The performance-expectations gap is a break or difference between the performance of an organization and the needs and expectations of stakeholders. In the Water Neutrality Initiative case at Coca-Cola, the performance-expectations gap concerned the issue of heavy use of water in Coca-Cola’s operations and productions in the face of concerns about depleting groundwater and safe drinking water resources. Coca-Cola utilizes huge quantities of water in its operations, for beverages production, cleaning bottles and equipment, workplace sanitation, and preparations of ingredients (tea, sugar, coffee, etc.). The need for water in Coca-Cola’s operations and production processes was so huge that the CEO observed that it had no business being and operating in communities without access to water.
Coca Cola provided 1.8b servings of more than 500 non-alcoholic beverage brands of juices, water, enhanced water, teas, coffees, sport and energy drinks, and juice drinks, and operated in more than 200 countries. In 2015, the corporation used about 82b gallons of water per year worldwide (DC, n.d.). Such heavy use of water involved heavy exploitation of water resources in the face of concerns about their depletion. Excessive water use has deprived local village communities in India of water for drinking and irrigation. Additionally, stakeholders observed that the excessive use of water in Coca-Cola’s operations depleted groundwater resources. These concerns among stakeholders also existed in the background of continuing fears about the availability of safe drinking water worldwide. In the 21st Century, world leaders are concerned that over 1b individuals across the world lack access to safe drinking water. The growth rate in the world’s consumption of water is also unsustainable. World leaders have expressed concern that by 2025, a third of the world’s population may face acute water shortages (DC, n.d.). These fears and concerns have caused stakeholders to worry that the heavy use of water in Coca-Cola’s operations and production processes represents a threat to the wellbeing and health of communities across the world.
Karl Albrecht’s strategic radar screens model has 8 points for analysis of the environment of an organization to obtain vital environmental intelligence. Using this model, the geophysical environment is the most significant issue that confronts Coca-Cola. The geophysical environment consists of the physical earth and its surroundings, including inland waters, the oceans, space, the atmosphere, and landmasses and forms. The principal issue facing Coca-Cola is the depletion of water resources, which falls under the geophysical environment (DC, n.d.). Particularly, the issue concerns the effect of Coca-Cola’s operations and production processes on water resources. This issue has a direct relationship with the strategic radar screen of the geophysical environment because it falls directly under it. The other seven radar screens are less significant because the issue of focus in the case has only secondary or little significance in them.
I think that Coca-Cola responded appropriately to the public issue that confronted it. Following the concerns of stakeholders in India about the adverse impact of heavy use of water and exploitation of water resources in its operations and production processes, Coca-Cola set about studying the significance and impact of its practices and business, particularly in regard to water use and management. The study was comprehensive and targeted and involved its operations globally. Coca-Cola also took the initiative to engage diverse stakeholders for advice (DC, n.d.). This engagement was relevant and appropriate to enable Coca-Cola to understand the issue that it faced from diverse perspectives. As part of the comprehensive study, Coca-Cola also engaged each of its top bottlers and operating groups and studied all aspects of water. The study effort was also appropriate because it involved a deliberate effort to reach an agreement on the way forward to address the issue of heavy use of water and exploitation of water resources in Coca-Cola’s operations. Coca-Cola’s response was appropriate because it tackled the fundamental issue that stakeholders raised about its operations and production processes, concerning heavy exploitation of water resources in the face of depleting water resources and fears about the availability of safe drinking water worldwide. The comprehensive study and engagements with stakeholders that Coca-Cola initiated yielded recognition of the need for an aspirational goal of water neutrality. The purpose of this goal was to return safely to nature and communities a quantity of water equivalent to that which the company used in all its production activities and beverages by 2020. Coca-Cola also outlined a structure to achieve this goal in its response, involving 3Rs (reduce, recycle, and replenish) (DC, n.d.). This action plan would feature more efficient operations to reduce its own utilization of water, treatment of wastewater prior to discharging it to ensure its cleanliness to support aquatic life, and participation in projects of water conservation.
The mentioned response by Coca-Cola has been practical and successful. The company reported, in 2011, that it has succeeded in reducing the quantity of water that it utilizes per gallon of product produced (the “water ratio”) by 13%. It also observed that more than a third (39%) of its facilities used recycled water and that through water projects at the community level, it had replenished 23% of used water in finished beverage products (DC, n.d.). Through partnerships with NGOs and governments, Coca-Cola had also built facilities for water treatment, restored watersheds, and improved sugarcane irrigation in Colombia, Thailand, and Australia. In 2014, it reported that it had succeeded in replenishing over two-thirds (68%) of the volume of final beverage products to nature and communities (DC, n.d.). The firm also invested in a tool, Ceres Aqua Gauge, to monitor its program for potential weaknesses and strengths. This tool has enabled the company to redouble efforts on water use efficiency, such that it expects to meet its goals of water replenishment five years earlier than planned, in 2020.
This assessment indicates the success and appropriateness of Coca-Cola’s response to the public issue that confronted it. It has shown commitment and a sincere approach to addressing the concerns of stakeholders, employing a multi-stakeholder approach, and reporting the progress it has made in public reports for purposes of accountability. In effect, Coca-Cola has taken and committed to the responsibility to rectify the problem with its operations and production processes effectively according to the interests and demands of stakeholders.
Part B: Public Issue relating to Tobacco Industry
One public issue relating to the tobacco industry is that of banning smoking in public places. Smoking results in absorption of smoke from tobacco into the bloodstream (Margham et al., 2016; WHO, 2007). The practice occasions health challenges for both smokers and non-smokers. Research has suggested that secondary smoke is just as harmful as direct smoking, influencing problems such as respiratory ailments, cancer of the lung, bronchitis, asthma, and diseases of the cardiovascular system. Smoking further endangers air quality, such that non-smokers still face risks to their health and wellbeing (WHO, 2007; Levy & Friend, 2003). This assessment implies that smoking bans are desirable in the endeavor to promote public health by controlling the risks of poor air quality and secondary smoke.
The primary stakeholders that the issue is likely to affect are smokers and local government authorities. The measure of banning smoking in public places would have a direct effect on smokers’ lives by restricting the places where these individuals could smoke. The action would restrict the behavior of smokers, especially in terms of their freedom to light up anywhere they choose and find suitable and any time they feel the need to smoke. Besides, it would affect the environments and social interactions of these individuals relating to smoking practice. Local government authorities would also be primary stakeholders in the measure of banning smoking in public places because they would have direct responsibility and authority to enforce the policy, monitoring its effects, and punishing potential violators. They would have the express authority and obligation to enforce the measure through active methods and actions of reinforcement.
Secondary stakeholders in the issue of banning smoking in public places would include the local community and its members and local health organizations and practitioners. Local community members would be indirect stakeholders in banning smoking in public places because the action would prevent the costs of exposure to secondary smoke on their health and wellbeing. The local community would benefit indirectly from the action through reduction of the adverse health effects of secondary smoke on health and reduced pollution of the air from cigarette smoke. Local health organizations and practitioners would benefit from the measure through reduced health risks as a result of lower exposure of patients to secondary smoke. In this way, there would be less strain on available healthcare resources at the community level.
Significance to my Family
My stakeholder role in relation to the tobacco industry and cigarette smoking in society concerns the adverse effects of secondary smoke on my own and others’ health and wellbeing. As noted earlier, smoking presents health challenges for people other than the smoker. Secondary smoke occasions similar problems in health as direct or first-hand smoke. In this context, the tobacco industry and smoking present risks for myself as an individual and for others in my community (WHO, 2007). As a rational human being, I desire to protect myself from the adverse health effects of secondary smoke, as well as contribute to efforts to protect other members of society from these effects.
The perspective that cigarette smoke, including secondary smoke, is harmful to my own and others’ health is an important basis of my position on the public issue of banning smoking in public places. Research findings on these dangers are an important source of bias in my experiences and perceptions concerning the issue. Therefore, I view smoking as a harmful behavior for both smokers and non-smokers, such that I am likely to support efforts to curb the practice in public places. Despite having a number of close friends and family members who smoke, this perspective and bias are likely to persist and inform my support for the banning of smoking in public places because of my belief that the behavior poses significant health risks for both these close friends/relatives and others in the society.
My view that each person has a responsibility to look out for others’ interests and wellbeing is also an important influence on my support for the ban. I believe that each person has a responsibility towards other members on a personal level based on the interdependent and social nature of human beings. In this context, I believe that it is important to protect others from the potential harm of smoking and secondary smoke through a ban on the practice in public.
Significance to my Company
From the perspective of an executive in the tobacco industry, the action of banning smoking in public places is directly inconvenient for business. I believe so because of the effect of limiting the comfort, choices, and freedom of the industry’s customers while using its products (Gilmore, Branston, & Sweanor, 2010). For the industry, an important part of effective marketing and promotion of cigarettes as a product is to portray their use as comfortable and appealing. The ban on smoking in public places is a direct contradiction of this effort and has the potential to stigmatize clients of the industry and portray the practice of smoking as unpalatable and as a health hazard. Enforcement of the action would serve to discourage smokers and potential smokers from the practice, thereby undermining the size and robustness of the market for the tobacco industry.
The tobacco industry executive would need to view the action from the perspective of CSR (corporate social responsibility). CSR necessitates business self-regulation to contribute to societal goals such as social wellbeing, population health, environmental health, and human rights (Banerjee, 2009). The executive has to consider that in modern times, CSR performance has become a critical part and determinant of the impressions and perceptions of companies and their brands in the market. In this context, the executive would have to consider the importance of the tobacco industry and firms’ sensitiveness to the society’s goals and interests, primarily in relation to the findings that cigarette smoke, including secondary smoke, has adverse effects on human health. In this context, accepting a ban on smoking in public places would likely be a suitable compromise or middle ground between the society’s desires to restrict the use of the products totally, based on the view that they are harmful, and the tobacco industry’s business objectives.
Significance for the Country
The significance of banning smoking in public places at the country level concerns the need to achieve a suitable balance between relevant health and economic issues. On the one hand, as discussed above, smoking is harmful to the health of both smokers and non-smokers. The government’s interest in creating and enforcing policies that promote population health would dictate the adoption of the ban to reduce the burden of adverse health effects emanating from smoking. This action would reduce the strain on health resources in the country and ensure that the population is more healthy and productive (Gilmore et al., 2010). On the other hand, the government benefits from tax income from the tobacco industry, which helps to fund government expenditure and efforts to provide public goods and services, including health, education, housing, and security. At the same time, the government has a responsibility to support business performance and boost the economy. The tobacco industry is an important source of employment for citizens and an important part of the economy (Smith, Savell, & Gilmore, 2013; Perera, 2020). These considerations would support the national government’s effort to balance the economic and health aspects. While it would support the tobacco industry from the perspectives of supporting entrepreneurship and business performance, the government could view a ban on smoking in public places as an appropriate measure to control the health burden of smoking at the population level.
The media is an important tool in informing the public and ensuring the accountability of public and private organizations and services. It plays an important role in informing the public concerning the positives and negatives of tobacco use (Coronel, 2004). Nonetheless, the media is also an important vehicle for the promotion of products, including tobacco products, especially from a commercial and profit-making stand-point. A responsible media fraternity would serve a policing and informing role to educate the public about the dangers of smoking and the effects of related public policies on the environment, public health, the economy, and society.
The media’s impact involves two sides, depending on their affiliations, freedom, and sense of responsibility. Industry-sponsored media communications portray tobacco use as “cool” and “classy,” largely overlooking the health concerns of smoking, while government communications emphasize the health aspects of tobacco use. In the popular media, the financial clout of the tobacco industry is a major influence on communications, with the media prioritizing the advertising incomes they obtain from the industry and serving their business interests by portraying the classy appeal of tobacco products. For example, the popular media portrays Phillip Morris tobacco brands as “vintage” products that are “naturally gentle and mild” for “those with keen, young tastes,” and Tipalet cigarette brands as appealing and manly, as evident in the slogan “Blow in her face, and she’ll follow you anywhere.”
“Discussion case: Coca-Cola’s water neutrality initiative” (DC) (n.d.). Discussion case, pp.43-44.
Banerjee, S. (2009). Corporate Social Responsibility: The good, the bad, and the ugly. London, UK: Edward Elgar Publishing
Coronel, S. (2004). The Role of the Media in deepening Democracy. UNPAN Document Management System article. Retrieved from http://www.changecommunications.org/docs/dib/dibengunpan010194.pdf
Gilmore, A., Branston, J., & Sweanor, D. (2010). The case for OFSMOKE: How tobacco price regulation is needed to promote the health of markets, government revenue and the public. Tobacco Control 19: 423-430.
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