The Coca Cola Struggles with Ethical Crises

Ethical issues affect all businesses. The definition of these ethical issues remains the responsibility of the stakeholders. Most often than not, an organizations get faced with a situation, a problem or an opportunity that requires its attention in making the right move.  It is in such a situation that the various moves become evaluated as to whether they are right or wrong. When it comes to ethical dilemma, all the alternatives are unethical and thereby the organization tends to seek the alternative that is less unethical or that contains the least wrong in it. Some of the ethical issues that coca cola faced include the following: abusive or intimidating behaviour, conflicts of interest, lying, bribery, sexual harassment, fraud, corporate intelligence privacy issues and insider trading as well as intellectual property rights (Wankel and Mallek, 2009). These at times get characterized by physical threats, false accusations, insults, and yelling.

Significant issues or dilemma

Regarded as one of the most common ethical nightmare for employees at Coca Cola Company, is the abusive or intimidating behaviour that has been there for quite a while now. Though it differs from one person to another, it has some common characteristics that are familiar with many people. Characteristics such as harshness, physical threats, insults, false accusations, and being irritating are not ethical. 

Another ethical issue that gets experienced in companies has got to do with lying. In this case, lying refers to the distortion or omission of truth. There is the type of lying that gets portrayed as a joke without meaning any kind of malice. There is also the kind of lying that affects the operation of the business or the workers at the company (Ferrell, Fraedrich and Ferrell, 2012). There is commission lying which involves forming perceptions or attitudes by words that deliberately deceive the receiver of the information. Commission lying often gets used in procedures, contracts and in words that bear same spelling but relay different meaning. Commission lying has even found its way in advertising. When the business shows a picture of its product that does not necessarily reflect the real product. This is most common at the Coca Cola Company and majorly gets used as a marketing strategy.

There is also the omission lying that involves intentionally refusing to notify the customers of any problems, changes or safety warnings or even the downside effects of the company’s product or service. Therefore, a lie becomes unethical when it happens to distort the truth and becomes proved by a court of law to cause damage to others meaning that it becomes illegal (Ferrell, Fraedrich and Ferrell, 2012).

Conflicts of interest are other ethical issues and dilemmas experienced by the company. It occurs when an individual becomes faced with tough choices to make. Choices such as whether to pursue ones own interest or the interests of the company. Sometimes there is also the dilemma of advancing the interest of other groups other than the company.

Bribery raises ethical issues involving the act of giving out something, in most cases money, in order to gain an upper hand in a certain situation. Bribery can become viewed differently in different environments. One thing is certain. If the act goes against morality, then it is unethical. The company experiences this kind of ethical issue when bribery takes many shapes, such as active corruption or active bribery and passive bribery. Active bribery happens when the person offering the bribe commits the offence and passive bribery happens when the person receiving the bribery commits the offence. The issue of bribery happens to the company when the company bribes government officials or public servants in order for them to influence some laws and decisions in favour of the company.

Corporate intelligence can also be categorized as an ethical issue affecting the company. It refers to information that gets gathered and analyzed concerning the market, technologies, customers as well as competitors. The socioeconomic and political aspects feature in this area. Theft of corporate intelligence is on the rise and causes ethical dilemma. Corporate intelligence can get used by the company to ensure it maintains its competitive edge against its competitors (Wankel and Malleck, 2009). The issue involves the way one goes about in acquiring the corporate intelligence, whether it is ethical and legal. The company values things like propriety information such as secret formulas, marketing strategies and even manufacturing process that are prone to theft. Some of the ways of obtaining the valuable trade secrets involves; hacking, social engineering, dumpster diving and even phone eavesdropping all with the aim of trying to get access to the corporate intelligence bringing about a range of ethical discussions.

The company also gets faced with the issue of discrimination. Discrimination can take many forms, from discrimination based on gender, age, race, religion, marital status to those involving sexual orientation and disability. The most common being race, gender and age discrimination as seen by the large number of charges reported.

 Sexual harassment also becomes experienced in the company, and it involves repeated, unwanted sexual advances by one individual towards another. It may take different forms, verbal, visual, written and even physical. Mostly happens to individuals of different sex but there are instances where same sex harassments get reported. Sexual harassment can take the shape of unethical intimate relationships. The results of these relationships involve conflicts of interest or some sort of unfair judgement in the future.

Out of all the above ethical issues, the one that was most significant was that of individuals putting their own interest ahead of the organizations interest. This is because between the years 2005, and 2007, among all the types of misconduct observed, it had the highest percentage, 22% meaning that it was the most common type of ethical issue that became experienced. About 21% showed that abusive behaviour was an issue. Lying to employees was also not far behind as it constituted 20% of the cases reported.  Therefore, the issues that dealt with misconduct and mismanagement were the most significant. This is because they affected the consumer directly or indirectly. Since consumers have the buying power, their attitude towards the company can affect its financial position and the operations of the company in general.

Steps to prevent the ethical issues or dilemmas

 In order to prevent the above issues from arising, coca cola should have ensured the workers became well motivated so as to avoid the issue of mismanagement such as workers putting their interest ahead of the company and avoiding bribes.  Merely asking customers to subordinate their interests to the interests of the company cannot be regarded as the best response. The company should have laid down strict code of conduct that should be adhered to by all without any exceptions so that no matter what the employees do, they should be aware that they will account for their actions. The human resource section of the company should ensure that those employed at the company are people of high morals. The consequences of unethical behaviour should be equivalent to termination of employment. This will help reduce the incidence of unethical behaviour. Work ethics should be clearly outlined in the broader mission and vision of the company. The company should earn and maintain the trust of the members so that all stakeholders can ensure that their deeds are for the best interest of the company (Trevino and Nelson, 2010).

Coca Cola Company took some actions in order to deal with some of the ethical issues that faced them. Pertaining sexual harassment for instance, the following steps were put forth to prevent it from happening: Sexual harassment became defined; a statement of policy was put in place whereby someone got named to be responsible in ensuring harassment was prevented. A reporting procedure also got established and a non retaliation policy became formulated to protect complainants and witnesses. The action of the company of simply defining sexual harassment can only be termed as a necessary but not a sufficient move. As such it cannot be regarded as the best move. The company should have formulated more stringent policies, like laying off the perpetrators of the action.

In an attempt to solve the problem of racial discrimination, Coca-cola pledged to spend $1 billion, on goods and services from minority vendors. This move can only be seen as an attempt to solve the current problem rather than solving the problem from the root cause. It can’t therefore be regarded as the best response.

Coca Cola Company came up with forums where people can discuss ethical issues that they face, and share ideas on how they overcome these issues. They provide their employees with guidance and resources on ways through which they can make difficult decisions when faced with dilemmas. Coca Cola Company has also made a great attempt to build and sustain the company’s reputation within the communities in which they operate.