A diverse workforce has an advantage to the firm. One significance is associated with having different cultural views on the products of a company. The process of handling a task and addressing different market needs can only be achieved by understanding the various markets. In this case, therefore, the issue of a diverse workforce comes to mind. In ensuring that the workforce is diverse, the company or the business can address the different issues of cultural understanding, and therefore address the market needs based on this understanding.
A firm that fails to address the issues of diversity in its workforce can be perceived to be discriminative. It is a social injustice to discriminate on people based on their cultural background or racw. A diverse workforce has different advantages that can be associated to the success of the company. Having different perspectives and views on various company policies and products can work effectively in promoting the market needs and operational capabilities of the given company. By focusing on leadership that supports diversity in a company, the different advantages of diversity can be absorbed into the firm and used in promoting the success of that given frim. This study will analyze the Coca-Cola case and the negative aspects of failed diversity companies that did not recognize the need of a diverse workforce. Also, it will describe how they recovered once they recognized the need to promote “social justice” in their workforce.
The Coca-Cola Company as a corporation has managed to create a brand for its name. Since the beginning, the company has been on an upward trend in growth as a brand and profitability for the company. Today, Coca-Cola is the world’s most recognized brand in the world, producing two of the world’s three most famous carbonated drinks. Coca-Cola its been known for over a century in over 200 countries around the globe. The company has grown over the years from producing carbonated drinks to include water, fruit juices, sports drinks and even tea. The company had humble beginnings, but its growth and good marketing strategies have enabled the corporation to now have a net income of about $6.8 billion and an estimated $31 billion in its operating revenues. The success of the company, however, has not prevented the company from having a few setbacks owing to its management and leadership inadequacies (Harvey &Allard 2015).
Diversity in a company does not only stem from its products or market segment but also from its workforce. Coca-Cola has been listed among the top 50 companies regarding diversity at number 18. However, the company has had setbacks in its record owing to the lawsuit cases filed against the company for discrimination. Racial discrimination is one of the world’s most recurrent problems, and it is sad that a big global corporation like Coca-Cola would be associated with it. Racial discrimination refers to treating one race as superior to others or even favoring one race at the expense of others. The world is a made up of diversity in its people and their cultures and beliefs. Racial segregation becomes a problem when one race behaves in a manner suggesting its superiority to the others regarding employment, politics, religious beliefs, education and sexuality among other sectors (Ng et al. 2012).
The Coca-Cola company has a record of losing y he largest racial discrimination lawsuit in the U.S. history. About 2000 members of the company’s workforce both former and current employees joined hands in suing the company citing racial discrimination when it comes to job promotions and salary remuneration. While it is true that the company has diversity in its workforce, the white labor force dominates the top positions, they are more eligible for promotions and get higher pay than other races doing the same job. The white race makes up the majority of the workforce especially the top management while the other races make up the minority of the workforce although they dominate the lower-paying positions. When it comes to consumption, the other races make up the majority of the consumers because Coca-Cola is now a worldwide brand. This is also reflect in the company’s labor force although the opposite is true (Harvey ; Allard 2015).
For a company that has managed to develop a brand name for itself with a good reputation, racial discrimination does not do well in maintaining the good image of the company. The company has been involved in several corporate social responsibility activities in sectors like politics, education, sports and even the environment and this has managed the brand to climb up the ranks of the reputable brand in the world. However, the racial discrimination lawsuit that was filed against the company managed to bring down the revenue earnings of the company owing to the negativity that the company portrayed to its potential market and investors. The company took drastic measures to reduce the severity of the lawsuit, for example, promoting an African American to a higher position and even sponsoring Nelson Mandela in his anti-apartheid campaign. However, the efforts did not make the lawsuit go away and instead it became worse. The company retaliated by demoting the newly promoted African American official and failed to abide by the court order that put up specifications of the designated email that the company was meant to circulate among its employees. The company lost the lawsuit and was ordered to pay millions of dollars to the plaintiffs as part of the settlement. The trial only portrayed how the company lacked its leadership and management competencies when it comes to embracing diversity as part of the company’s core values (Harvey & Allard 2015).
As part of the solution to the company’s pending lawsuit case, the company changed its leadership bench by bringing in a new chairperson and C.E.O. of the company. The new leader brought in amendments in the structural component of the workforce and even promoted Carl Ware who had been previously demoted on racial grounds. The new chairman also brought in new core values to the company and made diversity as one of the core values that was given priority in all the company’s endeavors. All these actions were taken by Coca-Cola after the lawsuit demonstrate the company’s commitment in ending the unpleasant confrontation between the company and its staff or even the end of incompetence in the company’s management and leadership team.
Racial discrimination is a breach of organizational ethics that are always stipulated to be one of the reasons for corporate achievements when it comes to profits and its general objectives. Racial discrimination may be intentional in some instances while in some, it remains unintentional thereby being a result of other factors beyond the control of the perpetrators. Discrimination charges against companies usually cost them a lot regarding finances and their reputation. In this particular case, Coca-Cola parted with about $192 million in the case settlement. In addition to this, the company’s reputation suffered significantly leading to a reduction in its sales which is the main path through which the company manages to stay at the top. Corporate reputation is precious, and it is always considered to be a competitive advantage for a company amongst its competitors. The business world is a competitive world and to stay at the top requires one to have a competitive advantage which is always the brand reputation. The discrimination case associated with the Coca-Cola brand presented an unflattering image of the company to its shareholders, investors, and markets.
Racial discrimination is inexcusable on whatever grounds that the company may have put forward. No race is considered superior. The fact that the top management positions at the company were all dominated by the white race is already enough proof of the company’s antics in discrimination. The areas may have been given out to the white people because of merit, but it is a fact that all the other races are equally or better educated than the ones in the said positions. All the actions of any company that boasts of a global presence like Coca-Cola should not assume such issues when brought forward. Perhaps the company thought that the internal dealings may not be returned to light and may have been the reason for its negligent actions. The company may have used merit and experience as the basis of the job placements in the company, but it is also true that the other races could present similar qualifications when asked. Racial discrimination goes against business ethics which are the basis of operations of any organizations in the world.
The Coca-Cola company was found guilty of all the racial discrimination cases filed against the company, and thus, it was forced to take drastic measures to solve the case and rebuild its reputation as a brand that embraces diversity not only in its products and markets but also in its labor force. Such matters as racial discrimination cases start from a small case and end up escalating to become bigger and more complex. It is important to put measures that will enable the company to tackle any instances of such incidents in the future so that the company can refrain from financial and reputational costs of discrimination. The first step towards solving such cases would be an acknowledgement of the existence of the problem. Coca-Cola should have accepted that there was a problem when the first case was brought forward. Recognition of the problem paves the way for the investigation to find out the causes. The company could have set up a committee to look into the matter early enough and solve it before it got out of hand to include third parties. The second thing that Coca-Cola did wrong was to make rash decisions that portrayed its denial of the claims against the company. Denial only procrastinates a problem, and in this case, the issues at Coca-Cola only grew more prominent. Since Coca-Cola boasts of diversity and is a global brand, then it would be wise for the company to include all the races in the top-notch management positions so that everyone would feel included. These two simple steps would have gone a long way in preventing the lawsuit from developing, and its brand would not have been tarnished (James & Wooten 2006)
The issue at Coca-Cola is one of the many diverse problems facing a lot of corporations in the world today, both big and small. Diversity in the organization is an essential component and should be taken more seriously to achieve the overall goals and objectives of the organization. Diversity should not only flourish in the product or the market base of the organization but also in the members of the workforce. Diversity brings in new ideas and attributes to the company that is important for the continuity of the company. A company that accepts diversity in religion, gender, culture and demography is considered compliant with the business ethics and is admirable to the public. Diversity gives the company a competitive advantage and thus; should be taken seriously when it was seeking to be successful. Now that Coca-Cola had cleared its discrimination case, it should serve as a lesson to the company and others that diversity should be an element of the company. Diversity is part of business ethics, and a lack of it is costly to the organization regarding reputation and the finances used in settling such cases.
Harvey, C. P., & Allard, M. (2015). Understanding and managing diversity: Readings, cases, and exercises. Pearson.
James, E. H., & Wooten, L. P. (2006). Diversity crises: How firms manage discrimination lawsuits. Academy of Management Journal, 49 (6), 1103-1118.
Ng, E. S., & Sears, G. J. (2012). CEO leadership styles and the implementation of organizational diversity practices: Moderating effects of social values and age. Journal of Business Ethics, 105(1), 41-52.