Introduction
- Background of the Organization
In this paper, the Four-Part Model is applied in the context of the social responsibility activities of the Coca Cola Corporation. In this regard, the specific components of this model will be discussed, and the effects of their application within this organization will also be analyzed. The Coca Cola Corporation is one of the largest soft-drinks` manufacturer in the United States and the globe at large. The company`s operations are found in almost all the countries in the world, and its corporate social responsibility programs are also run parallel to the company`s commercial activities in these countries.
- Objective of the study
This paper seeks to analyze and review the Four-Part Model of corporate social responsibility within the context of a modern-day business entity. According to Spence (2014), the Four-Part Model refers to a framework which is used as a checklist by business organizations in the evaluation of their corporate social responsibility activities and initiatives. The main components of this model will be analyzed and reviewed critically in this paper. The paper will conclude by highlighting the main issues that the company has encountered in regards to the theories of business ethics and those of corporate social responsibility.
The Four-Part Model
- Philanthropic Responsibility
According to Buchholtz (2014, pp.600-601), The Four-Part Model was developed by a management expert named Carroll with the intention of providing a comprehensive framework for corporate organizations to enable them engage in responsible business activities. This model is made up of four main components, thus, the name the Four-Part Model.
The first component of this model is the philanthropic responsibility aspect. According to Spence (2014), this component demands that business organizations must ensure that they operate in a manner that demonstrates good corporate citizenship. This citizenship applies to all the different activities and numerous geographic locations of the business entities. Accordingly, business entities that operate in different countries across the globe should practice good corporate citizenship in all their respective regional offices, according to Buchholtz (2014, pp.600-601).
According to Spence (2014), good corporate citizenship refers to the proactive initiatives that an entity engages in that are geared towards the resolution of some of the prevailing problems in the communities and societies where the entity operates. In this regard, the main stakeholders involved in the philanthropic responsibility component are the community and the public at large. Consequently, the corporate entities are expected to identify the most pressing and urgent societal problems afflicting the underlying communities, and to subsequently engage in projects that are directed towards the resolution of these issues (Buchhlotz, 2014, pp.600-601).
The Coca Cola Corporation is actively involved in a number of corporate social responsibility programs that fall under the philanthropic responsibility component. These projects include the provision of clean drinking water to thousands of people who desperately need it in various third world countries (Coca Cola, 2014).
- Ethical Responsibility
The second main component of Carroll`s Four-Part Model according to Shabana (2010, pp.88-89) is the ethical responsibility aspect. This component plays a critical role in guaranteeing the overall success of an organization`s corporate social responsibility programs. According to Wang (2014), the ethical responsibility component entails the overall compliance and adherence to ethical business practices by a corporate organization. In this regard, Wang (2014) adds that this component dictates that corporate entities must operate in a manner that avoids and prevents any harm or adverse effects to the various stakeholders affected by the organization`s activities.
According to Shabana (2010, pp.88-89), the main stakeholders affected by the ethical responsibility component of the Four-Part Model are the entity’s customers, competitors, suppliers, social activism groups and the Government among many others. Shabana (2010, pp.88-89) further adds that the entity is required to produce goods and services that do not harm its customers in any way. Accordingly, the company is expected to honor its ethical commitments in relation to the payment of its suppliers, and in the business relationships that it has with its employees.
The Coca Cola Corporation is involved in a variety of ethical responsibility programs that ensure that it adheres to this operational requirement. Firstly, the company has continually informed its customers on any dangers or adverse effects that are associated with the consumption of its products. Secondly, the company has formulated an ethical code of conduct which dictates how it is expected to relate to its suppliers in their on-going business transactions. Thirdly, the company has also invested heavily in numerous resources that promote the overall working conditions and employment relationships with its employees (Coca Cola, 2014).
- Legal Responsibilities
The third component of the Four-Part Model of corporate social responsibility developed by Carroll is the legal responsibility component (Lee, 2013, pp.1718-1719). This component entails the compliance and adherence to all the legal requirements of the business operations of a corporate entity. According to Claydon (2010), the legal responsibility component is summarized simply as the obedience of the law and legal regulations of a country by an organization.
Lee (2013, pp.1718-1719) adds that there are several stakeholders within a business entity that are affected directly by the legal responsibility component of the Four-Parts Model. These stakeholders include the employees of the organization; the entity`s suppliers, various social activism groups and finally, the Government and any other concerned regulatory authorities governing the organization. According to Claydon (2010), the business entity has a legal responsibility to its employees in regards to the payment of a fair compensation for their work, and in the working conditions that they are subjected. The business entity is also expected by law to meet all its payment obligations to its various suppliers that it has a business arrangement with (Claydon, 2010). Thirdly, a corporate organization is also expected to comply with all the legal requirements that are set out by the Government or any other regulatory authority that oversees its core operations.
The Coca Cola Corporation is actively involved in initiatives that ensure that it operates in a legally compliant fashion. These activities and initiatives are embedded into its core operations as well as in some of its social responsibility activities (Coca Cola, 2014). Through this dual approach, the company has consistently remained compliant with is legal expectations and it has subsequently avoided any repercussions that are attributed to its failure to comply with such legal requirements.
- Economic Responsibilities
According to Yakovleva (2011, pp.203-204), the fourth main component of Carroll`s Four-Part Model of corporate social responsibility is the economic responsibility perspective. This component entails the running of the corporate responsibility activities of an organization in a manner which is mutually beneficial for both the organization, as well as its targeted beneficiaries. According To Yahya (2014, pp.57-58), this component is beneficial to the sponsoring organization if the underlying initiatives result in the generation of profits and other monetary gains to the involved parties.
Consequently, the economic responsibility component of the Four-part Model significantly affects various stakeholders of a corporate entity. These stakeholders include the owners of the business, its main suppliers, and the Government among many other stakeholders (Yahya, 2014, pp.57-58). The owners of the business are primarily interested in the generation of a return on their investments in the business organization in question. In this regard, the economic responsibility component ensures that these owners enjoy an increase in their invested capital as a result of the engagement in the various projects by a company. These projects are expected to generate a return to the owners, and part of these returns are then invested in different social responsibility projects (Yakovleva, 2011, pp.203-204)
The economic responsibility component also affects the business relationship which exists between a business entity and its main suppliers. The primary objective of the suppliers is to generate a return on their investment in providing different suppliers to the organization. In this regard, the company is obligated to ensure that these suppliers can reap the desired benefits of their association with the underlying business organization (Yahya, 2014, pp.58-59).
Implementation of the Four-Part Model by Coca Cola
Since time immemorial, the Coca Cola Corporation has consistently demonstrated its application of the Four-Part Model in various responsible business activities across the globe. As previously mentioned, the company is actively involved in the provision of clean drinking water to thousands of people in different third world countries (Coca Cola, 2014). Through this initiative, the company has demonstrated the application of the philanthropic responsibility component of the Four-Part Model.
Secondly, the Coca Cola Corporation has also continually engaged in social responsibility activities that fall under the ethical responsibility component. These activities include its active drive towards the conservation and preservation of the environment (Coca Cola, 2014). Under this banner, the company is involved in initiatives such as different recycling programs that are geared towards the reduction of the prevailing industrial waste which is currently being deposited into the natural environment (Coca Cola, 2014).
Thirdly, the company is also involved in various initiatives that have resulted in its continued compliance with the legal and regulatory requirements by the Government and other concerned parties. Some of these activities have also been designed to help young people stay away from illegal activities such as drug abuse and crime. From a social responsibility perspective, these activities include the sponsorship of various football competitions across the globe such as the FIFA 2014 World Cup (Coca Cola, 2014).
Lastly, some of the social responsibility activities of the Coca Cola Corporation can be characterized as falling in the economic responsibility component of the Four-Part Model. These activities include the promotion of sustainable agricultural practices by the company in various countries such as Argentina, Mexico and Brazil (Coca Cola, 2014).
Challenges Facing Coca Cola in its CSR Programs
- Egoism
There are several theories of business ethics that can be applied by a business organization in its day-to-day operations. These theories include the business ethics theory of Egoism. According to Crane and Matten (2010, pp.540-541), this theory states that the corporate social responsibility activities that an entity engages in are primarily driven by the entity`s self-interest or gains that these projects may portend.
The business ethics theory of Egoism can be applied in addressing some of the challenges that the Coca Cola Corporation has faced consistently in its responsible business activities. These challenges include the company`s inability to reach all its targeted beneficiaries within the countries where it operates. Consequently, initiatives such as the clean drinking water project in third world countries have failed to reach their expected optimum level of operation in terms of the expected benefits to the concerned parties (Coca Cola, 204).
Through the ethical theory of Egoism, Bieri (2012, pp.65-66) notes that the company can address some of the highlighted problems, both from a theoretical as well as a practical approach. By understanding that the company stands to benefit immensely from the success of its corporate social responsibility projects, the company can subsequently re-package these projects into a framework that generates mutual benefits to the entity as well as the targeted beneficiaries (Bieri, 2012, pp.65-66). For example, the company can source for some of its raw materials in the areas where these projects have been implemented. Through this approach, the company will be motivated to keep these projects running, since they are providing operational advantages to the company, and they are also solving numerous underlying issues that are currently affecting the communities in question.
- Utilitarianism
The second theory of business ethics which can be used by the Coca Cola Corporation to resolve some of its corporate social responsibility challenges is the ethical theory of Utilitarianism (Baker, 2012, pp.111-112). This theory states that the corporate actions and activities of a business entity are primarily justified if they result in numerous mutual benefits for all the stakeholders affected by these projects (Baker, 2012, pp.111-112).
As previously the Coca Cola Corporation has faced a host of challenges in some of the corporate social responsibility activities that it is engaged in consistently over time. For example, the company runs numerous women`s economic empowerment programs across the globe that are intended at improving the welfare of the targeted women (Coca Cola, 2014). These initiatives are primarily informed by the realization that women are responsible for the growth and survival of a majority of the households in the third world and very poor countries. However, the existence of various repressive cultural practices in some of these countries have resulted in the failure by the targeted beneficiaries to take up these empowerment opportunities, and to improve the quality of their lives and those of their dependents (Coca Cola, 2014).
Through the theory of Utilitarianism, the Coca Cola Corporation can engage in sensitization programs that are meant to educate the concerned individuals on the importance of these empowerment initiatives. These stakeholders and concerned individuals include the menfolk in the said societies, the authorities’ in-charge, as well as the women themselves, among many other stakeholders. Ferrell (2014, pp.99-100) notes that this approach will result in the attainment of the corporation`s social responsibility goals and objectives in the targeted geographic regions.
- Deontology
The third theory of business ethics which can be used by the Coca Cola Corporation to resolve some of its existing challenges in its social responsibility activities is the Deontology theory. According to Prescott (2012, pp.400-401), this theory states that large business entities such as the Coca Cola Corporation are expected by default to provide sustainable solutions to the prevailing issues and problems that may be affecting the communities and societies in which the entities operate.
The responsible business activities of the Coca Cola Corporation are significantly executed in third world and poor countries such as Sub-Saharan Africa due to a larger proportion of community-based problems found in such areas. As previously mentioned, these projects include the provision of clean drinking water as well as other basic needs such as health care to the affected communities (Coca Cola, 2014). However, the company is consistently faced with the challenge of the absence of the required infrastructure which can support and sustain these projects once they have been commissioned (Coca Cola, 2014). These challenges are attributed to the poor economic conditions and lack of development projects which afflict these countries.
According to Trevino (2010 pp.267-268), the Coca Cola Company can apply the theory of Deontology to resolve these prevailing challenges in the underlying geographical areas. This theory empowers the company with the realization that it behooves the corporation to provide adequate solutions to these issues since the governments and other regulatory authorities in these countries do not have the required capacity to handle the problems. In so doing, the company will ensure that it benefits both the societies at large, as well as its future operations in those specific regions.
Conclusion
This paper has critically analyzed the Four-Part Model of corporate social responsibility which was applied within the context of the Coca Cola Corporation. The main components that characterize this model were discussed critically in this paper against the background of the corporation`s current activities. The main issues that the company has faced in relation to its corporate social responsibility activities have also been highlighted in this discussion. These issues were analyzed in relation to how they are impacted by different prevailing theories of business ethics.
In closing, the Coca Cola Corporation is actively engaged in a corporate social responsibility program which encompasses all the four main components of the Four-part Model. Going forward, the company should maintain its current momentum in regards to its CSR programs so as to ensure that it attains its short, medium and long term corporate goals and objectives.
Bibliography
Baker, H. K., 2012. Socially Responsible Finance and Investing: Financial Institutions,
Corporations, Investors, and Activists. New York: John Willey and Sons
Bieri, F., 2012. Corporate Social Responsibility. New York: John Willey and Sons
Buchholtz, A., 2014. Business and Society: Ethics, Sustainability, and Stakeholder Management.
New York: Cengage Learning
Coca Cola., 2014. Sustainability. (online) Available at: < http://www.coca-
colacompany.com/topics/sustainability> (Accessed 15 December 2014)
Claydon, J., 2010. A new direction for CSR: the shortcomings of previous CSR models and the
rationale for a new model. Social Responsibility Journal, Volume 7 Issue 3
Crane, A. and Matten, D., 2010. Business Ethics: Managing Corporate Citizenship and
Sustainability in the Age of Globalization. London: Oxford University Press
Ferrell, O. C., 2014. Business Ethics: Ethical Decision Making & Cases. New York: Cengage
Learning
Lee, E. M., 2013. Employee perception of CSR activities: Its antecedents and consequences.
Prescott, R. K., 2012. Encyclopedia of Human Resource Management, Key Topics and Issues.
New York: John Willey and Sons.
Shabana, K. M., 2010. The Business Case for Corporate Social Responsibility: A Review of
Concepts, Research and Practice. International Journal of Management Reviews,
Volume 12, Issue 1, pages 85–105
Spence, L. J., 2014. Small Business Social Responsibility Expanding Core CSR Theory.
Business Society, DOI 0007650314523256
Trevino, L. K., 2010. Managing Business Ethics. New York: John Willey and Sons
Wang, Y., 2014. The Impact of Four Types of Corporate Social Performance on Reputation and
Financial Performance. Journal of Business Ethics.
Yahya, W. K., 2014. Investigating the relationship between corporate
Citizenship culture and organizational performance in the Malaysian context. Asian Academy of Management Journal, Vol. 19, No. 1, 47 – 72
Yakovleva, N., 2011. Stakeholder Perspectives on CSR of Mining MNCs in Argentina. Journal
of Business Ethics, Volume 106, Issue 2, pp. 191-211
