You are on page 1of 10

CORPORATE SOCIAL RESPONSIBILITY: A CASE STUDY OF COCA COLA

ATMAKURU UNIT, GUNTUR DISTRICT.

B.UDAYA BHASKARA GANESH1 P. JAGADEESH2


Asst. Professor, Department of Management Studies, Student, Department of Management Studies,
Pydah College of Engineering & Technology, PSCMR College of Engineering &Technology,
Visakhapatnam 531163. (Andhra Pradesh) Vijayawada 520001. (Andhra Pradesh)
E-Mail: ganesh.uday6@gmail.com E-Mail:palapartis.jagan@gmail.com
Mob- 9000414130 Mob- 9441747647

ABSTRACT
___________________________________________________________________________

Within the world of business, the main responsibility for corporations has historically
been to make money and increase shareholder value. In other words, corporate financial
responsibility has been the sole bottom line driving force. However, in the last decade, a
movement defining broader corporate responsibilities for the environment, for local
communities, for working conditions, and for ethical practices has gathered momentum and
taken hold. This new driving force is known as corporate social responsibility (CSR). CSR is
oftentimes also described as the corporate triple bottom line the totality of the corporations
financial, social, and environmental performance in conducting its business. While there is no
universal definition of corporate social responsibility, it generally refers to transparent
business practices that are based on ethical values, compliance with legal requirements, and
respect for people, communities, and the environment.

Today, more and more companies are realizing that in order to stay productive, competitive,
and relevant in a rapidly changing business world, they have to become socially responsible.
In the last decade, globalization has blurred national borders, and technology has accelerated
time and masked distance. Given this sea change in the corporate environment, companies
want to increase their ability to manage their profits and risks, and to protect the reputation of
their brands. This research paper moves around developing an understanding about the
corporate social responsibility (CSR), its key drivers and benefits finding out its scope taking
the case study of the Coca cola. The CSR activities undertaken by the Coca cola Atmakuru
unit of Guntur district is observed.
___________________________________________________________________________

KEYWORDS : Corporate social responsibility, Profitability, Society, Stakeholders.


INTRODUCTION

Corporate Social Responsibility (CSR) is becoming an increasingly important activity to


businesses nationally and internationally. As globalization accelerates and large corporations
serve as global providers, these corporations have progressively recognized the benefits of
providing CSR programs in their various locations. CSR activities are now being undertaken
throughout the globe. The term is often used interchangeably for other terms such as
Corporate Citizenship and is also linked to the concept of Triple Bottom Line Reporting
(TBL), which is used as a framework for measuring an organizations performance against
economic, social and environmental parameters. The rationale for CSR has been articulated
in a number of ways. In essence it is about building sustainable businesses, which need
healthy economies, markets and communities.

2. DEFINITIONS

1. One of the definitions is that CSR is about how companies manage the business processes
to produce an overall positive impact on society.

2. CSR can also be defined as A commitment to behave ethically and contribute to economic
development while improving the quality of life of our workforce and their families as well
as the local community at large.

3. Corporate Social Responsibility (CSR) is the decision-making and implementation process


that guides all company activities in the protection and promotion of international human
rights, labour and environmental standards and compliance with legal requirements within its
operations and in its relations to the societies and communities where it operates.

3. REVIEW OF LITERATURE

The concept of CSR originated in the 1950s in the USA but it became prevalent in early
1970s. At that time US had lots of social problems like poverty, unemployment and pollution.
Consequently a huge fall in the prices of Dollar was witnessed. Corporate Social
Responsibility became a matter of utmost importance for diverse groups demanding change
in the business. During the 1980s to 2000, corporations recognized and started accepting a
responsibility towards society. Corporate social responsibility (CSR) focuses on the wealth
creation for the optimal benefit of all stakeholders including shareholders, employees,
customers, environment and society. The term stakeholder means all those on whom an
organization's performance and activities have some impact either directly or indirectly. This
term was used to describe corporate owners beyond shareholders as a result of a book titled
Strategic management: a stakeholder approach by R. Edward Freeman in the year 1984.

4. OBJECTIVES OF THE STUDY

1. To understand the concept of CSR.


2. To find out the scope of CSR.
3. To know how Coca cola has fulfilled its responsibility towards all stakeholders; what
specific activities, programs and strategies it has set, devised and implemented for the same.

5. KEY DRIVERS FOR CSR

5.1. Enlightened Self-Interest:

One of the key drivers for CSR is creating a synergy of ethics, a cohesive society and a
sustainable global economy where markets, labour and communities are able to function well
together.

5.2. Social Investment:

The main driver for CSR is contributing to physical infrastructure and social capital is
increasingly seen as a necessary part of doing business.

5.3. Transparency and Trust:

Business has low ratings of trust in public perception. There is increasing expectation that
companies will be more open, more accountable and be prepared to report publicly on their
performance in social and environmental arenas.

5.4. Increased public expectations of Business:

Globally companies are expected to do more than merely provide jobs and contribute to the
economy through taxes and employment. Another key driver of CSR is to increase public
expectations regarding the business and its activities.
6. BENEFITS OF CSR

Some of the positive outcomes that can arise when businesses adopt a policy of social
responsibility include:

6.1. Company benefits:

Improved financial performance;

Lower operating costs;

Enhanced brand image and reputation;

Increased sales and customer loyalty;

Greater productivity and quality;

More ability to attract and retain employees;

Reduced regulatory oversight;

Access to capital;

Workforce diversity;

Product safety and decreased liability.

6.2. Benefits to the community and the general public:

Charitable contributions;

Employee volunteer programmes;

Corporate involvement in community education, employment and homelessness


programmes;

Product safety and quality.

6.3. Environmental benefits:

Greater material recyclability;

Better product durability and functionality;

Greater use of renewable resources;

Integration of environmental management tools into business plans, including life-cycle


assessment and costing, environmental management standards, and eco-labeling.
7. CASE STUDY OF COCA COLA ATMAKURU UNIT, GUNTUR DISTRICT.

In India, beverages form an important part of the lives of people. It is an industry, in which
the players constantly innovate, in order to come up with better products to gain more
consumers and satisfy the existing consumers. If the behavioral patterns of consumers in
India are closely noticed, it could be observed that consumers perceive beverages in two
different ways i.e. beverages are a luxury and that beverages have to be consumed
occasionally. These two perceptions are the biggest challenges faced by the beverage
industry.

The product that has given the world its best-known taste was born in Atlanta, Georgia, on
May 8, 1886. Dr. John Smith Pemberton, a local pharmacist, produced the syrup for Coca-
Cola, and carried a jug of the new product down the street to Jacobs Pharmacy, where it was
sampled, pronounced excellent and placed on sale for five cents a glass as a soda fountain
drink. Carbonated water was teamed with the new syrup to produce a drink that was at once
Delicious and refreshing, a theme that continues to echo today wherever Coca-Cola is
enjoyed.

Coca-Cola was the leading soft drink brand in India until 1977, when it left rather than
reveals its formula to the Government and reduced its equity stake as required under the
Foreign Regulation Act (FERA) which governed the operations of foreign companies in
India. Coca-Cola re-entered the Indian market on 26th October 1993 after a gap of 16 years,
with its launch in Agra. An agreement with the Parle Group gave the Company instant
ownership of the top soft drink brands of the nation. With access to 53 of Parles plants and a
well set bottling network, an excellent base for rapid introduction of the Companys
International brands was formed.

The Coca-Cola Company acquired soft drink brands like Thumps Up, Goldspot, Limca,
Maaza, which were floated by Parle, as these products had achieved a strong consumer base
and formed a strong brand image in Indian market during the re-entry of Coca-Cola in
1993.Thus these products became a part of range of products of the Coca-Cola Company. In
the new liberalized and deregulated environment in 1993, Coca-Cola made its re-entry into
India through its 100% owned subsidiary, HCCBPL, the Indian bottling arm of the Coca-
Cola Company. However, this was based on numerous commitments and stipulations which
the Company agreed to implement in due course.

One such major commitment was that, the Hindustan Coca-Cola Holdings would divest 49%
of its shareholding in favor of resident shareholders by June 2002. Coca-Cola is made up of
7000 local employees, 500 managers, over 60 manufacturing locations, 27/25 Company
Owned Bottling Operations (COBO), 17/24 Franchisee Owned Bottling Operations (FOBO)
and a network of 29/21 Contract Packers that facilitate the manufacture process of a range of
products for the company. It also has a supporting distribution network consisting of 700,000
retail outlets and 8000 distributors. Almost all goods and services required to cater to the
Indian market are made locally, with help of technology and skills within the Company. The
complexity of the Indian market is reflected in the distribution fleet which includes different
modes of distribution, from 10-tonne trucks to open-bay three wheelers that can navigate
through narrow alleyways of Indian cities and trademarked tricycles and pushcarts.

7.1. CSR ACTIVITIES OF COCA COLA, ATMAKURU UNIT OF GUNTUR


DISTRICT.
Corporate Social Security (CSR) is the programme that is being implemented in order to
increase the levels of social responsibility. The following are the various programmes that
come under CSR:

7.1.1. Rain water Recharging:

Rain water recharging is one of the most important steps taken by Coca cola, Atmakuru unit
as a part of CSR programme. Groundwater is recharged naturally by rain water. Recharge
may be impeded somewhat by human activities including paving, development, or logging.
The term Rain water harvesting is being frequently used these days, however, the concept of
water harvesting is not new for India. Water harvesting techniques had been evolved and
developed centuries ago. The following are the advantages of rain water recharging:

To arrest ground water decline and augment ground water table.


To beneficiate water quality in aquifers.
To conserve surface water runoff during monsoon.
To reduce soil erosion.
To inculcate a culture of water conservation.
These water resources are utilized for crop harvesting and it is very much useful to the
farmers to a large extent.
7.1.2. Providing drinking water in rural areas:

In a country where many people are concerned about reliable drinking water, Coca cola,
Atmakuru unit delivers drinking water to the rural people as a part of CSR programme. Coca
cola identified and adopted around 500 rural villages in Guntur district and providing them
drinking water in a continuous basis. While accessing drinking water continues to be a
problem, assuring that it is safe is a challenge by itself. Water quality problems are caused by
pollution and over-exploitation. The rapid pace of industrialisation and greater emphasis on
agricultural growth combined with financial and technological constraints and non-
enforcement of laws have led to generation of large quantities of waste and pollution. The
problem is sometimes aggravated due to the non-uniform distribution of rainfall. Individual
practises also play an important role in determining the quality of water. So coca cola feels it
as a social responsibility and provides safe drinking water to the rural areas.

7.1.3. Blood donation:

Donating blood may be one of the most important things in the life. Giving blood does not
just benefit recipients. Regardless of age, donating blood offers many benefits for donors. In
patients prone to iron overload, blood donation prevents the accumulation of toxic
quantities. Donating blood may reduce the risk of heart disease for men, but the link has not
been firmly established and may be from selection bias because donors are screened for
health problems. Coca cola, Atmakuru unit as a part of CSR programme organizes blood
donation camps every year and the collected blood of the employees and workers working in
the organization is sent to the blood banks to save the lives of many people.

7.1.4. Basic infrastructure to ZP schools:

Infrastructure is basic physical and organizational structures needed for the operation of
a society or enterprise, or the services and facilities necessary for an economy to function. It
can be generally defined as the set of interconnected structural elements that provide
framework supporting an entire structure of development. The term typically refers to the
technical structures that support a society, such as roads, bridges, sewers, electrical
grids, telecommunications, and so forth, and can be defined as "the physical components of
interrelated systems providing commodities and services essential to enable, sustain, or
enhance societal living conditions." Coca cola, Atmakuru unit as a part of CSR programme
provides sufficient blackboards, tables, desks, chairs, library and computer facilities to 38
Zilla Parishad schools in Guntur district.

7.1.5. Sanitation and drinking water facilities to rural schools:

Sanitation is the hygienic means of promoting health through prevention of human contact
with the hazards of wastes as well as the treatment and proper disposal of sewage wastewater.
"Sanitation generally refers to the provision of facilities and services for the safe disposal of
human urine and feces. Inadequate sanitation is a major cause of disease world-wide and
improving sanitation is known to have a significant beneficial impact on health both in
households and across communities. The word 'sanitation' also refers to the maintenance of
hygienic conditions, through services such as garbage collection and wastewater disposal. A
number of innovative approaches to improve water supply and sanitation have been tested in
India. Most Indians depend on on-site sanitation facilities. Recently, access to on-site
sanitation has increased in both rural and urban areas. In rural areas, total sanitation has been
successful. The lack of adequate sanitation and safe water has significant negative health
impacts including diarrhoea. Coca cola, Atmakuru unit as a part of CSR programme provided
good sanitation facilities and safe drinking water facilities to 5 rural schools.

9. RESEARCH METHODOLOGY

Exhaustive literature survey regarding the topic and related concepts has been done.
Secondary data inclusive of quantitative and qualitative data as well collected from various
sources including books, research papers, newspapers, magazines, and websites is used for
the purpose of study.

10. FINDINGS & RECOMMENDATIONS

FINDINGS
As business is an integral part of the social system it has to care for varied needs of
the society.
Business which is resourceful has a special responsibility to the society.
Social involvement of business would enhance a harmonious and healthy relationship
between the society and business seeking mutual benefit for the both.
Social involvement may create a better public image and goodwill for the company
which further becomes instrumental in attracting customers, efficient personnel and
investors.
RECOMMENDATIONS

The concept of private-public partnership (PPP) should be applied in the effective


implementation of CSR i.e. government and business houses should act in
collaboration for the cause.
The Human Resource department should be entrusted with the responsibility of
measuring and evaluating in CSR activities. It can be done in two forms:
Direct results, such as, economic and financial savings.
Indirect results like increase in employee satisfaction, less absenteeism, less
employee turnover evaluated by staff surveys.
Periodic review of the CSR activities should be conducted by every business entity so
as to identify the pitfalls and the areas left out.
Innovation should essentially be a matter of concern; be it searching the untouched
areas and scope of CSR or the formulation of CSR strategy or the implementation
thereof.
CONCLUSION

Thus in short corporate social responsibility (CSR) is a concept describing corporate


activities beyond profit-making; the term is also increasingly used to describe the role of
business in society. CSR involves a broad commitment by companies to social welfare and
the common good and to the policies that support them. It involves not just the products that a
company manufactures but also being a good corporate citizen in terms of the employees that
it hires and the way it looks after them. It is also about protecting the environment and getting
involved in the local community and the wider culture in which the company engages in
business. For bringing back and maintaining the general balance in the economic and social
arena it is evident to think deeply and act wisely about CSR.

Every business house owes some responsibility towards the society, nation and world in
general which provide it with all human, material and natural resources. Considering the long
run growth and sustainable development following the norms of CSR, devising new policies
and effective implementation is inevitable to bring and sustain a balance between corporate
world and society, present generation and upcoming generation, man and nature. As far as
Coca cola is concerned, it has gone a long way in fulfilling its duty and responsibility towards
the society and the nation. It has reached the masses to elevate their lives.

REFERENCES
1. Corporate Social Responsibility in India - An Empirical Research By Bernadette Dsilva
2. Role of CSR in Developing Economies (2007) by Dr.Sanjeev Verma, Rohit Chauhan
3. Frederick, W.C., The growing concern over business responsibility (California
Management Review, Vol.2, 1960) pp. 54-61
4. Halal, W. E, Corporate community: A theory of the firm uniting profitability &
responsibility, strategy &leadership. (Vol 28. No 2. , 2000), pp10-16.
5. Corporate Social Responsibility practices in India (2011), Times Foundation (Times
group).
6. Principles for Global Corporate Responsibility: Bench Marks for Measuring Business
Performance

***

You might also like