Part A
Question One
Firms may perform well economically but still face negative criticisms among the public, a phenomenon present in Coca-Cola’s case scenario. To some scholars, this situation arises from a performance-expectations gap, whereby the perceptions and expectations of different stakeholders vary significantly (Brennan, 2006). Notably, while Coca-Cola took pride in being the largest beverage company in 2015, it faced a performance gap. The stakeholder’s reasonable expectations of the company’s involvement in sustainable production differed from Coca-Cola’s corporate impact on the availability and quality of water globally.
An analysis of Coca-Cola’s case scenario reveals a performance gap between the stakeholder’s expectations of sustainable production and the company’s actual corporate impact on the availability and quality of water globally. Notably, in the early 21st century, the secretary-general of the United Nations, an external stakeholder in Coca-Cola’s operations, highlighted the need for corporations to take measures to address the issue of water shortage (Carroll & Buchholtz, 2014). Therefore, the stakeholders expected that multinational firms such as Coca-Cola would indulge in sustainable production to combat the imminent danger of water shortage.
However, the stakeholders’ expectations in Coca-Cola’s scenario varied significantly from the latter’s performance in terms of corporate impact on accessibility and quality of water. Notably, the corporation utilized a large portion of water worldwide, creating concern over water shortage among communities in which it operated. For example, it is observed that Coca-Cola used about 82 billion gallons of water worldwide, with a significant portion of this water being used to produce crucial inputs utilized in its manufacturing plant (Carroll & Buchholtz, 2014). Therefore, society’s needs for accessible quality water differed from Coca-Cola’s high consumption of global water, an aspect that created a performance-expectation gap.
Question Two
As a strategic operation, businesses need to scan their external environment to ensure that they keep pace with the ongoing changes that may affect their overall performance. The market keeps changing based on various issues, especially regarding policies and regulations in industries, such as food, since they affect public health and social activities through employment among other activities. As such, external factors are crucial aspects that determine the performance as they interact with businesses on various levels. This scan can be done using a strategic radar screen, a model developed by Karl A. Albrecht to assist businesses in tracking trends and events within eight sectors of the environment and facilitating strategic thinking (“The strategic radar model,” n.d.). If I applied the strategic radar screens model in Coca-Cola’s case, the social sector would be the most significant to the firm, since problems in the public’s life appear to be the primary factors changing the company’s business environment.
Based on the analysis of Coca-Cola’s case using the strategic radar screen, it appears that the social sector would be the most significant area of focus within the business environment. As suggested by Albrecht, the social environment entails trends and conflicts that form the reference system of people’s behavior. Albrecht’s model also reveals that an organization may examine the public life problems that are changing part of a firm’s business environment when focusing on the social environment (“The strategic radar model, “n.d.). The synthesis of information from the case scenario shows that there were significant problems that changed Coca-Cola’s business environment. Notably, limited water among communities in which the firm operated, and growing concerns over water shortages among stakeholders such as the United Nations changed Coca-Cola’s operations. Due to the trends in the social environment, Coca-Cola had to think strategically of a way to combat the problem and bridge the performance-expectation gap.
Question Three
When companies face external issues within their operations, they have different ways of tackling them. While some firms may choose to avoid them, others develop measures to minimize the impact of the problem among the involved stakeholders. Similarly, when Coca-Cola was faced with the challenge of corporate effect on accessibility and availability of quality water, it responded to the matter by ensuring that it remained committed to its vision of creating a sustainable business. In my opinion, TCCC reacted appropriately to the public outcry by adopting corporate social responsibility as a tool to minimize, and where possible, eradicate the effect of its production activities on water shortages and accessibility of quality water for local communities.
In my view, the adoption of social responsibility by TCCC was the most appropriate response to the problem in the case scenario. As the literature suggests, social responsibility is the “fee charged on the returns derived from the wrongs committed by entrepreneurship to pay for some of the rights” (Goel & Ramanathan, 2014). Similarly, social responsibility is among the ideal ways of entrepreneurs compensating for the adverse effects of their operations on the environment and other stakeholders.
Similarly, TCCC chose to respond to the public issue through various social responsibility initiatives. For example, after understanding the magnitude of its water management practices, the Coca-Cola company decided to pursue a water neutrality initiative (Carroll & Buchholtz, 2014). This effort was a measure to compensate the local communities for the adverse effects on the company’s operations on the environment. Notably, to cover for its entrepreneurial wrongs, TCCC decided to reduce, recycle, and replenish water usage globally.
Part B
Section One
The tobacco industry has been making headlines in the Canadian media for all the wrong reasons, such as lawsuits by tobacco smokers for the health damages caused by the product. In addition, the industry has been facing various economic issues over the past few years, following the implementation of a ban on smoking in public places and controls on its advertising and corporate sponsorship, which is significantly reducing tobacco consumption in the country. The bans affect related corporations as they significantly depend on public notifications to expand their market and increase sales. Notably, other stakeholders have been influencing and are influenced by the two public issues, among them, the government and health and anti-smoking activists.
Among the primary stakeholders influencing various public issues are health and anti-smoking activists. The activists get involve as they are the primary promoters of good health, which tobacco does not provide. Consequently, they are majorly involved in activities that prevent or reduce increased consumption of tobacco. Notably, this category of stakeholders has been conducting campaigns to promote tobacco cessation and influence the government to implement laws limiting tobacco smoking. For example, the literature suggests that health activists in Canada have been increasing their efforts to ensure restrictions on the sale and use of tobacco are tightened (“Anti-smoking efforts,” 2011). Therefore, the advocates have a significant influence on tobacco bans and controls implemented in the country.
The Canadian government is also a key stakeholder influencing the ban and controls in the tobacco industry. While the government does not have a direct interest in companies that manufacture tobacco, it shapes their performance through the institution of rules and policies. Notably, the local authorities in various provinces have been implementing laws to restrict tobacco use and related publicity. For example, the provisional government in Newfoundland and Labrador amended the Smoke-free environment Act to ban smoking in all public places, including bingo halls and bars (“Anti-smoking efforts,” 2011). This scenario illustrates the influence that the government has on issues of tobacco use and advertisement.
Apart from the influencers, some stakeholders are directly influenced by the identified issues, including tobacco users and manufacturers. Specifically, the users are the immediate consumers of tobacco products; thus, a ban and control in public smoking lower their consumption level. For example, a study conducted in Canada revealed that bans on tobacco smoking led to a cessation of the behavior among users (Shields, 2007). On the other hand, tobacco manufacturers are also directly influenced by the public issue as the ban and control of tobacco advertisements lowers their sales. As noted, the prohibition of tobacco smoking in public places reduces tobacco use, which, in turn, lowers the purchase of the commodity and profitability of the industry. Therefore, the identified public issues have a direct influence on smokers and manufacturers of tobacco in Canada.
Section 2
The circle of influence on the ban on smoking in public places and controls on tobacco advertising and corporate sponsorship is broad, and it has a significant impact on my family. As a Canadian resident, I have close ties with immediate family members, some of whom are tobacco users. As a patriotic citizen, I would be expected to ensure that the individuals follow the established directives on public smoking. However, my biases towards promoting the interests of family members who smoke and perspective about the negative outcome of the public issues may influence my position to oppose the ban on smoking in public places.
My position on the public ban is biased as there are personal issues that influence my support, especially if my family members will be affected by the new directive. Although I acknowledge the negative health consequences of smoking, I also believe that restricting the practice in public places can adversely affect tobacco addicts. For example, as scientific evidence shows, nicotine withdrawal can lead to various symptoms, such as anger, depression, restlessness, and difficulty concentrating (McLaughlin, Dani & Biasi, 2015). This data implies that if tobacco addicts stay long without using nicotine, following the institution of the ban against smoking in public, they may experience the withdrawal symptoms. Therefore, my bias to protect family members who smoke against the withdrawal symptoms may influence my decision to oppose the identified public issues.
Section 3
Like consumers, the two public issues also have a significant effect on tobacco manufacturing companies. Due to the established ban on public smoking, the consumption of tobacco in Canada may decline and negatively affect my company’s profit. Additionally, the controls on tobacco advertising and corporate sponsorship may affect the company’s sales as the industry is highly dependent on advertisements to create awareness about the existing brands and trigger purchases among consumers. While the government must protect smokers and non-smokers against inaccurate and ambiguous advertising, it would be equally essential for my company to manage the public issue through alternative forms of advertising, such as direct mails, to ensure that it maintains considerable sales.
On the one hand, it may be difficult for my company to manage public smoking as the matter is beyond the management’s control. However, the firm can tackle the aspect of controlled advertisement through direct mail advertisements to drive the purchase of my company’s products. As the literature suggests, direct marketing is an important communication channel for brands and retailers (Francoise & Andrews, 2015). Notably, this advertising method can either assume the traditional approach of sending flyers to customers in their letterbox or the digital way of sending promotional emails to potential consumers. I find the use of direct advertising to be ideal in targeting the adult population who are the key focus of my company’s products while mitigating the adverse effects of controlled public advertisements. Besides, by adopting direct mail advertising, my company would remain compliant with the government effort to prevent exposure of tobacco advertisements to children as the mails would only be sent to people in specific age brackets.
Section 4
Based on an analysis of the selected public issues, it is evident that the government has the most influence on the matter; it is the primary stakeholder in charge of implementing the bans on smoking in public places and controls on advertisements. Besides being a significant influencer, the government has to support businesses and society. As I learned in module 1 of this course, the government has a role in protecting its citizens’ health and well-being by implementing necessary controls on manufacturers. Additionally, the government is using policies to limit the consumption of tobacco and controlling the publicity and sale of the product in the Canadian market.
One of the ways the government is influencing the industry is by utilizing policies and regulations to shape the latter’s activities. For example, by implementing rules on the advertisement of tobacco products and corporate sponsorship, the government can limit the publicity of the commodities and consequently lower the sales made by tobacco manufacturers. As noted, tobacco firms mainly rely on advertisements and corporate sponsorship in events such as sports to create awareness about their brands to potential consumers. Therefore, the government is influencing the tobacco manufacturers by targeting the primary source of their publicity in the industry.
The government also influences the public through the use of regulations to involuntarily shape their behaviors and change their perceptions about tobacco smoking. For example, by instituting restrictions on smoking in public, the government is slowly influencing the public to deter from consuming tobacco. Furthermore, the policies are being used by the government to reshape the public’s perception of tobacco smoking in public by branding the practice as ethically wrong and unacceptable. Therefore, the government regulations are the primary tools being used to influence the public’s opinion about tobacco smoking and promoting cessation of the practice among smokers.
Section 5
Apart from the government, the media also has a significant role in the identified public issues. As the literature in module 1 suggested, the media plays a central part in shaping society’s social values, such as influencing the public on what to consume and creating awareness about the benefits and adversities of various products in the market. Similarly, in the context of the tobacco industry, the media has a role of enlightening the public about the benefits of avoiding smoking in public as directed by the government through the use of industry-sponsored media communications, and broadcasting government communications and reporting in the popular press as is the scenario of the Canadian media.
The media is playing an educative role and changing people’s perspectives about smoking in public through industry-sponsored media communications. Notably, in Canada, there have been few industry-sponsored media communications that aim to change people’s perspectives on tobacco smoking. For example, in the 1970s, a TV commercial sent an anti-smoking message “smoking, it will suck the life out of you.” Such industry-sponsored media communications, although few in present times are playing a significant role in propelling the Canadian media at the forefront of enlightening the public about the adversities of smoking, both in private and public, on the user’s and others well-being.
The media is presenting a negative perspective about public smoking by promoting government communications and reporting in the popular press about the identified general issues. As literature in module 1 suggested, the media’s interest in a given topic such as violence drives further violence in a country. Similarly, the media’s interest in broadcasting government communications on bans of smoking in public places promotes the deterrence of the practice among smokers. For example, when the Canadian local authorities announced the bans on smoking in public places, the Canadian media such as CBC broadcasted various areas in which such prohibitions had were enacted, such as Ontario and Manitoba (“Anti-smoking efforts,” 2011). The media coverage on government reports and communications presents the preferred behaviors in society to the public, such as avoiding smoking in public.
References
“Anti-smoking efforts in Canada and abroad” (2011). CBC News. Retrieved from https://www.cbc.ca/news/health/anti-smoking-efforts-in-canada-and-abroad-1.829014
“The strategic radar model” (n.d.). Karlalbrecht. Retrieved from http://karlalbrecht.com/articles/pages/strategicradarmodel.htm
Brennan, N.M. (2006). Boards of directors and firm performance: Is there an expectations gap? Corporate Governance an International Review, 14(6), 577-593. DOI: 10.1111/j.1467-8683.2006.00534.x
Carroll, A.B., & Buchholtz, A.K. (2014). Business and society: Ethics, sustainability, and stakeholder management (9th ed.). Massachusetts, U.S: Cengage Learning
Francoise, S., & Andrews, L. (2015). A relational approach to direct mail consumption: The perspective of engagement regimes. European Journal of Marketing, 49(9/10), 1527-1562 https://doi.org/10.1108/EJM-04-2014-0212
Goel, M., & Ramanathan, P. (2014). Business ethics and corporate social responsibility- Is there a dividing line? Procedia Economics and Finance, 11(2014), 49-59. DOI: 10.1016/S2212-5671(14)00175-0
McLaughlin, I., Dani, J.A., & Biasi, M.D. (2015). Nicotine withdrawal. The Neuropharmacology of Nicotine Dependence, 24, 99-123. DOI: 10.1007%2F978-3-319-13482-6_4
Shields, M. (2007). Smoking bans: Influence on smoking prevalence. Health Reports/ Statistics Canada, Canadian Centre for Health Information, 18(3), 9-24. Retrieved from http://www.statcan.gc.ca/pub/82-003-x/2006008/article/smoking-tabac/10306-eng.pdf
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