Challenges in the Global Business Environment

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This paper will address the issues presented by the ethical business practices in the beverage bottling industry. The primary company related to the comparison companies utilized is Coca-Cola Bottling Company. In order to offer a full awareness of what issues Coca-Cola has brought upon itself through unethical business practices and what it has done to rectify them, a brief summary of their history will be discussed. Following this summary, there will be a summary of two relative companies, Molson Coors Brewing Company and Nestle Waters, and their individual ethics background and history. These histories will be compared and contrasted, offering insights into the ethics violations of the industry and solutions pursued and accomplished to address such violations.

Coca Cola has faced allegations of unethical business practices in its global commerce activities. One such case was in 2003 out of Kerala, India. Accusations described in “Business: In hot water; Coca-Cola” from The Economist (2005) included exceedingly high concentrations of pesticides in their soft drink products. Further investigation found them not to be at fault for the pesticide infiltration, but also cited them as violators of contributing to the water scarcity issue in India. They are not alone in this attack. Other companies, such as Nestlé have been attacked similarly by Corporate Accountability International’s Kathryn Mulvey, “for commodification of products that should not be bought or sold” (water). Such excessive use of water that does not actually go into the “hydration products” is irresponsible and in need of addressing. In their global expansion efforts, Coca Cola has made progress to help remedy this scenario and has made modest improvements since the incident. This leads us to address Nestlé Water’s similar challenge.

Nestlé Water’s primary accusation from Corporate Accountability International has much more to do with the fact that they are creating public distrust of tap water in regions where clean water is not of concern. Similarly, they were accused of selling infant formula, which requires the use of water, in areas where clean water is not available (Economist, 2005). The larger concern with Nestlé is its blatant promotion of infant formula over encouragement of breastfeeding, especially in impoverished countries (Stephen, 2011). More distressing to the situation was the purchasing of milk from the Zimbabwean land reform program (Stephen, 2011). The violations regarding the Zimbabwe land reform program fall under the territory of the Human Rights Watch efforts that are highly protecting the rights of black farmers.

The claims of violations to human rights included: assaults against farm owners and farm workers, use of farms as bases to harass political opposition supporters, police failure to protect victims, discrimination in land allocation, and displacement of farm (Stephen, 2011)

Nestlé’s participation in what has been a war-torn country, and its manipulation of the use of resources, which has been the center of the on-going war and human rights violations, renders them unethical in their business practices. What has been done to rectify this situation?

Nestlé has a well-established history of shared benefit partnerships in Africa to assist low-income peoples. Their vision is to improve nutrition by providing access to nutritious foods. Their belief is that this can be obtained by making it affordable to impoverished countries and their support efforts through lending, training, and technical services, offer rural development sustainability (Stephen, 2011). It is likely that Nestlé firmly believes that their efforts are helpful. However, as seen throughout history, many efforts of profiting corporations have spun the beliefs in order to influence the participation of those who hold the key to their financial success. Breast milk is always going to be biologically healthier for babies and providing formula without the use of clean water, which offers an additional environmental hazard, is not the most constructive way to help impoverished communities who struggle with adequate clean water supplies. Nestlé’s practices are clearly not helpful or benefitting the people they claim to want to help.

The final company analysis involves the Molson Coors Brewing Company. How does the behavior of Coca-Cola and Nestlé compare to the efforts of Molson Coors Brewing Company? Molson Coors Brewing Company appears to have a shortage of ethics violations reported. After an extensive search, the only reports found were of high standards, awards, and their joining of various ethics violations prevention organizations. They were listed by the Canadian Maclean’s “Best In Class” (2013) report as “the first brewer in Canada to convert its brewing by-products, such as spent yeast and waste beer, into fuel-grade ethanol” and improving their aluminum can recycling efforts by 42% in eight years. Their kegs are also refilled over 200 times throughout the 25-year lifespan of each keg. So what does Molson Coors Brewing Company have in common with Coca-Cola?

Coca-Cola and Molson Coors both were acknowledged in their efforts to improve water conditions and waste in water-scarce countries. Coca-Cola was acknowledged for improving its waste creation by 3% between 2003-2006 (Economist, 2005). Water scarcity is predicted to increase according to the 2007 Intergovernmental Panel on Climate Change due to global warming (Business Wire, 2008). The acknowledgment and effort to consciously use less water in countries not only drought-prone but likely to increase is a step in the right direction. The only other improvement might be to move their operations to areas where drought is not an issue. To put corporate needs above the human rights needs of residents is never ethically sound. The same can be said regarding Nestlé’s self-serving needs to acquire milk products from impoverished and war-torn countries while promoting the purchase of naturally occurring resources to those who are not in financially secure communities is a double insult to the countries they operate. The only one benefiting from such efforts is the corporation. The peoples they target and use are of no real significance to them and the efforts to truly provide sustainability and nutrition, the so-called intent of Nestlé’s mission in such countries, is a complete contradiction to their actual behavior. This is an example of blatant bait-and-switch behavior. Luring the consumer to believe they need to purchase said products when they naturally have the products available to them for free is highly unethical. Additionally, the promotion of formula in areas without clean water is doubly harmful to the infants they aim to feed. Taking advantage of government malpractice with land use for a personal corporate gain against the benefit of the impoverished they aim to serve is also despicable behavior.

Although Coca-Cola has made efforts to improve their efforts by reducing waste, their overall use of drought-ridden lands to produce their products in order to obtain cheap labor belies their real effort to help these areas. Creating jobs, but simultaneously wasting precious life-essential resources does not adequately compensate the community hosting the company. More conscious responsibility is required on the part of Coca-Cola to remove themselves from such situations and to offer their efforts in areas that can more adequately sustain their resource consumption. Their violation has not quite exceeded the violations of Nestlé, but definitely highlights the need for improvement. Molson Coors appears to be the winner of the day with having no ethics violations of record and ample examples of ethics code improvement efforts surrounding them. Their effort to take the waste and turn it into something reusable is the highest example of corporate responsibility and integrity. All companies mentioned herein should continue to pursue technological advances that enable them to be more resourceful in their environmental and social impact. The days of manipulating human capital and natural resources for capital gains are no longer acceptable and with the rise of organizations that provide intense scrutiny and watchdog services, their behavior will be forced to adapt to higher expectations and ethics.

References

Best in class. (2013). Maclean's, 126(23), 48-57.

Business: In hot water; Coca-Cola. (2005, Oct 08). The Economist, 377, 78. Retrieved from http://search.proquest.com/docview/224021686?accountid=458.

Multinationals and water: New ethical corporation report examines how Rio Tinto, SABMiller, Coca-Cola, Intel, Johnson & Johnson, IKEA, & Molson Coors are tackling the issue of water scarcity. (2008, Dec 23). Business Wire. Retrieved from http://search.proquest.com/docview/444337229?accountid=458

Stephen, G. S. (2011). Ethical performance evaluation: An extension and illustration. European Business Review, 23(6), 561-571. doi:http://dx.doi.org/10.1108/09555341111175408