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Coca-Cola's Water Neutrality Initiative

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1. The public issue, defined by Lawrence and Webber as “any issue that is of mutual concern to an organization and one or more of its stakeholders” (p.25), facing The Coca-Cola Company (or TCCC) was their mass consumption of water that was tainted with pesticides, depleting the local ground water supplies and negatively affecting surrounding communities of factories in India.
The performance-expectations gap, or “the gap between what the firm wants to do or is doing and what its stakeholders expect” (Lawrence & Webber, p.25), in this case was operating their business in a cost effective way and consuming enough water to operate at capacity verses producing their product in an ethical manner that didn’t negatively impact the stakeholders. The stakeholders initially were local communities and governments in India, the Center for Science and Environment, and the India Resource Center, before expanding to encompass the World Wildlife Fund, Nature Conservancy, CASE, and various academic experts and humanitarians.

2. If we apply the strategic radar screen model, which highlights “ways of tracking important developments…outside of [the company’s] immediate view” (Lawrence & Webber, p.29), the most significant environment identified is the geophysical environment. This environment is “related to awareness of the physical surroundings of the organization’s facilities and operations” (p.30) and best correlates with this case’s public issue regarding the dependency on consumption of a natural resource, water.

3. In applying the issue management life cycle process, we can identify the following stages: o Identify Issue: In the early 2000s, Coca-Cola factories were depleting groundwater supplies when communities were facing acute water shortages and using pesticide tainted water in production o Analyze Issue: Coca-Cola performed a study that surveyed its global operations to assess its water management practices and impacts o Generate Options: Conferred with the World Wildlife Fund, Nature Conservancy, CASE, various academic experts, TCCC affiliates, and local governments o Take Action: Proposed a goal of ‘water neutrality’ in 2007 which aimed to reduce, reuse, and recycle their water back into the community equal to that of production consumption by 2020 o Evaluate Results: While Coca-Cola measured and publically shared its favorable results in 2011, continual evaluation on the original issue is still advised

4. Coca-Cola used stakeholder engagement and dialogue to improve opinions on this issue by bringing in outside expertise from the World Wildlife Fund, Nature Conservancy, CASE, various academic experts, and local governments in order to assess the best course of action together. TCCC then extended these water conservation initiatives to its bottlers and operational groups, which showed that they took this issue seriously. The benefits to TCCC were as follows: o Built better relationships with their stakeholders, governments their business deals with, and nonprofit organizations o Capitalized on the opportunity to generate a creative solution with environmental and academic experts that improved their current technology/system o Reduced company-wide water usage and increased water neutrality.

5. In my opinion, The Coca-Cola Company responded appropriately, even if it took them a few years. It seems that in an effort to both support itself as a business and the communities that sustain its production facilities, TCCC and its stakeholders were able to develop a solution that satisfied TCCC’s short- and long-term goals. By listening to the issues presented by its stakeholders and subsequently creating a system in conjunction with outside parties that cyclically replenishes water it consumes and betters the surrounding communities, TCCC has established access to areas with a healthy water table that sustains both production facilities and the local populations for many years to come.

References:
Lawrence, Ann T. & Webber, James. (2014). Business and Society: Stakeholders, Ethics, and Public Policy. New York, NY: McGraw Hill Irwin.

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