A Look into Coca-Cola’s Role in India’s Water Trouble
Throughout the 2000s, Coca-Cola defined the quandary between industry, environment, and government in a case that made waves both at a local level and on the international stage. In response to a series of allegations by NGOs, most notably the India Resource Centre (IRC), Coca-Cola set out to change both their practices and their new global emergence as an environmentally detrimental company (Hills and Welford 2005). This change did not come about readily, though. It took the rallying cries of concerned citizens, a host of government mandates, and the relentless stream of accusations from NGO’s for Coca-Cola to respond accordingly. I will employ an institutional analysis to help understand the actors at play in this case, how they are involved, the sources and limitations of their authority and power, and the ways in which they collaborate in order to better their cause. By using the Institutional Framework, I will analyze the roles that Coca-Cola, the Indian government, NGOs, and activist groups (such as citizen and student groups) played in the Coca-Cola in India case.
First, I will look at the largest institution in the case, Coca-Cola. As one of India’s largest foreign investors, the company plays a vital role in the local economy (Hills and Welford 2005). From bottling operations to retail outlets, the company directly and indirectly influences a large breadth of Indian citizens. This economic and indirect social influence gives the company both power and authority, creating an institution that is difficult to challenge. However, with its poor environmental accountability, activists were capable of driving change from the ground up. In this way, much of the company’s authority was stripped when proven that their environmental responsibility was lacking, thus making them vulnerable to attack from critics. Though the company was able to ultimately recover from the public blow, they had to respond to growing pressure to improve their industry practices.
The second institution I will examine is the Indian government. A key player in this case, the government served as one of the main influencers in driving change from the polluting company, as well as one of the main sources of information for the public. The institution with arguably the most power and authority in this case, the government serves as the regulating entity. Though initially weak in terms of regulations, with enough pressure and backing from local entities the Indian government was able to increase the rules on Coca-Cola through court rulings. Much of the government’s authority also came from their ability to publish scientific resources on the impact that Coca-Cola had on the environment (Hill and Welford 2005). The government in a sense collaborated with both Coca-Cola and the activists, recognizing the economic impact that Coca-Cola had on the country but also responding to the pleas of the people.
NGOs are the third group of institutions represented in the case. NGOs serve as the source of salience for the issue, raising awareness of Coca-Cola’s poor health issues and unremittingly pursuing government action. The source of NGOs’ power comes from their ability to influence policymakers by raising awareness to the cause, however their ability to actually enact policy change themselves is limited. Their authority becomes limited when some of the facts that the NGOs propose against Coca-Cola are disputed, thus tarnishing their reputation as information-providers. By working with activist groups and government alike, the NGOs were able to influence the company to respond to concerns about its impact.
Finally, the last institution I chose to analyze is the activist groups such as the student movements around the globe. These groups helped motivate social change, from local riots at the Coca-Cola bottling facilities to challenging schools to end partnerships with the company internationally (Burnett and Welford 2007). While the groups were successful in raising the salience of their issue along with the NGOs, they were severely lacking in both power and authority because of their absence of a centralized organization. The groups were diverse and distant, arising in different pockets of the globe. Even so, by partnering with both the government and NGOs, the activist groups were able to get their voice heard. Further, by motivating individuals to take action against the company, they were able to make a big impact on the finances of the company as a whole (Hills and Welford 2005).
The collaboration between the latter three groups mentioned above helped raise concern about the harmful practices of Coca-Cola, thus coercing the company to change its practices in India. While I did not mention all of the institutions involved, I chose the four that I found to be the most influential in the case and in the outcome today. By looking at the roles each institution played, we can understand how Coca-Cola responded to growing environmental and social pressures to enact change and better their footprint in India.
Burnett, Margaret, and Richard Welford. 2007. “Case Study: Coca-Cola and Water in India: Episode 2.” In Corporate social responsibility and environmental management,Anonymous : Wiley InterScience, 298.
Hills, Jonathon, and Richard Welford. 2005. “Case Study: Coca-Cola and Water in India.” In Corporate social responsibility and environmental management,Anonymous : Wiley InterScience, 168.