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The company selected for this essay is the Coca Cola Company. The Coca Cola Company is headquartered in Atlanta, Georgia and it deals in the manufacture, retailing, and marketing of non-alcoholic beverage concentrates and syrups. The company’s mission is to ‘refresh the world in terms of spirit, body, and mind, to inspire optimistic moments, and to create value and make a difference everywhere of operation.’ Notably, the company’s vision provides a roadmap for the accomplishment of sustainable and quality growth in terms of portfolio, people, profit, partners, productivity, and the planet. The relationship of stakeholders to the company is seen in different ways including the provision of capital, fulfillment of the company’s duties and responsibilities, and the supply of products.
Freeman’s Stakeholder Theory brings out the view that firms consider the effects of their activities on stakeholders rather than their traditional view where they had a narrow focus on profitability and the interests of shareholders. Therefore, the theory emphasizes that firms would earn more benefits in instances where they have cordial relationships with their customers.
The purpose of this report is to utilize Freeman’s Stakeholder Theory and to analyze the relationship between the Coca Cola Company and its internal and external stakeholders.
The main findings of this report are that Coca Cola Company has numerous internal and external stakeholders, and it mainly uses the descriptive, normative, and the instrumental perspectives when dealing with them. Additionally, the findings indicate that the company works in line with the principles of acknowledging and monitoring the different interests of all stakeholders and listening and communicating to them openly.
Identification of Stakeholders
The Coca Cola Company boasts of numerous internal and external stakeholders that enhance its performance as a multinational beverage company. Here is a list of 10 stakeholders attached to the Coca Cola Company.
- Trade Unions;
- Activist Groups.
The chosen stakeholders for this discussion include employees, customers (internal stakeholders) and the government (External Stakeholders).
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According to Hays (2010), the main role of employees at the Coca Cola Company is to perform the different tasks and responsibilities that lead to the achievement of the goals of the organization. Employees are charged with the duty of ensuring that all the required tasks and responsibilities are completed within the appropriate time. They apply their skills to the performance of different tasks in terms of manufacturing, retailing, and marketing the different beverages that are produced by the Coca Cola Company. Employees also perform the role of decision-making in instances where they are accommodated in the process. These decisions affects the entire operations of the Coca Cola Company.
Customers perform the role of consuming the different products offered by the Coca Cola Company. Their purchases support the company’s ambition of becoming competitive in the industry by realizing the desired level of profitability. Their role of consuming the products of the company plays an instrumental role in the achievement of profits and the revenues for operation.
More so, the government plays the role of ensuring the company pays its taxes as provided by the Company’s Act. Hymson (2011) asserts that the government plays the role of monitoring the activities of the company to ensure that there is no tax evasion on the part of the company. In doing so, the government earns revenues from the taxes paid by the company. Again, the government plays the role of regulating the company’s competitive approach. It ensures that it takes a moderate approach that allows for the entry of other companies into the beverage market.
From my point of view, employees are primary stakeholders within the company since they directly effect on the operations of the company. As noted earlier, they are in charge of performing the different tasks that promote the success of the company. Their direct participation in the operations of the company puts them at the position of primary stakeholders as they have the capacity of stopping its operations in cases where the company fails to meet
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Additionally, customers are primary stakeholders. Customers could be categorized as primary stakeholders because they are the people that determine the economic outlook of the company and its competitive advantage. Without customers, the company would lose revenues and would fail to achieve the desired level of revenues. Again, they are primary stakeholders because of their sole role in influencing the quality of the products and the prices charged on each of the beverages.
Lastly, the government is an external stakeholder. The government is an external stakeholder because it does not engage directly in the affairs of the company. However, it has the capacity to affect the activities of the company because of its regulations and policies on tax payment and ethical operations.
Perspectives of Stakeholder Management
The Coca Cola Company takes varying perspectives to each of the stakeholders named above.
In respect to employees, the company takes the descriptive perspective. It is worth noting that the descriptive perspective is concerned with the influence of stakeholders on the activities of the organization. Fasan (2012) agrees that it requires the company to consider the effect of stakeholders on the survival of the firm and its continued profitability. It always involves the pro-active strategy, the defensive strategy, and the reactive strategy. This strategy has a direct application to employees because they affect the continuation of the company in terms of manufacturing activities, retailing, and marketing of beverage products. It mostly applies in instances where employees are demanding for an increase in their wages and salaries and the assurance of job security. For example, the management takes a proactive approach in addressing the salaries of employees in instances where employees pose a threat of engaging in strikes and go-slows.