Prepared for: Mr.

Cyril H. Ponnu
1:

Prepared by Group

Mahmood Ezzaddin CGA130003 Chin Soon Hwa Shahab Rezazadeh CGA130060 CGA120159

Suresh Krishnasamy CGA120169

PRESENTATION OUTLINES
The Coca-Cola Company (TCCC) TCCC crisis in India (2003) Public issue facing The Coca-Cola Company (TCCC) Performance-expectation gap Strategic radar screens model analysis Issue management life cycle process model Stakeholder engagement Conclusion References

The Coca-Colas Company (TCCC)

World largest beverage company. 70% of revenue ($34 billion) came from outside United States. Provides 1.7 billion serving per day. Water as the core resources, consumes 82 billion gallon per annum of water. 40% went to finished beverages and 60% used in manufacturing process (wash bottle, clean equipment, employees sanitation).

Water consumption in TCCC per day

Water usage of 5.7 million people in a day (*150 litre per head per day)

TCCC crisis in India (2003)

Center for Science Environment (CSE) accused TCCCs product contains high levels of pesticide residue and insecticides.
High enough to cause cancer, damage to nervous and reproductive system, birth defects, and severe disruption to immune system.

Pesticide level in soft drinks sold in Indian are significantly higher than permitted by European Union Standard.

Source: Center for Science Environment India

Accusation against TCCCs bottling plant uses too much water, depriving local villagers supplies of drinking and irrigation. TCCCs bottling plant was shut down by local authorities and with reason of causing underground water depletion. Court order was issued to soft-drinks maker to list pesticide residues on their label. Grassroots campaign to convince schools and colleges to boycott CocaCola products.

What was the public issue facing The Coca-Cola Company in this case?
As we enter the Twenty-First Century a global water crisis is threatening the security, stability and environmental sustainability of all nations, particularly those in the developing world. - UN World Water Development Report, 2003.

Water is the main ingredient in every product and is also a limited natural resource facing unprecedented challenges from over-exploitation, increasing pollution and poor management. The Coca Cola Company SEC 10-K Report, 2004Nearly

Nearly 2005 to the early 2010s, The emerging issue was facing The Coca Cola company is the availability of water. Based on the water is the main component in all aspects of the production.

Describe the "performance-expectations gap" found in the case? what were the stakeholders concerns, and how did their expectations differ from the company's performance?
From the company's perspective the water plays an essential role of the firm profitability. From other Stakeholder s perspective such as inhabitants of the around area and other environmental organizations were concern about something different is the impact of the long-term of demand on the water supply and contamination of water runoff. The company performance was inefficiently to take the right action toward the water crisis since it arose. The expectation of stakeholders is to use a company resources efficiently and to protect consumers from harmful contaminant. The company started to take a serious action for the dilemma after was abruptly reminded of the impact of its water use on local communities when the Center for Science and the Environment, a think tank in India, charged that Coca-Cola products there contained dangerous levels of pesticide residues. The difference in the company performance and stakeholder's expectation created a gap among them that left Coca Cola fighting to save its image.

Strategic Radar Screens model

Strategic Radar Screens model

1. CUSTOMER ENVIRONMENT: Customer comprising of local community will complaint on the shortage of waters. 2. COMPETITOR ENVIRONMENT: To maintain the business in this industry, Coca- Cola and other drink makers need aware on the necessity of waters and the problem they are facing. 3. ECONOMIC ENVIRONMENT: Ensure various water projects to make the continuous availability of water at a cheaper rates.

Strategic Radar Screens model

4. TECHNOLOGY ENVIRONMENT: Waste water treatment plant, efficient methods in reduce water require newer way of bottling the drink. 5. SOCIAL ENVIRONMENT: Need to bring confident in the local community, Coca-Cola Reduce, Recycle and Replenish.

6. POLITICAL ENVIRONMENT: United Nation, National Government involve in the water shortage globally.

Strategic Radar Screens model

7. LEGAL ENVIRONMENT: Court rule - soft drink maker to list pesticide residue on their labels. 8. GEOPHYSICAL ENVIRONMENT: Obvious natural resources Water shortage, waste water treatment. Global Issue.

Issue Management Life Cycle Process

Identify Issue

Evaluate Results

Analyze Issue

Take Action

Generate Options

Issue Management Life Cycle Process

Analyze Issue:
Serious threat to public health issue by Coca-Colas product which contains high level of pesticide contamination. Water shortage due to excess use of ground water by Coca-Cola's bottling plant. Interference to local culture - water carries an almost spiritual meaning to Indians. Bathing is viewed as a sacred act. Impact to TCCC: Enormous fall of revenue and increase damage to Coca-Cola image. Coca-Cola factory close down. Facing Lawsuit and further compensation.

Issue Management Life Cycle Process

Generate Options
Comprehensive study to survey global operations to assess its water management practices and impacts.
Consult World Wildlife Fund (WWF), Nature Conservancy. Humanitarian organization (CARE) and various academic experts. Discussion with coca-cocas bottler to reach consensus in water conservation project.

Issue Management Life Cycle Process

Take Actions TCCC committed to achieve goal of water neutrality.
To safely returns to nature and communities an amount of water equal to what we use in all our beverages and their production, by year 2020.

Implement Reduce, Reuse, and Replenish concept to reduce water usage and increase operation efficiency. Carry out waste water treatment before discharge into river. Participate in various water conservation projects, such as river conservation, rainwater collection, and efficient irrigation.

Issue Management Life Cycle Process

Evaluate Results TCCC moved to measure and publicly share their water neutrality achievement.
Source: The Coca-Cola Company

13% reduction of water ratio (the number of gallons of water used

per gallon of product produced)

39% of TCCC facilities were using recycle water. 29% of water used in finished product were replenished through community water projects.

Stakeholder Engagement
Stakeholder engagement is an organizations efforts to understand and involve stakeholders and their concern in its activities and decision-making process. Stakeholders can be any group or individual who can be affected by or can affect company or its activities , such as employees , suppliers, existing customer , community groups and so on .

It is the relationship between organization(business) and stakeholders.

This relationship develop gradually through four stages :

1)Inactive : In this stage , the company do not pay attention to stakeholders

concern. They make decision incorrect their own without consultation or dialogue with their stakeholders.

2)Reactive: They will take action when they feel that they have to do and they
should defend.

3)Proactive: proactive corporations are willing to anticipate stakeholders

concern and they have specific department to make relationships and communicate with stakeholders such as public affairs , consumer affairs and so on.

4) Interactive : this stage is the most effective way that the companies would
like to promote their relationships with stakeholders and enhance the mutual respect and confidence and take advice from their stakeholders.

How TCCC use stakeholder engagement :

TCCC started to consult with their stakeholders and share their idea with them such as world wild life fund, The Nature conservancy, the humanitarian organization care and the other experts to collaborate with them about this emerging issue and took their advice. They participated into different water conversation project like river conservation , rain water collection and efficient irrigation.

After that , they found out 3 ways : 1)reduce 2) recycle 3)replenish to accomplish their goal for storing the water and reducing the loss of water.

Benefit of stakeholder engagement :

Coca cola company had active dialogue and conversation with stakeholders that it help companies to anticipate environmental issues. Make a better and correct decision regarding this issue and they can be part of solution. It reduced the risk of litigation. HCCC get sufficient information about societys expectations and demands, bringing high level expertise, creative innovative solutions and could again improve their reputation in the market . HCCC could be more successful in shaping that impact their significant advantages. Furthermore , they could enhance their productivity and efficiency and sustainability. Reduced its water ratio by 13% and 39% of their facilities had used recycled water and 23% of water which used for production had been replenished through the community water project.

Conclusion
TCCC responded appropriately for the water issue. Their reaction to resolve the issue depicted how they are really care for their consumers and the societies which they operate in and to prevent from spreading sickness among the people particular young generation who are the most beverage consumers. They paid attention to outside of the company issues and look at this problem as their problem and attempted to communicate and consult with their stakeholders. Eventually TCCC didn't evade of their responsibilities toward the consumers and communities, and made a lot of efforts to resolve this emerging issue through commitment on water neutrality initiative activities, such as:Reduced its water ratio. Facilities were using recycled water. Partnerships with governments and nonprofit organizations Water treatment, Restore watersheds and Irrigation Improvement.

REFERENCES
Anne T. Lawrence and James Weber, Business and Society: Stakeholders, Ethics, Public Policy, 14th Edition, McGraw-Hill, 2014. Archie B. Carroll and Ann K. Buchholtz, Business and Society: Ethics, Sustainability, and Stakeholder Management, 8th Edition, CENGAGE Learning, 2008. Coca-Cola 2011/2012 Sustainability Report, 2012, Retrieved from http://www.cocacolacompany.com/sustainabilityreport/ Hard Truths about Soft Drinks, 2003, Retrieved from http://www.cseindia.org/node/507 The benefits of a stakeholder engagement plan: a Gap Inc. case study, 2011, Retrieved from http://communica.ca/the-benefits-of-a-stakeholder-engagement-plan-a-gap-inc-case-study Benefits of Stakeholder Engagement , 2013, Retrieved from http://www.future500.org/benefits-ofstakeholder-engagement/