1.

Who are the main stakeholders of beverage companies such as Coca-Cola and Nestle
in this case? How would you prioritize their stakes and how legitimate are the different
stakes?

The stakeholder theory of the firm is probably the most popular and influential theory to emerge
from business ethics (Stark 1994). While the use of the term ‘stakeholder’ in relation to business
was first noted in the 1960s, the theoretical by Edward Freeman in the 1990s. A stakeholder is
an individual or a group that, in the context of a specific situation, is either harmed by, or
benefits from, the corporation, or whose rights the corporation should respect. There are also
different Stakeholder models that firms use and they are commonly known as the traditional, the
stakeholder model, and the network model. In terms of Coca-Cola and Nestlé it is assumed that
they are following the Stakeholder Model where they companies have obligations to not only
one group, but also to a variety ofothers, which are affected by its activities. According to the
case study, the civil society are Nestlé’s and Coca Cola’s main stakeholders as it consists of
pressure groups, local communities and non-government organizations. The stake and legitimacy
of these stakeholders can be prioritized by utilizing the ‘Stakeholder Salience Model’ developed
by Mitchell in 1997. There are three different issues that can be used to assess the stakeholder
importance: their power, legitimacy urgency. Some stakeholders may be considered more
important than the others, even though they are all important.

2. How do you evaluate the growing expectations and the changing role of companies in the
arena of water management? What are the consequences for accountability, transparency,
and participation of stakeholders? Discuss the potential and the limits of what corporations
can ultimately achieve in the business of water.

Water demands are growing faster and faster as companies keep on wasting it, so by time
clean water might get expensive and be a liability that is hard to find. As a result, if companies
wanted to improve in any aspect it might be hard to do so. We think that companies that have
already been into the worst with either governments or people and found solutions that did
not effect both the company itself (Coca-Cola) or others need to spread awareness or their
"solutions" to other suffering companies like Nestle nowadays to not only benefit Nestle with
its success but also the company itself to have better sources of clean water and to provide
people with clean water to drink from. Last but not least, the stakeholders should surely
participate in the company causing them harm and give suggests to the problem for better
solutions in the near future hopefully.

The growing expectation towards these companies can be evaluated by considering

the three areas they are Social Policies: the Company’s values, beliefs and goals
with regards to its social environment. Social programmes: Specific social programs
of activities, measures and instruments implemented to achieve social policies.
Social impacts: social impacts can be traced by looking at concrete changes the
corporation has achieved through the programmers implemented in any period.
Recently companies are announcing goals to return to the environment.

The companies have now broadened the view of responsibility towards various
stakeholders. Rather than being simply the agents of shareholders ,management
has now started to take into account the rights and interest of all legitimate
stakeholders ,Competing interest of other stakeholders for long term survival of the
corporation ,instead of maximizing the interest for just one group at a time The
consequences’ of accountability is that the company now has to acknowledgment
and assume the responsibility for actions, products, decisions and are obligated to
report, explain and be answerable for their actions.

Transparency: Analyzed as the impact of an organization associated or affiliated with

its stakeholders. These impacts need to find out whether the organization’s activities
are consistent with regard to the society’s interests, whether they are ethical and
whether these activities are institutionalized. Participation of stakeholders: Increase
in the participation of stakeholders helps during the planning process will lead to
stronger, more durable management plans.

The corporations in the business of water have high potential to increase the profit
and productivity provided they involve all of the stakeholders in the decision makings
and facilitating them with the regular updates of the working of the company. If they
are not successful in pleasing any of the stakeholders in the process they might lose
the confidence of the market and consumer which will result in loss and complete
shutdown.