Role of Corporate Reputation
Corporate reputation is normally based on the past actions as well as the likelihood of the future behaviuor of a company. Good corporate reputation enables a company achieve its corporate objectives.
It enables a company and its stakeholders predict the future performance of the company. Corporate reputation is an asset to a company as it helps improve the value of the company in the financial marketplace. This implies that it helps stabilize the company’s stock listings in the stock exchange.
It gives a company the ability to charge fair prices for its products and services. It helps achieve customer preferences especially in cases where the products and services offered by the company have similar prices as well as quality to those offered by other companies. Thus it helps build customer loyalty based on its actions towards compliance to ethical values as well as social responsibility and this in turn enables it improve its market share. Suppliers will have trust in the company due to its ability to offer fair trading terms. Social responsibility improves customers’ trust towards the company therefore making them patronize the company’s brands. The company will definitely increase its corporate worth and gain sustained competitive edge over its competitors.
Good corporate responsibility stimulates stakeholder support for the company especially during times of controversy. Key stakeholders who include suppliers, the company’s largest customers, current employees as well as opinion leaders within the business community usually provide support crises that could rock the company’s business operations and market shares.
Factors considered in assessing corporate reputation
Stakeholder groups use different criteria to assess corporate reputation which include the social responsibility of the firm, its financial performance, product and service quality as well as the workplace environment. Other criteria include measuring the emotional appeal of the firm’s brand as well as the vision and leadership of company. Consumer-specific reputation takes into account the product and service quality as well as the emotional appeal of the firm’s brand.
It also considers the vision and leadership of the firm. Investor-specific reputation criteria majors on the financial performance of the organization, its leadership and vision and finally the product and service quality. Employee-specific reputation considers the workplace environment, the company’s vision and leadership as well as social responsibility. It also takes into account the financial performance of the company, its emotional appeal towards employees as well as product and service quality.
Supplier-specific reputation criteria majors on the financial performance of the firm as well as its emotional appeal towards suppliers. Finally, reputation specific to the general public measures the company’s social responsibility as well as emotional appeal of its brand to the general public. The corporate reputation factors are usually not consistent across stakeholders since corporate reputation is normally a situational construct. Thus the factors are relative to decision s the stakeholders are considering.
Steps to remedy concerns raised by Coca Cola stakeholders
All the stakeholders of a company are very important for its business growth and therefore addressing all the concerns raised by different stakeholders helps maintain trust from the business stakeholders and achieve business growth. Addressing the concerns requires various steps which include: Develop a diversity policy to address discrimination in the workforce and promote equal treatment of the culturally diverse employees.
The diversity policy will address equal employment opportunities, remuneration, promotion based on merit among many other equality issues. This would motivate workers and help the company avoid losses attributed to lawsuits. The company will develop an article of association which gives every employee the right to involve in association as long as he or she follows the guidelines provided for in the article and also respects the regulations of the company.
In order to avoid inflated earnings which are as a result of channel stuffing and other financial report fraud cases, the company will retain independent external auditors to audit the financial reports of the company before being presented to the public. The company will also ensure that shipping is done specifically to the orders received from wholesalers and retailers. The company will take extra precautions on the products it sells in the market. It will ensure that all products set for the market are tested in the company’s laboratory to ensure proportionality of the ingredients. All the raw materials have to be tested in the laboratory to ensure that they are fit for human consumption before they are used for making the products. In promoting the health of customers, the company will provide accurate and adequate information about the ingredients used in the preparation of the product on the bottles and in its product advertisement so as to enable customers make right choices.
It will also sponsor health education through nutrition agencies. The company will adopt fair trading policies which ensure that suppliers are provided with all the terms of the agreement before signing contracts. The company will agree on terms which benefit both the supplier and the company and adhere to the guidelines of the contract in order to gain supplier trust. Measures will be taken to preserve the water catchment areas in all its regions of operation and more support provided to communities with water catchment facilities. Finally, measures will also be put in place to ensure that all the waste from the industrial plants is properly treated before being disposed of.
Coca-Cola’s environmental initiatives
Some of the company’s environmental initiatives do not seem to be sincere. Coca-Cola has distribution centers and industries worldwide while its bottle plant only recycles plastic bottles used in North America meaning that it does not recycle other bottles in other continents. These initiatives are not long-term and do not aim at achieving environmental sustainability. Providing facilities for water catchment without preserving the main water catchment areas can not achieve sustainable development. This is also evidenced by its initiative to provide $20 million dollars to help protect freshwater resources without making the project long-term considering that it is among the companies which consume large amounts of freshwater worldwide.