Crisis management in the Coca-Cola company

¶ … Strategy for Alleviating Cultural and Legal Misconceptions and Miscommunications

Identifying the Problem

The Coca Cola Company has been receiving bad press in many different countries relative to supposed bad labor practices and union busting. These accusations go as far as to relate certain deaths of labor organizers to the fact that they were trying to form a union for workers employed by Coca Cola. The issue, on a broad scale, is more of a public and community relations issue than a human rights or labor dispute. Certainly the workers in Columbia and other countries that are receiving bad press have specific labor rights and regulations mandated by their home countries. The Coca Cola Company needs to make an attempt to eliminate the bad press associated with the labor struggles in South America and other parts of the world.

Coca Cola's involvement with foreign labor goes back to outsourcing much of its bottling, canning, and production where cheaper labor exists (Killer Coke, 2010). This practice has undoubtedly saved the company money and helped to make Coca Cola profitable as a company. The company should not look to pull out of the affected regions but instead begin modifying their public and labor relations efforts to reflect a more stable, less violent, and more worker-friendly image. Since the company has production locations worldwide, with no real plan of attack on how to begin to address the allegations of human rights abuses and even murder, they are not very well prepared to deal with the issues at the heart of the problem. At the same time, the root causes of many of the individual problems is the fact that workers, for one reason or another, are not being given enough of a voice from their perspective. The company needs to change this, or at least the perception that it is not listening to the specific needs of the workers worldwide. Certainly if there is a black market in existence for labor and union issues where people are being killed for their views, the company has not yet created an adequate forum or policy for dealing with workers' grievances, whatever they may be.

Macro Issues

Since the labor and legal restrictions for marketing and production differ around the world, it would seem rather difficult for Coca Cola to begin to solve their alleged problems with a single policy or change. Each country is culturally significant and represents a unique challenge to Coca Cola in helping to restrict illegal practices while encouraging a positive, safe, and healthy work environment (Paust, 2002). The inclusion of Coca Cola workers into a union would likely cost the company a very large amount of money annually, as the workers would then negotiate for higher pay and benefits. This is not to say that Coca Cola doesn't believe in taking care of their workers, but the bottom line would certainly be affected by a labor transition such as this.

Micro Issues

It is impossible to both analyze the key issues and successfully implement a strategy from the micro and macro perspective without first understanding that each one of the countries involved in legal or humanitarian struggles against Coca Cola is culturally and governmentally unique. There are many smaller local issues wrapped up in the grand accusations and issues that are plaguing Coca Cola in many countries. The lines of communication need to be enhanced and transparency needs to be encouraged in order to preemptively extinguish the labor issues as well as human rights issues and bad press. The root of the major problems are often culturally specific to certain areas or ways of life, and the company needs to invest some time and energy in better understanding these cultures and specific, micro issues.

Communications Strategy

Coca Cola needs to discourage the formation of labor unions while at the same time encouraging the workers to voice their own opinions on issues that affect them. This will help to remove much of the pressure from the activists that are pushing issues upon other workers as well as those within the countries who are killing and intimidating workers. As long as the lines of communication are open from the workers to their superiors and to the company itself, the transparency of the issues affecting the workers will be greatly increased. With increased transparency comes increased responsibility to monitor and act upon negative influences in the new system as it begins to function.

The key constituents in this strategy are the company and its liaisons and the workers themselves. The company needs to build a team of cultural liaisons who are sensitive to the considerations of the workers as well as the company. When this gap is bridged, Coca Cola can be certain that they will be provided traction in their dealings with each specific culture and population of workers. The company needs to live up to its responsibility to human rights and its workers' safety (Paust, 2002). Creating an environment where this ideal is expressed is key in overcoming most of the issues that Coca Cola faces.

Fixing the Problems/Solutions

One way that Coca Cola could resolve these issues in many of the countries it is experiencing problems in is to begin to build an internal labor structure that discourages the formation of a union but that also offers its own unique and valuable benefits. The costs of dealing with unions in so many countries would be staggering and the cost of doing nothing to quell the large amount of bad press and human rights issues is even higher (Killer Coke, 2010). Coca Cola should actively engage in a worker's rights and company benefits program that is both culturally significant as well as valuable to the workers themselves. If the workers feel as though they are being treated well and taken care of by the company itself, it can mitigate the potential costs of labor unions as well as legal issues and lawsuits. It would be far better to compromise in this area than it would be to sway in either of the other directions.

A workers' benefits program could be covered by a buy-in or personal investment plan for many of the workers overseas (Paust, 2002). The workers themselves would be subject to higher standards in the workplace as they agreed to participate in such a program. Before the implementation stage, there would need to be adequate surveying of the workers and an analysis of the most common problems and issues that workers are most concerned with would also need to be carried out. Just like in any successful public or worker's relations campaign, it is important to first understand the issues from the perspectives of the workers in order to be able to successfully combat any legal, humanitarian, or business woes.

Coca Cola needs to strive to maintain a clean human rights record since the brand name is such a major player in international markets (Killer Coke, 2010). Also, human rights and legal issues are easy for activists to latch onto as key issues, and these accusations harm the image of the company worldwide. The company needs to create a positive marketing campaign aimed at both crisis management in the near-term as well as reinforcing the idea that it listens to its workers and is sensitive to cultural and labor issues worldwide. Cultural sensitivity and understanding will go a long way in helping the company to positively relate to the specific issues and claims that workers have. Without common cultural understanding and common legal ground, the company will be wasting its time and money trying to solve these issues. Coca Cola needs to embark on a campaign of truly understanding the issues at hand and the cultures surrounding its workers.

Follow-Up

Following-up on the implementation of the workers' benefits and rights program that is company-based would be a matter of monitoring and subjecting the results to specific criteria of analysis. Most importantly, Coca Cola would be able to see direct results occur as a product of the lessening of bad press worldwide, and potentially the cooling down of workers' demands for unions. As long as the new system is monitored and has ample room to grow as well as adapt to each culture and the specific demands of workers, it will be successful in the long run (Paust, 2002). The follow-up plan needs to be comprehensive and long-term as well. The implementations made by the company to help curb the human rights and legal accusations should be included in any new grow or company policies in the future. This will help to ensure that future abuses or accusations do not occur. Another key component to a follow-up program is adequate enforcement of the regulations and rules laid out by the company as well as the home country. Author Collingsworth (2002) argues that while Coca Cola recognizes that violations are occurring, and sometimes has mechanisms in place to identify and correct these issues, there is inadequate enforcement after the fact.