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Leadership and Ethics

Looking closely at the decline of Coca-Cola’s image during the turn of the 21st century, it can be argued that its scandals and ethical dilemmas have provided the decline in its sales, profitability, and growth. Since the objective and design of the company remains centered on consumer loyalty and brand recognition, the existence of such rumors pulled down the ability of the company to grow and furthered the continued rise of problems. It was like a domino effect that overlaps into other issues.

Such realities then illustrated the inability of Coca Cola’s upper management to facilitate effective solutions in these given issues (Ferrell, Fraedrich, and Ferrell, 2006, p. 311). Moreover, the cases that Coca-Cola had been a part of remains to be controversial and struck an important point towards its capacity to handle issues and demonstrate accountability towards its business operations and decisions. The ethical issues from the production side, human resources, and to even stakeholders have really undermined the ability of the company to demonstrate effective corporate and business practices.

Likewise, these issues also backfired as the ability of the company to promote sustainable growth suffered and failed to make appropriate adjustments that can help alleviate the issue. Lack of Strong

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Leadership and Determination of Trends Assessing then the current challenge of Coca-Cola, one may observe that since the departure former CEO Roberto Goizueta, there had been troubles under the top management in their ability to handle issues related to the company.

In a way, they have only sought to consolidate opportunities to expand and allow Coca-Cola to dominate the world market without taking into account specific ethical considerations along the way. Given the fact that decision making is made by the leader, it is thus crucial that he/she knows the organization and how to handle particular issues related to work, productivity, and ethical standards (Forster, p. 492). Seeing this, the inability then of Coca-Cola to make effective adjustments to these ethical problems reflect the limited experience of leaders to handle ethical concerns.

Another probable reason for the continuous ethical issues faced by Coca-Cola through the years is the company’s inability to adjust to business trends. Given that the company has decided to expand globally, it carries along associated responsibilities and expectations that need to be fulfilled. However, since executives and decision making continues to be based on previous operational standards, it carries along a specific consequences. In a way, the ethical dilemmas faced by Coca-Cola are just manifestations of their inability to adapt to the increasing needs of today’s businesses to be socially and ethically responsible.

Overcoming the Obstacles and Recovering Seeing the damage done by the ethical problems of Coca-Cola, it can be argued the company has made considerable attempts to rectify its mistakes and learn from the past. Specifically, the company has made specific adjustments on how to handle employee diversity, handling of products, to even trying to settle issues in an appropriate manner (Ferrell, Fraedrich, and Ferrell, 2006, p. 315). Due to this, it can be expected that the company can recover from the turmoil it has created in early 2000 and try to come up with marketing strategies to effectively demonstrate consistency and growth.

Given these reasons, it can be argued that Coca-Cola would not end up like Enron. This is because the company has a rich organizational history and culture that transcends innovative business and established goals and objectives. Though the approaches made by the company are not a guarantee of effectiveness all the time, the mere fact that efforts are being made shows how the company is committed towards opening areas for change. The only question on this issue now is whether or not Coca-Cola can sustain these endeavors and adapt new ones that can suit current business trends.

Significance of Organizational Culture, Value Formation, and Strong Leadership Given the current situation of Coca-Cola, it is then essential that it takes into account not only the way the company can address the situation but also the ability of its workforce to reinforce such organizational culture and standard. By fostering an environment where everyone remains accountable and adhere to ethical principles, the company can then limit problems in the future. Specifically, employees also remain vital to this endeavor because they are the ones that influence direction and complement the goals and objectives of the company (Henn, 2009, p.

28). In essence, the ability then to bridge these areas together may be vital for Coca-Cola to sustain its endeavors related to continued sustainability and growth. Alongside the adherence to ethical principles and standards, the determination of organizational values through forming may also prove to be necessary. Here, employees are given the ability to adhere to what the company stands for and embed such ideals to how they administer their professional responsibilities (Forster, 2005, p. 498).

Thus, value formation is a significant approach for Coca-Cola because it opens up opportunities to rethink and reconsider things that need change or further development. Lastly, consideration must also be made in the leadership style by management from the CEO down to supervisor. Here, it takes account strong leadership and tries to address ethical issues effectively. Indeed, this may not be an easy feat to accomplish however, given the proper understanding and tools one can transcend over issues and facilitate change (Flynn, 2008, p. 40).

This perspective takes into account promoting competency, increased responsibility and accountability of each member’s role. By advocating this mindset, Coca-Cola can effectively administer suitable options that are aligned to its interests and the company’s stakeholders. Case 5: The American Red Cross, pp. 343-352 The different ethical problems that the American Red Cross is facing today showcase the ineffectiveness of leadership style and processes that the organization adheres to.

This specific case demonstrates the question of legitimacy and capabilities of its executives to fully implement rules, policies, and standards on how the ARC was designed. The transitions of chairman in the last ten years have been shrouded with controversy and somewhat damaged the reputation of the American Red Cross as an institution of service and volunteerism. Assessing the current issues faced today by the ARC, the idea of leadership and accountability remains to be minimal.

It may be true that the company has created and adopted specific standards and policies related to monitoring of finances and appropriation of funds according to specific disaster or calamity. However, it’s reinforcing powers remains to be minimal and the compliance remains construed with ethical and moral controversies (Ferrell, Fraedrich, and Ferrell, 2006, p. 346). These realities and actions of the people defeat the overall purpose of the organization and hinder the ability to facilitate effective means to reach out to people in need.

Ethical Culture and Inconsistencies Looking closely at ARC’s different cases, it can be seen that the organization’s ethical practices reflect loosely despite the fact that rules and standards are in place. The main problem here would be the organizational design of the ARC itself. Its defined rules only provide specific responsibilities and expectations among volunteers. Since money is derived from charity and associations with different corporations and business entities, the flow of income becomes readily available.

The tendency of this would be to promote corruption, misappropriation of funding and inefficiency on project allocations and disaster response systems (Ferrell, Fraedrich, and Ferrell, 2006, p. 346). These inconsistencies in turn result in poor management of funds and inability to facilitate the needs of victims according to the full extent that the ARC can give. Likewise, the design of the ARC as a non-profit organization furthers association by means of volunteering. It can be argued that loyalty would be a question here as some people are not really paid to participate in the program.

On the other hand, some would only receive a measly salary while the boards of governors are getting so much. In a way, it defeats the overall purpose of a non-profit organization as executives gain such big money during their tenure. Seeing this, the ethical culture in the ARC remains minimal due to inconsistencies from how executives enact decision making to the manner that monitoring remains to be minimal for the organization particularly on how it spends its funds. Lastly, the lack of appropriate and benchmark for rules concerning solicitations also impedes improving the ARC’s ethical culture.

The limited ability of both the government and citizenry to exercise monitoring furthers the opportunity to commit ethical problems for the organization. The issue here then becomes a question of how to exercise accountability not only to specific local representatives and executives of the ARC but also in the way the organization responds as a whole towards calamities and emergency situations (Ferrell, Fraedrich, and Ferrell, 2006, p. 352). Reaching Out For Change Given the scenarios surrounding American Red Cross, promoting change would require defining boundaries and increasing effectiveness in implementation and monitoring.

At the same time, appropriate sanctions and conditions must be reinforced to further better means to limit the occurrences of abuse and misappropriation of funds. In a way, these policies would only remain successful provided that executives recognize their roles as leaders and help consolidate means to make ARC more responsible, accountable, and responsive to its vision and objectives. Implementation and Monitoring A key then to lessen instances of corruption and embezzlement of charity funds is to strengthen the implementation of rules and ethical standards of the ARC.

This means that it should make each volunteer as well as its leaders responsible and accountable for every financial decision and objective made. The idea of implementing rules according to specific issues is to help members of an organization to adapt to policies and pursue behavior/s that is ethical and within the scope of their duties and responsibilities (Forster, 2005, p. 502). At the same time, monitoring how these funds are processed may also prove to be vital to optimize how funds are distributed to different areas. Since the scope of the ARC remains to be diverse, it needs to monitor how funds and donations are handled accordingly.

This can then prove to be supplemental for the organization because it can help build an image that the ARC is becoming responsible handling its finances. One good thing about monitoring is that it gives the assurance that organizations or companies seek to comply with what is expected of them and a sign that each one remains liable to any mistakes and inaccuracies committed (Flynn, 2008, p. 48). Improvements in Facilitation of Service Lastly, the American Red Cross may also consider exploring the potential of improving its services and responsiveness on disasters and calamities.

It may seek to develop partnerships and take advantage of the technology to improve effectiveness and efficiency. Since the purpose of the organization has always been to cater towards medical care and attention, it can use its services as leverage to become better. Rather than adopting policies on a case-to-case basis, it would be best if it tries to harness a comprehensive policy that integrates greater means to infuse the facilitation of ARC’s goals and policies. By trying to strengthen this part, the American Red Cross can fulfill its duties well and induce greater means to provide aid to victims.


Ferrell, O. C. , Fraedrich, J. and Ferrell, L. (2006) Business ethics: ethical decision making and cases. (US: Cengage Learning). Flynn, G. (2008) The Virtuous Manager: A Vision for Leadership in Business. Leadership and Business Ethics. (US: Springer), pp. 39-56 Forster, N. (2005) Chapter 12: Leadership and Business Ethics. Maximum Performance: a practical guide to leading and managing people at work. (US: Edward Elgar Publishing), pp. 487-535 Henn, S. K. (2009) Chapter 3: Why ‘Business Ethics’ Is Not Just About Corporations. Business Ethics: a case study approach. (US: John Wiley and Sons), pp. 23-35

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