Company Struggles with Ethical Crises
The Coca Cola Company struggles with ethical crises
Brenda James
HRM/522 Strayer University, Lithonia Campus
Dr. Huddleston
February 3, 2013
The Coca-Cola Company Struggles with Ethical Crises Since the late nineteenth century Coca Cola has been a successful company. Coco-Cola went to war with its competitor PepsiCo throughout the 1990s as Coca-Cola expanded its market overseas. Its overseas sales increased to the point where over 85 percent of its sales came from outside of the United States (Ferrell, Fraedrich and Ferrell, 2011). As a consequence, the Coca-Cola brand and trademark is the most recognized in the world and worth an estimated $25 billion. Yet, by 2000 Coca-Cola failed to make Fortune’s list of most admired American companies because in part of its serious ethics violations like charges of racial discrimination, contractual disputes with distributors, problems with long-term contracts and that Coca-Cola misrepresented market tests (Ferrell, Fraedrich and Ferrell, 2011). This paper will examine the ethical issues Coca-Cola encountered to argue that its response to the crisis was handled well but nonetheless deeply affected the company’s bottom line.
Coca-Cola’s ethical issues Since the late 1990s, Coca-Cola has been embroiled in at least eight significant ethical dilemmas. The first came in June 1999 when Coca-Cola’s products were contaminated. Consumers in Belgium, the Netherlands and Luxembourg became sick after using Coca-Cola products. Coca-Cola mismanaged the problem and downplayed it. Then over 100 people became sick in France and months later in Poland with water contaminated with mold. In each of these events, Coca-Cola did not react in a timely fashion or with the appropriate concern for public health, but eventually conceded that it was their contamination problem.
The second issue regarded Coca Cola’s unethical marketing behavior in Europe. Coca-Cola came close to crossing antitrust laws, which led the French government to deny
Brenda James
HRM/522 Strayer University, Lithonia Campus
Dr. Huddleston
February 3, 2013
The Coca-Cola Company Struggles with Ethical Crises Since the late nineteenth century Coca Cola has been a successful company. Coco-Cola went to war with its competitor PepsiCo throughout the 1990s as Coca-Cola expanded its market overseas. Its overseas sales increased to the point where over 85 percent of its sales came from outside of the United States (Ferrell, Fraedrich and Ferrell, 2011). As a consequence, the Coca-Cola brand and trademark is the most recognized in the world and worth an estimated $25 billion. Yet, by 2000 Coca-Cola failed to make Fortune’s list of most admired American companies because in part of its serious ethics violations like charges of racial discrimination, contractual disputes with distributors, problems with long-term contracts and that Coca-Cola misrepresented market tests (Ferrell, Fraedrich and Ferrell, 2011). This paper will examine the ethical issues Coca-Cola encountered to argue that its response to the crisis was handled well but nonetheless deeply affected the company’s bottom line.
Coca-Cola’s ethical issues Since the late 1990s, Coca-Cola has been embroiled in at least eight significant ethical dilemmas. The first came in June 1999 when Coca-Cola’s products were contaminated. Consumers in Belgium, the Netherlands and Luxembourg became sick after using Coca-Cola products. Coca-Cola mismanaged the problem and downplayed it. Then over 100 people became sick in France and months later in Poland with water contaminated with mold. In each of these events, Coca-Cola did not react in a timely fashion or with the appropriate concern for public health, but eventually conceded that it was their contamination problem.
The second issue regarded Coca Cola’s unethical marketing behavior in Europe. Coca-Cola came close to crossing antitrust laws, which led the French government to deny
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