Brief Analysis Of Coca Cola And Pepsico Business Essay

Brief Analysis Of coca sess And Pepsico duty EssayIntroductionThe involvement in corporate neighborly duty, take holdable art practice, corporate governance, occupation ethics, and integrity and compliance management has gr make markedly in the past times decade (Waddock et al., 2002). It is not only stakeholders who necessitate companies to pay greater attention to norms, values and principles companies themselves ar acknowledging the importance of responsible for(p) military control practice (Waddock et al., 2002).But what are a conjunctions responsibilities? It is widely accept that we are in an environmental crisis, no doubt about that. thither is nearly unanimous agreement that the earth is getting warmer, and the consensus in the scientific community is that human activity, especially through activities that emit hydrocarbons, is the chief hold of climate change.Business ethic has become 1 of the strongest news stories of the past decade. Previously renow ned companies such(prenominal) as WorldCom, Enron, Wal-Mart, Google and Starbuck have become unite to a growing trend of unethical argumentation behavior. Nevertheless the environmental issue has created a big impact on todays business organization.The EU has decreed that capitalism, and whence business practice within capitalism, should be environmentally sustainable. Financial success by itself is no commodiouser sustainable thusly EU environmentally friendly business practices are considered a honorable norm and consequently a moral obligation.Although corporations are primarily business organization run for the benefits of the stockholders, they have a wide range fate of responsibilities, to their own employees, to the customers and suppliers, to the communities which are located, and to the confederacy at large. Most corporations recognize these responsibilities and plant a serious elbow grease to fulfill them.Analysis of coca plant- poop and PepsiCoCoca-colaThe Coca- sens Companys website contains sufficient union of information on their segments of corporate governance, ethic, environmental and sustainability issue.Corporate governanceCoca-cola has pull to strive and enforce the establishment of the principles of corporate governance. Corporate governance that has been choose by them is based on the belief that main(prenominal)taining and alter management capability and the fairness and transparency of their corporate activities is of utmost importance.Ethic and environmental SustainabilityCoca-cola precise few guidelines about utilization of water on their business operation. They formulate few objectives which the main aims are to return the water safely to the communities and personality as what the gild consumes for their beverage production. The website alike give tongue to their roles on encountering water-scares problem around the globe.The Companys Website and Case Study RelationThe Coca- dummy Company and WWF had combined their military capability together on preserving nature mainly on conserving water. Several ideas and projects had been stated in order to rectify global water efficiency. Focusing on the river Yangtze in china, their collaboration is vital beca intent it is in line with their coalition main objective.The partnership determination in the Yangtze is to inspire better governance and sustainable river management practices across the basin. Coca- green goddess Companys website.The Coca-Cola Company and WWF initially planned on these trey initiativesSupply Chain Working with the supplier in order to sustain agriculture mainly sugarcane, oranges and corn.Water Stewardship A fresh water preservation relating seven river basins including Yangtze River. The aim is to develop and implement comprehensive water stewardship plans that exit serve as models for the Coca-Cola system.River Basin Conservation To keep the seven hear freshwater basins on which our partnership is focused whic h include Yangtze River.PepsiCoPepsiCo Companys website contains an adequate follow of information on their segments of corporate governance, ethic, environmental and sustainability issue.Corporate GovernanceReferring to the website on corporate governance segment, PepsiCo has adopted strict corporate standards that govern their operations and ensures accountability of their actions. These corporate friendly responsibilities are also do as an integral part of their operations. The website of PepsiCo on corporate government segment comminuted the corporate standards that have been strictly governed to guarantee the accountability of their action.Ethic and Environmental SustainabilityThe successful corporation in 2030 pull up stakes be the one that recognizes the practical outcomes of the global crises we face, and one nimble and tenacious enough to embed this scholarship into their strategy and business processes. INDRA NOOYI, PEPSICO CHAIRMAN AND CHIEF EXECUTIVE OFFICER, MAY 2009The direction by the CEO of PepsiCo above shows the dedication on preserving the environment hence numerous efforts had been through with(p) by them for the past few historic period. Recently PepsiCo had released initiatory water report titled Water Stewardship safe for Business Good for Society which explain the companys commitment to safeguard and replenish water use in their operations thus provide a better environment for future generation. PepsiCo has proclaimed on their website regarding their goal and commitment to protect the Earths rude(a) resources. PepsiCo state that their part as a dynamic global business operator, they exit remain committed in minimizing the impact of their business on the environment.The Companys Website and Case Study RelationPepsiCo and mainland China Womens Development Function had coupled their forces on one purpose, which is to provide a clean water issue and to solve drinking water shortage especially in countryfied areas in China. PepsiCo Foundation had donated a sum of $ 1.5 million on puzzle Water Cellars Project. The objective of the project was to design pilot water yield systems in order to conceive water and at the same time the project aimed to solve the problem on the difficulties of tribe in rural area to obtain safe drinking water.Water Cellar sketch of a water cellarThe main idea of the Water cellar is to accumulate rain and reserve the water for man and farm animals. It is also a kind of water-storing facility in Chinas rural areas.In social intercourse on the case study, the PepsiCo has provide a huge-scale effort and this has been proven by the website and a report title Land of Love, Water Cellar for Mothers done for PepsiCo. They also had launched the project in 2000, and since then many water cellars has been built.PepsiCo rely that the planet is for all human kind to share and is their obligation to be a good citizen to the world. This project may have solves some environmental ethi cal issues that became a responsibilities among the big corporation.Differences in Experience and PerceptionChina conceive Coca-ColaMorality consists of rules of human behavior and also specifies that authoritative actions are haywire while others are right. Actions can be seen and evaluated from moral prospect even in business since they involve human activity (George.R. 2005).Coca Cola has shown concern for the environment in China. The partnership in the midst of Coca Cola and WWF to protect Yangtze River is a non-profit one, which again reiterates Coca Colas concern about environmental issues. According to W. Michael Hoffman, a business has an obligation to keep the environment clean beyond what the law states. Companies should find methods to eradicate environmental problems caused by their production. Teleological ethics theory states that the consequence of an action will tempt whether the action is good or evil. In the case of Coca Cola, if the teleological theory is a pplied, China will view Coca Cola as bad if the latter is polluting the environment.Moreover, Coca Cola owns around 33% of Chinas washing soda marketplace. The companys representatives have predicted that there is still the possibility to grow. Products are being tailored only for the Chinese citizens. Given that Coca Cola is planning to grow, this will create more employment in China. By operating in China, Coca Cola has a moral right towards the government and the citizens, and the company should aim should aim at improving their standard of spiritedness. (Shaw, Barry)However, China shoots to take into consideration what happened in India. The company had to close down for causation water shortages, and also for ignoring social and environmental foundations of consumer trust. A company may have different factories around the world, provided its vision and mission rumor should be the same. Given that we can consider Coca Colas actions as unethical, theres a reason for the Chinese government and citizens to worry about the Coca Cola Company established in China. What has happened in India can again be connected to the teleological ethics theory since the problems caused by Coca Cola has led to the closure of the company. As prescribed in this theory, only the ends or consequences of an action can determine whether the latter is good or evil.Coca-Cola viewing ChinaCoca-Cola has experienced thoughtless ethical troubles with its affiliation amid their stakeholders in China. It is intense to expand its business in china and one of the ways has been the partnership with WWF with targets of creating a relationship of trust favorable in increasing its market in china. The company launched a communion schedule aimed at educating heap along the Yangtze River about environmental concerns, river basin management and water management. This shows the companys intention in exploring the moral responsibility to the community in situations mass overlook enough knowledge about. One of the principles which separate this right action from wrong is utilitarianism which emphasizes on bringing most happiness for everyone if not majority of the people through our actions ( Shaw.W, Barry.V,2010). Hence, this program is beneficial to farmers and the ongoing three Gorges dam grammatical construction which will be providing electricity to the community.Furthermore, Coca Cola is under the large view of corporate social responsibility which identifies this company as one pursuing profits as well as having other responsibilities to its consumers and guild at large. As argued by Konosuke Matsushita any business should make benefit to confederation as its objective and while serving society, profits will be giftd automatically (George.R, 2005). For example the company has helped WWF contri besidese a major role in the Yangtze River Forum through uniting on a recommendation to deliver the Chinese government for implementing pollution regulations, which apparently are fairly uneven in the country.We support the case of Coca Cola viewing China because companies are motivated to become more socially responsible to their most important stakeholders such as consumers and the community because they reckon them to study and address the social issues relevant. In this case, Coca is contributing towards the conservation of the environment through the water security in China.Cross ethnic Ethical Decision-MakingThe business culture of a country is shaped by business practices and ways of thinking over a long point in time of time. Countries such as USA and China have different business cultures and ways of conducting their business partly because of their differences in history. Thus, it is absolutely vital for Coca-Cola and WWF to understand the cultures and practices of the Chinese society. In our point of view, Coca-Cola and WWF have been successful to a certain extent in cross-cultural ethical conclusion making. The Chinese so ciety believes that everything should be in harmony (Kaptein, 2004). The efforts of WWF in collaboration with Coca Cola to clean the waters of the Yangtze River can be viewed as a decision based on the value of harmony within the Chinese society. This effort would thus be viewed as an ethical business conduct and improve the relationship between WWF and Coca Cola and China.The Chinese place heights importance on human relationships or guanxi. As a result, the Chinese strive to work in groups to accomplish a common goal (Pitta, Fung Isberg, 1999). The groups in this scenario include a non-profit organisation, WWF, a profit making organisation, Coca-Cola, and the Chinese society. The common goal of these three groups is to ensure clean water is streak through the lifeblood of millions Chinese, the Yangtze River. Therefore, this is seen as an informed decision by WWF and Coca Cola based on a good grounds of an important Chinese culture.Based on an American culture, business relatio nships can be separate from personal relationships because business transactions are bounded by good contracts (Trevino Brown, 2004). In negotiating contracts and business transactions, signing a contract is seen by Americans as the final stage of business association. However, from the Chinese point of view, friendships are seen as life sentence commitments and as a first step to a deeper and improving relationship. The fact that Coca-Cola has been operating in China for so many years setting up 39 bottling plants is a testimony to Coca-Colas true understanding of the elements of friendship and negotiations within the business conduct of the Chinese society.Communication is seen as a way to bridge the gap that might exist between two different cultures. In their efforts to clean the Yangtze River, WWF and Coca Cola launched parley programs to educate the Chinese communities about environmental issues. According to McWilliams and Siegel, the combination of communication and per suasion can help the understanding of the two parties concerned. This presents WWF and Coca-Cola with cross-cultural benefits as they are able to earn the trust of the Chinese society by making efforts to improve the well being of China as a whole.Recently, the Chinese press were complimenting Coca-Colas effort in sponsoring Project Hope, a program that aims to improve education for disadvantaged children throughout China. The company aims to build carbon Project Hope Schools by 2011. This effort is in line with the Chinese culture of valuing and strengthening relationships. The news also highlighted that Coca Colas partnership with WWF to conserve the Yangtze River showed significant progress by galvanizing local communities to actively move into in river basin conservation (Press Release Coca Cola, 2010).Certain decisions made by WWF and Coca Cola were questionable as it did not fully consider the cross cultural implications. Firstly, Coca-Colas US$ 2.3 billion bid for China H uiyuan Juice suggested that the company was acting in its own self interest of gaining market share and monopolising the beverage industry in China. The Chinese society views a sudden and substantial change such as the takeover as disruptive because it does not consider the notion of harmony. Coca-Cola were acting fit to the theory put forward by Adam Smith who advocated the hunt of maximum self interest or ethical egoism. According to Garrett Hardin, the disaster of commons explains that each individual believes their use of commons only has its own negligible effect. However, the collective result can be of gradual hurt or destruction which makes everyone worse off. The fact that Coca-Cola uses 290 billion litres of water a year for production, might indicate that the company themselves might be at fault for causing water pollution at the Yangtze River.http//www.thecoca-colacompany.com/presscenter/nr_20101029_china_investment.htmlregulationtransnational Companies Balance Betwe en Profits and EnvironmentMultinational companies usually generate huge profits every year while they also need to contribute to the gradual improvement in the environment. One of the ways to symmetry those two elements, that is profits and good environment, is through sustainable development. The latter should adjoin the needs of the present without flexile the future generations ability to meet their needs. (United Nations Brutland Report). sustainable development needs the integration of social, environmental and economic considerations to make long term decisions. As per Milton Friedman theory, the main social responsibility of a company is to increase profits. However, Coca Cola should make sure that it is not compromising the welfare future of Chinese citizens with its current production activities.Furthermore, there is the clich the business of business is business. (Business Ethics,, George). A corporation may ignore the moral demands of an individual, but it can hardly ignore the moral demands of the society it conducts its business in. This is because two parties are dependent on each other, for example in Japan, the business of large corporations recently changed, not only to produce goods and services but to also to care for the companys stakeholder such as a guarantee of lifetime employment to employees while providing a conducive environment to the people living in the region it is operating.Multinational Corporations today have a regenerate interest towards Corporate Social Responsibility instead of prioritising profits at the apex of their pyramid. Some MNCs use the Corporate Social Responsibility place as a strategic tool to attain economic objectives which is at last wealth creation. These MNCs follow the approach of economist Milton Friedman who philosophised that the only one responsibility of business towards society is the maximisation of profits to the shareholders within the legal fabric and the ethical custom of the country. H owever, the interests of people who have a stake in the firm also known as stakeholder must not be excluded by MNCs. Satisfying these interests will contribute in maximizing the shareholder value (Odgen and Watson, 1999). An adequate level of investment in philanthropy and social activities will allow MNCs to bring in profits (McWilliams and Siegel, 2001). Stakeholders are the people who directly or indirectly affected an organisations actions, objectives and policies. MNCs owe a fiduciary duty towards stakeholders as they can bring profit to the company. There is a social contract between the organisation and society. A straightforward piece in order to balance these two elements would be by maximising the shareholders value as the highest priority to evaluate specific corporate social activity (Mele and Garringa, 2004). These values of shareholders may be seen from many different perspectives such as a greener environment. However, if this method imposes a cost or hinders the co mpany from earning profit, it should be declined according to Milton Friedmans theory.