External Influences 4: Coca-Cola - Activity
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2012
External Influences 4: Coca-Cola - Activity
Most businesses have to consider the impact of their activities on stakeholders. Coca-
Cola is no exception but their operations in the southern Indian state of Kerala have
caused widespread concern and a string of claims and counter-claims by residents of the
local community and the company.
The Story
Image: Coca-Cola has become one of the most popular drinks in India. Copyright: Rosika
Voermans, stock.xchng
In 1998, Coca-Cola set up a bottling plant in Perumatti in the southern state of Kerala.
Since it opened, local villagers have complained about the fall in the amount of water
available to them and have blamed the fall in supplies on Coca-Cola who, they claim, use
up to a million litres per day at the plant. Coca-Cola claims that the shortage in the water
is due to the lack of rains in the region. Coca-Cola even sends round tankers of water to
the region to help the local community. Local farmers are claiming that their livelihood
has been destroyed since the building of the plant and that the number of people working
on the land has dropped considerably because they cannot survive.
Following the cleaning of the bottles, a waste sludge is produced that Coca-Cola have
been disposing of on the land of local farmers, claiming it was a useful fertiliser.
Following a BBC Radio 4 programme, samples of the sludge were analysed by scientists
at Exeter University in the south-west of England and found to contain toxic chemicals
including lead and cadmium - both of which can be harmful to humans - and further
suggested that there was little or no benefit of the sludge as a fertiliser. Recent tests by
the local state laboratories find that the levels of toxic chemicals are within safety levels
but that it should not be used as a fertiliser.
In a separate development, sales of Coca-Cola have been hit by suggestions that its drinks
produced in India contained higher levels of pesticide residues than was healthy! A large2012
number of bodies have joined in the local community's campaign demanding the plant be
closed down and that tests be carried out on Coca-Cola to assess its safety. A lawsuit to
this effect was thrown out in August, which prompted Coca-Cola to issue an angry
comment claiming that the reports were scurrilous, unnecessarily scared large numbers of
Coca-Cola's customers and put thousands of jobs in its plants throughout India at risk.
Coca-Cola claims to employ in excess of 5,000 people in the country, not to mention the
many thousands that are linked in some way to the product.
Analysis
There are a number of issues relating to this incident that demonstrate the ethical and
moral issues surrounding business.
• Coca-Cola has become one of the most popular drinks in India.
• Coca-Cola's business in India leads to a wide range of direct and indirect
employment related to the business as a result of $1 billion (£520 million) worth
of investment by the company.
• Coca-Cola claims that its activities are entirely legal.
• How honest are the claims that Coca-Cola is making?
• How reliable are the claims made by those who oppose Coca-Cola's activities?
• What conflicts arise between the responsibilities that Coca-Cola has to the
environment and the local community, and to its shareholders, suppliers and
employees?
• How much pressure would local council officials be under to give Coca-Cola a
clean bill of health, as some would suggest?
Related Web sites for Research
Use the links below to help research the issue and to get further information about the
circumstances and problems that are raised by this story. Then answer the question below
which is typical of an analysis and evaluation based question in an examination on this
topic.
• A list of reports relating to Coca-Cola's operations in India - from domain-b.com
(http://www.domain-b.com/companies/companies_c/coca-cola_india/index.htm)
• Coca-Cola in India accused of leaving farms parched and land poisoned - from
the Guardian (http://www.guardian.co.uk/water/story/0,13790,1012193,00.html)
• Coca-Cola India (http://www.coca-colaindia.com/)
• 'Coke plant will not be allowed to function' - from CorpWatch
(http://www.corpwatch.org/issues/PID.jsp?articleid=7528)
• Cola Companies Told to Qui - also from CorpWatch
(http://www.corpwatch.org/issues/PID.jsp?articleid=7548)
• People's Union for Civil Liberties - Kerala - another pressure group
(http://www.pucl.org/Topics/Industries-envirn-resettlement/2003/coke-pucl.htm)
• India bans soft drinks in pesticides row - from the Guardian2012
Business Ethics, Moral
and Environmental
Issues2012
At the end of this lesson, students will be able to:
• Identify how ethics can affect a business
• Identify and clarify the role of a stakeholder and their
importance in (and to) a business
• Clarify solutions used by business and government to
resolve ethical dilemmas2012
Social responsibility
• The business philosophy that emphasises that
business should behave as good citizens
• They should consider the effects of their activities on
society as a whole on the stakeholders2012
Stakeholders
• Recap Quick Fire:
1. Who and what are stakeholders?
2. Identify 5 stakeholders of a business?2012
Who are stakeholders?
Share
holders
Management Customers
The Local
Employees Business Community
Government Environment
Suppliers2012
Stakeholders
A business social Responsibilities to stakeholder groups:
• Shareholders
Generate profits and pay dividends
• Customers
provide good quality products at reasonable prices.
Safety, honesty, decency and truthfulness
• Employees
health and safety at work, security, fair pay
• Suppliers
pay on time, pay fair rates
for the work done, provide element of security2012
Stakeholders
• Local Community
provide employment, safe working environment, minimise
pollution and negative externalities – provide external benefits?
• Government
abide by the law, pay taxes, abide by regulations
• Management
their aims versus those of the organisation as a whole
• Environment
limit pollution, congestion, environmental degradation,
development, etc.2012
Business Ethics
• The moral guidelines for decision making by
organisations.
• Adopting a moral code – identifying what is ‘right’
and what is ‘wrong’ and act accordingly
• Highly subjective nature
• Tension between different stakeholders2012
Business Ethics
Tensions:
• Profits versus higher wages
• Expansion versus development
• Production versus pollution
• Supplier benefits versus consumer prices/lower
costs
• Survival of the business versus needs of
stakeholders2012
Identify each case examples ethical issue
Examples
Production of children's toys Profits versus higher wages
Expansion versus
Coffee industry
development
Music industry Production versus pollution
Supplier benefits versus
Multi-national operations
consumer prices/lower costs
McDonalds – food quality, Survival of the business
litter versus needs of stakeholders
Jewellery – diamonds and
gold Or any ethical issues that
you can identify
Chemical industry2012 Solutions • Self Regulation • Subsidies • Government/EU regulation • Legislation • Pressure Groups • Improve competition and contestability of markets • Social and Environmental Audits
Which solution could “solve” the
2012
ethical issues?
Examples Solutions
• Production of children's – Self Regulation
toys – Subsidies
• Coffee industry – Government/EU regulation
• Music industry – Legislation
• Multi-national operations – Pressure Groups
• McDonalds – food – Improve competition and
quality, litter contestability
of markets
• Jewellery – diamonds – Social and Environmental
and gold Audits
• Chemical industry2012
• But do they solve the issue?2012
Case studies
Objectives
• Identify stakeholders within group
• Identify of ethical issue within case study
• Identify tensions created between stakeholders
• Recommend a possible solution2012
Quick discussion – extension task
In many markets firms are becoming fewer and
Larger e.g. car manufacturing.
In view of this, discuss whether the consumer is
really becoming more powerful?2012
DESE Model Curriculum
GRADE LEVEL/UNIT TITLE: 11-12/Explore Legal, Ethical, & Social Aspects of Management
Course Code: 040005/034301 CIP Code: 52.0701/52.0101
COURSE INTRODUCTION:
An instructional program that generally describes the planning, organizing and controlling of a business, including organizational and human
aspects, with emphasis on various theories of management, the knowledge and understanding necessary for managing people and functions,
and decision making.
Business management prepares students for administrative and management occupations. Students learn to make decisions based on data,
develop leadership skills, and select appropriate management styles for varying employment situations. Not only is this area of study vital to
the development of all business students, it also provides skills and knowledge that can be used effectively on many occasions when
professional management skills are needed.
This course is designed to help students develop an understanding of skills and resources needed to manage a business. Instruction includes
a general overview of American business, forms of business ownership, personnel management, labor-management relations, public and
human relations, taxation, and government regulations. The use of computers and software as tools in making business decisions in areas
such as accounting, sales analysis, and inventory control is also introduced.
Missouri Department of Elementary and Secondary Education Page 1 of 102012
DESE Model Curriculum
GRADE LEVEL/UNIT TITLE: 11-12/Explore Legal, Ethical, & Social Aspects of Management
Course Code: 040005/034301 CIP Code: 52.0701/52.0101
UNIT DESCRIPTION: SUGGESTED UNIT TIMELINE: 1 WEEK
Students will learn how ethics and social responsibility impact businesses. CLASS PERIOD (min.): 50 MINUTES
ESSENTIAL QUESTIONS:
1. How can businesses demonstrate social responsibility?
2. Why are ethics important in business?
ESSENTIAL MEASURABLE LEARNING OBJECTIVES CCSS LEARNING GOALS CROSSWALK TO STANDARDS
(Anchor
Standards/Clusters) National CCSS MBA Research DOK
Business Standards
Education
Standards
1. Identify current laws and regulations BL IV.A.1.1 SL.11-12.1.a Understands 1
affecting the establishment and operation SL.11-12.4 business’s
of businesses RI.11-12.1 responsibility
RI.11-12.2 to know,
RI.11-12.3
abide by, and
RI.11-12.4
enforce laws,
RST.11-12.9
regulations,
and ethical
behavior that
affect
business
operations
Missouri Department of Elementary and Secondary Education Page 2 of 102012
DESE Model Curriculum
GRADE LEVEL/UNIT TITLE: 11-12/Explore Legal, Ethical, & Social Aspects of Management
Course Code: 040005/034301 CIP Code: 52.0701/52.0101
and
transactions.
2. Explain the elements of federal legislation BL III.B.1.1 SL.11-12.1.a Understands 3
relevant to staffing SL.11-12.4 business’s
L.11-12.1 responsibility
L.11-12.3 to know,
L.11-12.5 abide by, and
L.11-12.6
enforce laws,
RI.11-12.1
RI.11-12.2
regulations,
RI.11-12.3 and ethical
RI.11-12.5 behavior that
RST.11-12.9 affect
business
operations
and
transactions.
3. Discuss ethical behaviors in the workplace Man V.A.1.1 SL.11-12.1.a Understands 2
Man V.A.3.6 SL.11-12.1.c the economic
SL.11-12.4 principles and
L.11-12.1 concepts
L.11-12.3
fundamental
L.11-12.5
to business
L.11-12.6
operations.
Understands
techniques,
strategies,
and systems
used to foster
self-
understanding
Missouri Department of Elementary and Secondary Education Page 3 of 102012
DESE Model Curriculum
GRADE LEVEL/UNIT TITLE: 11-12/Explore Legal, Ethical, & Social Aspects of Management
Course Code: 040005/034301 CIP Code: 52.0701/52.0101
and enhance
relationships
with others.
Understands
tools,
strategies,
and systems
needed to
access,
process,
maintain,
evaluate, and
disseminate
information
to assist
business
decision
making.
Understands
the processes
and systems
implemented
to monitor,
plan, and
control the
day-to-day
activities
required for
continued
Missouri Department of Elementary and Secondary Education Page 4 of 102012
DESE Model Curriculum
GRADE LEVEL/UNIT TITLE: 11-12/Explore Legal, Ethical, & Social Aspects of Management
Course Code: 040005/034301 CIP Code: 52.0701/52.0101
business
functioning.
4. Demonstrate characteristics of an Man V.A.1.1 SL.11-12.1.a Understands 2
acceptable work ethic (e.g., attendance, SL.11-12.4 the economic
attire) principles and
concepts
fundamental
to business
operations.
Understands
techniques,
strategies,
and systems
used to foster
self-
understanding
and enhance
relationships
with others.
5. Identify business’ responsibilities in the Man V.B.3.2 SL.11-12.1.a Understands 1
workplace, community, and society SL.11-12.4 business’s
RI.11-12.1 responsibility
RI.11-12.2 to know,
RI.11-12.3 abide by, and
RI.11-12.5
enforce laws,
RST.11-12.9
regulations,
and ethical
behavior that
affect
business
Missouri Department of Elementary and Secondary Education Page 5 of 102012
DESE Model Curriculum
GRADE LEVEL/UNIT TITLE: 11-12/Explore Legal, Ethical, & Social Aspects of Management
Course Code: 040005/034301 CIP Code: 52.0701/52.0101
operations
and
transactions.
Understands
the economic
principles and
concepts
fundamental
to business
operations.
Understands
the processes
and systems
implemented
to monitor,
plan, and
control the
day-to-day
activities
required for
continued
business
functioning.
Understands
the concepts
and strategies
needed to
Missouri Department of Elementary and Secondary Education Page 6 of 102012
DESE Model Curriculum
GRADE LEVEL/UNIT TITLE: 11-12/Explore Legal, Ethical, & Social Aspects of Management
Course Code: 040005/034301 CIP Code: 52.0701/52.0101
communicate
information
about
products,
services,
images,
and/or ideas
to achieve a
desired
outcome.
ASSESSMENT DESCRIPTIONS*: (Write a brief overview here. Identify Formative/Summative. Actual assessments will be accessed by a link to PDF file or Word doc. )
Website for samples on developing a Business Survey www.samplequestionnaire.com/management-questionnaire-template.html
Cooperative Learning (Group work rubric example) http://www2.uwstout.edu/content/profdev/rubrics/secondaryteamworkrubric.html
Essay writing rubric Examples: http://www.teachervision.fen.com/rubrics/teaching-methods/6359.html
*Attach Unit Summative Assessment, including Scoring Guides/Scoring Keys/Alignment Codes and DOK Levels for all items. Label each
assessment according to the unit descriptions above ( i.e., Grade Level/Course Title/Course Code, Unit #.)
Obj. # INSTRUCTIONAL STRATEGIES (research-based): (Teacher Methods)
3 1. Guided Practice, Independent Practice, & Guest Speaker:
• Teacher led discussion: Coordinate a “dress up” day (perhaps during FBLA-PBL week ) after providing appropriate
guidelines(handout) and discussing a typical attendance policy (use local schools attendance policy as an example) obtained
from a local business. (great time to discuss FBLA Dress Code – see unit Resources)
• Student research – Assign each student a business and have them interview someone from a local business (a parent) or
research on the internet the dress code/attendance policy of the business and then write a short essay describing the policies.
• Invite a speaker from an area business (Human Resource Department) to talk about company policy on dress code, attendance,
rules and regulations about hiring, etc.
Missouri Department of Elementary and Secondary Education Page 7 of 102012
DESE Model Curriculum
GRADE LEVEL/UNIT TITLE: 11-12/Explore Legal, Ethical, & Social Aspects of Management
Course Code: 040005/034301 CIP Code: 52.0701/52.0101
3, 4, 5 2. Guided Practice - Open dialogue: Ask students to first define ETHICS. This will give the instructor an idea of the students’
experiences and background with the topic. Key words should be recorded on newsprint, chalkboard, overhead, etc. The intent
of this discussion is to generate key words such as: values, belief or belief system, morals, principles, code of right and wrong,
social values, etc.
1, 2 3. Independent Practice , student research – Students conduct research for laws and regulations on starting businesses.
Obj. # INSTRUCTIONAL ACTIVITIES: (What Students Do)
3 1. Go to the web site www.ceres.org and research CERES PRINCIPLES. Assign each student a principle and have them write a short
paragraph describing the principle in addition have the student research a company that is practicing the principle and an
example of that practice.
3, 4, 5 2. Students will contact local business owners from surrounding rural and urban areas to compare their policies on: attire, ethics,
and attendance ect. (see website link in Assessments for ideas on developing a survey)
1, 2 3. WebQuest: Students will search the internet for laws and regulations on starting the following forms of Businesses:
(Proprietorship, Partnership, and Corporation ect.) (see link in unit resources – Business Informational website and Missouri
Legal Website)
UNIT RESOURCES: (include internet addresses for linking)
Business Registration Checklist: http://www.business.mo.gov/BusinessRegistrationChecklist.pdf
Missouri Legal Website: http://www.business.mo.gov/register.asp
FBLA Dress Code www.fbla-pbl.org
Ethics and Social Responsibility www.enotes.com/social-responsibility-organizational-ethics-reference/social-responsibility-organizational-
ethics
Laws and Regulations regarding opening a business: http://www.business.gov/we-have-moved.html
Business informational website: http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-
Missouri Department of Elementary and Secondary Education Page 8 of 102012
DESE Model Curriculum
GRADE LEVEL/UNIT TITLE: 11-12/Explore Legal, Ethical, & Social Aspects of Management
Course Code: 040005/034301 CIP Code: 52.0701/52.0101
business/establishing-business/incorporating-registering-your-
Resources @MCCE:
BE 13.1399 W333 - Teaching the Ethical Foundations of Economics
Jonathan B. Wight and John S. Morton
NEW YORK, NY, NATIONAL COUNCIL ON ECONOMIC EDUCATION, 2007.
BOOK — Book contains 10 lessons that reintroduce an ethical dimension to economics in the tradition of Adam Smith. Through these materials
students will have the opportunity to learn about the important role ethics and character play in a market economy and how, in turn, markets
influence ethical behavior. The lessons involve students through simulations, group decision making, problem solving, classroom demonstrations
and role playing. Grades 9 - 12.
BE DVD ROM 41 - Business Law and Ethics--If It Is Legal, Is It Ethical?
Palomar College
SAN MARCOS, CA, PALOMAR COLLEGE, 2005.
DVD ROM — Enron, MCI, and Tyco have become household words, not because of their products or services, but rather because of their
unethical conduct setting new records in the annals of business. A panel of experts help the viewer to understand the ethics of business. High
School. 22 minutes.
BE GAME 4 - The Ethics Challenge
Lockheed Martin
WESTLAKE VILLAGE, CA, LOCKHEED MARTIN CORPORATION, 1998.
GAME — Lockheed Martin's Ethics Challenge is a set of training materials based on cartoonist Scott Adams' famous DILBERT characters. The
heart of the program consists of fifty Case Files that set up a wide variety of issues and dilemmas, covering virtually every aspect of business.
Includes video, game board & playing pieces, leader's guide, 6 guide books.
BE GAME 5 - Perspectives
Lockheed Martin
WESTLAKE VILLAGE, CA, LOCKHEED MARTIN CORPORATION, 2002.
GAME — Doing the right thing calls for a great deal of common sense, but sometimes what is right is not obvious. Perspectives, Lockheed Martin
Ethics Challenge 2002 game focuses on many of the ethical challenges that employees may encounter. The theme for Lockheed Martin Ethics
Missouri Department of Elementary and Secondary Education Page 9 of 102012
DESE Model Curriculum
GRADE LEVEL/UNIT TITLE: 11-12/Explore Legal, Ethical, & Social Aspects of Management
Course Code: 040005/034301 CIP Code: 52.0701/52.0101
Challenge 2002 is perspectives and their role in decision-making. Includes video, leaders guide, and twelve workbooks. (Same author as Gray
Matters game)
BE VIDEO 180 - Professional Development: Business Ethics and Social Responsibility
Diamond Educational Productions/MarkED
COLUMBUS, OH, DIAMOND EDUCATIONAL PRODUCTIONS, 2004.
VIDEO — Through group discussions, industry professionals, educators, and recent college graduates look at the social responsibilities of
businesses and processes of ethical decision-making. Codes of ethics and theories are discussed. Great for class discussions. Discussion centers
around the recent events with Martha Stewart, Tyco, WorldCom, Enron and others. FORMAT: Panels and focus groups discuss trust issues
involved between consumers and businesses since the recent barrage of illegal and in ethical activities of business CEOs.
MCE DVD ROM 44 - Corporate Social Responsibility: From Principles to Profit
Films for the Humanities & Sciences
PRINCETON, NJ, FILMS FOR THE HUMANITIES & SCIENCES, 2004.
DVD ROM — This program looks at how product and service providers develop and implement better business practices to satisfy shareholders,
customers, employees, and the community. Companies such as Shell, DHL, Nike, and GlaxoSmithKline--placed on the hot seat by Greenpeace,
the World Wildlife Fund, Oxfam, and other watchdog groups--explain how they dealt with environmental impact management, ethical supply
chain management, equitable treatment of employees, proactive addressing of consumer disgruntlement, and accurate assessment of
shareholder sentiment. 51 minutes.
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