Susan Bloemke
June 14, 2015

Discussion Case: Coca-Cola’s Water Neutrality Initiative

1. The public issue facing Coca-Cola Company was that its stakeholders were upset with Coca-Cola because of the impact of its excessive water use on local communities. “The Center for Science and the Environment also charged that Coca-Cola products contained dangerous levels of pesticide residues.” Local officials were shutting down a local plant in the state of Kerala. “An Indian court issued an order requiring soft-drink makers to list pesticides residues on their labels.” In the United States, a grassroots campaign was established “to convince schools and colleges to boycott Coca-Cola products.” (Lawrence and Weber, p. 43)

The performance-expectations gap is “the perceived distance between what a firm wants to do or is doing and what the stakeholder expects.” (Lawrence and Weber, p. 548)
Stakeholders expected a large company such as Coca-Cola to be more proactive about being sustainable and protecting the communities that were home to its factories. The performance expectation gap was large because what the communities were expecting from Coca-Cola was much higher than what Coca-Cola was performing. Stakeholders expected: * Coca-Cola plants to be more sustainable in regard to the natural resources it was using in production, and * offer products that were pesticide free.
Coca-Cola was: * producing products that were containing pesticides and not disclosing that on its labels, * using 82 billion gallons of water per year depleting communities of much needed water.

2. If you applied the strategic radar screens model to this case, Geophysical environment would be the most significant. Geophysical environment ‘relates to awareness of the physical surroundings of the organization’s facilities and operations, whether it is the organization’s headquarters or its field offices and distribution centers, and the organization’s dependency and impact on natural resources such as minerals, water, land, or air. (Lawrence and Weber, pg. 30) Coca-Cola was not paying attention to the amount of natural resources it was affecting. They were depleting local communities of water and introducing pesticides to their products. They needed to focus more on the Geophysical environment on their radar.

3. Issue management lifecycle process is divided up into 5 stages: Identify issue, analyze issue, generate options, take action and evaluate results (Lawrence and Weber, pg. 32). Coca-Cola has participated in each of these stages. For example: * Identify issue: Coca-Cola “sat down with each of its top bottlers, all of its operating groups, and really walked through all aspects of water and really understood where they were coming from and reached consensus through a very deliberate process.” (Lawrence and Weber, pg 44) * Analyze issue: Coca-Cola surveyed its global operations to assess its water management practices and impacts. Coca-Cola identified the issue in 2007 when it announced an aspirational goal of water neutrality to “safely return to nature and to communities an amount of water equal to what we used in all our beverages and their production by the year 2020. (Lawrence and Weber, pg 44). * Generate Options: They devised a plan to accomplish its goal by reducing, recycling and replenishing. * Take Action: Coca-Cola vowed to reduce its own use of water by running its operations more efficiently, discharge water used in manufacturing only if it were clean enough to support aquatic life, replenish the balance of the water it used. * Evaluate results: Coca-Cola estimated in 2011 that these conservation projects had replenished the equivalent of 31 percent of the water used in finished beverages.

4. Coca-Cola ‘measured the benefits of over 300 partnering water treatment facilities in Columbia to restore watersheds in Thailand, to improving sugarcane irrigation in Australia.’ (Lawrence and Weber, pg 44)

5. I feel that Coca-Cola responded appropriately to the issue at hand because they took necessary steps to such as those outlined in answer #4 to improve the damage they had caused. They acknowledge that they still have considerable improvements to make and are still evolving but now the issue in on their strategic radar and they are addressing the issues.

References
Paul R. Lawrence and James F. Weber. (2014). Business and Society: Stakeholders, Ethics, Public Poicy. New York: McGraw-Hill.