SUNWAY DIPLOMA STUDIES

Diploma in Business Administration

Individual Assignment
Semester : S1 Jan 2023
Student Name & ID. : Yong Kah Kah & 23011851
Subject Code & Name : MGT1213 Introduction to Business
Semester 1 Theme: Sustainability & Green Technology
Date of Issue : Thursday 16th February 2023
Date of submission : Tuesday 28th February 2023
Lecturer : Ms. Noorhayati, Mr. Andrew (Velocity)

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Table of Contents

1. Introduction.............................................................................................................................3

2. Sustainable Development (SD)..............................................................................................4

3. Overview of Coca-Cola...........................................................................................................5

4. Business Ethics and Corporate Social Responsibility (CSR) of Coca-Cola......................6

5. Conclusion ..............................................................................................................................8

6. References................................................................................................................................9

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 Coca-Cola’s Ethical and Corporate Social Responsibility (CRS)

Yong Kah Kah Sunway College Velocity (16/2/ 2023-23/2/2023)

1. Introduction

Objective(s)

The objective of this report is to provide in-depth knowledge of the concept and importance
of Sustainable Development, Business Ethical, Corporate Social Responsibility, and
Environmental, Social, and Governance principle (ESG).

Purpose

The purpose of this report is to determine whether Coca-Cola is a qualified sustainable

company by figuring out what it did to adhere to Sustainable Development regulations and
the positive impact it had on society and the environment.

Scope

Malcolm Gladwell mentions the blind taste test conducted by Pepsi in his book ‘Blink’. The
experiment revealed that most people prefer Pepsi over Coca-Cola. Coca-Cola then
launched a new formula drink called ‘New Cola’, but consumers still prefer the original
coke. Eventually, Coca-Cola brought it back and named it ‘Coca-Cola Classic’. In this
report, I will utilize it to investigate the effectiveness of branding and marketing in changing
consumers’ demands and analyse the aftermath of changing product brand image. Besides, I
am going to apply the stakeholder theory of corporate governance. It is a principle that
focuses on stakeholders’ opinions when making decisions and aims to maximize the profit
for them over time. To complete this report, I will obtain the information from Blink, ESG
report, Coca-Cola website, and publicly available resources. ESG stands for Environmental,
Social, and Governance and it can assist in determining the positive impact of a company’s
activities and operations.

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2. Sustainable Development (SD)

Sustainable Development is a principle that aims to satisfy present and future customers’ needs in
an environmentally friendly way. It aims to transform our world and improve the quality of our life
by ensuring the economic, societal, and environmental needs are in equilibrium. Additionally, the
purpose of it is to ensure natural resources are not being abused by humans and allow the younger
generation to live in a healthy environment.

Sustainable Development assists in economic growth and creates job opportunities. Moreover, it
also helps to conserve vital natural resources including oil, natural gas, and coal for future
generations. Besides, it advocates social equity and justice. Hence, everybody can enjoy general
services like education and healthcare. Sustainable development brings numerous positive impacts
on business. Sustainable organizations managed to improve their reputation and create a well brand
identity. Therefore, they can enter new markets and attract potential customers easily. Furthermore,
they can reduce wastage and production costs by reusing several materials. Sustainable companies
can achieve competitive advantages as they are encouraged to launch new products and services to
stand out from rivals and maintain competitiveness. Conversely, there are several negative effects
on business. Costs will be increased when companies start to apply sustainable practices since they
must purchase additional capital. Lastly, businesses must follow the guidelines of Sustainable
Development. Otherwise, the company will be penalized by the government, and this will affect the
reputation of the company.

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3. Overview of Coca-Cola

Coca-Cola was established in 1886 and was invented by Dr. John Stith Pemberton. The company
is generally focused on manufacturing and selling its beverages to different markets. Apart from
sparkling soft drinks, it also offers mineral water, sports drinks, coffee, and tea. Coca-Cola, Fanta,
Dasani, Costa Coffee, and Fuze Tea are some of the brands under The Coca-Cola Company.
Besides, it has around 30 million customer outlets in more than 200 countries. In 2021, about
seventy-nine thousand people were hired by Coca-Cola. This helps to reduce the unemployment
rate and improves the global economy. In 2022, the full-year revenue of The Coca-Cola Company
was $43.004B, an 11.25% increase from 2021, which means they have boosted their sales.
Moreover, the amount of cash flow in 2022 was $9.5 billion, a decrease of 1.7 billion from 2021
due to the increase in tax and annual incentive payments. Recently, it has encountered many
difficulties, including labour shortages and higher spiking gas prices. The biggest challenges are the
higher cost of factors of production and the shortage of aluminium cans. When the costs of raw
materials and wages go up, the price of the product will also increase, so consumers will purchase
from its competitors. Besides, due to the limited number of cans produced by suppliers, Coca-Cola
is forced to decrease the production of canned products and thus is unable to satisfy consumers’
demands.

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4. Business Ethics and Corporate Social Responsibility (CSR) of Coca Cola

Business Ethics is the standard of morals that companies and employees must follow whereas
Corporate Social Responsibility refers to the responsibility taken by businesses to bring beneficial
effects to communities and the environment. Below are the CSR activities done by Coca-Cola:

Sustainable Packaging

Initially, Coca-Cola utilized tonnes of plastic in its packaging, which destroys the ecosystem and
increases pollution. Therefore, it introduces different recycling programs such as collecting and
reusing bottles and cans from the public. It also aims to make its packaging 100% sustainable by
2025 using plant-based plastic. By making itself an eco-friendly product, it can decrease packaging
costs and satisfy customers’ demands.

Promote Economic Empowerment

Coca-Cola promotes economic empowerment by creating the Coca-Cola Foundation and offers
scholarships to support students in a few countries, especially United States. In the last 20 years, it
has offered more than $69 million in scholarships. By providing financial aid, it can build a positive
brand image and stand out from its competitors. Hence, it can increase customer loyalty and gain
more customers.

Water Stewardship

Coca-Cola has run various water conservation programs in different areas. It reduces water usage
and replenishes the water. Besides, it also improves the quality of water and ensures it is safe to
drink. When the use of water decreases, Coca-Cola can save costs. By emphasizing water
stewardship, it can also enhance its reputation with stakeholders such as employees and customers
and build a good relationship with them.

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Improve Workplace Safety

Coca-Cola is working toward to minimize the risk of injuries and it is collaborating with its
partners to protect employees. This can meet the workplace safety guideline and prevent penalize
and fines to preserve its reputation. Moreover, the employees’ motivation can be improved so they
will work harder to increase productivity.

Suggestion

Danone is a multinational food and beverage company, which has conducted various CSR
activities. It introduced the “One planet, One Health” project, which aims to encourage people to
eat healthily. It increases customers’ awareness of the importance of eating healthy through having
conversations with them on the “Act For Food” platform. It also launched some organic and plant-
based products to promote healthy eating habits. I think Coca-Cola should also introduce a similar
program and emphasize the health of customers. Although it has launched zero-sugar coke, the
sugar level is higher than the classic coke. This is where Coca-Cola should improve. Otherwise, its
customers will reduce since people prefer healthy products nowadays. If it promotes healthy eating
habits, it can contribute to a healthy society and create a positive brand identity. Apart from
improving customer loyalty, it can also improve the job satisfaction of employees. They are more
likely to be enthusiastic about working for companies that caring customer health. However, the
cost will be increased since healthy products are always expensive. Coca-Cola might need to
increase its budget to purchase new machinery and healthy ingredient.

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5. Conclusion

In summary, branding and marketing is important to businesses because they can assist in shaping
customers’ preference. Besides, companies with strong brand image can lead to a differentiated
competitive advantage among competitors. So, they should avoid changing their brand identity.

Coca-Cola is an intelligent and innovative company because it came up with many methods to
tackle different problems. For illustration, it brought bad effects on the environment because of its
previous plastic packaging. Then, it reuses the bottles and cans collected from the public to reduce
the use of plastic. Based on my research, Coca-Cola has a high potential to make its profit on an
upward trajectory at the end of 2023 as it improves its reputation and brand identity by doing a lot
of corporate social responsibility activities. Besides, Coca-Cola also takes benefits from CSR
activities including cost savings, increased sales, and improve employee motivation.

As for me, I think Coca-Cola should make its business activities 100% eco-friendly and change
healthier ingredients to produce its products. Furthermore, it can also introduce green technology in
its business such as solar power and wind power to reduce pollution and save costs.

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6. References

2021 Business, Environmental, Social & Governance | Company Reports. (n.d.). The Coca-Cola
Company. https://www.coca-colacompany.com/reports/business-environmental-social-
governance-report-2021

About. (n.d.). The Coca-Cola Company. https://investors.coca-colacompany.com/about

Coca-Cola Reports Fourth Quarter and Full-Year 2022 Results. (n.d.). The Coca-Cola Company.
https://investors.coca-colacompany.com/news-events/press-releases/detail/1076/coca-cola-
reports-fourth-quarter-and-full-year-2022-results

Corporate Finance Institute. (2023, February 22). ESG (Environmental, Social and Governance).
https://corporatefinanceinstitute.com/resources/esg/esg-environmental-social-governance/

D. (2022, August 10). Business Ethics and Corporate Social Responsibility Debunked.
https://www.diligent.com/insights/esg/business-ethics-and-corporate-social-responsibility/

Edu, L. (2022, September 19). Concept of Sustainable Development | Leverage Edu. Leverage Edu.
https://leverageedu.com/blog/concept-of-sustainable-development/

Gladwell, M. (2007). Blink: The Power of Thinking Without Thinking. Back Bay Books.

Lucas, A. (2021, October 27). Coca-Cola CEO expects to see sporadic product shortages through
2022. CNBC. https://www.cnbc.com/2021/10/27/coca-cola-ceo-expects-to-see-sporadic-
product-shortages-through-2022.html

Partridge, J. (2021, September 2). Coca-Cola’s supply chain under pressure due to shortage of
cans. The Guardian. https://www.theguardian.com/business/2021/sep/02/coca-colas-supply-
chain-under-pressure-due-to-shortage-of-cans

Promote healthy diets that are better for the planet - Danone. (2021, September 14). Danone.
https://integrated-annual-report-2020.danone.com/cause/promote-sustainable-healthy-diets/

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Stakeholder Theory of Corporate Governance - Explained. (n.d.). In The Business Professor, LLC.
https://thebusinessprofessor.com/en_US/business-governance/stakeholder-theory-of-
corporate-governance

The Importance of Sustainability in Business | HBS Online. (2019, November 6). Business Insights
Blog. https://online.hbs.edu/blog/post/business-sustainability-strategies

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