This blog was set up as part of a MA project. The purpose of the blog is to make research more accessible and public. Also, to encourage a more collective approach to learning and knowledge formation. I welcome any and all comments and hope this material is helpful.
The blog is organized in the following way: First, I posted the entire MA thesis. Next, I posted the thesis proposal and annotated bibliography. At the end of the blog I posted pictures, figures, etc. that were used during the course of my research.
Saturday, December 12, 2009
Tuesday, December 8, 2009
The Illusion of Social Responsibility: The Production of Coca-Cola's Socially Responsible Corporate Image
Contents
ABSTRACT
Chapter I: INTRODUCTION: ‘CONNECTED CAPITALISM’: A NEW ERA OF GOVERNANCE
Chapter II: THE COCA-COLA SYSTEM
Chapter III: COCA-COLA’S MARKETING OF CORPORATE SOCIAL RESPONSIBILITY
Chapter IV: CASE STUDY: IMPLEMENTING ‘CONNECTED CAPITALISM’ IN CHILE
Chapter V: CONCLUSION
BIBLIOGRAPHY
ABSTRACT
Chapter I: INTRODUCTION: ‘CONNECTED CAPITALISM’: A NEW ERA OF GOVERNANCE
Chapter II: THE COCA-COLA SYSTEM
Chapter III: COCA-COLA’S MARKETING OF CORPORATE SOCIAL RESPONSIBILITY
Chapter IV: CASE STUDY: IMPLEMENTING ‘CONNECTED CAPITALISM’ IN CHILE
Chapter V: CONCLUSION
BIBLIOGRAPHY
Abstract
This project explores how corporate social responsibility (CSR) campaigns are creating new forms of governmentality through partnerships formed between multinational corporations, government institutions, non governmental organizations (NGOs), and not for profit organizations. By focusing on one multinational corporation, the Coca-Cola Company, and utilizing Gramsci’s understanding of hegemony and Foucault’s concept of “field[s] of intervention,” this project argues four main points:
1.) CSR initiatives are part of a broader initiative to bolster legitimacy for free market policies by attempting to incorporate social concerns. The result of CSR initiatives has been the creation of new forms of governmentality.
2.) The Coca-Cola Company utilizes corporate sanctioned studies, technology, and institutional research to create an image of social responsibility. This top down approach serves the following functions: to gain specific information about the local environment, which is incorporated into micro-organizational strategies; it serves as a mechanism to co-opt and control local discourses on social responsibility; and allows the Coca-Cola Company to position itself as a moral authority.
3.) CSR campaigns allow Coca-Cola to create relationships with powerful NGOs and state institutions. Out of these partnerships, Coca-Cola gains access to new locations for corporate advertising, increasing its corporate encroachment into local spaces.
4.) The image of a ‘socially responsible’ corporation is used to distract from unethical international corporate practices. It is also used to discredit ‘grassroots’ organizations calling for corporate accountability, as part of a preemptive plan to counter any accusations of unethical business practices, and as a way to avoid government regulation.
1.) CSR initiatives are part of a broader initiative to bolster legitimacy for free market policies by attempting to incorporate social concerns. The result of CSR initiatives has been the creation of new forms of governmentality.
2.) The Coca-Cola Company utilizes corporate sanctioned studies, technology, and institutional research to create an image of social responsibility. This top down approach serves the following functions: to gain specific information about the local environment, which is incorporated into micro-organizational strategies; it serves as a mechanism to co-opt and control local discourses on social responsibility; and allows the Coca-Cola Company to position itself as a moral authority.
3.) CSR campaigns allow Coca-Cola to create relationships with powerful NGOs and state institutions. Out of these partnerships, Coca-Cola gains access to new locations for corporate advertising, increasing its corporate encroachment into local spaces.
4.) The image of a ‘socially responsible’ corporation is used to distract from unethical international corporate practices. It is also used to discredit ‘grassroots’ organizations calling for corporate accountability, as part of a preemptive plan to counter any accusations of unethical business practices, and as a way to avoid government regulation.
Chapter I: Introduction: ‘Connected Capitalism,' A New Era of Governance
Under contemporary globalization, corporations have achieved a size and scope unparalleled to any other time in history (May 24). In response to growing corporate power, there have been contestations from a variety of social actors, including unions, environmentalists, and anti-corporate movements, stressing corporate reform. One result of social pressure has been the incorporation of Corporate Social Responsibility (CSR) campaigns into corporate branding strategies (May 201; Klein 430; Foster 155). On the surface, these campaigns appear to address and integrate social concerns into regular business practices. Yet, I argue that CSR campaigns are one component of a broader strategy to improve the management of crises by incorporating criticisms into corporate managed social responsibility initiatives. Instead of addressing critiques in a substantive manner, CSR initiatives “break off the sharp points of contention” to bolster legitimacy for free market policies (Hobsbawm). Partnerships between corporations, state institutions, and nongovernmental agencies (NGOs) are transforming the way citizenship and social responsibility are being conceptualized. The purpose of this project is to understand how corporations work in concert with state institutions and NGOs to access and analyze information about a local setting and incorporate this data into micro and macro-organizational strategies. CSR campaigns appear to acknowledge social concerns, but in practice, they allow corporations to tap into new social settings and increase brand value by appropriating moral rhetoric. Foster points out, “almost every socially responsible initiative on the part of the company doubles as a marketing opportunity” (158). In order to further understand this process, I focus on the Coca-Cola Company and examine its CSR campaigns.
Since the 1990s, CSR activities have become more popular in the business world, as well as within NGOs, academic institutions and the media (May 227-228). The growing number of CSR initiatives appears to coincide with “societal discontent with corporate behavior and with neoliberalism itself” (May 7). In 2000, the United Nations (U.N.) launched the Global Compact, to align the objectives of the international community with the business world and to develop “a market economy with a human face in response to some of the problems associated with globalisation” (United Nations; Williams 755). The compact is a voluntary association in which corporate members, including the Coca-Cola Company, commit to ten principles. The principles touch on human rights, labor, the environment and corruption (United Nations). The compact stresses the importance of the private sector in managing challenges brought about by contemporary globalization. In one U.N. press release, Bunmi Akinremi, a Nigerian Bank Chief argues that CSR initiatives are, “essential to easing the tension between social justice and entrepreneurial drive, and failure to achieve that balancing act could put market capitalism at risk” (United Nations 2007). According to this logic, the private sector should be invested in social justice initiatives, not solely for altruistic reasons, but based on its own self-interest. Kofi Annan, secretary-general of the United nations, argued at the Davos World Economic Forum in 1999 that “shared values provide a stable environment for a world market that without these explicit values business could expect backlashes from protectionism, populism, fanaticism and terrorism” (Williams 755). Annan’s statements situate CSR campaigns within a broader initiative to buffer some of the adverse effects of contemporary capitalism including grave disparities in wealth, environmental devastation and unequal access to resources.
On March 6, 2009 Chairman of the Coca-Cola Board, Neville Isdell delivered a speech entitled “Connected Capitalism: Growing Sustainability for the 21st Century.” During the speech, Isdell warned of the dangers of embracing protectionist policies during the growing global economic crisis. Instead, he urged for the continued advancement of free market economics, but with adjustments to how capitalism is practiced. His proposed solution was embodied in what he termed “Connected Capitalism” which is “a new model of how businesses must engage with society across four platforms – communities, institutions, social challenges and values” (Isdell 2009). These “four connections” include working with communities, civil society, and governments. One of the means to forge such connections is through partnerships with communities, non governmental organizations (NGOs), and governments around social responsibility initiatives.
“Connected Capitalism” and the partnerships created over CSR initiatives (like the Global Compact) signal a shift in the role of the private sector in social responsibility discourse and initiatives. Haufler explains that many countries are “moving toward a more market friendly system of regulation, in which governments often delegate numerous responsibilities to the private sector” (1). Many CSR initiatives include projects that were previously conceptualized as public sector responsibilities. For example, the Coca-Cola Chile Foundation (CCCF) was created in 1992 to help “meet the challenge of the Chilean Government to have a TAVEC [Tecnología Avanzada en Educación Científica] Laboratory in every city with more than 50,000 inhabitants by 2012” (Herrera 1). Coca-Cola is also the main donor for the Colombian Foundation for Education and Opportunity whose goal is to “create sustainable programs by generating joint and articulated efforts (with public & private entities) aimed to respond to basic needs related to education and decent labor” (Funda Colombia). In both of these initiatives, the Coca-Cola Company is teaming up with national governments to address the country’s educational demands. Muhtar Kent, the current CEO of Coca-Cola explained “for our Company and our bottling partners, sustainability reflects an understanding of the role our business must play in society if we are to be successful in the 21st century” (The Coca-Cola Company 2008). Kent is viewing sustainability not as an environmental initiative, but as a way to rescue and sustain business in the 21st century.
CSR campaigns, while bringing together the private sector, state institutions and nongovernmental agencies, are altering society-state-market relationships and creating new areas of corporate governance. Claire Cutler points out that “there are clear links between the CSR movement, alongside the increasing multiplicity of sources of and mechanisms for corporate governance, and political economic changes brought about by the neoliberal discipline of global capitalism” (May 214). Cutler also explains that part of the CSR movement includes expanding corporate operations into the “public” dimension (May 222). I argue that these partnerships, formed over CSR initiatives, constitute new “field[s] of intervention” (Foucault 135).
Foucault traces the development of governmentality, or the art of government, from the sixteenth to the eighteenth century noting shifts in the aim and function of state apparatuses. In the eighteenth century, he points to a number of developments which added complexity to the nature of governing. Tagg describes this ensemble of forces as a:
constellation of institutions – including the hospital, the asylum, the school, the prison, the police force – whose disciplinary methods and techniques of regulated examination produced, trained and positioned a hierarchy of docile social subjects in the form required by the capitalist division of labour. (Evans 245).
CSR initiatives allow states and corporations to combine institutional resources and knowledge to create new campaigns aimed at social control. New information technologies coupled with relatively flexible corporate capital enables these initiatives to appear highly coordinated and responsive to public impulses. CSR initiatives are creating relationships between the private sector, state institutions and NGOs which may potentially address some of the state’s needs, but simultaneously create complex spaces of corporate governance. For example, if the private sector takes on some of the functions previously carried out by the state (e.g. providing access to education), private institutions are not held to the same standards of accountability, transparency, or monitoring as a state institution. Thus the private sector can take on “public” projects, but with more freedom from public oversight and with the added value of potentially improving reputability. These new techniques can be understood using Foucault’s notion of governmentality, yet in the context of contemporary capitalism corporations can be added to the ‘constellation of institutions’ initially conceptualized by Foucault as coordinating efforts to ensure the “orderly conduct of social and economic life” (Evans 245). CSR initiatives are one example of new governing strategies with distinct characteristics which raise questions about the transparency, accountability, monitoring, and ultimate intentions of these projects.
Antonio Gramsci pointed to the coordination of politics, economics, intellect, and morals in establishing and maintaining hegemony. As Gavin Smith explains, hegemony is used "to refer to the complex way in which power infuses various components of the social world" (216). Gramsci also draws attention to the economy as a potential site for the consolidation of power. Smith states,
Gramsci identified a very particular compact for securing social order between corporations and the state: “an intensification of exploitation achieved through new forms of management and corporatist strategies, and expansion of state intervention in the economy and society" (225).
Social order and hegemony are described more as an ideal state of social control for forces in power, than a present social state. Therefore, I think it is important to focus on “hegemonic processes” which Smith describes as “when power is used to organize, consent, and when consent is used to facilitate the securing of a political project” (217). Tracing the relationship between state institutions and corporations provides an entry point to examine how hegemonic processes are established and coordinated through relationships between educational, state, and economic institutions, as well as the media. I argue that CSR campaigns are an example of a corporate-state compact and can be understood as part of a larger trend to couple free market economics with progressive politics as a way to gain wider legitimacy for capitalism. In a broader sense and with Gramsci’s insight in mind, this compact is part of a new “corporatist strategy” which allows the state and corporations to increase its intervention into society as a way to gain widespread consent for free market policies.
Using Gramsci’s understanding of hegemony and Foucault’s concept of “field[s] of intervention,” this project argues four main points:
1.) Corporate social responsibility initiatives are part of a broader initiative to bolster legitimacy for free market policies by attempting to incorporate social concerns. The result of partnerships formed over CSR initiatives has been the creation of new forms of governmentality.
2.) The Coca-Cola Company utilizes corporate sanctioned studies, technology, and institutional research to create an image of social responsibility. This ‘top down’ approach serves three main functions: first, to gain specific information about the local environment, which is incorporated into a micro-organizational strategies; secondly, it serves as a mechanism to co-opt and control local discourses on social responsibility; and third Coca-Cola is able to position themselves (amongst various institutions) as a moral authority.
3.) CSR campaigns allow Coca-Cola to create relationships with powerful NGOs and state institutions like the United Nations, the World Wildlife Fund, and the Chilean Ministry of Education. Out of these partnerships Coca-Cola gains access to new locations for corporate advertising, increasing its corporate encroachment into local spaces.
4.) The image of a ‘socially responsible’ corporation is used to distract from unethical international corporate practices, as a way to discredit ‘grassroots’ organizations calling for corporate accountability, and as part of a preemptive plan to counter any accusations of unethical business practices, as well as to avoid government regulation.
In order to understand the changes brought about by CSR initiatives, I focus on three sites of Coca-Cola’s operations; the global, the national and the local. Stohl, Stohl and Townsley emphasize the importance of a global perspective stating “CSR issues, concerns, and behaviors are often obscured or hidden when examined solely at the local or national level” (34). Yet, in order to understand how global trends in CSR are tailored to various localities as part of a global strategy or how local or national contestations impact the global operations of Coca-Cola, I trace CSR initiatives along the three sites, starting with the global and moving to the local. While mapping out CSR initiatives at these three interconnected sites, I focus specifically on the interaction between corporations and social movements calling for reform. Juxtaposing corporate rhetoric and images with critiques and contestations allow me to examine the interplay between corporations and social movements. Focusing on corporate-social interactions also raises broader questions about the direction of social-market relations. Ngai-Ling Sum points out that many have questioned “whether the adoption of corporate social responsibility is leading to the ‘marketization of the social’ and/or ‘socialization of the market’” (1). Are corporations legitimately responding to social pressures? Or do CSR campaigns function as a mechanism to control and co-opt critiques?
Coca-Cola’s publications often appear as if they are divorced from social processes. Yet, I understand that branding campaigns are products of a dialectical relationship between consumers and producers. Corporations and their employees are embedded within a social context. Robert Foster explains the concept of cross-cultural consumption, drawing on the work of Nicholas Thomas (1991) he states, “cross-cultural consumption is a multi-directional process… meanings and qualifications are being generated by all the agents assembled in a network of production, distribution, and exchange, a commodity or product network” (17). Even though the process of ascribing meaning to words and images is multi-directional, within the context of a product network, power relations have a strong impact on the messages (whether blatant or latent) that are broadcast to a wide audience. Coca-Cola, through international production and distribution networks, has access to a wide audience. Therefore, how the company incorporates and articulates social responsibility and sustainability has an impact on how people conceptualize those initiatives.
I focus on partnerships between the Coca-Cola Company and various international organizations, like the World Wildlife Fund (WWF) and the United Nations, to understand how CSR operates on a global level. Publications from SINALTRAINAL, the Stop Killer Coke Campaign, and War on Want are utilized to examine how an international campaign has impacted Coca-Cola’s articulation of workers’ rights on a global level. Chile is the focus of the national case study to understand corporate relations within the country in comparison to other areas of Latin America. The local level includes high schools in Chile that have received donations from the Coca-Cola Company through the Coca-Cola Chile Foundation (CCCF). I focus on corporate documents including websites, statements and advertisements, as well as publications and material from social movements calling for corporate reform at each of these three sites. The Coca-Cola Company publishes annual reports on corporate responsibility and environmental sustainability. These reports vary depending on the location and intended audience. Since CSR is a relatively new trend, analysis is limited to the period between 1990 and 2009.
This project is divided into five chapters. Chapter 1 is the introduction, which includes an explanation of the theory and methods use to analyze Coca-Cola’s CSR campaigns. Chapter 2 explores the history and logic behind the “Coca-Cola System” or Coca-Cola’s approach to business on three levels (global, national, and local). Chapter 3 includes an analysis of how Coca-Cola has marketed social responsibility. This chapter also includes material from SINALTRAINAL, the Stop Killer Coke Campaign, and War Against Want to explore issues arising on a global level in response to national and international contestations. Chapter 4 focuses on the case study of Coca-Cola in Chile and the Coca-Cola Chile Foundation. In Chapter 5, I tie together material from the previous chapters and comment on how CSR campaigns function on the three levels.
Since the 1990s, CSR activities have become more popular in the business world, as well as within NGOs, academic institutions and the media (May 227-228). The growing number of CSR initiatives appears to coincide with “societal discontent with corporate behavior and with neoliberalism itself” (May 7). In 2000, the United Nations (U.N.) launched the Global Compact, to align the objectives of the international community with the business world and to develop “a market economy with a human face in response to some of the problems associated with globalisation” (United Nations; Williams 755). The compact is a voluntary association in which corporate members, including the Coca-Cola Company, commit to ten principles. The principles touch on human rights, labor, the environment and corruption (United Nations). The compact stresses the importance of the private sector in managing challenges brought about by contemporary globalization. In one U.N. press release, Bunmi Akinremi, a Nigerian Bank Chief argues that CSR initiatives are, “essential to easing the tension between social justice and entrepreneurial drive, and failure to achieve that balancing act could put market capitalism at risk” (United Nations 2007). According to this logic, the private sector should be invested in social justice initiatives, not solely for altruistic reasons, but based on its own self-interest. Kofi Annan, secretary-general of the United nations, argued at the Davos World Economic Forum in 1999 that “shared values provide a stable environment for a world market that without these explicit values business could expect backlashes from protectionism, populism, fanaticism and terrorism” (Williams 755). Annan’s statements situate CSR campaigns within a broader initiative to buffer some of the adverse effects of contemporary capitalism including grave disparities in wealth, environmental devastation and unequal access to resources.
On March 6, 2009 Chairman of the Coca-Cola Board, Neville Isdell delivered a speech entitled “Connected Capitalism: Growing Sustainability for the 21st Century.” During the speech, Isdell warned of the dangers of embracing protectionist policies during the growing global economic crisis. Instead, he urged for the continued advancement of free market economics, but with adjustments to how capitalism is practiced. His proposed solution was embodied in what he termed “Connected Capitalism” which is “a new model of how businesses must engage with society across four platforms – communities, institutions, social challenges and values” (Isdell 2009). These “four connections” include working with communities, civil society, and governments. One of the means to forge such connections is through partnerships with communities, non governmental organizations (NGOs), and governments around social responsibility initiatives.
“Connected Capitalism” and the partnerships created over CSR initiatives (like the Global Compact) signal a shift in the role of the private sector in social responsibility discourse and initiatives. Haufler explains that many countries are “moving toward a more market friendly system of regulation, in which governments often delegate numerous responsibilities to the private sector” (1). Many CSR initiatives include projects that were previously conceptualized as public sector responsibilities. For example, the Coca-Cola Chile Foundation (CCCF) was created in 1992 to help “meet the challenge of the Chilean Government to have a TAVEC [Tecnología Avanzada en Educación Científica] Laboratory in every city with more than 50,000 inhabitants by 2012” (Herrera 1). Coca-Cola is also the main donor for the Colombian Foundation for Education and Opportunity whose goal is to “create sustainable programs by generating joint and articulated efforts (with public & private entities) aimed to respond to basic needs related to education and decent labor” (Funda Colombia). In both of these initiatives, the Coca-Cola Company is teaming up with national governments to address the country’s educational demands. Muhtar Kent, the current CEO of Coca-Cola explained “for our Company and our bottling partners, sustainability reflects an understanding of the role our business must play in society if we are to be successful in the 21st century” (The Coca-Cola Company 2008). Kent is viewing sustainability not as an environmental initiative, but as a way to rescue and sustain business in the 21st century.
CSR campaigns, while bringing together the private sector, state institutions and nongovernmental agencies, are altering society-state-market relationships and creating new areas of corporate governance. Claire Cutler points out that “there are clear links between the CSR movement, alongside the increasing multiplicity of sources of and mechanisms for corporate governance, and political economic changes brought about by the neoliberal discipline of global capitalism” (May 214). Cutler also explains that part of the CSR movement includes expanding corporate operations into the “public” dimension (May 222). I argue that these partnerships, formed over CSR initiatives, constitute new “field[s] of intervention” (Foucault 135).
Foucault traces the development of governmentality, or the art of government, from the sixteenth to the eighteenth century noting shifts in the aim and function of state apparatuses. In the eighteenth century, he points to a number of developments which added complexity to the nature of governing. Tagg describes this ensemble of forces as a:
constellation of institutions – including the hospital, the asylum, the school, the prison, the police force – whose disciplinary methods and techniques of regulated examination produced, trained and positioned a hierarchy of docile social subjects in the form required by the capitalist division of labour. (Evans 245).
CSR initiatives allow states and corporations to combine institutional resources and knowledge to create new campaigns aimed at social control. New information technologies coupled with relatively flexible corporate capital enables these initiatives to appear highly coordinated and responsive to public impulses. CSR initiatives are creating relationships between the private sector, state institutions and NGOs which may potentially address some of the state’s needs, but simultaneously create complex spaces of corporate governance. For example, if the private sector takes on some of the functions previously carried out by the state (e.g. providing access to education), private institutions are not held to the same standards of accountability, transparency, or monitoring as a state institution. Thus the private sector can take on “public” projects, but with more freedom from public oversight and with the added value of potentially improving reputability. These new techniques can be understood using Foucault’s notion of governmentality, yet in the context of contemporary capitalism corporations can be added to the ‘constellation of institutions’ initially conceptualized by Foucault as coordinating efforts to ensure the “orderly conduct of social and economic life” (Evans 245). CSR initiatives are one example of new governing strategies with distinct characteristics which raise questions about the transparency, accountability, monitoring, and ultimate intentions of these projects.
Antonio Gramsci pointed to the coordination of politics, economics, intellect, and morals in establishing and maintaining hegemony. As Gavin Smith explains, hegemony is used "to refer to the complex way in which power infuses various components of the social world" (216). Gramsci also draws attention to the economy as a potential site for the consolidation of power. Smith states,
Gramsci identified a very particular compact for securing social order between corporations and the state: “an intensification of exploitation achieved through new forms of management and corporatist strategies, and expansion of state intervention in the economy and society" (225).
Social order and hegemony are described more as an ideal state of social control for forces in power, than a present social state. Therefore, I think it is important to focus on “hegemonic processes” which Smith describes as “when power is used to organize, consent, and when consent is used to facilitate the securing of a political project” (217). Tracing the relationship between state institutions and corporations provides an entry point to examine how hegemonic processes are established and coordinated through relationships between educational, state, and economic institutions, as well as the media. I argue that CSR campaigns are an example of a corporate-state compact and can be understood as part of a larger trend to couple free market economics with progressive politics as a way to gain wider legitimacy for capitalism. In a broader sense and with Gramsci’s insight in mind, this compact is part of a new “corporatist strategy” which allows the state and corporations to increase its intervention into society as a way to gain widespread consent for free market policies.
Using Gramsci’s understanding of hegemony and Foucault’s concept of “field[s] of intervention,” this project argues four main points:
1.) Corporate social responsibility initiatives are part of a broader initiative to bolster legitimacy for free market policies by attempting to incorporate social concerns. The result of partnerships formed over CSR initiatives has been the creation of new forms of governmentality.
2.) The Coca-Cola Company utilizes corporate sanctioned studies, technology, and institutional research to create an image of social responsibility. This ‘top down’ approach serves three main functions: first, to gain specific information about the local environment, which is incorporated into a micro-organizational strategies; secondly, it serves as a mechanism to co-opt and control local discourses on social responsibility; and third Coca-Cola is able to position themselves (amongst various institutions) as a moral authority.
3.) CSR campaigns allow Coca-Cola to create relationships with powerful NGOs and state institutions like the United Nations, the World Wildlife Fund, and the Chilean Ministry of Education. Out of these partnerships Coca-Cola gains access to new locations for corporate advertising, increasing its corporate encroachment into local spaces.
4.) The image of a ‘socially responsible’ corporation is used to distract from unethical international corporate practices, as a way to discredit ‘grassroots’ organizations calling for corporate accountability, and as part of a preemptive plan to counter any accusations of unethical business practices, as well as to avoid government regulation.
In order to understand the changes brought about by CSR initiatives, I focus on three sites of Coca-Cola’s operations; the global, the national and the local. Stohl, Stohl and Townsley emphasize the importance of a global perspective stating “CSR issues, concerns, and behaviors are often obscured or hidden when examined solely at the local or national level” (34). Yet, in order to understand how global trends in CSR are tailored to various localities as part of a global strategy or how local or national contestations impact the global operations of Coca-Cola, I trace CSR initiatives along the three sites, starting with the global and moving to the local. While mapping out CSR initiatives at these three interconnected sites, I focus specifically on the interaction between corporations and social movements calling for reform. Juxtaposing corporate rhetoric and images with critiques and contestations allow me to examine the interplay between corporations and social movements. Focusing on corporate-social interactions also raises broader questions about the direction of social-market relations. Ngai-Ling Sum points out that many have questioned “whether the adoption of corporate social responsibility is leading to the ‘marketization of the social’ and/or ‘socialization of the market’” (1). Are corporations legitimately responding to social pressures? Or do CSR campaigns function as a mechanism to control and co-opt critiques?
Coca-Cola’s publications often appear as if they are divorced from social processes. Yet, I understand that branding campaigns are products of a dialectical relationship between consumers and producers. Corporations and their employees are embedded within a social context. Robert Foster explains the concept of cross-cultural consumption, drawing on the work of Nicholas Thomas (1991) he states, “cross-cultural consumption is a multi-directional process… meanings and qualifications are being generated by all the agents assembled in a network of production, distribution, and exchange, a commodity or product network” (17). Even though the process of ascribing meaning to words and images is multi-directional, within the context of a product network, power relations have a strong impact on the messages (whether blatant or latent) that are broadcast to a wide audience. Coca-Cola, through international production and distribution networks, has access to a wide audience. Therefore, how the company incorporates and articulates social responsibility and sustainability has an impact on how people conceptualize those initiatives.
I focus on partnerships between the Coca-Cola Company and various international organizations, like the World Wildlife Fund (WWF) and the United Nations, to understand how CSR operates on a global level. Publications from SINALTRAINAL, the Stop Killer Coke Campaign, and War on Want are utilized to examine how an international campaign has impacted Coca-Cola’s articulation of workers’ rights on a global level. Chile is the focus of the national case study to understand corporate relations within the country in comparison to other areas of Latin America. The local level includes high schools in Chile that have received donations from the Coca-Cola Company through the Coca-Cola Chile Foundation (CCCF). I focus on corporate documents including websites, statements and advertisements, as well as publications and material from social movements calling for corporate reform at each of these three sites. The Coca-Cola Company publishes annual reports on corporate responsibility and environmental sustainability. These reports vary depending on the location and intended audience. Since CSR is a relatively new trend, analysis is limited to the period between 1990 and 2009.
This project is divided into five chapters. Chapter 1 is the introduction, which includes an explanation of the theory and methods use to analyze Coca-Cola’s CSR campaigns. Chapter 2 explores the history and logic behind the “Coca-Cola System” or Coca-Cola’s approach to business on three levels (global, national, and local). Chapter 3 includes an analysis of how Coca-Cola has marketed social responsibility. This chapter also includes material from SINALTRAINAL, the Stop Killer Coke Campaign, and War Against Want to explore issues arising on a global level in response to national and international contestations. Chapter 4 focuses on the case study of Coca-Cola in Chile and the Coca-Cola Chile Foundation. In Chapter 5, I tie together material from the previous chapters and comment on how CSR campaigns function on the three levels.
Chapter II: The Coca-Cola System
Coca-Cola has sharpened its management system primarily through trial and error. It was one of the first U.S. corporations to become multinational and has internalized many of the initial lessons from its international ventures. Coca-Cola is organized as a franchise system where local bottlers have primary ownership over the operation and distribution, but the Coca-Cola Company dictates the formula, production process, and much of the advertising for the local bottler. The relationship between the global corporation and the local bottler has been consistent throughout the history of Coca-Cola’s operations resulting in varying management strategies. Currently, Coca-Cola has shifted more toward allowing limited decentralization at the local level to encourage increased localization of product creation and advertising material.
The Coca-Cola Company was founded in 1886 and the Coca-Cola Export Corporation was established in 1930 (Kuisel 53). Coke was being sold in Latin America before the establishment of its Export Corporation; in 1897 Coke was sold in Mexico and in 1927 it was distributed in Honduras, Colombia, and Haiti. One of the first international bottling plants was established in Havana, Cuba in 1906 (Louis 29). In 1928, it was sold in Venezuela and by 1942 Coca-Cola was sold in Nicaragua, Argentina, Brazil, Costa Rica and Uruguay (Lydersen). Currently, Coca-Cola has bottling plants or operations in at least 12 Latin American countries and is sold in at least 42 (Coca-Cola Company 1-121). Coca-Cola is present in over 200 countries worldwide and produces more than 300 beverage brands (Coca-Cola Company 2008: 3). The corporation’s economic success depends heavily on its access to international markets and its relationship with domestic and foreign governments.
Some of the earliest Coca-Cola salesmen, who introduced Coca-Cola to foreign markets before the establishment of the export corporation, operated similar to Catholic missionaries bent on spreading Catholicism to ‘remote’ parts of the world. As Pendergrast explains “Asa Candler fully indoctrinated them [salesmen] into the religion of Coca-Cola… stressing the purity of the ingredients, the sanctity of the secret formula, the extraordinary qualities of the product” (65). Candler focused heavily on economic expansion very early in Coca-Cola’s history and was even described as having a “Napoleon complex” (Pendergrast 65). Asa Candler, the founder of the Coca-Cola Company, kept a close eye on international relations. In 1899, he announced the appointment of a salesman for business operations in Cuba and Puerto Rico following the Cuban War for Independence, a war that resulted in Cuban liberation from Spain. Candler was organizing a business plan for Cuba, following closely behind U.S. military and economic intervention into Cuba. McQueen points out that the French coined the term “coca-colonization” to refer to “the expansion of U.S. capital, commodities and cultures” (206). Coca-Cola’s operations and its cultural impact were, in many parts of the world, seen as synonymous with growing U.S. imperialism because Coca-Cola often followed on the coattails of U.S. military intervention.
Coca-Cola CEO Robert Woodruff was also particularly focused on expanding Coca-Cola markets outside of the United States in the early 1920s. In 1926, Woodruff established the Foreign Department to oversee international ventures. From the start, Coca-Cola set up contracts that placed the majority of ownership and risk in the hands of local bottlers. Aside from financial reasons, Coca-Cola executives speculated that local bottlers could connect better to local populations and “the Company wouldn’t suffer from the stigma of being an intrusive American product” (Pendergrast 168). Making connections with local markets became difficult, Pendergrast states,
Coca-Cola had to rely either on already established local bottlers, who might not push the product properly, or on wealthy entrepreneurs who knew nothing about soft drinks… the Company preferred to deal with prominent locals, but often wound up using American corporations. In Guatemala and Honduras, for instance, the United Fruit Company, which dominated the local economy, took the franchise (Pendergrast 168).
Internationally, Coca-Cola aligned itself mostly with wealthy entrepreneurs, prominent locals, or American corporations. In the case of Chile, Coca-Cola started operations in 1941 (Herrera 1). Morton Hodgson, Robert Woodruff’s nephew, owned and operated the first plant, along with plants in Argentina and Uruguay (Pendergrast 242). He established the plants after Mladin Zarubica, owner of an Australian Coca-Cola plant, surveyed areas of Latin America gathering information on “age and sex distribution, natural resources, the water situation, cultural prejudices, available refrigeration, and weather” (Pendergrast 242). The plants were partially owned by the Joroberts Corporation, whose investors included heads of General Motors and U.S. Steel (Pendergrast 242).
Coca-Cola was not a local product in foreign markets; it was a U.S. product that struggled to entice local audiences. Language and culture created significant barriers in Coca-Cola’s international business endeavors. Pendergrast details one particularly amusing anecdote, “in Cuba, an unfortunate wind blew one day as the soft drink manufacturer tested the new art of skywriting. ‘Tome Coca-Cola’ (Drink Coca-Cola) was blurred so that the crowds below received the message, ‘Teme Coca-Cola’ (Fear Coca-Cola)” (169). In another instance, Coca-Cola executives sent a letter to a Brazilian company in Spanish “thereby confusing and offending the Portuguese speaking businessmen who received the letter” (Allen 173). Coca-Cola was not initially well received in many foreign countries, yet through aggressive marketing and persistent lobbying at all levels of national and international government Coca-Cola was able to force a presence in almost all the countries it established bottlers.
The Coca-Cola Company does not have a uniform business plan for all of its bottling plants across the world. Instead, it operates within a variety of local environments. The company statements explain:
One of our greatest strengths is our ability to conduct business on a worldwide scale while maintaining a local approach. At the heart of this approach is the Coca-Cola bottling system. The Coca-Cola system comprises our Company and our bottling partners -- more than 300 worldwide. Many consumers do not realize this, but there is a distinction between our Company and our bottling partners (www.thecoca-colacompany.com).
Coca-Cola emphasizes the separation between the corporate entity and the local bottlers. Under this system, the Coca-Cola Company can legally divorce itself from the day-to-day operations of the foreign bottlers. It can operate in a variety of ways depending on the cultural, legal, or governmental restrictions of the region. Ethical practices are defined by the “regional” economy, thus concepts of workers’ rights, discrimination, corruption, and profiteering are not universal, but defined by local criteria.
Oddly enough, the majority of its profits come from bottlers, over which they claim to have very little ownership (See Figure 1). The company states;
The Coca-Cola system is not a single entity from a legal or managerial perspective, and the Company does not own or control most of our bottlers. In 2006, bottling partners in which our Company had no ownership interest or a noncontrolling equity interest produced and distributed approximately 83 percent of our worldwide unit case volume (The Coca-Cola Company).
The Coca-Cola Company, in a legal sense, contracts out to local bottlers that conduct themselves how they see fit within a set of managerial guidelines. Coca-Cola, in turn, can avoid culpability for abuses taking place at foreign bottlers. Aside from avoiding culpability, it can also divide up production and subcontract to areas viewed as the most profitable. Gary Gereffii explains "this new international division of labor was created in order to exploit reserve armies of labor on a world scale by using the advanced transport and communication technologies that permit the spatial segmentation of the production process" (507 1989). Corporations, like Coca-Cola, profit from subcontracting various sections of the commodity chain out to the lowest bidder. It also profits from creating a complex network that, through technology, is easy to manage, but difficult for consumers to understand, connect with, or visualize.
Even though the Coca-Cola Company does not technically have controlling ownership over the majority of its international bottlers through its franchise system, bottlers are expected to adhere to a rigorous set of managerial standards put forth by the parent company. These standards are outlined in the “Coca-Cola Management System: The Quality Management System Standard,” an annual corporate publication which is described as “the framework in which we coordinate and guide our continual improvement activities and relentlessly pursue excellence in execution” (4). The framework contains four layers (See Figure 2). Part of the implementation of these four layers includes the development of a business plan by each organizational unit.
The business plan must consider the following six items;
a. Determination of the factors of success for the organizational unit;
b. An assessment of financial, economic, environmental, safety, and other current factors that bear on the organizational unit’s success;
c. An assessment of the risks posed by internal and external factors that could affect the organization’s ability to meet its objectives and the assets that it needs to manage;
d. Human resource capabilities and needs;
e. Quality capabilities and needs, including resource availability;
f. Objectives and metrics
(Coca-Cola Company 2008: 10)
Each organizational unit must also maintain documentation of the creation, establishment and implementation of the business plan, as well as documentation of:
a. Document control procedure;
b. Quality Manual;
c. HACCP program;
d. Control of nonconforming material and product procedure;
e. Quality Statement (may be controlled through its inclusion in the Quality Manual);
f. Objectives and metrics;
g. Control of records procedure;
h. Competency requirements and levels for each position;
i. Design and development control procedure;
j. Commercialization procedure;
k. Procurement, outsourcing, and supplier management procedure;
l. Materials, products, and service integrity procedure;
m. Calibration procedure;
n. Audit procedure;
o. Audit schedule;
p. Incident Management and Crisis Resolution (IMCR) Plan;
q. Corrective action procedure;
r. Preventive action procedure.
(The Coca-Cola Company 2008: 15).
Through a detailed set of guidelines and meticulous record keeping, the Coca-Cola Company can monitor almost every aspect of an organizational unit’s business practices which makes the company’s detachment seem limited to legal liability. Louis and Yazijian explain, “[The Coca-Cola Company’s] detachment from a bottler’s activities, even if laws or human rights have been violated, is conspicuously inconsistent with the company’s obsession with overseeing local production and promotion” (185).
The breakup of commodity chains on a global scale, as articulated by Gereffi, creates a tension between coordinating a massive global network of production, which is based on seeking out cheap labor, while also depending heavily on emerging markets and foreign consumers for profit growth. As previously mentioned, Coca-Cola statements relate that in 2006, 83% of Coca-Cola’s worldwide unit case volume was produced and distributed by “bottling partners in which our Company had no ownership interest or a noncontrolling equity interest” (The Coca-Cola Company). Simultaneously, the Coca-Cola Company has been increasingly dependent on international sales (or sales outside North America) in the last ten years. In one USA Today article, Muhtar Kent, CEO of Coca-Cola noted that “the company’s international business, in particular emerging markets, continue to fuel growth” (Tong). CSR initiatives are one way to attempt to strike a balance between these tensions. Neville Isdell commented that:
The Coca-Cola Company operates in more than 200 countries around the world. While it’s fair to say that we are a truly global company, we’ve learned that there is no such thing as a global consumer – all consumers are local. That means you have to win their trust at the local level. And the only way to do that is through individual relationships… by focusing on local needs and demands… and by acting as an integral part of the local communities in which you operate (Isdell 2006).
Isdell stresses the importance of consumer trust and localizing corporate operations to win consumer loyalty.
Balancing global and local operations has been challenging for the Coca-Cola Company since its inception. In 2000, Coca-Cola shifted its international business approach, attempting to put more control into the hands of local bottlers in response to declining profits. Part of this strategy was the decentralization of price setting, advertising and brand creation. Mooij & Hofstede explain “Coca-Cola launched a series of innovation centers around the world wherein scientists are able to work directly with marketing managers to develop, package, and sell new drinks at local market levels” (61-62). This current trend has included attempts to become more sensitive and responsive to local markets. Coca-Cola’s marketing chief was quoted as stating “[the company’s] big successes have come from markets where we read the consumer psyche every day and adjust the marketing model every day” (Mooij & Hofstede 62). The company attempts to dream itself anew on a daily basis in response to local, shifting tastes with the ultimate goal of constantly capturing the essence of consumer desire.
Coca-Cola needs to be particularly sensitive to local backlash in part due to the landscape of the contemporary global market, where multinational corporations are becoming increasingly dependent on international consumer trust, as well as reserves of cheap labor. CSR initiatives are one way to make local connections while simultaneously obscuring the harsh realities of the global market, including exploitation of labor. In the case of the Coca-Cola Company, there has been a push and pull relationship between global and local operations. Despite increased decentralization, local operations are still heavily overseen by the parent corporation through the company’s management system. The Coca-Cola franchise system allows Coca-Cola to operate on a transnational level with the ability to coordinate relatively consistent production, making adjustments to the level of centralization over time. The result varies from location to location, but the goal is to make Coca-Cola appear as embedded in local culture as possible, obscuring the local bottler’s connection to a heavily coordinated global system.
The Coca-Cola Company was founded in 1886 and the Coca-Cola Export Corporation was established in 1930 (Kuisel 53). Coke was being sold in Latin America before the establishment of its Export Corporation; in 1897 Coke was sold in Mexico and in 1927 it was distributed in Honduras, Colombia, and Haiti. One of the first international bottling plants was established in Havana, Cuba in 1906 (Louis 29). In 1928, it was sold in Venezuela and by 1942 Coca-Cola was sold in Nicaragua, Argentina, Brazil, Costa Rica and Uruguay (Lydersen). Currently, Coca-Cola has bottling plants or operations in at least 12 Latin American countries and is sold in at least 42 (Coca-Cola Company 1-121). Coca-Cola is present in over 200 countries worldwide and produces more than 300 beverage brands (Coca-Cola Company 2008: 3). The corporation’s economic success depends heavily on its access to international markets and its relationship with domestic and foreign governments.
Some of the earliest Coca-Cola salesmen, who introduced Coca-Cola to foreign markets before the establishment of the export corporation, operated similar to Catholic missionaries bent on spreading Catholicism to ‘remote’ parts of the world. As Pendergrast explains “Asa Candler fully indoctrinated them [salesmen] into the religion of Coca-Cola… stressing the purity of the ingredients, the sanctity of the secret formula, the extraordinary qualities of the product” (65). Candler focused heavily on economic expansion very early in Coca-Cola’s history and was even described as having a “Napoleon complex” (Pendergrast 65). Asa Candler, the founder of the Coca-Cola Company, kept a close eye on international relations. In 1899, he announced the appointment of a salesman for business operations in Cuba and Puerto Rico following the Cuban War for Independence, a war that resulted in Cuban liberation from Spain. Candler was organizing a business plan for Cuba, following closely behind U.S. military and economic intervention into Cuba. McQueen points out that the French coined the term “coca-colonization” to refer to “the expansion of U.S. capital, commodities and cultures” (206). Coca-Cola’s operations and its cultural impact were, in many parts of the world, seen as synonymous with growing U.S. imperialism because Coca-Cola often followed on the coattails of U.S. military intervention.
Coca-Cola CEO Robert Woodruff was also particularly focused on expanding Coca-Cola markets outside of the United States in the early 1920s. In 1926, Woodruff established the Foreign Department to oversee international ventures. From the start, Coca-Cola set up contracts that placed the majority of ownership and risk in the hands of local bottlers. Aside from financial reasons, Coca-Cola executives speculated that local bottlers could connect better to local populations and “the Company wouldn’t suffer from the stigma of being an intrusive American product” (Pendergrast 168). Making connections with local markets became difficult, Pendergrast states,
Coca-Cola had to rely either on already established local bottlers, who might not push the product properly, or on wealthy entrepreneurs who knew nothing about soft drinks… the Company preferred to deal with prominent locals, but often wound up using American corporations. In Guatemala and Honduras, for instance, the United Fruit Company, which dominated the local economy, took the franchise (Pendergrast 168).
Internationally, Coca-Cola aligned itself mostly with wealthy entrepreneurs, prominent locals, or American corporations. In the case of Chile, Coca-Cola started operations in 1941 (Herrera 1). Morton Hodgson, Robert Woodruff’s nephew, owned and operated the first plant, along with plants in Argentina and Uruguay (Pendergrast 242). He established the plants after Mladin Zarubica, owner of an Australian Coca-Cola plant, surveyed areas of Latin America gathering information on “age and sex distribution, natural resources, the water situation, cultural prejudices, available refrigeration, and weather” (Pendergrast 242). The plants were partially owned by the Joroberts Corporation, whose investors included heads of General Motors and U.S. Steel (Pendergrast 242).
Coca-Cola was not a local product in foreign markets; it was a U.S. product that struggled to entice local audiences. Language and culture created significant barriers in Coca-Cola’s international business endeavors. Pendergrast details one particularly amusing anecdote, “in Cuba, an unfortunate wind blew one day as the soft drink manufacturer tested the new art of skywriting. ‘Tome Coca-Cola’ (Drink Coca-Cola) was blurred so that the crowds below received the message, ‘Teme Coca-Cola’ (Fear Coca-Cola)” (169). In another instance, Coca-Cola executives sent a letter to a Brazilian company in Spanish “thereby confusing and offending the Portuguese speaking businessmen who received the letter” (Allen 173). Coca-Cola was not initially well received in many foreign countries, yet through aggressive marketing and persistent lobbying at all levels of national and international government Coca-Cola was able to force a presence in almost all the countries it established bottlers.
The Coca-Cola Company does not have a uniform business plan for all of its bottling plants across the world. Instead, it operates within a variety of local environments. The company statements explain:
One of our greatest strengths is our ability to conduct business on a worldwide scale while maintaining a local approach. At the heart of this approach is the Coca-Cola bottling system. The Coca-Cola system comprises our Company and our bottling partners -- more than 300 worldwide. Many consumers do not realize this, but there is a distinction between our Company and our bottling partners (www.thecoca-colacompany.com).
Coca-Cola emphasizes the separation between the corporate entity and the local bottlers. Under this system, the Coca-Cola Company can legally divorce itself from the day-to-day operations of the foreign bottlers. It can operate in a variety of ways depending on the cultural, legal, or governmental restrictions of the region. Ethical practices are defined by the “regional” economy, thus concepts of workers’ rights, discrimination, corruption, and profiteering are not universal, but defined by local criteria.
Oddly enough, the majority of its profits come from bottlers, over which they claim to have very little ownership (See Figure 1). The company states;
The Coca-Cola system is not a single entity from a legal or managerial perspective, and the Company does not own or control most of our bottlers. In 2006, bottling partners in which our Company had no ownership interest or a noncontrolling equity interest produced and distributed approximately 83 percent of our worldwide unit case volume (The Coca-Cola Company).
The Coca-Cola Company, in a legal sense, contracts out to local bottlers that conduct themselves how they see fit within a set of managerial guidelines. Coca-Cola, in turn, can avoid culpability for abuses taking place at foreign bottlers. Aside from avoiding culpability, it can also divide up production and subcontract to areas viewed as the most profitable. Gary Gereffii explains "this new international division of labor was created in order to exploit reserve armies of labor on a world scale by using the advanced transport and communication technologies that permit the spatial segmentation of the production process" (507 1989). Corporations, like Coca-Cola, profit from subcontracting various sections of the commodity chain out to the lowest bidder. It also profits from creating a complex network that, through technology, is easy to manage, but difficult for consumers to understand, connect with, or visualize.
Even though the Coca-Cola Company does not technically have controlling ownership over the majority of its international bottlers through its franchise system, bottlers are expected to adhere to a rigorous set of managerial standards put forth by the parent company. These standards are outlined in the “Coca-Cola Management System: The Quality Management System Standard,” an annual corporate publication which is described as “the framework in which we coordinate and guide our continual improvement activities and relentlessly pursue excellence in execution” (4). The framework contains four layers (See Figure 2). Part of the implementation of these four layers includes the development of a business plan by each organizational unit.
The business plan must consider the following six items;
a. Determination of the factors of success for the organizational unit;
b. An assessment of financial, economic, environmental, safety, and other current factors that bear on the organizational unit’s success;
c. An assessment of the risks posed by internal and external factors that could affect the organization’s ability to meet its objectives and the assets that it needs to manage;
d. Human resource capabilities and needs;
e. Quality capabilities and needs, including resource availability;
f. Objectives and metrics
(Coca-Cola Company 2008: 10)
Each organizational unit must also maintain documentation of the creation, establishment and implementation of the business plan, as well as documentation of:
a. Document control procedure;
b. Quality Manual;
c. HACCP program;
d. Control of nonconforming material and product procedure;
e. Quality Statement (may be controlled through its inclusion in the Quality Manual);
f. Objectives and metrics;
g. Control of records procedure;
h. Competency requirements and levels for each position;
i. Design and development control procedure;
j. Commercialization procedure;
k. Procurement, outsourcing, and supplier management procedure;
l. Materials, products, and service integrity procedure;
m. Calibration procedure;
n. Audit procedure;
o. Audit schedule;
p. Incident Management and Crisis Resolution (IMCR) Plan;
q. Corrective action procedure;
r. Preventive action procedure.
(The Coca-Cola Company 2008: 15).
Through a detailed set of guidelines and meticulous record keeping, the Coca-Cola Company can monitor almost every aspect of an organizational unit’s business practices which makes the company’s detachment seem limited to legal liability. Louis and Yazijian explain, “[The Coca-Cola Company’s] detachment from a bottler’s activities, even if laws or human rights have been violated, is conspicuously inconsistent with the company’s obsession with overseeing local production and promotion” (185).
The breakup of commodity chains on a global scale, as articulated by Gereffi, creates a tension between coordinating a massive global network of production, which is based on seeking out cheap labor, while also depending heavily on emerging markets and foreign consumers for profit growth. As previously mentioned, Coca-Cola statements relate that in 2006, 83% of Coca-Cola’s worldwide unit case volume was produced and distributed by “bottling partners in which our Company had no ownership interest or a noncontrolling equity interest” (The Coca-Cola Company). Simultaneously, the Coca-Cola Company has been increasingly dependent on international sales (or sales outside North America) in the last ten years. In one USA Today article, Muhtar Kent, CEO of Coca-Cola noted that “the company’s international business, in particular emerging markets, continue to fuel growth” (Tong). CSR initiatives are one way to attempt to strike a balance between these tensions. Neville Isdell commented that:
The Coca-Cola Company operates in more than 200 countries around the world. While it’s fair to say that we are a truly global company, we’ve learned that there is no such thing as a global consumer – all consumers are local. That means you have to win their trust at the local level. And the only way to do that is through individual relationships… by focusing on local needs and demands… and by acting as an integral part of the local communities in which you operate (Isdell 2006).
Isdell stresses the importance of consumer trust and localizing corporate operations to win consumer loyalty.
Balancing global and local operations has been challenging for the Coca-Cola Company since its inception. In 2000, Coca-Cola shifted its international business approach, attempting to put more control into the hands of local bottlers in response to declining profits. Part of this strategy was the decentralization of price setting, advertising and brand creation. Mooij & Hofstede explain “Coca-Cola launched a series of innovation centers around the world wherein scientists are able to work directly with marketing managers to develop, package, and sell new drinks at local market levels” (61-62). This current trend has included attempts to become more sensitive and responsive to local markets. Coca-Cola’s marketing chief was quoted as stating “[the company’s] big successes have come from markets where we read the consumer psyche every day and adjust the marketing model every day” (Mooij & Hofstede 62). The company attempts to dream itself anew on a daily basis in response to local, shifting tastes with the ultimate goal of constantly capturing the essence of consumer desire.
Coca-Cola needs to be particularly sensitive to local backlash in part due to the landscape of the contemporary global market, where multinational corporations are becoming increasingly dependent on international consumer trust, as well as reserves of cheap labor. CSR initiatives are one way to make local connections while simultaneously obscuring the harsh realities of the global market, including exploitation of labor. In the case of the Coca-Cola Company, there has been a push and pull relationship between global and local operations. Despite increased decentralization, local operations are still heavily overseen by the parent corporation through the company’s management system. The Coca-Cola franchise system allows Coca-Cola to operate on a transnational level with the ability to coordinate relatively consistent production, making adjustments to the level of centralization over time. The result varies from location to location, but the goal is to make Coca-Cola appear as embedded in local culture as possible, obscuring the local bottler’s connection to a heavily coordinated global system.
Chapter III: Coca-Cola's Marketing of Corporate Social Responsibility
When Coca-Cola introduced the Always Coca-Cola campaign in 1993 it ran twenty-seven different commercial designs. Even though each design was different, the final message was the same: Always Coca-Cola (Coca-Cola Television Advertisements). As Mark Pendergrast explains, “Coke has created ‘patterned advertising’ which, with little or no modification, can appeal to any culture in the world. The Coke message has universal appeal- by drinking this product, you will be self-assured, happy, popular, sexy, youthful…” (464). Coca-Cola markets and implements Corporate Social Responsibility in a similar fashion. The Coca-Cola Company has developed a kind of CSR portfolio of issues they work on which are implemented differently depending on the location. These CSR initiatives are then heavily publicized through company reports, press releases, the Coca-Cola website, and advertising campaigns. In short, there is a global blueprint for CSR initiatives which is tailored to the specific region, nation or locale and then these initiatives are broadcast widely through Coca-Cola’s media network.
The company’s 2007/2008 Sustainability Review includes one page summaries of each of the six regions in which Coca-Cola operates. Contributions towards CSR initiatives are divided into six categories; community, water stewardship, education, HIV/AIDS, health & wellness, and the environment. Depending on the region, Coca-Cola contributes a different amount to each focus area. For example, in Latin America the charitable contributions are divided as follows:
Education – 55%
Community – 38%
Water Stewardship – 3%
HIV/AIDS – 2%
Health and Wellness - 2%
In Latin America, the bulk of the contributions are focused on education (55%) whereas, in North America the majority of contributions are dedicated to community (71%) and in the Pacific the bulk of the contributions are directed towards health and wellness (56%) (The Coca-Cola Company 2007). The themes for the CSR initiatives remain the same from region to region, but the combination and distribution of funds varies depending on location.
The Coca-Cola Company has published over 35 reports on Corporate Social Responsibility since 2003. The reports are divided by theme, date, region, and bottling partner. In Latin America, the Coca-Cola Company has published 11 CSR reports (See Table I). Close to one-third of the CSR reports released have been targeted towards Latin America, which means Latin America is heavily targeted in comparison to the other six regions in which Coca-Cola operates globally (Coca-Cola splits its global operations into the following regions: Africa, Eurasia, European Union, Latin America, North America, and Pacific). Latin America is the second highest targeted area after the U.S. There appears to be a correlation between CSR reports and Coca-Cola sales. In 2007, Coca-Cola sold 22.7 billion unit cases worldwide. Latin America had the highest amount of sales (27%) followed closely behind by the U.S. (25%), meaning that 52% of all Coca-Cola sales come from Latin American and the U.S. combined (See Figure 3).
Within most CSR reports, initiatives are divided into four categories; workplace, marketplace, community, and governance (See Figure 4). These four categories appear to coincide with the four connections outlined in Isdell’s speech entitled “Connected Capitalism: Growing Sustainability for the 21st Century.” Below are the four connections, which are part of implementing “Connected Capitalism” as highlighted by Isdell. I added the CSR categories in parenthesis following each connection:
1. Connect your business to the communities that you serve. (Community)
2. Connect your business with civil society and governments to address relevant large scale problems. (Governance)
3. Connect your philanthropy -- your sustainability agenda -- with the core of your business, not tangential, but related to the core of your business. (Marketplace)
4. And finally connect your business with the values of your own employees. (Workplace)
(Isdell 2009)
Using “Connected Capitalism” as a foundation for business operations, Corporate Social Responsibility initiatives operate as the vehicle for creating the four connections, allowing Coca-Cola to rewire its operations and image in an attempt to encourage a friendly environment for transnational capital. Then “patterned advertising” is used to communicate the new image and initiatives to a wider audience.
In 2006, the Coca-Cola Company launched its ad campaign entitled The Coke Side of Life, which intended to showcase its new image as a socially responsible corporation. One company press release describes the launching of the new ad campaign stating “Through The Coke Side of Life creative strategy, the Company is using its global resources to drive a multi-media, multi-cultural platform in markets across the world” (The Coca-Cola Company March 2006). Patterned advertising is the logic driving The Coke Side of Life campaign on the global scale, yet by soliciting active collaboration from consumers around the world the company is able to create and produce hundreds of variations of the initial ad. Esther Lee, chief creative officer of Marketing, Strategy and Innovation for the Coca-Cola Company commented “because Coca-Cola is a global brand with local connections and meanings, The Coke Side of Life offers each country an opportunity to interpret their own moments of happiness and the brand’s role in those… we are inviting countries to add to the effort through joint global initiatives” (The Coca-Cola Company March 2006).
The Coke Side of Life campaign is one component of Coca-Cola’s branding strategy. Branding is a relatively new trend, which Naomi Klein dates back to the mid-1980s and describes as “the core meaning of the modern corporation.” Klein states that advertising acts as “one vehicle used to convey that meaning to the world” (5). According to Interbrand, Coca-Cola is the world’s most valuable brand and has been for the last 7 years (Interbrand). The Coca-Cola brand has evolved over time and currently includes a website dedicated solely to the brand. Alongside the Coke Side of Life campaign, the company launched the brand website in 26 countries and in 6 different languages; the brand website is a separate website which invites “visitors around the world to participate in the evolution of the brand’s heritage” (The Coca-Cola Company July 2006). The content of the brand website is partially molded by visitor input and is a wholly separate entity from the corporate website, which contains company news and information. The website allows for intensified localization of the global brand, at least on the level of image production and creation.
Statements from the Coca-Cola Company stress the act of being “seen” while carrying out CSR initiatives and engaging consumers to take part in brand creation. Isdell states “We need to be seen -- and we need to be -- a functioning part of the local communities where we operate” and later he continues “when employees enter a company that is seen to be improving society, employees bring their whole selves to work"[Emphasis Added] (Isdell 2009). The focus on being “seen” to be ethical resonates in their spending on advertising globally versus the company’s spending on CSR initiatives. Coca-Cola spent a total of $2.1 billion on global advertising in 2007 (See Table II for breakdown by region). According to their Sustainability Review, the company spent $81 million globally on CSR initiatives, meaning that it spent over $2 billion more on global advertising than on CSR initiatives (See Table III). In Latin America, Coca-Cola spent $121.4 million more on advertising than CSR initiatives in 2007. Coca-Cola does not publish a detailed breakdown of product or campaign advertising expenditures so it is difficult to know how much was spent on the Coke Side of Life campaign or advertising costs for CSR initiatives specifically.
In Corporate Governance and the Ethics of Narcissus, Roberts deconstructs current notions of business ethics drawing the distinction between being ‘seen to be ethical’ and ‘being responsible for.’ He argues that the act of being seen as ethical and the obsession with projecting an ethical self image is markedly different than the sense of responsibility that comes with the recognition of others. Roberts defines ethics in part as “not a rule to be followed, but as felt responsibility for my neighbor” (109). Coca-Cola’s marketing of CSR, its advertising budget, and its investment in a highly developed brand image all stress the act of being seen versus taking responsibility for the corporation’s impact on others. The company also appears to want to distance the brand from the day to day operations of the corporation by creating a separate website for the brand so the image can be detached from the actions of the corporation.
Coca-Cola’s CSR reports mention its policy statements regarding the environment, labor, and corporate governance. The CSR reports highlight awards and acknowledgements of Coca-Cola’s CSR initiatives around the world, emphasizing how Coca-Cola is “seen” as ethical. In the company’s 2007/2008 Sustainability Review, over 11 awards and recognitions were mentioned throughout the report as evidence that Coca-Cola is acting as a socially responsible company. In 2007, Coca-Cola was named one of the “World’s Most Accountable Corporations” by One World Trust. Yet, One Trust World does not monitor how CSR initiatives are implemented, only how a company’s policy appears through its own publications. In the 2007 Global Accountability Report released by One World Trust Bank, they state “variations between policy commitments made by an organization and what happens in practice on the ground may occur… the study therefore does not claim to offer a full and definite assessment of an organization’s accountability” (Lang 2007). Some of the awards Coca-Cola has received measure how Coke appears through its policies, therefore Coke was awarded for being “seen” to be one of the world’s most accountable corporations.
Roberts also argues that self-obsessed and narcissistic behavior is encouraged within typical business environments through a hierarchical corporate governance structure, including the “progressive instrumentalization of relationships” where others are viewed as vehicles to either leverage or limit the ultimate realization of the self (118). Through the Coke Side of Life campaign, which is partially implemented through the brand website, visitors and consumers are invited to interface with the corporation, but only in a way that creates brand value for the company. Relations with consumers are based on the “instrumentalization of relationships” where the mode of connection is one in which the company provides the tools to leverage consumer ideas into the mass media, but only if their creativity translates to profits for the Coca-Cola Company.
By challenging consumers to engage in brand creation, the Coca-Cola Company is also attempting to tap into the creativity and diversity of various people, ultimately soliciting labor from loyal and interested consumers. Daniel Miller describes the very act of consumption as a form of labor. His definition could also be expanded to include branding strategies. Miller’s conception of consumer labor is described as “[the] practical activity in which people meet an object world that confronts them as external and foreign and through which they fashion objectifications of themselves as social beings recognizable to themselves and to others” (Foster 11). The Coca-Cola Company asks consumers very directly to re-fashion the brand to fit their personal interpretations and to “interpret their own moments of happiness and the brand’s role in those” (the Coca-Cola Company March 2006) requesting that consumers do the work of localizing and internalizing Coca-Cola’s global image.
Coca-Cola’s preoccupation with being ‘seen’ to be ethical stems from their dependence on consumer trust. According to Coca-Cola’s 2008 10K form, they believe “that our success depends on our ability to connect with consumers” (3). The inability to maintain a valuable brand image and corporate reputation is listed as a potential risk factor that could impact profits. The company’s 10k form states:
adverse publicity surrounding obesity concerns, water usage, labor relations and the like, and campaigns by activists attempting to connect our system to environmental issues, water shortages or workplace or human rights violations in certain developing countries in which we operate, could negatively affect our Company’s overall reputation and our products’ acceptance by consumers(The Coca-Cola Company 2008).
Coca-Cola’s financial statements reflect a cognizance of the company’s dependence on consumer approval. The company’s statements emphasize the importance of connecting with consumers while making sure consumers do not connect the Coca-Cola system to labor, health or environmental issues. Coca-Cola wants to control its image through a highly sophisticated brand, but wants to disconnect its image from the negative externalities of its international operations.
In Coca-Cola’s self-titled, self-published Corporate Responsibility Review (2006) it boasts “we may be best known for the shape of our bottle, but we are also passionate about shaping the world – one community at a time” (3). The report is a compilation of statements asserting what Coca-Cola is and represents, but lacks a detailed explanation of how social responsibility is implemented throughout the corporation. The report asserts that employees of Coca-Cola “respect the human rights principles embodied in the Universal Declaration of Human Rights and strive to ensure that human rights are respected by our business partners” (21). It also asserts that the company has “a single set of global quality standards and an uncompromising commitment to product safety and quality” (22). The assertions lack reference to how those policies came to fruition, making the statements and policies appear divorced from any set of social processes.
By looking at material from organizations, unions, and movements which have critiqued Coca-Cola’s operations alongside Coke’s CSR material illuminates the company’s embedded nature. SINALTRAINAL is a Colombian union which has accused Coca-Cola of severe human rights abuses, including colluding with paramilitary forces to carry out the murder, torture and intimidation of workers in Colombia (SINALTRAINAL). Although the union is nationally based in Colombia, their fight has grown to a global scale winning the support of the International Labor Rights Fund, United Steelworkers of America, United Students Against Sweatshops, and Corporate Campaign Inc. (Colombia Action Network).
Colombia has a long history of violent internal conflict that includes a civil war spanning more than four decades. Richani argues that multinational corporations are part of the “war system” which has perpetuated violence in Colombia. He states, “MCs not only generated violence but also financed opposing forces… wittingly or unwittingly, MCs helped to maintain a balance of forces” (115). Coca-Cola is one example of a corporation that has actively contributed to violence in Colombia. War on Want reported that, “since 1990, eight employees of Coca-Cola bottlers in Colombia have been killed by these [Colombian] paramilitaries” (8). SINALTRAINAL, the union representing 2,300 food workers in Colombia, including 500 Coca-Cola bottling plant employees stated, “another 48 workers have been forced into hiding and 65 have received death threats” (BBC 2001; War on Want 8). Lesley Gill explains that the murder of Isidro Gil and violence against SINALTRAINAL was part of a paramilitary offensive in the 1990s. Gill states:
The paramilitaries seized control of the Urabá region, where Carepa is located, and they decimated the SINALTRAINAL affiliate in 1996. They did so, according to SINALTRAINAL, with the complicity of company officials. Union leaders say that average wages in the plant then dropped from $380 a month to $130 (244).
Despite testimonies from the workers, Coca-Cola has denied culpability because of its relationship with the bottler. Coca-Cola spokesman, Rafael Fernandez Quiros responded to the allegations stating, “Coca-Cola denies any connection to any human-rights violation of this type… we do not own or operate the plants” (BBC 2001). The company has asserted that it is not responsible because it does not own a controlling interest in the particular plants where the violence took place.
In 2001, SINALTRAINAL, with the help of the United Steelworkers Union and the International Labor Rights Fund, filed a lawsuit against the Coca-Cola Company in a Florida court under the Alien Tort Claims Act (ATCA) (Business Wire 2001). The ATCA raises interesting questions about legal jurisdiction in an increasingly globalized world. Aside from signifying potential legal repercussions for U.S. multinational corporations, lawsuits brought under the Alien Tort Claims Act have also generated significant debate over the scope of corporate social responsibility. Multinational corporations have a vested interest in articulating their liability for environmental, labor, and human rights abuses taking place in, around or in relation to their foreign business operations. Gill explains:
Hiding behind layers of subcontracting is a common defense used by global corporations. It allows them to claim that they do not employ workers and that subcontractors are the sole employers, and thus enables them to avoid any responsibility for providing minimum wages, health care, safe working environments or negotiating in good faith with labor unions (250).
The loss of any legal battles could translate to increased liability, decreased bargaining power with labor unions, and less control in defining the parameters of social responsibility outside the U.S.
In the case of Coca-Cola, the company fought the lawsuit and in 2003 the Coca-Cola Company was dropped from the lawsuit because of issues over jurisdiction. The U.S. District Judge Jose Martinez, who presided over the case, stated “demonstrating indirect liability for human rights abuses on the part of corporate entities is an inherently difficult task,” (Goodman). Coca-Cola commended the judge stating “[Coca-Cola] is gratified by Judge Martinez’ decision to dismiss the cases. We reaffirm our belief that the claims in the suit filed against The Coca-Cola Company and two bottlers in Colombia are inaccurate and based on distorted versions of events” (Coke Facts). Although Coca-Cola asserts itself as a socially responsible company, it refuses to acknowledge or take responsibility for violence taking place at its bottling plants. The lawsuit represents an attempt to control what ‘responsibility’ means in relation to the corporation. Shamir argues:
the strategic maneuvering of corporations in the CSR field consists of two basic moves: one that resists attempts to subject MNCs to an enforceable legal framework, and another that engages in actively consolidating a self-regulatory regime of CSR that is based on a host of voluntary and nonenforceable instruments (660).
Coca-Cola wants to define how it will be responsible by avoiding legal or governmental regulation, like the Alien Tort Claims Act.
Accusations of human and labor rights abuses resonate in Coca-Cola’s social responsibility material, but the connections between social pressure and company policy are not clearly articulated. According to Coca-Cola’s Global Workplace Rights Policy, the company “respects our employees’ right to join, form or not to join a labor union without fear of reprisal, intimidation or harassment” (The Coca-Cola Company). On the surface, it appears that Coca-Cola is capable of managing workers’ rights internally and has taken initiative to ensure its workers enjoy basic rights, yet this is problematic because the majority of Coca-Cola’s workforce is employed at bottling plants where Coca-Cola does not have controlling interest. The company asserts:
The Coca-Cola system is not a single entity from a legal or managerial perspective, and the Company does not own or control most of our bottlers. In 2006, bottling partners in which our Company had no ownership interest or a noncontrolling equity interest produced and distributed approximately 83 percent of our worldwide unit case volume (www.thecoca-colacompany.com).
Self-regulation is inadequate in regards to labor rights because the majority of Coca-Cola’s workforce is not covered by its Global Workplace Rights Policy.
The Coca-Cola Company presents its Corporate Social Responsibility initiatives as an extension of its brand image. Coca-Cola is careful to separate its brand from the corporation, making it difficult to draw connections between the corporate entity and the negative externalities of Coca-Cola’s international operations. Foucault understood this masking of power as a kind of theatrics. As Tagg explains “Power in the West, Foucault says, is what displays itself most and hides itself best. ‘Political life’, with its carefully staged debates, provides a little theater of power – an image – but it is not there that power lies; nor is that how it functions” (Evans 248). CSR initiatives create a space where the Coca-Cola Company can control how social problems are framed and addressed. Coca-Cola has worked to limit what “responsibility” means by maneuvering complex relationships with subcontractors. By detaching itself from local bottlers in a legal sense, the company can avoid culpability for abuses taking place at those plants. It can simultaneously publish progressive CSR policies that cast the Company a leading role in solving global problems. The Company can be the expert, the hero, but never the perpetrator of labor, environmental or human rights abuses.
The company’s 2007/2008 Sustainability Review includes one page summaries of each of the six regions in which Coca-Cola operates. Contributions towards CSR initiatives are divided into six categories; community, water stewardship, education, HIV/AIDS, health & wellness, and the environment. Depending on the region, Coca-Cola contributes a different amount to each focus area. For example, in Latin America the charitable contributions are divided as follows:
Education – 55%
Community – 38%
Water Stewardship – 3%
HIV/AIDS – 2%
Health and Wellness - 2%
In Latin America, the bulk of the contributions are focused on education (55%) whereas, in North America the majority of contributions are dedicated to community (71%) and in the Pacific the bulk of the contributions are directed towards health and wellness (56%) (The Coca-Cola Company 2007). The themes for the CSR initiatives remain the same from region to region, but the combination and distribution of funds varies depending on location.
The Coca-Cola Company has published over 35 reports on Corporate Social Responsibility since 2003. The reports are divided by theme, date, region, and bottling partner. In Latin America, the Coca-Cola Company has published 11 CSR reports (See Table I). Close to one-third of the CSR reports released have been targeted towards Latin America, which means Latin America is heavily targeted in comparison to the other six regions in which Coca-Cola operates globally (Coca-Cola splits its global operations into the following regions: Africa, Eurasia, European Union, Latin America, North America, and Pacific). Latin America is the second highest targeted area after the U.S. There appears to be a correlation between CSR reports and Coca-Cola sales. In 2007, Coca-Cola sold 22.7 billion unit cases worldwide. Latin America had the highest amount of sales (27%) followed closely behind by the U.S. (25%), meaning that 52% of all Coca-Cola sales come from Latin American and the U.S. combined (See Figure 3).
Within most CSR reports, initiatives are divided into four categories; workplace, marketplace, community, and governance (See Figure 4). These four categories appear to coincide with the four connections outlined in Isdell’s speech entitled “Connected Capitalism: Growing Sustainability for the 21st Century.” Below are the four connections, which are part of implementing “Connected Capitalism” as highlighted by Isdell. I added the CSR categories in parenthesis following each connection:
1. Connect your business to the communities that you serve. (Community)
2. Connect your business with civil society and governments to address relevant large scale problems. (Governance)
3. Connect your philanthropy -- your sustainability agenda -- with the core of your business, not tangential, but related to the core of your business. (Marketplace)
4. And finally connect your business with the values of your own employees. (Workplace)
(Isdell 2009)
Using “Connected Capitalism” as a foundation for business operations, Corporate Social Responsibility initiatives operate as the vehicle for creating the four connections, allowing Coca-Cola to rewire its operations and image in an attempt to encourage a friendly environment for transnational capital. Then “patterned advertising” is used to communicate the new image and initiatives to a wider audience.
In 2006, the Coca-Cola Company launched its ad campaign entitled The Coke Side of Life, which intended to showcase its new image as a socially responsible corporation. One company press release describes the launching of the new ad campaign stating “Through The Coke Side of Life creative strategy, the Company is using its global resources to drive a multi-media, multi-cultural platform in markets across the world” (The Coca-Cola Company March 2006). Patterned advertising is the logic driving The Coke Side of Life campaign on the global scale, yet by soliciting active collaboration from consumers around the world the company is able to create and produce hundreds of variations of the initial ad. Esther Lee, chief creative officer of Marketing, Strategy and Innovation for the Coca-Cola Company commented “because Coca-Cola is a global brand with local connections and meanings, The Coke Side of Life offers each country an opportunity to interpret their own moments of happiness and the brand’s role in those… we are inviting countries to add to the effort through joint global initiatives” (The Coca-Cola Company March 2006).
The Coke Side of Life campaign is one component of Coca-Cola’s branding strategy. Branding is a relatively new trend, which Naomi Klein dates back to the mid-1980s and describes as “the core meaning of the modern corporation.” Klein states that advertising acts as “one vehicle used to convey that meaning to the world” (5). According to Interbrand, Coca-Cola is the world’s most valuable brand and has been for the last 7 years (Interbrand). The Coca-Cola brand has evolved over time and currently includes a website dedicated solely to the brand. Alongside the Coke Side of Life campaign, the company launched the brand website in 26 countries and in 6 different languages; the brand website is a separate website which invites “visitors around the world to participate in the evolution of the brand’s heritage” (The Coca-Cola Company July 2006). The content of the brand website is partially molded by visitor input and is a wholly separate entity from the corporate website, which contains company news and information. The website allows for intensified localization of the global brand, at least on the level of image production and creation.
Statements from the Coca-Cola Company stress the act of being “seen” while carrying out CSR initiatives and engaging consumers to take part in brand creation. Isdell states “We need to be seen -- and we need to be -- a functioning part of the local communities where we operate” and later he continues “when employees enter a company that is seen to be improving society, employees bring their whole selves to work"[Emphasis Added] (Isdell 2009). The focus on being “seen” to be ethical resonates in their spending on advertising globally versus the company’s spending on CSR initiatives. Coca-Cola spent a total of $2.1 billion on global advertising in 2007 (See Table II for breakdown by region). According to their Sustainability Review, the company spent $81 million globally on CSR initiatives, meaning that it spent over $2 billion more on global advertising than on CSR initiatives (See Table III). In Latin America, Coca-Cola spent $121.4 million more on advertising than CSR initiatives in 2007. Coca-Cola does not publish a detailed breakdown of product or campaign advertising expenditures so it is difficult to know how much was spent on the Coke Side of Life campaign or advertising costs for CSR initiatives specifically.
In Corporate Governance and the Ethics of Narcissus, Roberts deconstructs current notions of business ethics drawing the distinction between being ‘seen to be ethical’ and ‘being responsible for.’ He argues that the act of being seen as ethical and the obsession with projecting an ethical self image is markedly different than the sense of responsibility that comes with the recognition of others. Roberts defines ethics in part as “not a rule to be followed, but as felt responsibility for my neighbor” (109). Coca-Cola’s marketing of CSR, its advertising budget, and its investment in a highly developed brand image all stress the act of being seen versus taking responsibility for the corporation’s impact on others. The company also appears to want to distance the brand from the day to day operations of the corporation by creating a separate website for the brand so the image can be detached from the actions of the corporation.
Coca-Cola’s CSR reports mention its policy statements regarding the environment, labor, and corporate governance. The CSR reports highlight awards and acknowledgements of Coca-Cola’s CSR initiatives around the world, emphasizing how Coca-Cola is “seen” as ethical. In the company’s 2007/2008 Sustainability Review, over 11 awards and recognitions were mentioned throughout the report as evidence that Coca-Cola is acting as a socially responsible company. In 2007, Coca-Cola was named one of the “World’s Most Accountable Corporations” by One World Trust. Yet, One Trust World does not monitor how CSR initiatives are implemented, only how a company’s policy appears through its own publications. In the 2007 Global Accountability Report released by One World Trust Bank, they state “variations between policy commitments made by an organization and what happens in practice on the ground may occur… the study therefore does not claim to offer a full and definite assessment of an organization’s accountability” (Lang 2007). Some of the awards Coca-Cola has received measure how Coke appears through its policies, therefore Coke was awarded for being “seen” to be one of the world’s most accountable corporations.
Roberts also argues that self-obsessed and narcissistic behavior is encouraged within typical business environments through a hierarchical corporate governance structure, including the “progressive instrumentalization of relationships” where others are viewed as vehicles to either leverage or limit the ultimate realization of the self (118). Through the Coke Side of Life campaign, which is partially implemented through the brand website, visitors and consumers are invited to interface with the corporation, but only in a way that creates brand value for the company. Relations with consumers are based on the “instrumentalization of relationships” where the mode of connection is one in which the company provides the tools to leverage consumer ideas into the mass media, but only if their creativity translates to profits for the Coca-Cola Company.
By challenging consumers to engage in brand creation, the Coca-Cola Company is also attempting to tap into the creativity and diversity of various people, ultimately soliciting labor from loyal and interested consumers. Daniel Miller describes the very act of consumption as a form of labor. His definition could also be expanded to include branding strategies. Miller’s conception of consumer labor is described as “[the] practical activity in which people meet an object world that confronts them as external and foreign and through which they fashion objectifications of themselves as social beings recognizable to themselves and to others” (Foster 11). The Coca-Cola Company asks consumers very directly to re-fashion the brand to fit their personal interpretations and to “interpret their own moments of happiness and the brand’s role in those” (the Coca-Cola Company March 2006) requesting that consumers do the work of localizing and internalizing Coca-Cola’s global image.
Coca-Cola’s preoccupation with being ‘seen’ to be ethical stems from their dependence on consumer trust. According to Coca-Cola’s 2008 10K form, they believe “that our success depends on our ability to connect with consumers” (3). The inability to maintain a valuable brand image and corporate reputation is listed as a potential risk factor that could impact profits. The company’s 10k form states:
adverse publicity surrounding obesity concerns, water usage, labor relations and the like, and campaigns by activists attempting to connect our system to environmental issues, water shortages or workplace or human rights violations in certain developing countries in which we operate, could negatively affect our Company’s overall reputation and our products’ acceptance by consumers(The Coca-Cola Company 2008).
Coca-Cola’s financial statements reflect a cognizance of the company’s dependence on consumer approval. The company’s statements emphasize the importance of connecting with consumers while making sure consumers do not connect the Coca-Cola system to labor, health or environmental issues. Coca-Cola wants to control its image through a highly sophisticated brand, but wants to disconnect its image from the negative externalities of its international operations.
In Coca-Cola’s self-titled, self-published Corporate Responsibility Review (2006) it boasts “we may be best known for the shape of our bottle, but we are also passionate about shaping the world – one community at a time” (3). The report is a compilation of statements asserting what Coca-Cola is and represents, but lacks a detailed explanation of how social responsibility is implemented throughout the corporation. The report asserts that employees of Coca-Cola “respect the human rights principles embodied in the Universal Declaration of Human Rights and strive to ensure that human rights are respected by our business partners” (21). It also asserts that the company has “a single set of global quality standards and an uncompromising commitment to product safety and quality” (22). The assertions lack reference to how those policies came to fruition, making the statements and policies appear divorced from any set of social processes.
By looking at material from organizations, unions, and movements which have critiqued Coca-Cola’s operations alongside Coke’s CSR material illuminates the company’s embedded nature. SINALTRAINAL is a Colombian union which has accused Coca-Cola of severe human rights abuses, including colluding with paramilitary forces to carry out the murder, torture and intimidation of workers in Colombia (SINALTRAINAL). Although the union is nationally based in Colombia, their fight has grown to a global scale winning the support of the International Labor Rights Fund, United Steelworkers of America, United Students Against Sweatshops, and Corporate Campaign Inc. (Colombia Action Network).
Colombia has a long history of violent internal conflict that includes a civil war spanning more than four decades. Richani argues that multinational corporations are part of the “war system” which has perpetuated violence in Colombia. He states, “MCs not only generated violence but also financed opposing forces… wittingly or unwittingly, MCs helped to maintain a balance of forces” (115). Coca-Cola is one example of a corporation that has actively contributed to violence in Colombia. War on Want reported that, “since 1990, eight employees of Coca-Cola bottlers in Colombia have been killed by these [Colombian] paramilitaries” (8). SINALTRAINAL, the union representing 2,300 food workers in Colombia, including 500 Coca-Cola bottling plant employees stated, “another 48 workers have been forced into hiding and 65 have received death threats” (BBC 2001; War on Want 8). Lesley Gill explains that the murder of Isidro Gil and violence against SINALTRAINAL was part of a paramilitary offensive in the 1990s. Gill states:
The paramilitaries seized control of the Urabá region, where Carepa is located, and they decimated the SINALTRAINAL affiliate in 1996. They did so, according to SINALTRAINAL, with the complicity of company officials. Union leaders say that average wages in the plant then dropped from $380 a month to $130 (244).
Despite testimonies from the workers, Coca-Cola has denied culpability because of its relationship with the bottler. Coca-Cola spokesman, Rafael Fernandez Quiros responded to the allegations stating, “Coca-Cola denies any connection to any human-rights violation of this type… we do not own or operate the plants” (BBC 2001). The company has asserted that it is not responsible because it does not own a controlling interest in the particular plants where the violence took place.
In 2001, SINALTRAINAL, with the help of the United Steelworkers Union and the International Labor Rights Fund, filed a lawsuit against the Coca-Cola Company in a Florida court under the Alien Tort Claims Act (ATCA) (Business Wire 2001). The ATCA raises interesting questions about legal jurisdiction in an increasingly globalized world. Aside from signifying potential legal repercussions for U.S. multinational corporations, lawsuits brought under the Alien Tort Claims Act have also generated significant debate over the scope of corporate social responsibility. Multinational corporations have a vested interest in articulating their liability for environmental, labor, and human rights abuses taking place in, around or in relation to their foreign business operations. Gill explains:
Hiding behind layers of subcontracting is a common defense used by global corporations. It allows them to claim that they do not employ workers and that subcontractors are the sole employers, and thus enables them to avoid any responsibility for providing minimum wages, health care, safe working environments or negotiating in good faith with labor unions (250).
The loss of any legal battles could translate to increased liability, decreased bargaining power with labor unions, and less control in defining the parameters of social responsibility outside the U.S.
In the case of Coca-Cola, the company fought the lawsuit and in 2003 the Coca-Cola Company was dropped from the lawsuit because of issues over jurisdiction. The U.S. District Judge Jose Martinez, who presided over the case, stated “demonstrating indirect liability for human rights abuses on the part of corporate entities is an inherently difficult task,” (Goodman). Coca-Cola commended the judge stating “[Coca-Cola] is gratified by Judge Martinez’ decision to dismiss the cases. We reaffirm our belief that the claims in the suit filed against The Coca-Cola Company and two bottlers in Colombia are inaccurate and based on distorted versions of events” (Coke Facts). Although Coca-Cola asserts itself as a socially responsible company, it refuses to acknowledge or take responsibility for violence taking place at its bottling plants. The lawsuit represents an attempt to control what ‘responsibility’ means in relation to the corporation. Shamir argues:
the strategic maneuvering of corporations in the CSR field consists of two basic moves: one that resists attempts to subject MNCs to an enforceable legal framework, and another that engages in actively consolidating a self-regulatory regime of CSR that is based on a host of voluntary and nonenforceable instruments (660).
Coca-Cola wants to define how it will be responsible by avoiding legal or governmental regulation, like the Alien Tort Claims Act.
Accusations of human and labor rights abuses resonate in Coca-Cola’s social responsibility material, but the connections between social pressure and company policy are not clearly articulated. According to Coca-Cola’s Global Workplace Rights Policy, the company “respects our employees’ right to join, form or not to join a labor union without fear of reprisal, intimidation or harassment” (The Coca-Cola Company). On the surface, it appears that Coca-Cola is capable of managing workers’ rights internally and has taken initiative to ensure its workers enjoy basic rights, yet this is problematic because the majority of Coca-Cola’s workforce is employed at bottling plants where Coca-Cola does not have controlling interest. The company asserts:
The Coca-Cola system is not a single entity from a legal or managerial perspective, and the Company does not own or control most of our bottlers. In 2006, bottling partners in which our Company had no ownership interest or a noncontrolling equity interest produced and distributed approximately 83 percent of our worldwide unit case volume (www.thecoca-colacompany.com).
Self-regulation is inadequate in regards to labor rights because the majority of Coca-Cola’s workforce is not covered by its Global Workplace Rights Policy.
The Coca-Cola Company presents its Corporate Social Responsibility initiatives as an extension of its brand image. Coca-Cola is careful to separate its brand from the corporation, making it difficult to draw connections between the corporate entity and the negative externalities of Coca-Cola’s international operations. Foucault understood this masking of power as a kind of theatrics. As Tagg explains “Power in the West, Foucault says, is what displays itself most and hides itself best. ‘Political life’, with its carefully staged debates, provides a little theater of power – an image – but it is not there that power lies; nor is that how it functions” (Evans 248). CSR initiatives create a space where the Coca-Cola Company can control how social problems are framed and addressed. Coca-Cola has worked to limit what “responsibility” means by maneuvering complex relationships with subcontractors. By detaching itself from local bottlers in a legal sense, the company can avoid culpability for abuses taking place at those plants. It can simultaneously publish progressive CSR policies that cast the Company a leading role in solving global problems. The Company can be the expert, the hero, but never the perpetrator of labor, environmental or human rights abuses.
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