A

Report
On
A study of the ethical policies and CSR activities of coca cola in partial fulfillment of MBA
programme 2014-16

Submitted On:15/09/2014
Submitted To: Komal Mam

Submitted By:
1.Pratik Galiya

(14032)

2.Krishna kanajariya (14053)

3.Saurabh Panchal (14087)

NRIBM affiliated to GTU

4.Ankit Patel

(14098)

5.Hitesh Prajapati

(14110)

6.Manish Ravat

(14128)

INTRODUCTION
The Coca-Cola Company is the world's largest beverage company. Along with Coca-Cola,
recognized as the world's most-valuable brand, the Company markets four of the world's top five
soft drink brands, including Diet Coke, Fanta and Sprite and a wide range of other beverages,
including diet and light soft drinks, water, juices and juice drinks, tea, coffee and sports drinks.
Through one of the world's largest beverage distribution system, consumers in more than 200
countries enjoy the Company's beverages at a rate exceeding 1.8 billion servings each day.

INDUSTRY PROFILE
BEVERAGE INDUSTRY IN INDIA
In India, beverages form an important part of the lives of people. It is an industry, in which the
players constantly innovate, in order to come up with better products to gain more consumers
and satisfy the existing consumers.

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The beverage industry is vast and there various ways of segmenting it, so as to cater the right
product to the right person. The different ways of segmenting it are as follows:

Alcoholic, non-alcoholic and sports beverages.

Natural and Synthetic beverages.
In-home consumption and out of home on premises consumption.
Age wise segmentation i.e. beverages for kids, for adults and for senior citizens.
Segmentation based on the amount of consumption i.e. high levels of consumption and
low levels of consumption.

If the behavioural patterns of consumers in India are closely noticed, it could be observed that
consumers perceive beverages in two different ways i.e. beverages are a luxury and that
beverages have to be consumed occasionally. These two perceptions are the biggest challenges
faced by the beverage industry. In order to leverage the beverage industry, it is important to
address this issue so as to encourage regular consumption as well as and to make the industry
more affordable.
Four strong strategic elements to increase consumption of the products of the beverage industry
in India are:
The quality and the consistency of beverages needs to be enhanced so that consumers are
satisfied and they enjoy consuming beverages.
The credibility and trust needs to be built so that there is a very strong and safe feeling
that the consumers have while consuming the beverages.
Consumer education is a must to bring out benefits of beverage consumption whether in
terms of health, taste, relaxation, stimulation, refreshment, well-being or prestige
relevant to the category.
Communication should be relevant and trendy so that consumers are able to find an
appeal to go out, purchase and consume
The beverage market has still to achieve greater penetration and also a wider spread of
distribution. It is important to look at the entire beverage market, as a big opportunity,
for brand and sales growth in turn to add up to the overall growth of the food and
beverage industry in the economy.

COMPANY PROFILE

 The Coca-Cola Company re-entered India through its wholly owned subsidiary, CocaCola India Private Limited and re-launched Coca-Cola in 1993 after the opening up of the
Indian economy to foreign investments in 1991. Since then its operations have grown
rapidly through a model that supports bottling operations, both company owned as well
as locally owned and includes over 7,000 Indian distributors and more than 2.2 million
retailers. Today, coca colas brands are the leading brands in most beverage segments.
The Coca-Cola Company's brands in India include Coca-Cola, Fanta Orange, Limca,
Sprite, Thums Up, Burn, Kinley, Maaza, Minute Maid Pulpy Orange, Minute Maid
Nimbu Fresh and the Georgia Gold range of teas and coffees and Vitingo (a beverage
fortified with micro-nutrients).
In India, the Coca-Cola system comprises of a wholly owned subsidiary of The CocaCola Company namely Coca-Cola India Pvt Ltd which manufactures and sells
concentrate and beverage bases and powdered beverage mixes, a Company-owned
bottling entity, namely, Hindustan Coca-Cola Beverages Pvt Ltd; thirteen licensed
bottling partners of The Coca-Cola Company, who are authorized to prepare, package,
sell and distribute beverages under certain specified trademarks of The Coca-Cola
Company; and an extensive distribution system comprising of their customers,
distributors and retailers. Coca-Cola India Private Limited sells concentrate and beverage
bases to authorized bottlers who are authorized to use these to produce their portfolio of
beverages.These authorized bottlers independently develop local markets and distribute
beverages to grocers, small retailers, supermarkets, restaurants and numerous other
businesses. In turn, these customers make their beverages available to consumers across
India.

CSR ACTIVITIES

 The Company provides direct and indirect employment to more than 2500 people in its
five bottling plants in Andhra Pradesh situated in Ameenpur, Moula Ali (near
Hyderabad), Vizag, Vijayawada, and Nellore. The Company has been recognized for
Best HR practices like KO Role Model -Deferred Rewards program, reinforce
performance and behavior, KO Key Contributor - Cash reward for superlative
performance (CE & Solid Citizens) with citation & a gold pin, KO Vacations - A program
to include the associate's family in celebrating his professional success by sending them
on a vacation, motivational programs like Surge Beyond 100% to recognize team
performance.
In addition to the professional growth of the employees, the Company also focuses on
personal and social growth by involving employees in various corporate social
responsibility projects undertaken in Andhra Pradesh. These include blood donation
camps, health camps for local communities around the bottling plant, education support
to local community, etc in association with NGOs like Red Cross and Hyderabad Round
Table. In addition to the above, the Andhra Pradesh team came forward to donate
generously to Chief Minister's Relief Fund during the tsunami tragedy besides working
on location to help the victims.
Coca-Colas Concern for The Disabled
The Company employs 88 people with hearing and speaking disability, who work as
Special Inspectors at its Nemam plant near Chennai. They have been trained by the
Company to observe the bottles and check for any foreign particles during quality
The "Abhyaasa Project" (Systematic on-the-job training) in particular, undertaken with
the objective of enhancing technical skills of casual workers and as well as consistent
harmonious industrial relations displayed by the workers as well as the management also
helped the company
The Coca-Cola plant in Kerala has been providing commercial waste to local farmers as
fertiliser which has proved to be contaminated with toxic substances.
The programme said it had discovered dangerous levels of cadmium and lead in the
sludge produced by the plant which was lying on the fields of local farmers. It was

alleged that the substance was actually useless as a fertiliser. BBC reporters also said they
had seen waste leaving the factory to be dumped directly into a local river.The VicePresident of Coca-Cola in India, Sunil Gupta, said that the fertiliser was absolutely safe.
However, Professor John Henry, consultant at St Mary's Hospital in London, said that the
levels of toxins found in water samples taken near to the plant would cause serious
problems of pollution that could have "devastating consequences".
On January 20, 2009 SOS Childrens Villages of India, The Coca-Cola Foundation and
Coca-Cola India announced a partnership to implement water conservation projects for a
better life for children. This partnership will collaborate to ensure sustainable water
resources by undertaking rainwater harvesting (RWH) projects at 39 SOS locations
spread across the country. The partnership will also support creating or improving the
awareness on Water conservation and artificial recharge.
In the beginning of 2008, a pilot project was initiated in SOS Childrens Village, Bawana,
to collect rain water to replenish ground water by using funds from SOS-India budget.
Coca-Cola India stepped in to fund this project and helped SOS save funds from its
budget for other use. The success of the project in terms of professional implementation
and impact on quality of life of SOS children prompted The Coca-Cola Foundation and
Coca-Cola India to join hands with SOS for undertaking RWH projects in the remaining
39 SOS locations.
Further, The Coca-Cola Company in India has been recognized for its community
programs and environmental practices by prominent global organizations such as the Red
Cross and has won prestigious Indian environmental awards for environmental practices.
The rainwater harvesting technology it has established at many locations (including the
plants at Plachimada in Kerala, Kaledera in Rajasthan and Varanassi in Uttar Pradesh).

ETHICAL POLICIES
Business Ethics:
Business ethics is also referred to as corporate ethics. It can be defined as using philosophical
methods to attain a direction which is morally correct. These directions are used in business
environment to ascertain the right course of action of the employee as well as the business
organization as a whole. It is an amalgamation of profit oriented mindset and non-monetary
concerns. The concept of Business Ethics came to limelight with the advent of Social
Responsibility Movement in 1960 when masses became interested in the mutual effects
between Consumerism and Natural Ecosystem. Business ethics basically refers to the non
supervised code of functioning of the corporation concerned but with the identification of some
ethically deviant cases and the emergence of profit oriented companies, government formally
imposed some moral obligations which has shown tremendous growth in considerate behavior of
the organizations.
Organization: Coca Cola Company
Coca Cola Company is an American beverage manufacturing corporation taking care of the
manufacturing, marketing and retailing of their non alcoholic beverage and syrup products
throughout the world. Started by a pharmacist named John Stith Pemberton in 1889 in
Columbus, Georgia it is now a multi-billion corporation operating in nearly 200 countries with
its main headquarters in Atlanta, Georgia. Although the company is best known for its star
product Coca Cola, an aerated non-alcoholic cold beverage, but it offers around 500 brands all
over the globe.
Code of Conduct:
Code of Conduct in an organization is a list of formally binding norms within the organization. It
is a kind of policy statement or legistation within the company working on its employees as an
ethical protocol with penalties associated with violations of any of the norms, severest penalty
being the termination of employees stay in the company, except in cases of criminal activities.
With the rise of Social Responsibily Movement in 1960, the concept of Code of Conduct
began to gain momentum and now its existence is quite substantial in all organizations

throughout the planet. Code of Conduct is not just a set of unwritten rules or unmonitored but
expected moral behavior and responsibility, it is actually a carefully written document which an
employee has to sign, signifying that the employee concerned has read and understood all the
norms under it and will abide by them, prior to joining the organization.
Code of Conduct basically contains four parts:

Preamble
Objective and values
Precise rules with bifurcations
Implementation including the permissions, penalties and monitoring

Code of Conduct-Coca Cola Company

In the multibillion brand of Coca Cola Company, the code of conduct is summarized in five
small lines:

Act with integrity.

Be honest.
Follow the law.
Comply with the Code.
Be accountable.

Elaboration is as followsDiscrimination and harassment

1. Discrimination on the basis of caste, colour, religion, race or creed is a punishable
offence and the culprit will be dealt with strictly.
2. Sexual harassment in any form is strictly prohibited. The person responsible for such
actions will be held accountable for same.

Finance record keeping

1. All the revenue calculations should be done in the predetermined time and limit, no one is
allowed to modify the period of accounting of revenue in order to meet their optimal
budgetary goals.
2. All the data in the financial report should be backed up by required legitimate documents.
3. No transactions should be twisted and modified in order to display a different set of
scenario altogether.
4. No person or entity should be allowed to defy the laws in order to evade from paying
taxes and duties. Everyone should abide by the monetary, judicial and government norms
of the country where the business is carried out unless and until the entity involved in the
transaction has sold its rights to another party.
5. Personnel concerned should be accurate in laying out the companys pecuniary details,
however, honest mistakes or misprints could happen and will not be concerned as a noncompliance or violation of code.
Ethical Dilemma
Ethical dilemma is a problematic situation or group of situations in which the corporation or the
person concerned needs to make a choice within several options available, none of which solves
the situation ethically.
The Ethical Dilemma Of Coca Cola Company
The population near the Coca Cola plant in Kerala complained regarding the scarcity and
pollution of water by the plant involved in the bottling of their product in 2003.This complain
gained momentum and resulted in the closing of the bottling facility concerned followed by the
banning of the brand in Kerala. The Company hadnt even recovered from this setback when an
environmental NGO by the name of Centre for Science and Environment (CSE) published a
report showing high levels of pesticides by the European standards in the flag product of the
Coca Cola Company i.e. the aerated non alcoholic beverage of the same name. As expected there
were worldwide protests against the company. As a result the company was placed under a
probation period in 2006. The samples were tested then by an independent lab named TERI (The
Energy and Resources Institute) whose report declared the product as safe. Nevertheless CSE
claimed that the report published by TERI wasnt comprehensive and that the lab did test only
the solvent portion of the product, neglecting the rest of the ingredients.

Steps taken by the Company

These situations caused declination in the sale of Coca Cola by an astronomical value and further
the company started losing its trustworthiness .Hence, solid steps were taken by Coca Cola
Company to ensure its comeback in the market

It reduced its consumption of water by more than a quarter by utilizing techniques

like rain water harvesting.

It stopped distributing the waste products produced during the manufacturing of

its beverage to farmers as fertilizers.

Activated Carbon Filtration technique came into use by the company in order to

rid the solvent as well as the ingredients of the beverage off any pesticide.
The company, to gain peoples trust back, carried out various medical camps in
association with government and several NGOs for providing medical assistance
to poor people.

SUGGESTION:
Coca Cola was based on the 6 pillars of business ethics i.e. contribution to economic
growth, creation and preservation of jobs, contribution to training, protection of the
natural environment, contribution to the development of the region and finally
contribution to the fight against social rejection.
To achieve these goals, Coca Cola involved all stakeholders i.e. employees, shareholders,
consumers and their movements, and local governmental bodies and NGOs.
If the pillars are examined one by one the following will be seen:
For the employees, Coca Cola has created a healthy and safe working environment, it is
against discrimination (in terms of gender, race, nationality), the remuneration offered to
employees is satisfactory (Coca Cola supports that the wages offered are above the
average level of wages and that it implements benchmarking regarding remuneration).

FINDINGS
According to the Coca Cola Corporate Social Responsibility the CSR program of the company is
the following:
The main objective of the CSR program is Sustainability. This is expressed through the
actions of the company in the following areas: consumer health, packaging and recycling,
water stewardship, employee development, involvement of suppliers and energy and
climate.
Regarding of Consumer Health, the company wants to meet the modern life trends of
consumers. For this reason it has broadened the product portfolio with products that are
not fattening and it has reduced the amount of calories in its beverages by 88% according
to school beverage guidelines. It has also supported Michelle Obamas campaign (Lets
Move) with the initiative Clear on Calories.
With respect to the axis of Packaging Recycling, the company introduced PlantBottle
which is a fully recyclable PET bottle made from a blend of petroleum based materials
and up to 30 per cent of plant-based materials (Coca Cola CSR 2010). Coca Cola has also
managed to achieve high recycling rates of its bottles (99 per cent in Europe and 92 per
cent in North America).
Regarding Water Stewardship, the company strives to improve the efficiency of water
use. It has improved the use of water by 3.5 per cent from 2008. It current average water
use ration to make one litre of its products is 1.67 litres.

CONCLUSION
1. CSR ACTIVITIES

The Coca cola maintains a considerable involvement in philanthropy and in volunteering. It is

considered to be an active participant in the Indian Corporate Social Responsibility field and
received Award for CSR in 2007. When youre serious about social change, the numbers speak
for themselves. For the Coca Cola, Corporate Social Responsibility (CSR) is not just a duty. It's
the unique way we work and live..
2. ETHICAL POLICIES
To be really effective the code of conduct shall be prepared and laid down in the most
comprehensive way possible. It shouldnt leave out even a single entity within the organization
or without, irrespective of the power or authority of that entity.
The code of conduct and business ethics in an organization are guidelines to work in the interest
of their own while also caring the integrity and welfare of others the employee or the company
might effect.

BIBILIOGRAFHY:
www.coca-colaindia.com
www.cocacola.com
www.scribd.com
www.slideshare.net
www.ukessays.com