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Coca-Cola Company - Delineate the Ethical Issues and Dilemmas the Company Faced

Autor:   •  February 16, 2014  •  Case Study  •  1,311 Words (6 Pages)  •  999 Views

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Delineate the ethical issues and dilemmas (as found in Chapter 3) the company faced.

The ethical issues and dilemmas that the Coca-Cola Company has faced since within the last few decades have brought into question the responsibility that a company has to the consumers, financial stakeholders, employee’s and the environment. Companies throughout history have all dealt with ethical issues but Coca-Cola has used these incidents to understand and increase their ethical standards and compete in a morally conscious business environment (Ferrell, Ferrell & Fraedrich, 2011). The types of dilemmas that The Coca-Cola Company has include a contamination scare, racial discrimination allegations, inflated earnings, trouble with distributors, and employees leaking of trade secrets. The company responded to these ethical issues differently in which they seem to never be resolved completely (Ferrell, Ferrell, & Fraedrich, 2011).

During the 90’s Coca-Cola consumers were getting sick after drinking some Coca-Cola products. After the first incidents the Coca-Cola Company activated a regional recall where the sicknesses in the regions where it was happening, but that wasn’t enough for the area affected. The government of Belgium ordered that all Coca-Cola products be recalled. The government recall escalated with other countries such as Luxembourg and the Netherlands following suite and recalling all the Coca-Cola products as well. It took days for the company to find the culprit of what was causing the sickness. Coca-Cola’s timeliness to formally respond to the sicknesses caused uproar with the media and the public. This ethical issue here is that consumers of their product are the most important part of the business (Ferrell, Ferrell, & Fraedrich, 2011). Coca-Cola has an obligation to their customers to keep them safe from harm and sickness. They have an obligation to keep them safe from harm at all costs.

Anti-trust laws in Europe are strict and its governments do not allow companies to have large market dominance or monopolies of industries. Coke was interested in purchasing both an Italian and French drink company. They also were accused of un-lawful marketing and distribution policies by other companies producing a probe by the governent, which found wrong doing by Coke. These actions led the governments to decline their purchase of the drink companies and reprimand Coke for their unlawful marketing practices. This is proof that Coke did not immerse themselves in the culture or learn the practices of the lawful business practices in Europe (Ferrell, Ferrell, & Fraedrich, 2011). Coke was negligent in their practices and abiding by the law.

Financial documentation and accounting was questioned when the Security and Exchange Commission found they inflated their profits numbers and by using “Channel Stuffing”

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