Global [ ] 1

G

Fahad Umar

ABSTRACTThis paper focuses on global business strategy of Coca-Cola Company. The first part of the paper concentrate on the internal and external analysis of the company in the international business environment as well as the extent of globalisation on the company with a detailed report on different organisational structure being implemented on an international scale. The second part of the paper explicitly congregate issues on Corporate Social Responsibility on organisations operating internationally with regards to moral and ethical issues, conflicts between social responsibilities and ethical issues and regulations/guidance as regards to social responsibilities with emphasis on Coca-Cola company.

Stratford Collage of Business and Management UK

Table of Contents

ABSTRACT............................................................................................................................ 1

Introduction and Coca-Cola Company’s overview..................................................2

PESTEL ANALYSIS.............................................................................................................. 3

SWOT ANALYSIS................................................................................................................. 8

The impact of international business environment on Coca-Cola Company:.............................................................................................................................................. 15

Globalization:................................................................................................................... 16

Brief history of Globalization...................................................................................... 16

Benefits of Globalization.............................................................................................. 16

Factors affecting Globalization................................................................................... 17

Extent of Globalization on Coca-Cola Company....................................................18

Challenges faced by Coca-Cola Company on Globalization...............................19

Structures of organisation operating on international scale...........................20

Moral and ethical issues faced by organisations operating internationally.............................................................................................................................................. 21

Conflicts between corporate strategy and ethical and social responsibility.............................................................................................................................................. 24

The legislation, regulation and guidance as to corporate social responsibility................................................................................................................... 25

Code of ethics in regards to guidance on corporate social responsibility.. .26

Conclusion and recommendations...........................................................................27

Reference........................................................................................................................... 27

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Introduction and Coca-Cola Company’s overview

According to a report by United State Securities and Exchange Commission

(2006) the Coca-Cola Company was established in Atlanta, Georgia, in the year

1886. The company is considered to be the world number one non-alcoholic

beverages company, leading in manufacturing, marketing and distribution of its

product (concentrate and syrups). Concentrates and syrups are being sold out to

bottling companies for final dilutions and packaging to consumers, Coca-Cola

Company produces a wide range of about 500 different beverage brands across

the world. In the late 1920’s the company begins its journey for globalisation and

presently operating in more than 200 countries following a simple global

formula “Provide a moment of refreshment for a small amount of money – a

million times a day”.

The Coca-Cola Company together with the bottling companies forms the best

production and distribution system in the world, the system is designed in such a

way that employees dedicated and put the company’s objectives as their number

one priority. Products of this company have proven to be the number one soft

drink in quenching consumer’s thirst of non-alcoholic soft drinks from Moscow

to Montreal and from Beijing to Boston all over the world for more than 115

years of its existence. One of the key objective of the company is to increase its

market share-value, which was achieved by operating with associates with the

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aim of satisfying customers and valuing customers interest as well as protecting

company’s assets and minimizing business ricks.

PESTEL ANALYSIS

A recent analysis polled online (http://anasurname.hubpage.com) written by

Annasurmane on PESTL analysis. PESTL analysis is an mnemonic meaning

Political, Economical, Social, Technological and Legal often use is a tool by

companies to analyze the whole EXTERNAL environment from every angle the

company is operating under. Although Coca-Cola Company is the world leading

non-alcoholic beverages company in the world, its still needs to undertake

PESTL analysis to know more about its external environment, precisely the

opportunities out there and it competitors so as to maintain its customers loyalty

and position.

The Political factors establish the extent as to which the serving political policies

and rules influence the economy or rather the business organisation. This

policies and rules include, how much tax is impose, trade tariffs and fiscal

policies to mention few.

The economic factors are the determinants of economic performance that impact

the company in one way or the other, factors such as interest rate, inflation rate,

foreign exchange rate and economic growth. These factors will affect the

company’s sales, product price and purchasing power of potentials customers.

The social factors comprises of environmental trends, which includes cultural

trends, population analytics, demographics trends, seasonal trends to mention

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few. For example, in the western countries there is high demand of things during

holiday seasons.

Technological factors includes innovations and technological development the

affect the organisational performance in either in positive or negative way. This

can be in form of automation of some organisational.

Legal factors involves both internal and external segment of the organisation,

internal in the sense that the organisation develop some inside laws and

regulations to maintain its operations and dealings while external in the case

where certain law, policies and regulations are imposed to the company by

legislation, government or regulatory agency.

PESTL ANALYSIS FOR THE COCA-COLA COMPANY

POLITICAL:

Political changes in accordance with the ruling government, changes that has to

do with government regulations, majors and policies as to how a companies

should operate and as to how the products should also be. By setting up those

rules and regulations the government intervene with the company’s decisions

because the board have to make sure in every decision that is being made those

roles and regulations must in no circumstance be violated, some of which

includes monitory policy, trade restriction, recruiting policy, environmental

policy.

The Coca-Cola Company being a non-alcoholic beverages company falls in the

category of what is known as the Food and Drug Administration (FDA), FDA is a

globally recognized agency originated from the United State of America to

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monitor and verify ingredients that are being used in manufacturing non-

alcoholic products. The coca-cola company cautiously examine their ingredients

to meet up requirements of the FDA before presenting it for approval.

However, aside from the FDA’s requirements other political majors that are

being set in accordance with the jurisdictions of countries includes income tax,

import and export regulations and the uncertainty of political crisis. Political

crisis can be in form of protest, which might affect the demand of products, as

well as political violence that makes it hard for the products to penetrating in

political crisis zones.

ECONOMIC:

These are economical factors, which companies uses in forecasting future

decisions on investment. These includes interest rate, inflation, standard of

living, wages, exchange rate, unemployment rate and the overall economic

growth of the country. These economical factors differs in each of the operating

countries, which is why before a company venture any country it has to

comprehensively analysed the economy of the country considering the upper

mentioned factors.

Economic growth of a country gives a company a glimpse of high purchasing-

power, this is what most marketers use in penetrating the market. Coca-Cola

Company uses this tool to market their product across the world, which brought

about the 63 different types of currency being used by the company. However,

due to constant fluctuation on exchange rate strong or weak currency are some

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of the determinants of exporting product world wide which is very important as

the company generate 72% of its operating profit outside the United State.

Furthermore, another major economical tool is the interest rate imposed on

borrowed money. Changes in interest rate affect the financial status of a

company and further investments as it increase total cost, the Coca-Cola

company manage to cope with interest rate fluctuation by implementing a

derivative instrument. In the case of inflation, the Coca-Cola Company sort their

employees with higher wages and salaries in countries with high inflation rate so

as to enable them cope with the situation. This increase in wages increase

product cost and couldn’t be reflected on the product price due to the

competitive and risk of the market, a threat being faced by external environment

in most companies.

SOCIAL:

The social factors have to do with people’s cultures, traditions, health perception,

safety majors, population growth and new trends among the population. A

company is not expected to change the social factors but rather, to adapt and

adjust to suit these social factors.

This is a very important section as regards to a company like Coca-Cola that has a

direct link to the customers, companies of this nature are considered to be B2C.

Countries are diversify in terms of culture and tradition, this element have to be

absolutely analyse before introducing marketing and introducing products. Coca-

Cola Company has about 3300+ different products, in penetrating new market

after intensive market analysis the Company start by introducing few of their

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products based on the social factors of the general population subsequently

increasing products based on social factors.

Consumers and government are very cautious on the issue of health and safety,

in beverages industries obesity is the most common concern of the general

public. This concern is mostly raised by younger generations so as to maintain

good physique. According to a study consumers of Coca-Cola are very concern

with nutritional content nowadays. This is one threat that the management was

able to turn into opportunity by introducing dietary products such as Coca-Cola

Zero, Light Coke and Diet Coke.

In a non-alcoholic beverages company, most of the market share comes from

youth and children, which is why population growth is being given high

emphasis in market analysis and being one of the major factor of social analysis.

TECHNOLOGY:

Technology plays several functions in beverages industry as with the

manufacturing new products, packaging product and distribution of products.

Coca-Coca Company rely on its bottling partner for packaging, 83% of case

volume produce across the world is being manufactured by bottling partners

which the company don’t have total control power over. This is why it’s essential

for the company to keep a healthy relationship not just with its bottling company

but within and outside the entire departments companies involve.

The availability of different Coca-Cola packaging has everything to do with the

advance in technology, various vending machines are available all over the

world. This let to the production of some stylish non-refillable bottles and cans,

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which are trending among youth and attractive to children which also serves as a

marketing tool for promoting products.

LEGAL:

Legal laws includes, employment law, antitrust law, customer law, health and

safety law and discrimination law to mention few.

Various acts and regulations exist in the United State of America some of which

includes Federal Food Act, Federal Trade Commission Act, Drug and Cosmetic

Act, health and safely Act apart from the upper mentioned Acts several

environmental regulations are being implemented within the State some of

which include, regulations on advertising, sales and production. Slight alteration

in either of the laws, regulations or act could yield to positive or negative impact

on the company. Furthermore, violation of any of the upper mentioned laws,

acts, or regulations will escalate serious penalty which will definitely affect the

company.

SWOT ANALYSIS

According to Berry (2014) SWOT is mnemonic representing Strengths,

Weaknesses, Opportunities and Threats which are considers to be internal and

external factors some of which the company has control over and some of which

it has no control over. This analysis is been used as a tool of auditing of generally

strategic position of an organization.

The factors can be overviewed as follows

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Strengths: These are qualities of an organization that facilitate that support the

organization to achieve its mission. These qualities could be what the

organization is versed on or expertise on, these includes individual and team

quality of employee, the diverse qualities that distinguished the organization

from its competitors. Strengths of an organization can be on its brand, financial

resource, human competency, products/services to mention few.

Weaknesses can be regards to the attributes the prevent an organization from

achieving its mission or operating effectively, these weaknesses hinder the

growth and success of the organization. Weaknesses include poor machinery,

ineffective decision-making, deficient research and development capability etc.

Opportunities are usually presented by the external environment within which

the organization operates to take advantage of, when opportunities arise its

expected for an organization to strategized on how to take advantage of it be its

in profitability, brand, customer loyalty, product/service recognition,

penetrating new market etc.

Threats are also attributes presented by external environment, attributes that

have the tendency of jeopardizing the organization. This are sometimes being

mistaken for weakness, but threats are external while weakness are internal

within the organization example of which includes technological changes,

increase in competition to mention few.

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SWOT ANALYSIS FOR COCA-COLA COMPANY

Jurevicius (2013) in a site conducted a detailed SWOT analysis of the Coca-Cola

Company using so many factual statistics and evidences in validating the

analysis. As mentioned earlier SWOT analysis comprises of Strengths, weakness,

opportunity and threats, where the strengths and weakness are considered to be

internal factors while the opportunities and threats are the external factors

influencing the company. This will be discussed in details below.

STRENGTHS:

1. World’s foremost brand: Coca-Cola as a brand is consider to be the global

leading brand, in the year 2006 an international branding consulting firm

ranked Coca-Cola number one brand on the hierarch of top 100 global

brand in the same year week-inter-brand valued the brand at

$67,000,000. The brand is racked far above it competitors in the

beverages industry, the brand following it in the beverages industry is

Pepsi which was ranked number 22 with brand value of $12,690,000.

Moreover, aside from being the number one brand, it owns the top four

beverages brand in the world that include Fanta, Sprite, Coca-Cola, and

Diet Coke. This is why the Coca-cola brand posses the largest portfolio of

product brand in the beverages industry. This advantage is what the

company look at in introducing new brand example of which are Vanilla

Coke, Cherry Coke, and Limon Coke. Coca-Cola Company heavily invest in

promoting the brand over the years, this is one major advantage the

Company uses in penetrating new market meanwhile strengthening

existing markets.

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2. Large scale of operations: In the whole world Coca-Cola Company is the

largest beverages company operating with more than $24 000,000,000

(twenty four billion USD), it manufacture, market and distributes its

product in more than 200 countries with approximately 52,000,000,000

(fifty two billon) consumed everyday. The company account for more

than 1.4 billion USD in beverages bearing trademarks. These operations

are being supported by strong infrastructures with 32 high standard

manufacturing plants distributed across the world along with 95 bottling

and canning plants outside the United State. In addition the company also

produce bottle water and concentrates juice. This advantage enable the

company to be able to meet up to its high demands of products as well as

increase the company’s revenue.

3. Vigorous revenue growth: Coca-Cola Company’s revenues double it

growth in Latin America, Pacific Rim and East, South Asia. In the year

2006 its recorded revenue grew by 20.4% in Latin America, and grew by

10.6% in East/South Asia and Pacific Rim. Furthermore, the bottling

company accounted for 34.8% of revenue generated during the fiscal year

2006. This vigorous raise in revenue in those segments contributed

effectively in the overall growth of the Company during the year.

WEAKNESS:

1. Negative Publicity: The Company has been allege to various unethical

related issues which prompt lawsuits against the Company on issues of

human right violations, there have been rapid allegations raised

concerning the Middle East and U.S foreign policy over the years. In the

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year 2006, the company received negative publicity concerning

ingredients used for producing its products by CSE (centre for Science

and Environment). The products where asserted to contain pesticide

residue.

The President/CEO of Coca-Cola Company Mr. Muhtar Kent received a

note on the 10th of December 2008 from FDA warning him about some of

its product that are violating the Act. Products include Diet Coke, Plus,

20FL and OZ. Furthermore, Coca-Cola Company has been suit by United

State Consumer Group I early January 2009 against the company’s

flavours for Vitamins Water.

2. Slow performance in some regions: In North America Coca-Cola Company

generate about 30% of it total revenue during the fiscal year 2006, this

significantly shows how important this region is to total revenue growth

of the Company. Prior to this study estimate a weak market performance

in this region due to weak trends of sparkling beverages in the region,

where the company recorded a decrease supply in company’s warehouse.

Slow performance in this region will defiantly impact the company

negatively in terms of revenue growth and hinder the company in

entering the top growth list of companies.

3. Decline liquidity from operating activities: As recorded in the company’s

annual report, there is a clear declination in cash flow from operating

activities in the year 2006. Comparing it to the preceding year in 2006 the

operating activities cash-flow decrease by 7%. Total cash flow generated

in the year 2005 is recorded to be $6,423,000 which decrease to

$5,957,000 in the year 2006. The decrease of $216,000,000 is as a result

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of tax-qualified trust, which is set up to promote and fund retiree medical

sector. However, the decrease is also as a result of positive marketing

strategy in the year 2005, which was lacked in 2006. Decline liquidity

reduced the financial investment rate that will positively impact on the

total company’s growth.

OPPORTUNITIES:

1. Acquisitions: in the year 2006 Coca-Cola Company acquired Kerry

Beverages (KBL) this made it possible for the company to take control

over manufacturing and distributing its product across Chinese provinces

operating in form of join ventures. Likewise in Germany Apollinaris was

acquired, a company that is engage in sparkling and mineral water. More

also the company owns 100% interest in South African company named

TJC Holdings, more acquisitions where made in Australia and New

Zealand in the year 2006. This acquisition did not only expand the

company’s revenue but rather strengthened the company’s international

operation, which is an added advantage. Furthermore, as we mentioned

earlier robust international operations increase the company’s overall

growth and make it much more easier for the company to penetrate into a

new and existing markets. Coca-Cola Enterprises is one of the biggest

bottling company in North America was also acquired by Coca-Cola

Company on 25th of February 2010.

2. Emergence of Bottle Water: In beverage market today bottle water is the

fastest growing commodity study has showed that in the year 2006 bottle

water generated revenue of $15.6 billion. This is due to increase in health

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concerns, in the years 2006 consumption of bottle water was estimated

around 30 billion volume of litres and statistics expect it to increase in

2010 by 38.6 billion unit.

The value of bottle water is estimated to reach $19.3 billion in 2010 while

the revenue generated by the flavour (slightly sweetened refreshing

flavour) is annually increasing by $10 billion. In the United State Coca-

Cola bottle water Dasani brand is rated to be the third best selling water.

3. Rapid population growth: Rapid increase in Hispanic population across

the United State is an added prospect for the company to snatch so as to

generate higher revenue on products consumption. In the year 2006 its

confirmed that 11.6 million households in United State are Hispanic,

where at the same year census estimated that Hispanic population will

increase to more than 60 million by 2020 (18% of United State

Population). Translating this to buying power, the Nielsen media

proclaimed Hispanic buying power will increase to $1 trillion by the year

2003.

THREATS:

High Competition: Coca-Cola Company being among the non-alcoholic

beverages find it’s self in highly competitive position in various market

within the United State and outside. PepsiCo is the major competing company

to Coca-Cola Company; other companies include Danone, Krafft Foods,

Cadbury Schweppes, and Nestle to mention few. The presence of these

competitors elevated the factors which include issues of pricing, innovations,

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brand, advertising, sales and protection. High competition rate could impact

the company’s general performance.

Dependence on bottling companies: The Company generate lion share of it

revenue through sales of concentrates and syrups to many bottling

companies of which the Coca-Cola Company have no total control of. It was

approximated in 2006 that 83% of the total volume unit is been produce and

distributed by various bottling companied across the world.

Health cautious is now becoming major concern among people. In the United

State of America people are searching for different variety of non-alcoholic

beverages and at the same time highly cautious with carbonated and

sweetened drinks are are align to prompt a decline rate in consumption of

those carbonated drinks. The general revenue generated in 2005 by

carbonated drinks decrease by about $63.9 billion USD. Beverages Company

faces criticism for promoting obesity and poor diet to their consumers.

The impact of international business environment on Coca-Cola Company:

As studied in 2007 (ElAmin) Coca-Cola Company being on a multinational

manufacturing business environment with high valuable brand, high market

development and vast scope for product development on an international

level the company own its national and international operations in an

extensive economic segment. This makes the level of company’s turnover as

well as the profitability margins proportionate to the company’s expansion

and development in the outskirts market. Wide brand expansion is one of the

company’s main objectives which is maintain through producing over 260

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million bottles of different sizes. Aside from the upper mentioned Coca-Cola

product, the company owns Schweppes in the Great Britain name and

produces it in different flavors so also other products, which include Capri

Sun, Friutiser, monster Appletiser and some sparkling fruit juices.

The strategic management policy of the Coca-Cola Company focused toward

imprisoning the national and international market for the purpose of quality

improvement, developing strength in the international market at the same

time holding accountability of environmental strategy on the ground of

business operations, performance management and developing

environmental standard in an international scale. There is a rapid change in

the economic environmental structure over the years; in the year 2005 there

was high marketing strategy that was why distribution of products was being

done through advertising campaign. This got success and yield to 35%

increase in international sales force in the year 2006 while in the preceding

year sale strategy was included through promotion techniques in the

international market which also yield to an increase in sales with 39.5%

more than the previous year.

Globalization:

As defined by McGrew (2014) in the general scale globalization is a way of

eliminating the difference between different countries, continent and

economy so as to make it easier to trade and conduct transactions within and

between every nations there by putting the whole world under the same

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umbrella called GLOBALIZATION. This process has been going on over a

century particularly in the 1945, but the process has been moving on a slow

rate until in the last 20 year when it became much more faster due to

development and order forces which will be discuses letter on.

Brief history of Globalization

According to James and Peck (1998) Globalization started in the 17th century

with the inventions of new ships which gave Europeans avenue to trade with

other centuries on a large scale, comparing to agriculture trade was still a

tiny part of the economy as of then. With the recent development and

innovations in transport sector such as rails, steam ships and Airplanes.

These developments contributed hugely in the sense it shrinks the world and

make it more convenient and faster for people to travel across the world and

carry out trade, with the presence of the Internet it makes it even much more

easier to communicate internationally. Decline in barriers to trade between

different countries increase international trade that makes the world’s GDP

increasing in a steady rate.

Benefits of Globalization

Increase in economic integration can be seen to be on of the major benefit

gain from the umbrella term Globalization as asserted by Jeffrey (2003).

Economy used to be self-contained in the sense that import and export are

mostly independent but rather now with integration between countries

economies are closely dependent in the sense that importing raw materials

for a production. This is why recession in an economy of one’s country affect

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the others. However, consumer markets are considered to be more important

in the economy, as there is convergence globally in customer tastes and

purchasing habit. Hence, businesses operate and productions are mostly on

global preference example is Coca-Cola. Company’s operating in that scale are

known as multinational companies, these companies have been existing in

small number until recently with the advance in technology and they have

brought a great positive change to world GDP as mentioned earlier.

Factors affecting Globalization

A later study (Jeffrey, 2003) shows that fluctuations of monetary capital

exchange between countries: This has to do with the policies and regulation

concerning transfer of funds between different countries, with this barriers

in some countries it makes transactions unattractive in the region but with

free movement of funds like in the 90’s huge amount of funds enter United

Kingdom form the United State of America.

This is what is known as deregulation, which is also a factor that affects

globalization. Its started in the UK in the 80’s when many policies and rules

regarding foreign business ownership where removed and privatization took

place, this prompt foreign investors to carry out their businesses across the

world. A clear example is the one that took place in the UK, many of their

utilities which used to be own by the government are now owned by local

and foreign investors.

Rapid development in technological and communication sector is another

major driving force of globalization, this development made information

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open and accessible to everyone and anywhere. This gives investors all over

the world a chance to search and take chance of new business opportunities.

This is visible due to the presence of faster and cheaper transportation

medium.

Transportation medium is now much faster and cheaper, aside from

airplanes, containerisation that was developed in the 50’s was a major drive

in transporting heavy and huge goods. However, there was a continuous

enhancement to shipping technology ever since.

Extent of Globalization on Coca-Cola Company

According to Coca-Cola Company’s report (2006) The name Coca-Cola is one

of the must popular brands in the world and the company is ranked the

largest company in beverages industry today. This is so because the Coca-

Cola Company continuer to gain growth due to the prompt expanding across

the world, the Company operate presently in more than 200 countries with

84,000 suppliers this makes 70% of the company’s turn over to be from other

foreign country.

This is possible due to globalization; John Pemberton founds the company in

the 1880’s in United State of America with a good reputation of consistency

and high quality, in the early stage storekeepers requested for an attractive

package with brand recognition. The Coca-Cola Company focus and meets

those requests with a brand name Coca-Cola and a red and white attractive

package with a uniform taste of product across the country, this became

some of the foundation strategy of the company.

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Globalization in Coca-Cola Company started in the 1900’s when bottling

plants where built in Panama and Cuba as military spread through those

regions, this spread prompt the rise in demand of the product. These plants

reduced the shipping cost of the product in these regions, the success of these

plants swift the Company to build many more across which includes Hawaii,

Puerto Rico and Philippines. By the year 1926 the Company established a

strong foreign relationship with other countries around the world this gave

the company a chance to continue on its quest of rapid expansion and mass

production of its product across the world by the use of local branches and

local partnerships. This expansion continue to take place for several

centuries until the end of World war II and Cold war that is when the

company was marked as a accurate global corporation.

Challenges faced by Coca-Cola Company on Globalization.

The road to success has never been smooth and easy. For Coca-Cola Company

the phrase seems perfectly matched, the Company faced a lot of challenges in

some countries as it was trying to globalize. Some countries prohibited the

used of Coca-Cola products with the assertion that the products are health

threatening and cheering obesity, which are two major concern for people

nowadays. Aside from these assertions so many suits had been filed against

the Coca-Cola Company with the allegation of “child labour sweatshops”

other countries suits the Company for being selective in providing healthcare

to their workers. Another major challenged faced by the Company was the

infiltration of the beverages market by other strong Companies such as Pepsi

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and co as analysed by the company’s sustainability report (http://www.coca-

colacompany.com/sustainability/global-challenges.html).

However, upon the above mentioned challenges, the Coca-Cola Company

remain strong and overcome the obstacles by focusing on its mission to

provide good quality, satisfying and refreshing products to their customers.

The Coca-Cola Company uses a strategy of uniform tastes, which is been

achieved by ensuring strict control of recipes and facilities. This strategy

really helps the Company in overcoming some of the challenges and the

Company’s number one goal to be the number one beverages company in the

world.

Structures of organisation operating on international scale

Organisational structure

According to an article written by Nordmann (2004) The term organisational

structure is primarily used in defining how organisations structure their

operational tasks. Six key elements are expected for an organisation to

consider in structuring organisational tasks, this includes work

specialization, span of control, decentralization, centralization,

departmentalization and chain of command.

The Simple Structure

The Simple organisational structure is mostly been use in a small businesses

where the owner is likely to be the manager of the business, this structure is

characterized with low degree subdivision of tacks. This made it easy for the

authority to be sided or centralized to a single manager who is assumed to be

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the owner of the business. From the name simple structure, its consider to be

simple with little formalization, this makes it flexible, easy to control, more

accountability, fast to coordinate and more economical to operate. However,

as organisation is growing bigger this structure is prompt to so many

challenges due to low level of formalization and high level of decision

centralization this will eventually instigate information overload which drive

ineffective decision making by slowing it down.

The Bureaucracy Structure

Bureaucracy business structure is a pyramidal structure that is often use by

government agencies and public administrations which involved a lot of

paper work with the intent of achieving predefined complex goal efficiently

and at low cost. The structure is characterized with extremely organized

structure with high level of formality and the structure has a strict orderly,

highly efficient and fair line of command at all times with centralized

authority as well. This structure has many layers of line management, flowing

from executives to senior regional managers on to departmental managers

flowing all the way down to supervision officers.

The Coca-Cola company has a similar organisational structure with a distinct

international division which is in the head office commanding the five

continental divisions around the world, this includes Eurasia and Africa

Group, Pacific Group, Europe Group, North America Group and South America

Group. Each of those continental groups has a vice president that assumes the

control of each sub-division. The company’s structure is uniformly

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irrespective of region or country of operations with rigid command of

operations control from the head office.

Moral and ethical issues faced by organisations operating internationally

According to Donaldson on a recent polled site

(https://www.karlknapp.com/resource/ethics) Generally, organisation

operates in either production of goods or services by utilizing limited

resources to meets customers needs and wants. The organisational activities

is expected to be carry out in such an efficient way to maximize profitability

so as to get back to the society in a positive way, by so doing the organisation

is fulfilling its social responsibility. In light of globalization, there has been an

increase number of ethical and moral issues facing international

organisations, issues of cross-cultural situations where many international

organisations are being accused of ethical misconduct in carrying out some of

there functions. Most if not all organisation operating internationally in a

cross-cultural setting are being exposed to divers ethical norm and values

which have to be taking care of for the organisation to succeed. Addressing

such ethical issues has never been easy but it could be influence using some

ethical approaches, some of which include “descriptive-prescriptive and

normative approach”.

Descriptive approach laid more emphasis on taking a deep understanding of

moral reasoning and value of groups and individuals when making decision

on ethical matters, in this approach ethical decision making process is being

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influence by different individual, contextual and situational context such as

cultural environment, organisational environment, opportunities and

personal experience.

Ethical standards are often not clear or not defined explicitly in many

countries, which is why moral question of what is right or wrong is still a

dilemma in both local and international market place. This problem is more

complicated in the international scale due to diverse cultural groups, that is

accepted in one country might be rejected in another country. This gave raise

to the issue of universal ethical norms that had been based upon some basic

moral principles that could be used to appraise international organisational

ethics, where violation of such basic moral values could be regarded as a

bridge. Most of this basic morals values are cultivated using a scenarios in

various organisational sub- disciplines which includes retail management,

advertising management, purchasing management, human resource

management and so on.

General ethical and moral issues faced by organisations operating

internationally include the following:

Bribery: This could be categorised in either traditional small scale or large

scale, which involves the payment of relatively small of large amount of

money to any official to overlook of violate some of his/her

duties/responsibilities or rather to facilitate policies in favour of the giver.

Pricing: The issue as regards to pricing involve differential pricing and

incontrovertible invoice. These include a scenario where buyer will request

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for a different price written on the invoice other than the actual transactional

price and secondly for the prices to be unjustly different form the host

country.

Illegal/immoral activities: Some organisational practices can be seen as

illegal in the hosting country due to the negative effect it has on the country,

workers or customers of the products/services. This includes polluting

environment with organisational by-products or operating in an unsafe

environment that prompt the workers at ricks.

Cultural differences: Their exist a high tendency of cultural misunderstanding

in transactional and exchange processes due to cultural diversification, a

clear business transactional practice could be considered a bribery by other

culture example include political contribution, gift, favours, monetary

payment and so on.

Conflicts between corporate strategy and ethical and social responsibility

As asserted by European competitiveness report (2008) A corporation being

having a predefine decision making ability on rules and policies is the key

element that makes it mandatory to abide by society’s ethical and social

responsibility. Some corporation policies and rules can contradict society

ethical and social principles, which will defiantly bring conflict between the

society and the corporation. A most common conflict that usually arises

between corporations and society is the issues of advertisement.

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Advertising is way of broadcasting message through the media with the

intension of reaching out to customers or potential customers in order to

promote certain goods or services. This process is conducted with the aim of

achieving three consecutive goals, which include convincing potential

customers over certain product of services, communicating information to

the general public and constructing some certain values to the society.

This process can bring conflict between the society and the corporation if

either the message is unwholesome to the audience or if the advert is

conveying negative value to the audience. Furthermore, if the message is

unwholesome it can mislead the audience. A clear example is the advert

slogan that uses to exist many year ago “Do whatever you want” this slogan is

believed to have violate sensibility of the audience which was argued on and

letter modify to “Do what you should”. The second phase is the conveying

values, which can either be positive or negative. A common positive advert

slogan is “You only live once” this is inspiring and it teaches the audience the

value of life, on the contrary some does convey negative values. Examples of

such are the hedonism as well as the patriarchy; the hedonism adverts

always encourage the value of material wealth to be the greatest good such

adverts distort the moral and ethical value of human and encourage trend of

audience chasing after brands and materials while some advertisements

contains some violent sexual implication which are some of the reasons why

many countries regulate the type of advert to shown due to these negative

influence on audience. Examples includes, Sweden and Norway prohibit

advert of any kind to children under 12, Greece prohibits adverts on war

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games, Germany and Finland prohibits advert of products that children can

access and buy directly, England prohibits adverts starring in children

programmes to mention few.

Hence, its expected for the corporation’s advert to stay within the society’s

social norms and encourage significant social values to its audience.

The legislation, regulation and guidance as to corporate social responsibility

Feris (1997) These are parameters most managers and government agencies

used to ensure and promote ethical conduct of an organisation, which can be

shaped within the organisation by the managers and outside the organisation

the organisation by government and regulatory agencies.

Legal responsibility in this phase has to do with the rules and regulation

enforce by state legislators, federal regulatory agencies and local town

councils on corporations operations, those embrace what the regulating

bodies as mentioned earlier deems as significant in respect to proper

corporate behaviour. Its expected for every organisation to operate within

the legal framework set by those regulatory bodies wherever the

organisations is located or positioned.

Any organisation that is found to compromise any of those rules and

regulations is likely to be suit by any of these regulatory bodies. Example is

Tenet healthcare; this health organisation had a federal lawsuit on one of its

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hospitals for performing excessive cardiac procedure to some client that has

to be settled with $54,000,000 USD. There are several numerous cases of

such federal lawsuit against organisation across the world this is making

managers to be more cautious in abiding by each one of their legal

responsibilities. Some of this laws and regulations include, tariffs, child

labour law, import/export quotas, discrimination law, site regulations, and

administrative policies, International financial reporting standard, OECO,

ISGN, ISAR to mention few.

Code of ethics in regards to guidance on corporate social responsibility

Porter (2006) Code of ethics is a formal statement developed by the

organisation revelling the company’s stands of social and ethical issues, this

statement is formed primarily to communicate directly to the employees on

certain level of social, moral behaviours and values that are being expected

from them at the same time those that wont be tolerated. This statement

often comes in two categories, the policy based statement and the principal

based statement.

The principal base statement is popularly known as corporate credos which

is developed to address corporate culture, the statement define the

fundamental ethical and social values on company’s products quality,

employee welfare and company’s responsibilities. The policy-based

statement is designed to address situational techniques to be used in address

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specific ethical and social circumstances, which include conflict of interest,

proprietary information, equal opportunities and marketing practice.

Conclusion and recommendations

The report commenced with a brief introduction of Coca-Cola Company with a

detailed analysis of the international market of its products. PESTL and SWOT

analysis was being conducted to identify potential segments the management

needs to focus on in order to achieve its objectives so also the trends and factors

affecting the company on an international scale. The report also examines the

global position and structure of the company. Although there were some

limitations and challenges being faced by the company, it still maintained its

position due to its Brand, Taste< Availability and Innovativeness.

It is clear that customers are being regards as the number one factors to be

considers in operating under international or local level, unlike before nowadays

customers have different varieties of choices between products. Therefore, if a

company can not satisfy his/her desired product they will eventually switch to

the other sources. Hence, for any company or organization to endure its market

competition they need to put in their best in given customers what the desired

because customers are no longer loyal.

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