Introduction
Coca-Cola is one of the leading beverage companies worldwide. It has strived to be ethical regarding its operations although the company is still faced with other challenges which have not yet been addressed hence costing the business its reputation and profits.
Coca colas biggest and pressing environmental issue has been the use of water. When it began its bottling water services, Dasani brand, a lot of criticism faced the company. For instance, the corporation was accused of advocating for the privatization of the municipal water systems which threatened access to public water in places such as India ( Karnani, 2013).
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Most of the water controversies which have hit the coca cola company are in India where it has struggled to keep up its business. For example, in 2003, the company was accused of depleting most water supplies at the expense of the local citizens. A court order prohibited the company from using underground water in one of its manufacturing plant, Plachimada.
The environmental problem has and still continues to affect the company in many ways. For instance, in 2004, the company’s introduction of Dasani to Europe suffered a major setback after 500,000 bottles were recalled after traces of excess bromate, a byproduct of the procedure used to purify the tap water.
Correspondingly, the controversy has led to the company losing most of its businesses, especially with learning institutions. For example, universities in the US terminated the contracts they had with the company as well as prohibited the selling of its products in their school cafeterias after it emerged that some of its drinks in India contained excessive amounts of pesticides which were harmful to the health of the public ( Gleick,& Ajami, 2014).
Further, the company has faced massive losses especially from lawsuits which sue the company of polluting natural water sources or using all the water available causing shortages to the citizens who need it more. For instance, still in India, the company was ordered to pay $47 million to compensate the farmers surrounding its local branch, Kerala which had depleted underground water causing their crops to die.
Water is a challenge for the coca cola company because all its operations need a lot of water to be carried out. For the firm to satisfy its eater needs, it ends up drying the plants, farmer’s wells and the local agricultural activities. The business admits that without water, it could as well as be off the market.
Typically, its operations rely on vast access to water since it takes approximately 3 litres of pure water to make one litre of coca cola. To ensure the continuity of its business, the company has taken control of most of the aquifers in various regions worldwide where it has established itself.
To minimize its impacts on water usage, the company has come up with different strategies since the year 2004. To start with, the company replenishes its water ( Jones, et.al, 2014). Between the year 2005 to 2011, the company replaced approximately 35% if the water it used for the production of its privileges.In India, the company has focused on harvesting rainwater, constructing dams as well as restoring fishponds and other sources of water which have helped the company not to use too much water from the regular supply services.
The firm needs to address the issue of water as soon as because there are other emerging businesses which are likely to use these controversies to overtake the business. Further, dealing with this issues promotes the publicity of the firm since it can be identified with practicing social cooperate responsibility.
In the same way, the company recycles waste water. The practice is in agreement with its strategy to improve the efficient use of water systems while contributing production of quality. The company ensures that such water is well treated to avoid health risk factors .In the year 2011, the company recycled 159 billion liters of water from its business operations worldwide.
However, the technique is still facing some challenges in the construction and upgrading of the treatment systems because the process requires a lot of money. Likewise, delays in construction or poor government policies have led to little or no water recycling in some of the company’s production plants ( Alabau, et.al, 2015).
The company executive has a chance to invest more on the water stewardship and recycling projects. It needs to ensure that the operating firms get the maximum amount of water they can get from these two procedures to enable them to carry out their business activities.
On the other hand, the management can choose to store a lot of water in huge reservoirs which will guarantee a continued production service even though it will mean that some communities experience water scarcity.
These two approaches have both positive and negative impacts on the business. For example, using their own will restore its public image towards saving water. For a company like coca cola, it would mean that it receives a good reception in the Middle East countries especially India which blame it for practicing discrimination in the variety of products it produces. Such a move will boost the business of the company to higher profits.
However, since the projects have not commenced on many countries worldwide, it is still likely that the company will continue using the natural water sources in these countries and as a result, lead to continuous depletion of underground resources. Thus, the company will face more criticism which in turn will affect its sales.
Mass water storage is beneficial to the enterprise because in case the water source become scarce, the operations of the firm will still continue while still looking for better alternatives. However, the practice may be seen as the business fraud from its primary competitors as well as the governments and public who are likely to demand that the company gives away the water for more important uses.
I recommend the water recycling and replenishing options because they are in line with the companies goals of environment protection ( Bryant, 2015). The whole process of making the procedures work involves a lot of talent hence the company will be teaching its employees on how to recycle water among other things.
In this business scenario, the company will be using its resources to manufacture its products hence saving a lot of capital which it could have invested in acquiring water sources. Equally, it will be easier for the company to get licenses to operate for various reasons because it won’t be endangering the water environments. Lastly, the company’s reputation will be on the right track since the various controversies currently surrounding it will seize to exist.
Conclusion
The various controversies threaten Coca-Cola it faces each day due to its massive use of water resources. Therefore, the management needs to come up with better strategies to curb the problem. Currently, it has some useful measures for example recycling and replenishing water. However, a lot needs to be done to ensure that the company contributes to a safe environment by not exploiting the available water sources.
References
Alabau, G. M. C., Shaw, K. A., Kenney, M. R., Kalloch, S., & Nelson, T. (2015). The Challenge of Positive Water Balance for Multinational Corporations.
Bryant, S. (2015). A Comparison of Water Conservation Methods Within the Supply Chain.
Gleick, P. H., & Ajami, N. (2014). The world's water volume 8: The biennial report on freshwater resources (Vol. 8). Island press.
Jones, P., Comfort, D., & Hillier, D. (2014). Water Stewardship and Corporate Sustainability. Economia. Seria Management , 17 (2), 358-372.
Karnani, A. G. (2013). Corporate Social Responsibility Does Not Avert the Tragedy of the Commons--Case Study: Coca-Cola India. Ross School of Business Paper , (1210).
