The Possible Risk Management Strategies for Coca-cola Company

The Coca Cola Company and its network of bottlers are operating in more than 200 countries so it is obligated to follow the local rules, policies and regulations. Otherwise the high likelihood of this risk will incur significant penalties which should exceedingly damage the company’s brand reputation. In 2013 the company was fined$70,000 for violating Ontario health and safety regulations in their Brompton plant (Anon, 2013), in 2015 the company was fined for defrauding tax in America around$3.4billion (Heyed, 2015), in addition company was fined $61000 for safety violation in their new jersey distribution warehouse in the same year (Hardcastle, 2015). Occupational safety and health administration(OSHA) accused that the firm constantly breached the regulations like congested emergency exit routes, insufficient emergency exits and unshielded floor holes that can cause severe danger to their staffs (NBCnews, 2015). Furthermore in 2017 Coca-Cola in Israel faces a giant $17.1 million (country’s highest ever antitrust fine) fine for antitrust penalty (Globes, 2017).

It can be a challenging issue for Coca-Cola Company to fulfill various designs of constituencies, even though the firm is participating in political avenues that can exert influence on laws, regulations and policies which impact on their business operations. The company vice president of Corporate affairs is responsible to oversee these activities, however in order to actively review the policies and the company’s participation and performance in political contributions, public policy advocacy and trade association memberships the Coca-Cola Company has appointed a Public Issues and Diverse Review committee to the Board of Directors who plays a critical role in managing the various risks that the company faces (The Coca-Cola Company Corporate Website, 2017) The company has to reduce its likelihood by Risk avoidance, is the better response strategy to eliminate the risk completely.

Their Division risk committee comprised of a cross functional so geographical management team have to meet regularly each year to identify, assess, prioritize and division specific risks of the firm (power, 2007). For the development of regulatory compliance risk rate companies must hold sufficient information regards to the nature of problem as it helps to systematically identify the outcomes related to the policy goals (OECD, 2000). Develop and implement ethical anti-fraud policies based on COSO framework guidance (Whistle blower) across the organization helps to respond to the risk as early as possible (CIMA,2009). Accordingly Coca-Cola Company must develop its data collection mechanisms by having constant dialogue with both the company and external regulators. Further those information needs to be managed appropriately along with detailed audit trails and accurate reporting. In addition rigorous training for the employees on the subject of operational efficiencies, code of conduct and work safety would create awareness on company’s culture of ethics, values and principles to them, thereby this understanding will help to alert all employees regarding the consequences of risks and the importance to mitigate them (Volkov, M., 2014)

Also as a step further the Coca-Cola Company must continuously monitor the existing controls and systems to ensure that they are implemented and followed accurately at no cost and if not along with the company’s senior leadership team it must review and identify the mechanisms to improve the effectiveness of mitigation efforts. Also implementing network based GRC systems help to capture and report organizations corporate and legal structures, create and apply a risk taxonomy, evaluate risk and help to track compliance with internal codes of conduct or regulation.