human capital, the environment and relations with stakeholders." The triangular relationship keeping three partners industry, society and the state compels the corporate to maintain and develop their brand image and operations through service to the society and also be highly responsible and responsive to its commitments.
There are some inconsistencies noted here as PARADOX with the giant beverage manufacturer and MNC, the Coca Cola. Coke contributed a lot to the world community under the United Nations Global Compact that was appreciated by its former Secretary General Kofi Annan. It helped HIV afflicted community, tsunami affected countries and its commitment to conduct business with the utmost respect for universal principles around human rights, workplace standards, responsible environmental practices and anti-corruption cannot be underestimated.
On the other hand there had been several complaints in the Asian and African countries. The protests from the local community have led to world wide reaction and have even led to open campaigns for boycott of products of Coca Cola. During May 2008, China declared 593 products as unsafe for consumption and Coke is also one among them. The government of Kerala also ordered the stopping of operations of the plant at Plachimada to safeguard the interests of the local community. Coca Cola's behavior in its expanding Indian market has led to world wide apprehension with the international media and agencies showing support to the protests against the multinational. There were campaigns for international boycott of Coca Cola's products (Atlanta IMC, 2003). In India the protests were also directed against MNCs in general and there were also demands for irresponsible MNCs to leave the country. Coca Cola responded to these by litigations in the court and applying pressures through its power centers in US. Public Relations agencies were hired to neutralize the situation. The company also issued releases which mentions about its socially responsible behavior and good corporate citizenship. Coke utilizing about 40 % of its revenue for promoting its products and advertisements made by it beyond norms is another allegation made against it.
This presentation analyses the various paradox that are surrounding the beverage giant and its response to the brickbats and bouquets that will be useful for the knowledge society to understand and react.
Keywords: corporate social responsibility, MNC, paradox
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