Strategic Management

Case 23: Coca-Cola Indias Corporate Social Responsibility

Strategy
By : Mohamad Hafiz Arsan Haq

EXECUTIVE SUMMARY
Coca-Cola Company becomes one of the biggest carbonated drink manufacturers in the
world when Robert Winship Woodruff was elected as the company president in 1923. He
successfully generated a huge revenues and profits affecting image of the company as a valuable
brand. Therefore, in 1993, Coca Cola decided to open up again for the second time the operations
site in India. They already operated in India in 1977, but due to limitation mandatory from ruling
party the company decided to close the factory.
Nowadays, environmental issue becomes hot issue in this globalization era and Coca
Cola realizes an importance of communitys involvement in business activities. Thats why in
2006, Coca-Cola emphasized the management on CSR to answer the question regarding the
responsibility to environmental issues. In India, the enterprise already established several critical
corporate responsibility programs in India because either directly or indirectly its operation
affected the environment in such many ways. They divided the programs into 4 sectors, which
are water, energy, fuel, and packaging and recycling that also will be elaborated in table 1.
Table 1. Coca-Cola CSR Programs
Water

Energy

Fuel

Packaging and
Recycling

2002- 2007 :

2000:

Cooperated with local 2005:

Water efficiency

Launched

2005:

refreshment cooler

production,

Community

2006:

and delivery

eKO- operations

watershed partnership Converted

1300

for Initiated a recycling

bottling, project

in

Mumbai

partnered with BMC,

Municipal

program

models of refrigerator

Corporation

2007:

equipment

Mumbai, and FORCE

Global water project

free refrigerator.

to reduce the impact

2008:

Develop an Energy

of

Collaboration
ICRISAT

and

to

HFC

with Management System

CII 2007:

PET

of

bottle

environment
2006:

to

Strategic Management
Case 23: Coca-Cola Indias Corporate Social Responsibility
Strategy
By : Mohamad Hafiz Arsan Haq
building
water Cooperated
with
Partnering with Delhi
resources

bottling

infrastructure
other

partners

and installed over 8,500

natural units of HFC free

government
IAPM,

and
launched

recycling PET bottle

resources

equipment

program

management

Launched esKO

Initiative a program

2010:

2010:

that focused on eco-

Reducing waste water Raised

until 100 percent

efficiency

energy

innovation, improving

of

efficiency, and life-

equipment by 40 to 50

cycle effectiveness

percent

Besides those green-programs, Coca-Cola launched a 5 pillars growth strategy created

to strengthen the relationship with India. The growth strategies are emphasized on People,
Planet, Portfolio, Partners, and Performance. The company hopes the program will restore Indian
communities toward the company. Therefore, Coca-Cola successfully attracts many investors to
invest within the company and understand how the company reacts to both communities and
environment problems.
However, several communities surrounding the area claim that all of those programs are
differently actualized in a real situation. A long debate between the company and communities
has already begun since Coca-Cola started the operations in India. Government agency claims
that the ground water level was significantly depleted in first of seven years the company
operated. The result affected to the communities life where they have no access to drinking water
and water for farming. Most of the people are farmers who rely on natural water resources to
irrigating their plants. On the other hand, an answer from the company resists that there are no
evidence of overexploitation of the ground water reserves. They blame that water scarcity is
generated due to the seasonal condition.
One topic that the writer wants to arise is about the award which is obtained by the
company because of its CSR initiatives. World Environment Foundation, the organization who

Strategic Management
Case 23: Coca-Cola Indias Corporate Social Responsibility
Strategy
By : Mohamad Hafiz Arsan Haq
presents the award, in reality was sponsored only by Coca-Cola. Many statements occurred
questioning the reality of that green-company predicate. They also said that the firm eagerly want
to attach a green image to the brand, thus, it will convince the consumers about their effort in
answering the incident. It is really hard to decide which one is the good guy and which one is the
bad guy. External environment could disrupt and change peoples mind set where the good guy
could become the bad guy and vice versa.
However, we have to analyze the problem transparently, although, it will generate pro and
contra from both different point of views. As a Coca-Cola, they already crafted excessive plans
proving the importance of CSR sector. They understand that the combination of internal and
external parties allow the company to sustain its existence and oblige to nurture the condition of
surrounding environment and communities. Coca-Cola should responsible to the societies who
live around the site even the fault is still blur and unclear. Previously, the author already mention,
how the firm react to the issue of water depletion in the beginning of its operation. In contrary,
the local communities opposed differently. The important thing is the evidence of the result. If
the communities experience something bad happen to themselves, it means the purpose of the
program is still not exactly targeted to people. In addition, probably, Coca-Cola must focus on
socialization to the publics before constructing and implementing the program in order to avoid
miscommunication among the engaged members.
The best options to valuate how Coca-Cola contributes on revitalizing the environment is
by comparing benefits and burdens that generate from that action. If the company generates more
positive effect to the communities and environment rather than negative effect, they have already
chosen the right option. Eliminating the entire problems is almost impossible even for a big
company such as Coca Cola. Therefore, reducing the pollution, waste and defect products are
considered for nurturing the nature. Provide the communities with evidence and continuously
develops the CSR program to support projects related to the green program.