Coca-Cola is the world biggest soft drink manufacturing company with outlets in more than two hundred countries. The company operates the largest distribution network in the world and it is estimated that more than 1 billion company’s product are consumed every day. It has the most valuable brand name in the world and has got tremendous opportunities of excelling in all dimensions.
The company has always demonstrated strong market orientation, making strategic decisions and taking actions to attract, satisfy and retain customers. This has afforded it with an added advantage over their competitors in the world market. However over the past decade the company has been involved in gross misconduct and questionable behaviors. This legal and ethical problem has got impact on the coca-cola financial performance, investor trust, slowed sales to an extent that the company’s sale today is at the same level it used to be ten years ago.
Coca-Cola Company’s Legal and Ethical Problem
In Colombia, Coca-Cola Company has been accused of participating in unethical behavior. The Pan-American beverage (Panamco), coca-cola main bottlers In Latin America has been criticized of having negative attitude towards workers union (Bose, 2009). It is alleged that the coca-cola bottling company hired paramilitary mercenaries to assassinate the workers and union leaders. The union of worker in Colombia stated that eight coca-cola workers died, fourthly eight went into hiding and sixty-five received death threats by militias hired by the coca-cola management to terrorize workers. The union believed that the coca-cola and its local bottlers were complicit in the case hence sought reparations to the families of the slain and displaced workers.
Among the cases that were heard in court include the one filed by the united steelworker of America and the international labor rights fund .In the lawsuit titled, Sinaltrainal vas as, it was alleged that coca-cola hired, contracted or otherwise directed paramilitary security forces to terrorize and kill workers union leaders in bid to weaken the union. However the company has since denied the allegation. The critics argue that in whatever case the assassination helped the company to reduce the agitators and weakened the workers union much to the delight of the company.
Workers in Colombia work in environment full of fear. Many of them are intimidated and forced to achieve targets that are much higher than their ability. Weakened trade union has enabled the company to manipulate workers by paying low wages and expose workers to long working hours (Bose, 2009). Workers in Colombian coca-cola company struggle each day to produce enough bottles or product for the company with minimal wages and fear of being sacked or killed. Many of them fear to expose the challenges in public because of their job security. It should be understood that Strong legal backing has helped coca-cola company to win many cases sued against it.
To mitigate and improve the relationship between the workers union and the management of coca-cola company, Christian Brother’s investment services submitted a shareholders resolution that called for adoption of code of conduct on the bottling practices and the employee relations. This code of conduct was submitted in the year 2002 and it cited all the problems in the company suggesting standards for suppliers, bottlers and vendors (Bose, 2009). This resolution received support from the workers union in Colombia and many other countries but the coca-cola company of directors rejected the proposal.
The board justified its action by saying that the company already has enough policies addressing substantially all the concerns raised in the proposal. These actions among many others have agitated workers who feel that the company has no respect for their rights. Colombian trade union has since called for the international boycott of all coca-cola products citing intimidation, kidnapping and assassination of its workers by the paramilitaries acting on behave of the company. This move has since drastically reduced total sale of the company’s product in Colombia.
Improving Company’s Social Responsibility
To regain the lost glory and improve the cooperative responsibility of the company, several measures have to be taken. In the first place the company needs to improve on financial performance that has dwindled every year. One effect that might have a critical influence is its relationship with the workers and distributors (Bose, 2009). Coca-cola Colombia needs to admit and be responsible of workers who lost their lives. To show solidarity and social responsibility, compensation should be made to the families killed by the militia men and the rest of the workers promised that nothing of the sort will ever happen again in future. Workers should be allowed to have free and independent union to represent them in day to day problems.
Although the company has managed to invest and improve its reputation in quality product, more should be done to improve social responsibilities. The company should invest in environmental concern, education and culture. For instance the company should be willing to invest more money in educating the poor children in the society including those of workers. However, a comprehensive policy that addresses the needs and responsibility of workers, management and stakeholders should be adopted.