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    Coca-Cola: Diversity Essay (2422 words)

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    Analysis of an Organization: Traci Jancasz June 15, 2010 MGT 540: Diversity Professor Venecia Morris Graduate School of Management Table of Contents Introduction3 Racial Discrimination Issues3 “Quota Cola” Case3 Cincinnati Case4 Hawaii Case4 Coca-Cola Company Reaction to Lawsuits5 Analysis of Coca-Cola Diversity Initiatives8 Works Cited10 ————————————————- Introduction In order for any organization to flourish, there must be inclusion of cultural diversity throughout.

    In saying that, the management of diversity in an organization is a direct reflection of realizing, accepting, and acknowledging differences, whether it is based upon race, ethnicity, age, etc. The following report will focus on the diversity issue of racial discrimination that the Coca Cola organization has been dealing with for a great deal of time. There will be evidence analyzed of several cases dealing this issue for the past ten years.

    In addition, the analysis will go one step further by referencing the various programs that have been adapted, in order to deal with the diversity issues, as well as what the organization can and should be done to avoid future problems. ————————————————- Racial Discrimination Issues Although the Coca-Cola Company has had a long-standing reputation for its diversity programs, there have been several discrimination cases that have been filed against the organization within the last decade.

    Even though in some of the cases filed, the organization is denying the charges, it still must react to the allegations in order to comply with opinions from both internal and external stakeholders. In all the cases that will be mentioned, management is accused of underpaying, creating hostile work environment, and general discrimination regarding whistle blowing. “Quota Cola” Case The case brought forth in 1999 and settled in 2000, set the stage for a great deal of changes to be made in the Coca-Cola Company.

    Four black, dissatisfied employees filed a racial discrimination lawsuit based upon charges of Coca-Cola underpaying them since they were black and creating a hostile work environment. This case ended up becoming a class-action lawsuit that was settled out of court. More commonly known as, “Quota Cola Case”, it opened the flood gates for many more cases of racial discrimination allegations to be brought against Coca-Cola. The settlement for this case, with all additional fees totaled a little over $475 million, which covered all “salaried blacks employed by the organization in the U. S. rom April 22, 1995 to June 14, 2000. ” The settlement and fees not only included the salaried employees, but also donations to such organizations as: NCAA (national effort and Atlanta Coke Bottler), Minority Suppliers and Contractors, Coke pension funds, and other minority activism and non-profits (Things Go Better with Quotas? Case 26: Quota Cola! , 2002). Even though there was a great deal of changes that Coke went through as a result of the previous case, which will be discussed later, there have been two other cases revolving around racial discrimination. Both cases are currently still on-going in the court system.

    Cincinnati Case Another class-action lawsuit was filed in October of 2001 by a group of approximately 1,000 African-Americans that worked for the company since 1995. The allegations of the case accuse Coke of “creating a hostile, intimidating, offensive and abusive workplace environment for its African-American employees. ” Claims stated that supervisors allowed white employees to both physically and mentally abuse minority employees, minorities (including Asians and Native Americans) were disciplined more sternly than white employees, and were denied overtime and promotional opportunities.

    A spokeswoman for Coca-Cola made a generic statement in response to the accusations, stating that the organization “does not tolerate discrimination of any kind” and that if there are any allegations, it is taken seriously and dealt with quickly. On the other hand, Kevin Johnson, African-American and former HR manager (appointed after the first lawsuit), had some insights into the organization that was stated in a memorandum regarding the evaluation of race relations at the plant.

    He notes that there is a “very apparent need for education in the area of racism, diversity and fundamental training for supervisors and key roles in the organization. ” Additionally, Johnson explained the workers as being “tense” due to “disparate treatment” to minorities. The judge that awarded the case to become a class-action lawsuit informed the plaintiffs that they will have to seek monetary compensation separately (Lovel, 2003). Hawaii Case Most recently, in early 2009, two former Coca-Cola employees filed suit against the company.

    Both of Asian ancestry, the plaintiff’s claimed that they had been fired for whistle-blowing on an executive that was pressuring employees for positive reviews, in order to receive increased bonuses. Months after a complaint was filed with the organization’s hotline the two men were terminated from their long-standing positions. There was an attempt of their part to communicate with the vice president of HR, but their efforts were not reciprocated.

    The two employees, one a sales center manager and the other HR manager, also claimed that they were discriminated against by Coca-Cola executives , who are white, not only because of their Asian ethnicity, but also since they were over 40 years old (Magin, 2009). Theses three cases prove that, even though there are programs and procedures put in place to avoid diversity issues, especially that of racial discrimination, this is an on-going problem within the Coca-Cola organization. ————————————————- Coca-Cola Company Reaction to Lawsuits

    In response to the allegations and requirements of the “Quota Cola” case’s settlement, Coke took a hard look at their diversity initiatives and made some significant changes. Some of the key features of focus include the following: 1. Become a Fortune 500 Quota Company: Among other Fortune 500 companies, Coke agreed to make a great effort in the hiring and promotional practices of as many non-white employees as possible and to serve as a model for other companies. 2. Responsibilities of the Board of Directors: The Board must be a representation of all racial classes. 3.

    An independent Task Force: Coke agreed to abdicate its responsibility to the shareholders by allowing an outside “diversity” body, termed “A Seven Member Task Force”, the purpose of which is to ensure that the right numbers of persons of color are hired, promoted, and contracted with according to the terms of the settlement. This outside body will have unprecedented power to force Coca Cola to hire persons of the right color at all levels of the company, without regard to years of service or other demonstrable qualifications (besides, of course, the color of their skin 4.

    Review by Joint Experts: Coca Cola has “voluntarily” agreed to plaintiff demands that the company use mutually agreed-upon “experts” to review the company’s personnel policies and to prepare a minority-oriented “Joint Expert and Recommendation” to the racial task force (see 3, above). 5. An independent Ombudsperson: Coca Cola is required to hire an allegedly “independent” ombudsperson (kind of an unofficial mediator), with approval of the minority special interests.

    This supposedly “independent” person will address internal reports of discrimination and retaliation and “independently” monitor the handling of complaints by Coca Cola’s personnel department. 6. Monitoring: The Task Force has the power to force Coca Cola to report the promotion and hiring of blacks and other non-whites within the company. These reports will go to the Board of Directors, among others. 7. EEO Performance: The “Compensation Committee” will determine whether the company has hired or promoted sufficient blacks and other non-whites. Managerial bonuses will be based upon individual managers’ ability to hire, romote or subcontract with the largest possible number of non-whites. This “racial performance appraisal” will be distributed annually to all employees, managers, and directors. 8. Limitations on managerial discretion: The Task Force will have the power to penalize managers if they do not hire or promote sufficient numbers of non-whites. Furthermore, the Task Force will force the company to allow any disgruntled minority to challenge (appeal) promotion or hiring decisions by management if such decisions seem to result in too many white employees being promoted. . Meaningful mentoring: Coke’s race-based Task Force will ensure that employees who are non-white will have access to meaningful mentoring and professional opportunities. No similar support for white employees is mentioned in the settlement agreement. 10. Proper EEO compliance: Coke’s race-based Task Force will ensure that Quota-Cola properly develops its Affirmative Action Plans under Executive Order 11246. [This is an inside joke by the racial quota lobby: In reality, EO 11246 was signed by Lyndon Johnson on Sept. 4, 1965 and was completely race-neutral! Johnson’s original Order required only that employers not discriminate in any way on the basis of race, sex or national origin. The quota lobby has repeatedly amended EO 11246 so that now it defines affirmative action almost entirely in terms of racial quotas, targets and goals. ] 11. Diversity training: The race-based Task Force will force Quota-Cola to put its employees through political re-education training wherein employees learn that hiring the right number of the “correct” skin colors is a good thing.

    Managers will be forced through this re-education regimen once a year; lower level employees will be forced through his re-education regimen twice a year [ (Things Go Better with Quotas? Case 26: Quota Cola! , 2002) ]. In addition to those listed, Coke has established a Diversity Review Committee Charter. This committee, made up of no more than three people, is established by the Board in an effort to assist in reviewing company policy and practices. Specifically public issues that shareholders, Coke, the business community and the general public are concerned with.

    There is on-going diversity training and development for the committee, which allows them to serve as a liaison between shareholders and management [ (Coca-Cola Staff, 2009) ]. There have been other initiatives made by the company that aided in it consistently being ranked on the Diversity Inc. ’s Top 50 List. As recently as 2009, the Coca-Cola Company was ranked No. 17 on that list [ (Staff, 2009) ]. The list is derived from surveys that are submitted, voluntarily, by 256 corporations. In addition, the organization has been awarded for its efforts in diversity.

    Most notably is the top rating for the Human Rights Campaign Best Place to Work, Top 40 Best Companies for Diversity, by black enterprise Magazine (2009), and America’s Top Corporation for Women Business Enterprises. The following graphs are quantitative representation of the slight increases in Coke’s diversity. (Our Progress, 2009). ————————————————- Analysis of Coca-Cola Diversity Initiatives The analysis of this organization and more specifically how it dealt with the diversity issue of racial discrimination should begin with the outline of the basic definition of the subject matter.

    Racial discrimination is most commonly thought of a superior race dominating and even holding back the progress of another race. In the business world, this is usually thought of as white managers being in the superior role and minorities (blacks, Hispanics, Asians, etc. ) being the latter. The Civil Rights Act of 1964, prohibits discrimination in education, housing, public accommodations, and employment. Since its inception, organizations have attempted to find the right diversity methods that not only comply with regulations, but also meld with the company culture/environment.

    There are various paradigms or approaches that organizational leaders have developed and implemented that allow for organizations to manage diversity. In relationship to the cases, there are two such paradigms that should have been followed by Coke. The first is the Discrimination-and-Fairness Paradigm, which “makes efforts to recruit and, to some extent, to retain diverse employees, but treats all people within a given social demographic category as the same. There are issues that go along with following this paradigm, which include that the company may not have a developed strategy for diversity management and it may leave minorities without a true voice in the company. The notable paradigm is the Access-and Legitimacy Paradigm, which companies “accept and celebrate differences so they can better serve their diverse pool of customers” (Sondak, 2011). In reading the cases and has reacted, thus far, it appears that they have transitioned from utilizing the Discrimination-and-Fairness Paradigm to the Access-and Legitimacy Paradigm.

    There is a possibility that the organization could have avoided many of the discrimination lawsuits by reinforcing the tactics of the Access-and Legitimacy Paradigm. The company was in great need of revamping their policies and procedures in diversity and the “Quota Cola” suit made them take those drastic actions. Although these changes were necessary for continued success of the organization, it is difficult to praise the organization for changes that they were forced into. The cases all mentioned that there were issues with management’s treatment towards minorities, i. e. ostile work environment. Even though the programs, procedures and committees are established at the corporate level, the real diversity issues are happening in the plants. There is no mention in any of the literature researched that Coke does any follow-up with their plant managers to evaluate the progress of diversity initiatives. In addition, since the first case had such a large out of court settlement, this quite possibly opened the flood gates for other such cases to be filed. What is it Coke’s best interest in the long-run to not have their day in court’some might say no.

    The changes that Coke has made in regards to diversity in the workplace have been significant to the organization. This is reflected in the many awards and recognitions the company has received. In order to continue success with diversity, it is important that Coke is constantly evaluating not only corporate policy, but also that the policies are being implemented appropriately. As previously stated, the lawsuits were all stemming from issues with management from the plants. These managers are a direct reflection of the organization and should have random diversity evaluations on a regular basis.

    This type of step will only add to the already company diversity strategy of being a model for all other top Fortune 500 companies. ————————————————- Works Cited Coca-Cola Staff. (2009). Public Issues And Divesity Review Committee Charter. Retrieved June 15, 2010, from The Coca-Cola Company: www. thecoca-colacompany. com/investors/governance/public. html F. Dobbin, A. K. (2007). Diversity Management in Corporate America. American Sociological Association , pp. 21-27. Johnston, L. (2006, August 25). Coca-Cola doubles diversity efforts.

    Retrieved June 15, 2010, from Atlanta Business Chronicle: www. atlanta. bizjournals. com/atlanta/stories/2006/08/28/focus4. html? tt=printable Lovel, J. (2003, May 2). Race Discrimination Suit Targets Coke Bottler CCE. Retrieved June 13, 2010, from Atlanta Business Chronicle: www. atlant. bizjournals. com/atlanta/stories/2003/05/05/story1. html Magin, J. (2009, February 20). Ex-Hawaii Workers Sue Coca-Cola for Discrimination. Retrieved June 15, 2010, from Pacific Business News: www. atlantabizjournals. com/pacific/stories/2009/02/23/story5. tml Our Progress. (2009). Retrieved June 15, 2010, from Coca-Cola: http://www. thecoca-colacompany. com/citizenship/our_progress. html Sondak, K. c. (2011). Opportunities and Challenges of Workplace Diversity. Upper Saddle River: Pearson Education, Inc. Staff. (2009). No. 17: The Coca-Cola Co. . Retrieved June 14, 2010, from Diversity Inc. : www. diversityinc. com/article/7278/No-17-The-CocaCola-Co Things Go Better with Quotas? Case 26: Quota Cola! (2002). Retrieved June 13, 2010, from Adversity. Net: www. adversity. net/c26_quota-cola_1. htm

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