*Hand-in Assignment #*4: Coke - Ethical Issues Your st numbr? Valeria van der Kemp / Nemtseva 459938 Group: IBA-C02 Tutor: Arno Teunissen (please check his lat name) Table of contents: 1. Background information 2. Problem definition The main problem discussed in this report is the following: “Should private or commercial companies be allowed to close exclusive school contracts with schools, or should their activities be forbidden by law?” 3. Objective The purpose of this report is to give an advice to the United States Department of Justice pertaining to the ethical issues surrounding exclusive school contracts. Consequently, suggestions will be given on how to minimize negative effects of the exclusive vending contracts if these operations are allowed to be continued. 4. The Moral Philosophies *4. 1. Teleology* (Utilitarianism) Teleology is a moral philosophy that assesses the ethics of decisions looking at the consequences of the latter. One of the most significant theological theories is utilitarianism theory that is focused on the consequences. It is concerned with the greatest benefit for the greatest number of people even if there are negative consequences for some parties involved. Coca Cola By signing exclusive school contracts and displaying its logos in public schools the company wanted to re-establish its brand loyalty and recognition. This results in increased sales volumes of Coca Cola products leading to additional revenues for the company. The money would be then spent on investment in better working conditions and higher salaries for the employees. Moreover the company production will increase which would lead to hiring additional personnel. On the other hand Coca Cola is aware of the fact that by establishing this programme it would facilitate the increase of soft drinks consumption by children which would cause children’s health problems. However, from the point of view of the company the consequences of closing exclusive school contracts will create more benefit to the company, its employees and society as well, therefore according to the utilitarianism, these contracts are ethical. Government For the government exclusive school contracts on one hand would enhance a local economy supported by increased production and sales of company’s products, increased tax payments by companies and creating hundreds of new jobs. Moreover, it would have a positive effect on the quality of education as schools would receive extra revenues and invest this money in study materials, equipment and personnel. On the negative side higher consumption of junk food and soft drinks would impact the health of children causing obesity and heart problems and in long-term that would increase the cost of health care and the death rate in the country. However, according to the National Soft Drink Association (NSDA), there is no direct link between health problems and soft drinks consumption. From a utilitarian point of view the positive consequences of such contracts will outweigh the negative ones and therefore the decision of allowing the exclusive school contracts is ethical. Public Schools Schools that are engaged in exclusive contracts would benefit from exclusive contracts because they will have the ability to spend more money on educational materials and equipment such as books and computers. The money received by schools can also be spent on higher salaries of the teachers. Moreover, more teachers can be hired. All in all this will result in a better working environment for teachers, a better learning environment for children as well as the quality of education itself. Children Children studying in public schools would on one hand benefit from the money that is provided by the exclusive school contracts because they will be able to use better study materials and equipment, have better teachers and study programs. On another hand they will be exposed to brands and logos used in commercials of firms that engage in exclusive contracts. This will influence children’s preferences for food and drinks. Moreover, exposure to only soft drinks and junk food can cause children to consume these products in higher volumes than healthier alternatives. This will deteriorate their eating habits and cause health problems in a long run. The benefits of educational facilities and materials as well as more qualified teachers do not outweigh the negative effects of soft drinks on the child’s health. Therefore, from the perspective of utilitarianism, exclusive school contracts will be unethical from children. Parents Summarizing, following the Utilitarian point of view exclusive school contracts will benefit the society in a long run more than it would harm some parties involved in these programs. Therefore, these actions are considered ethical 4.2. Deontology A deontologist believes that he/she should fulfil obligations when confronted with ethical issues. The deontology philosophy states that promises should always be kept and that laws should be adhered to. Unlike teleology, deontology refers to moral philosophies that focus on the rights of individuals and on the intentions associated with a particular behaviour rather than on its consequences. Coca Cola If Coca Cola would utilize the deontologist’s philosophy it would quit the Exclusive School Contracts based on the results shown in the latest research conducted on children’s obesity and other problems caused by soft drinks. As it is already mentioned, there is not enough evidence to link health problems and consumption of soft drinks. However, in this research it’s proven that sugar and caffeine, as well as various other elements used in soft drinks can negatively affect consumer’s health. By placing vending machines at schools Coca Cola is stimulating the exposure of soft drinks and company products’ logos to children and therefore prompt consumption that cause harm to them. The potential damage to children’s health would therefore outweigh the profits and potential benefits of school contracts. Government Schools On one hand, Deontologists believe that companies and individuals have certain absolute rights and one of them is Freedom of consent. Based on this right a rule deontologist would argue that public schools have a freedom of consent in deciding whether to close up a contract with a particular company or not. Nevertheless, currently the fastest growing commerce in schools is vending contracts with soda and junk food companies that are not healthy for children. This aspect contradicts with the main idea of deontologists of protecting the good for every individual child involved. Consequently, it is unethical to close the exclusive contracts with soft drinks and junk food companies according to deontology. Children Applying deontological theory to children, the freedom of consent implies that children can choose themselves about two aspects: whether to purchase a soft drink or not and the frequency of the purchase. There are no restrictions concerning these aspects and therefore every child should have a right to purchase as many soft drinks junk food. Anyway, the lack of healthy foods and drinks in the school vending machines makes the choice of the soft drinks inevitable for children. Parents For parents the absence of healthy food and beverages for their children, as well as a harmful effect of the elements used in production of soda and junk food makes the action of exclusive contracts in schools unethical towards their children. To summarize, from Deontologist’s perspective it is unethical to implement school exclusive programs because it can result in harm to one of the most vulnerable groups of the society – children. 4.3. Relativism Relativists believe that ethical behavior is based upon what is previously or currently been done by other individuals or groups. Relativism relies on group consensus to decide what ethical behavior is and what is not. From relativist’s perspective we should investigate the opinion and general practice of parties involved. Coca Cola and its stakeholders are closing exclusive contracts for the company’s sake, creating revenues and serving its corporate objectives. This practice is concerned to be normal among the other companies in the industry. Another important party involved in the situation are the parents of children. There are groups of parents who have a strong negative opinion about a growing number of brands and logos appearing in schools. They maintain that the overexposure of logos and brand names to children can strongly influence their future choices. The health experts are also concerned with the growing intake of soft drinks by children at schools. The consumption of soda by young adolescents has increased almost twice since 1970. The resent report of Centre for Science in the public interest has indicated that consumption of soft drinks can lead to obesity, bones and osteoporoses, tooth decay and heart disease. Moreover, according to the American Federation of Teachers the sale of junk food and drinks negatively affects health of children and adults. However, according to the National Soft Drinks Association, there is still *not enough of evidence to link the health problems of children to the increased *consumption of soft drinks. The exclusive contracts programs are widely accepted by *US *government, schools and fast food and beverage industry and therefore considered to be an ethical issue from the point of view of *relativism*. 4.4. Justice The justice theory can be dived into three different categories, yet they all follow the same core principle, namely: individuals should be treated the same, unless they differ in ways that are relevant to the situation in which they are involved. Having exclusive contracts with only one particular company, schools exclude other firms that are active in the same industry and that have no differences in ways that are relevant to this issue. They give a priority to the most profitable company that can create highest revenues for the school, making this an unethical issue towards other companies in the industry because as stated above, Justice Philosophy argues that all individuals have to be treated in the same way. 5. Conclusion Based on the abovementioned ethical theories we can conclude that exclusive school contracts which supply the schools with foods or beverages that can harm students health is unethical according to Deontology. However, potential harm can be greatly reduced if school commercialization is subject to stricter regulations. Our advices upon the following rules that the US Department of justice could enforce: Contracts which limit the school’s supply of food and drinks to unhealthy options pressurize children to consume products that are potentially harmful to their health. If only 30 % of products offered on these contracts are unhealthy and the remaining 70% are of more healthy alternatives such as yogurts, waters and juices, this will give children the freedom of choice (Deontology). Contracts signed with schools should not be allowed to be exclusive *Businesses* are not allowed to advertise or promote products at *US *primary schools Prohibit sale of soft drinks at *US *primary schools The majority of soft drinks contain various substances that, if consumed repeatedly and at high amounts, could pose a risk to a child's well being and health. Some soft drinks also contain caffeine, a drug that is shown to be addictive, and in high doses can be fatal. Children are not aware of the effects of drinking soft drinks and could be easily influenced to do so (Deontology Theory). *The implementation of these regulations will result in harm reduction towards children and more ethical business practices associated with the commercialization of public *schools* in US*.