In this paper we will take a closer look to a discrimination lawsuit towards the Coca-Cola company that took place back in 1999. The result of the lawsuit was that the above-mentioned company payed $192,5 million to 2200 present and former employees. This was the largest racial discrimination settlement in the United stated history. In my paper we will analyse the fundamental issues within the company. We will also take into consideration the immediate problem that the company faced and were not dealt with properly. We will also analyse some of the alternative course of action that the company could have used in order to avoid this problem. Even more we will go through some strategies and actions that would be beneficial for the company to use in the future to avoid similar consequences. The company should focus on the structural changes within in order to get an effective diverse management. This is where the human esource (HR) team has to play the major role and implement policies and regulations to avoid any kind of discrimination. Another great policy to implement would be the Equal Employment Opportunity policy or EEO. However, the are that is in my opinion the most crucial one is to emphasize the importance of good leadership. Because it is obvious from the paper that the fundamental problem was the inability of the company to manage diversity.
My opinion is that the lack of corporate diversity leadership was the cause of the lawsuit and for this reason I believe that using EEO policy which implements moral values that are turned towards respecting and accepting differences in others. So, following this approach would be the best long-term course of action for the company to avoid similar problems in the future.
Congress enacted Title VII of the civil Rights Act of 1964 to prohibit discrimination based on sex, among other protected traits. Now, many times amended, Title VII states that ”employers may not: discriminate against individual with respect to…compensation, terms, conditions, or privileges of employment because of sex or limit, segregate, or classify his employees or applicants for employment in a way which would deprive or tend to deprive an individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s modifiers” (Tyson, 2005).
In 1999, a lawsuit towards the Coca-Cola company was raised by four employees of the company at the time. All four plaintiffs were African – Americans. The topic they brought up were discrimination issues regarding promotions, merit of pay and work evaluations. Moreover, in the next months was found that more than two thousand two hundred employees sharing the same race were also discriminated upon. However, the Coca-Cola company denied all the accusations even after the lawsuit which was concluded with a settlement of $192 million. After the lawsuit the company has been closely watched for several years by a special team in order to assess their progress regarding this specific area. The controlling team confirmed that the company had made substantial progress during the ”observation” period.
According to the Coca-Cola Company (2009), the minorities in 2009 represented only 34% of their workforce. At that time the biggest problem in the company were the discriminatorily practices used by the HR department. The company itself did not have a defined structure regarding job posting and promotions. At that time most of the managers where white people who were given a great amount of discretion, which resulted in that the minorities were unable to fairly compete for any open position (Coca-Cola Company, 2009). Even more shocking was the fact that the four plaintiffs showed statistics which showed that African-American employees used to earn significantly less than their Caucasian co-workers, and they also argued that there was a system in place for professional limitation towards their minority. This are some of the practices used within the company that lead to the lawsuit in the first place. Perhaps with the right leadership and strategies put in place, the lawsuit could have been avoided.
What I could understand form all the facts at our disposal is that the settlement was a sort of calming pill for the employees. The reality is that the discrimination was not restricted to only African-American but to other subgroups to. For this reason, I believe that the company paid out such a large settlement in order to avoid the situation to escalate even further.
As a global brand, Coca-Cola should have been aware that this kind of ”accidents” can destroy a company’s name. Planning and implementing diversity management strategy is paramount for them to be able to survive. That symbiosis between employees’ and organizations’ values is the key to a sustainable work place. My opinion is that there are two main factors that were responsible for these events. The misguided HR department practices and the lack of involvement from the top management of the company. From my research I found out that previously the lawsuit there where many complaints filed by minorities regarding discrimination at the workplace. The company should have taken the complains seriously and they should have investigated and took proper action in regards, but they ignored them.
As I mentioned before in the abstract the first thing that the Coca-Cola Company must change is the agent strategy and the recruitment policies used by the HR department. According to Newton (2016) the change agent strategy helps the company rebuilt a new organizational culture for its employees. Moreover, this strategy gives a better understanding of how a company can change and how should the HR management work. However, the recruitment policy refers to a clear and concise procedure in order to avoid biases. As suggested by EU commission (2001) this strategy can be implemented by Coca-Cola with hiring more minorities than already are part of the company and also women or people with different beliefs. Supporting the LGBT by recruiting people that have different sexual orientation and by balancing theoretical skills and practical skills of employees.
Secondly, thay could also implement the Equal Employment Opportunity (EEO) policy in every department of the organization and for every employee in order to avoid discrimination. Even more, this would help individuals to understand and accept the differences and make it easier for them to respect each other. Nonetheless, managing a diverse company is not easy, misunderstandings among employees are frequent and need to be dealt quickly and effectively (US Commission, n.d.).
The last thing I want to talk about is the management of the company. The role model of any employee within the organization he is working should be his direct superior or someone even higher than him. A good leader is someone smart enough to think outside the box, it has to be able to understand and accept the differences of others and be a friend to all employees. Thus, if positivity attracts more positivity, that will also be the case with kindness and acceptance within the company. Moreover, good leaders support their qualified personnel to participate in managerial programs. However, on the other hand they have to be able to overcome certain challenges in order to improve their employees required qualifications for such program (US Commission, 2004).
To conclude, organizations that are able to manage a diverse workforce have the capacity to cover a broader customer satisfaction spectre due to various employees within the company and thus be more globally successful. The strategies discussed previously could make a significant impact if correctly implemented. Moreover, to achieve a better outcome, is advisable for the company to apply all of the policies and practices one by one. Never the less, the most suitable strategy in my opinion is the Equal Employment Opportunity policy. If implanted correctly it is like a third party that works, the problem inside-out in the organization.
Along term solutions for this discrimination issue would be if the top management, including the Chief Executive Officer are personally involved and committed to the principles of EEO policy. If I have to make a prediction if the Coca-Cola brand will completely remove this mark from its resume, I would say yes. We are now in 2018 and Coca-Cola is still the brand that is associated with fun and sponsors almost every major sporting even on the planet on yearly bases. However, this does not mean that if something similar would happen again, that it would go away so ”easily”.