Running head: ETHICAL ISSUES IN BUSINESS REPORT PART 1 – BACKGROUND 1 ETHICAL ISSUES IN BUSINESS REPORT PART 1 - BACKGROUND 2 Ethical Issues in Business Report Part 1 - Background Tracey Butler BUS-340 September 11, 2016 Steve Wynne Ethical Issues in Business Report Part 1 - Background The summary of information regarding the business and its history The Coca-Cola Company is the world’s largest American-based manufacturer, marketer and distributor of carbonated beverages. It is headquartered in Atlanta, Georgia and currently sells over 1.5 billion bottled beverage drinks daily in many places around the global. Isdell & Beasley (2012) noted that Coca-Cola Company is known for its flagship brand product, Coca-Cola that was invented by pharmacist John Stith Pemberton in Columbus, Georgia in 1886. Asa Griggs Candler bought the brand and Coca-Cola formula in 1889 and incorporated the Coca-Cola Company in 1892. The company has managed to stay strong against the competition from other beverage manufacturing companies because of its strong global marketing strategy and the secret of the beverage formula that has been kept. Bodden (2009) stated that the beverage formula is only known by few top officials and is passed by word of mouth only and this has come to be known as the most guarded secret in American corporate industry. According to Lopez (2013) Coca-Cola Company manufactures four of the top 5 soft drinks that are sold around the world. Coca-Cola product is at number one with Diet Coke, Fanta and Sprite at numbers three, four and five respectively. The company operates world’s largest pervasive distribution network, distributing approximately 400 soft drinks products in over 200 countries around the world. The company has registered high and growing profits over years. However, Coca-Cola Company like any other company has had highs and lows in its progress to maintain in market share in the global market of soft drinks and beverages. Ferrell et al. (2010) stated that there are crises that the company has faced along the way that made it to loss sales and drop in revenue in some financial quarters. In the mid of 1999, Coca-Cola company was faced with a crisis in its Belgian market. The summary of the Coca-Cola Company Crisis in 1999 It was on 8th of June, 1999 when many school children fell ill after consuming Coca-Cola beverages. This made the Belgian Health Ministry to announce a ban of Coca-Cola drinks when it was suspected to have made over 100 school children to be ill in preceding six days. Most of these students complained of headaches, dizziness, nausea and discomfort and a few vomited and were sent home. The management of the school made efforts to investigate what was making their students to fall ill. According to Ferrell et al. (2013), the inquiry was able to reveal that the students had drunk Coke before they began complaining of their illness shortly after. The Coke, product of Coc ...

1. Running head: ETHICAL ISSUES IN BUSINESS REPORT
PART 1 – BACKGROUND 1
ETHICAL ISSUES IN BUSINESS REPORT PART 1 -
BACKGROUND 2
Ethical Issues in Business Report Part 1 - Background
Tracey Butler
BUS-340
September 11, 2016
Steve Wynne
Ethical Issues in Business Report Part 1 - Background
The summary of information regarding the business and its
history
The Coca-Cola Company is the world’s largest American-based
manufacturer, marketer and distributor of carbonated beverages.
It is headquartered in Atlanta, Georgia and currently sells over
1.5 billion bottled beverage drinks daily in many places around

2. the global. Isdell & Beasley (2012) noted that Coca-Cola
Company is known for its flagship brand product, Coca-Cola
that was invented by pharmacist John Stith Pemberton in
Columbus, Georgia in 1886. Asa Griggs Candler bought the
brand and Coca-Cola formula in 1889 and incorporated the
Coca-Cola Company in 1892. The company has managed to stay
strong against the competition from other beverage
manufacturing companies because of its strong global marketing
strategy and the secret of the beverage formula that has been
kept. Bodden (2009) stated that the beverage formula is only
known by few top officials and is passed by word of mouth only
and this has come to be known as the most guarded secret in
American corporate industry.
According to Lopez (2013) Coca-Cola Company manufactures
four of the top 5 soft drinks that are sold around the world.
Coca-Cola product is at number one with Diet Coke, Fanta and
Sprite at numbers three, four and five respectively. The
company operates world’s largest pervasive distribution
network, distributing approximately 400 soft drinks products in
over 200 countries around the world. The company has
registered high and growing profits over years. However, Coca-
Cola Company like any other company has had highs and lows
in its progress to maintain in market share in the global market
of soft drinks and beverages. Ferrell et al. (2010) stated that
there are crises that the company has faced along the way that
made it to loss sales and drop in revenue in some financial
quarters. In the mid of 1999, Coca-Cola company was faced
with a crisis in its Belgian market.
The summary of the Coca-Cola Company Crisis in 1999
It was on 8th of June, 1999 when many school children fell ill
after consuming Coca-Cola beverages. This made the Belgian
Health Ministry to announce a ban of Coca-Cola drinks when it
was suspected to have made over 100 school children to be ill in
preceding six days. Most of these students complained of
headaches, dizziness, nausea and discomfort and a few vomited
and were sent home. The management of the school made

3. efforts to investigate what was making their students to fall ill.
According to Ferrell et al. (2013), the inquiry was able to reveal
that the students had drunk Coke before they began complaining
of their illness shortly after. The Coke, product of Coca-Cola
Company packed in cases of 20- centiliter bottles had arrived at
the school. They were shipped from a Coca-Cola plant that is
situated in Antwerp, Belgium. On that day, the plant managers
were called and briefed about the case. They came and assessed
the situation but failed to take the remaining stock of Coke with
them.
According to Mitroff & Silvers (2010), the announcement to ban
Coca-Cola drinks made the Coca-Cola company to recall over
15 million containers of soft drinks and before the end of that
month the company has recalled over 30 million cans and
bottles of soft drinks making it the largest product recall in its
history which has lasted for over a century. The sales of Coca-
Cola products and brands in Belguim, Europe and also around
the world were greatly affected by this news and the company
registered a great drop 3rd quarter of 1999 and annually great
drop in profits and sales that year (Ferrell et al., 2013).
The stakeholders involved, actions take and the results of the
actions
The stakeholders who were involved in this case included the
following: the Antwerp plant management, Belgium Health
Ministry, the school administration and consumers (which
include the students who got ill after drinking Coke). All these
stakeholders had a say in this case and they were involved in
one way or other in trying to explain the situation and find a
solution to it.
The first action taken was from the ministry of Health in
Belgium. They quickly responded by banning the sale of Coke
in the country. This was after the school management had
engaged the distributors and the ministry officials. The plant
management responded by recalling over 15 million bottles and
started investigations on the cause of change of color and the
strange smell in the drinks that called the children to experience

4. physical illness.
There are results that followed the actions that were taken.
These include the public announcement of the Coca-Cola about
the cause of the change in color of the drinks. They attributed
this to “off quality” carbon dioxide which is used as a
preservation in the drink. For the strange smell, they attributed
this to the vendor machines that they were bought out of.
According to Ferrell et al. (2010), the CEO of Coca-Cola also
made a public apology for the disappointment caused to its
consumers in Belgium. After the ban was lifted, they started
campaigns which included the Coca-Cola Beach Party, Coca-
Cola Summer Tour, Prize awards and other promotions that
were staged around the world in order to attract back the
consumers who were now scared of the contamination of Coca-
Cola drinks.
The legal and ethical issues surrounding the crisis
There are legal and ethical issues that are attached to this crisis.
It is legally wrong to supply substandard or contaminated
products to the consumers (Ferrell et al., 2010). There are laws
that have been enacted by nations in order to protect the rights
of consumers. It was legally wrong for Coca-Cola to supply its
products with defects to consumers. It shows that someone was
negligent until it lead to the use of “off quality” carbon dioxide
as a preservation and the use of vendor machines that cause
contamination to the drinks. It was also unethical to supply a
product that causes harm to consumers. It actually showed that
someone wasn’t concerned about the wellbeing of the
consumers. Ethical codes of conducts and ethical business
practices should be upheld in every situation in order to avoid
cause harm to humanity.
In conclusion, it is important to note that Coca-Cola
Company responded to the crisis using an effective crisis
communications and it has always had lessons to learn from the
crises it has gone through over decades. According to Elmore
(2015), this has helped the company to build one of the
strongest public relations in the corporate world. Currently, the

5. company communicates well with its employees, consumers and
the public to ensure that they deliver quality products at all
times. Morley & Palgrave Connect (2002) argued that this
strategy has enabled the company to remain a top manufacturer
and distributor of soft drinks globally over several decades,
with strong product loyalty.
References
Bodden, V. (2009). The story of Coca-Cola. Mankato, MN:
Creative Education.
Elmore, B. J. (2015). Citizen Coke: The making of Coca-Cola
capitalism.
Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2010). Business
ethics: Ethical decision making and cases: 2009 update. Mason,
OH: South-Western Cengage Learning.
Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2013). Business
ethics: Ethical decision making and cases. Mason, OH: South-
Western/Cengage Learning.
Isdell, E. N., & Beasley, D. (2012). Inside Coca-Cola: A CEO's
life story of building the world's most popular brand. New
York: St. martin's Griffin.
Lopez, D. (2013). Brand development of Coca-Cola company
(uk). Place of publication not identified: Grin Verlag.
Mitroff, I. I., & Silvers, A. (2010). Dirty rotten strategies: How
we trick ourselves and others into solving the wrong problems
precisely. Stanford, Calif: Stanford Business Books.
Morley, M., & Palgrave Connect (Online service). (2002). How
to manage your global reputation: A guide to the dynamics of
international public relations. Basingstoke: Palgrave.
Running head: ETHICAL ISSUES IN BUSINESS REPORT
PART 1 – BACKGROUND 1
ETHICAL ISSUES IN BUSINESS REPORT PART 1 -
BACKGROUND 2

6. Ethical Issues in Business Report Part 1 - Background
Tracey Butler
BUS-340
September 11, 2016
Steve Wynne
Ethical Issues in Business Report Part 1 - Background
The summary of information regarding the business and its
history
The Coca-Cola Company is the world’s largest American-based
manufacturer, marketer and distributor of carbonated beverages.
It is headquartered in Atlanta, Georgia and currently sells over
1.5 billion bottled beverage drinks daily in many places around
the global. Isdell & Beasley (2012) noted that Coca-Cola
Company is known for its flagship brand product, Coca-Cola
that was invented by pharmacist John Stith Pemberton in
Columbus, Georgia in 1886. Asa Griggs Candler bought the
brand and Coca-Cola formula in 1889 and incorporated the
Coca-Cola Company in 1892. The company has managed to stay
strong against the competition from other beverage
manufacturing companies because of its strong global marketing

7. strategy and the secret of the beverage formula that has been
kept. Bodden (2009) stated that the beverage formula is only
known by few top officials and is passed by word of mouth only
and this has come to be known as the most guarded secret in
American corporate industry.
According to Lopez (2013) Coca-Cola Company manufactures
four of the top 5 soft drinks that are sold around the world.
Coca-Cola product is at number one with Diet Coke, Fanta and
Sprite at numbers three, four and five respectively. The
company operates world’s largest pervasive distribution
network, distributing approximately 400 soft drinks products in
over 200 countries around the world. The company has
registered high and growing profits over years. However, Coca-
Cola Company like any other company has had highs and lows
in its progress to maintain in market share in the global market
of soft drinks and beverages. Ferrell et al. (2010) stated that
there are crises that the company has faced along the way that
made it to loss sales and drop in revenue in some financial
quarters. In the mid of 1999, Coca-Cola company was faced
with a crisis in its Belgian market.
The summary of the Coca-Cola Company Crisis in 1999
It was on 8th of June, 1999 when many school children fell ill
after consuming Coca-Cola beverages. This made the Belgian
Health Ministry to announce a ban of Coca-Cola drinks when it
was suspected to have made over 100 school children to be ill in
preceding six days. Most of these students complained of
headaches, dizziness, nausea and discomfort and a few vomited
and were sent home. The management of the school made
efforts to investigate what was making their students to fall ill.
According to Ferrell et al. (2013), the inquiry was able to reveal
that the students had drunk Coke before they began complaining
of their illness shortly after. The Coke, product of Coca-Cola
Company packed in cases of 20- centiliter bottles had arrived at
the school. They were shipped from a Coca-Cola plant that is
situated in Antwerp, Belgium. On that day, the plant managers
were called and briefed about the case. They came and assessed

8. the situation but failed to take the remaining stock of Coke with
them.
According to Mitroff & Silvers (2010), the announcement to ban
Coca-Cola drinks made the Coca-Cola company to recall over
15 million containers of soft drinks and before the end of that
month the company has recalled over 30 million cans and
bottles of soft drinks making it the largest product recall in its
history which has lasted for over a century. The sales of Coca-
Cola products and brands in Belguim, Europe and also around
the world were greatly affected by this news and the company
registered a great drop 3rd quarter of 1999 and annually great
drop in profits and sales that year (Ferrell et al., 2013).
The stakeholders involved, actions take and the results of the
actions
The stakeholders who were involved in this case included the
following: the Antwerp plant management, Belgium Health
Ministry, the school administration and consumers (which
include the students who got ill after drinking Coke). All these
stakeholders had a say in this case and they were involved in
one way or other in trying to explain the situation and find a
solution to it.
The first action taken was from the ministry of Health in
Belgium. They quickly responded by banning the sale of Coke
in the country. This was after the school management had
engaged the distributors and the ministry officials. The plant
management responded by recalling over 15 million bottles and
started investigations on the cause of change of color and the
strange smell in the drinks that called the children to experience
physical illness.
There are results that followed the actions that were taken.
These include the public announcement of the Coca-Cola about
the cause of the change in color of the drinks. They attributed
this to “off quality” carbon dioxide which is used as a
preservation in the drink. For the strange smell, they attributed
this to the vendor machines that they were bought out of.
According to Ferrell et al. (2010), the CEO of Coca-Cola also

9. made a public apology for the disappointment caused to its
consumers in Belgium. After the ban was lifted, they started
campaigns which included the Coca-Cola Beach Party, Coca-
Cola Summer Tour, Prize awards and other promotions that
were staged around the world in order to attract back the
consumers who were now scared of the contamination of Coca-
Cola drinks.
The legal and ethical issues surrounding the crisis
There are legal and ethical issues that are attached to this crisis.
It is legally wrong to supply substandard or contaminated
products to the consumers (Ferrell et al., 2010). There are laws
that have been enacted by nations in order to protect the rights
of consumers. It was legally wrong for Coca-Cola to supply its
products with defects to consumers. It shows that someone was
negligent until it lead to the use of “off quality” carbon dioxide
as a preservation and the use of vendor machines that cause
contamination to the drinks. It was also unethical to supply a
product that causes harm to consumers. It actually showed that
someone wasn’t concerned about the wellbeing of the
consumers. Ethical codes of conducts and ethical business
practices should be upheld in every situation in order to avoid
cause harm to humanity.
In conclusion, it is important to note that Coca-Cola
Company responded to the crisis using an effective crisis
communications and it has always had lessons to learn from the
crises it has gone through over decades. According to Elmore
(2015), this has helped the company to build one of the
strongest public relations in the corporate world. Currently, the
company communicates well with its employees, consumers and
the public to ensure that they deliver quality products at all
times. Morley & Palgrave Connect (2002) argued that this
strategy has enabled the company to remain a top manufacturer
and distributor of soft drinks globally over several decades,
with strong product loyalty.
References

10. Bodden, V. (2009). The story of Coca-Cola. Mankato, MN:
Creative Education.
Elmore, B. J. (2015). Citizen Coke: The making of Coca-Cola
capitalism.
Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2010). Business
ethics: Ethical decision making and cases: 2009 update. Mason,
OH: South-Western Cengage Learning.
Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2013). Business
ethics: Ethical decision making and cases. Mason, OH: South-
Western/Cengage Learning.
Isdell, E. N., & Beasley, D. (2012). Inside Coca-Cola: A CEO's
life story of building the world's most popular brand. New
York: St. martin's Griffin.
Lopez, D. (2013). Brand development of Coca-Cola company
(uk). Place of publication not identified: Grin Verlag.
Mitroff, I. I., & Silvers, A. (2010). Dirty rotten strategies: How
we trick ourselves and others into solving the wrong problems
precisely. Stanford, Calif: Stanford Business Books.
Morley, M., & Palgrave Connect (Online service). (2002). How
to manage your global reputation: A guide to the dynamics of
international public relations. Basingstoke: Palgrave.
PROFESSOR’S FEEDBACK:
Thanks so much for your efforts in the week 3 paper where we
asked you to research a business that has had an ethical crisis.
We asked you to write a background summary report of 1,000 to
1,500 words. Your report should accomplish the following:
Summarize relevant information regarding the business and its
history. Summarize the crisis. What stakeholders were
involved? What actions did they take? What were the results of
those actions? Explain the legal and ethical issues surrounding
the crisis. Include a minimum of four academic citations. You
did some great work on the introduction where you summarized
the issue the streak holders and the actions or results of the
issue presented. You also identified the basic tenets of Business
Law surrounding the crisis and explained whether the company

11. acted within the boundaries of the Law as well as the decision
making process in handling the situation when it was
discovered. The paper flowed well was well constructed and
presented some great analysis. The paper was structurally sound
formatted well the citation and referencing was quite good. The
submission addressed all of the areas we require and it was well
written and persuasive. The analysis was also quite good but
could have gone a bit more in-depth on the legal and ethical
issues and different ways of resolving them with a more fully
developed conclusion with more recommendations so you did
lose a few points please see the rubric from more information.
Great work overall and if you have any questions on how to
improve the analysis please let me know.