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Evaluation of level of corporate responsibility courtesy of coca-cola bottling company in Anambra State

Evaluation of level of corporate responsibility courtesy of coca-cola bottling company in Anambra State

CHAPTER ONE

INTRODUCTION

1.1: Background of Study

          It has been observed by many economists and policy makers that the long run survival of any business organization, which in fact, is the most fundamental goal of every business cannot be guaranteed without a peaceful harmonious relationship with its communal environment.

          The above statement is born out of the fact that some Nigeria businesses usually collapse within a short time frame, not because of external factors like government policy, but simply due to their (the business organizations) policy formulation regarding the provision of social responsibility to the community in which the business is located.

          The society can be referred to as a system where there are three key players; government, consumers and firms other things being equal. The government is usually the umpire; if the government controls the system in favour of the firms, more firms will be born than die and more consumers will die than be born. As a consumer becomes increasingly scared, things will begin to go badly for the firm. If the condition persistently continues, more firms will die than born.

          As the years pass by the system continues to be controlled in favour of the consumers, things will really begin to look good for the consumers at the expense of the firms. This inter-change will continue until the government plays a neutral role in the system and that will bring the system to a balance. No commercial organization supplying goods and/or services will be able to survive let alone thrive unless it has customers who are willing to pay for those goods and/or services it provides.

          The evolution of business history as an academic discipline began at Harvard business school, U.S.A (United State of America) in 1920’s and ascribed to dean Donham (warner, 1996). Donham sought both to develop a research area which would examine critically the history of firm and to apply the lesson learnt from this to the current challenge faced by the business.

Business and society study all the interfaces between business organization and wider community in which they situate. While traditionally it was not considered part of business management to influence the operation of these interfaces, in the modern world manage must be active in these wider areas as they are within their own firms. This entry explores those interfaces examining the role of managers in advertising, marketing research and public relation. The application of business ethics concern for the physical environment, the use of technological changes and their impact on industrial relations, the awareness of political changes with new laws and new taxes and a recognition of demographic changes all have implications for the firm activities and each has a contributory influence on the general social awareness which modern manages require. Traditional theory sees a firm strictly as profit maximize. Business enterprises feel that public power in determining the survival of the firms are influence business response to social programmes. These special programmes are called social responsibilities of business.

          Social responsibility requires business organizations to consider their act within the framework of the whole social system. This implies that business organizations are responsible for the effectiveness of their acts anywhere in the system. It is an important part in the modern business administration in the sense that, management considers social effects as well as economic effect in its decision.

          Business does not exist in isolation nor in a vacuum of empty space; it has environment in which it operates and this environment is not static in nature. This business environment is the aggregate of the demographic, social, culture, economic, political and technological conditions that influence organization. The environment provides resources and limitations and determines opportunities open to and threats that can be faced by the business organizations. However business executives should realize that the healthy environment is the bedrock for survival and growth of any enterprise.

For the purpose of the study social responsibility might be defined as a concept that involves all activities of an organization in which their limited resources are expanded, appear and viable, but are socially desirable by the members of the society. Example includes awarding scholarship, financial support for charities, tarring of roads, sinking of bore-hole and so on.

          Social irresponsibility therefore is the ability of the failure of business organizations to pursue these policies, to make those decisions or to follow those lines of action, which are desirable in terms of objectives and values of the society.

          The research work is intended to study social responsibility in the area of provision of social amenities to the immediate environment by businesses and to examine whether coca-cola bottling company situate in Onitsha is socially responsible within its environment.

1.2 Statement of Problems

          In the early 1900s the mission of business organizations was primarily to utilitarian. But within the past few decade business organizations have move away from the traditional utilitarian model to take a more pro-active stance with respect to contributing to social responsibilities (Okafor and Ama 2002)

          Corporate enterprise has grown in size; the level of education has significantly increased and people now ask a lot of questions about their rights, privileges and responsibilities. Related to this is the fact that the awareness of social impact of business activities on the society as a whole is enormous but directly and indirectly (Aluko 1998). Based on the above assertion we usually here of some community revolting against the companies that are operating in their areas. For instance, when Enugu vegetable oil was in operation, Nachi people revolted against the company saying it was not being of any help to the community. Again in the year 2002 we heard that Ngwo people of Udi L.G.A in Enugu State stopped production at coca-cola company at 9th mile because of the absence of social irresponsibility.

          With increasingly awareness of consumers, and environmental concern now leading to conflict between the company and citizens clamouring for less pollution and more amenities, there is need to evaluate the level of corporate responsibility, courtesy of coca-cola bottling company, in Anambra State.

1.3: Objective of the Study

          The general objectives of this study were to determine the level of economic growth and associated with Coca-Cola social responsibility culture. However, the specific objectives were

  1. To determine the operational activities of Coca-Cola bottling company and how they fit into the doctrine of social responsibility, in Anambra State.
  2. To determine the relationship between social responsibility by the coca-cola bottling company and economic growth of Anambra State.
  3. To identify the financial implication of corporate social responsibility on the profitability of coca-cola bottling company in Anambra State.

 

1.4: Research Question

In the course of carrying out this research work the following research question was formulated and investigated

  • To what extend do operational activities of coca-cola bottling company necessitate provision of social responsibility issues in Anambra State?
  • To what extend does implementation of social responsibility by the coca-cola bottling company impact in the economic growth of Anambra State?
  • To what extend do social responsibility expenditure in Anambra State by coca-cola impact on the profitability of coca-cola bottling company?

1.5: Statement of Research Hypothesis

          The following testable hypothesis evolved from the stated specific objectives cum research questions.

H01: Operational activities of Coca-Cola Company in Anambra State do not necessitate provision of corporate social responsibility.

H0A: Operational activities of Coca-Cola Company in Anambra State necessitate provision of corporate social responsibility.

H02: Implementation of social responsibility by Coca-Cola company in Anambra State does not impact in the economic growth of Anambra State.

HA2: Implementation of social responsibility by coca-cola company in Anambra State impacts the economics of the State.

H03: Expenditure on corporate social responsibility made by coca-cola company in Anambra State does not impact the profitability of coca-cola company in the state.

HA3: Expenditure on corporate social responsibility made by coca-cola company in Anambra State impact the profitability of coca-cola company in the state.

1.6: Significance of the Study

          It is hoped that the result of this study would be of enlightening important to coca-cola bottling company and business organization, especially in Onitsha Anambra State. If would help managers to determine whether more input in social responsibility culture would mar or boost corporate image.

          Furthermore, it would add to the existing stock of knowledge on related topics, as literature review available for use, for the present and future researchers. The study would more importantly enable the owners or operators of firm/business organization to know how far they can go while cultivating the co-operation of the host community in order to achieve their goals or objectives.

1.7: Scope and Limitation of the Study

          The research intends to access the extent of social responsibility implications as they concern the coca-cola bottling company and Anambra State.

Limitations: to carry out a research is usually fraught with some difficulties mostly due to a host of problems like inadequate finance, inadequate time, inadequate library (literatures) materials, dishonesty and biases of questionnaire respondents, etc. this constraints applied to the study. However, attempts will be made to surmount them by sourcing more money, maximizing the available time, using the internet and e-library sources, and controlling possible bias of respondents.

1.8: Historical Background of Coca-Cola Bottling Company PLC

          Coca-cola originated as side fountain beverage in 1886 selling for five cents a glass. Early growth was impressive, but it was only when a strong bottling system was developed that coca-cola became the world’s famous brand. It entered into its first bottling agreement, in 1899. Two young attorneys from Chattanooga, Tennessee, USA, believed they could build a business around bottling coca-cola. In a meeting with chandler, the attorneys Benjamin F. Thomas and Joseph B. Whitehead obtained exclusive right to bottling coca cola across most of the United States (specifically excluding Vicksburg) for the sum of one dollar. A third Chattanooga lawyer, John T. Lupton, soon joined their venture.

          Between 1900 and 1909 the three pioneer bottlers divided the country in territories and sold bottling rights to local entrepreneurs. There were boasted by major progress in bottling technology, which improve efficiency and product quality. By 1909, nearly 400 coca-cola bottling plants were operating, most of them family owned businesses. Some were opened only during hot weather months when demand was high.

          In 1916 the birth of the contour bottler evolved. Bottlers worried that the straight sided bottle for coca-cola was easily confused with imitators. A group representing the company and bottlers asked glass manufacturers to offer ideas for a distinctive bottle. A design from the root glass company of Terrettante, Indiana won enthusiastic approval in 1915 and the new glass was introduced in 1916.

          New coca-cola brands were introduced in the 1950’s including Fanta, Sprite, Minute Maid, and Tab. In the 1960’s, Mr. Pibb and Melo Yello were added. In the 1970’s and 1980’s brought diet and cherry coke followed by powerade and dasani in the 1990’s. Today, hundreds of other brands are offered to meet consumer preferences in the local market around the world. The coca-cola bottling system has grown with roots deeply planted in local communities. This heritage serves the company well today as people seek brand that honour local identity and distinctiveness of local markets. As was true a century ago customers and communities are the foundation on which the entire business grows.

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