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Have a Coke and a Controversy

6/17/2011 --

Case study on confrontation between activists and Coca-Cola Co. at U-M shows how change agents inside and outside a company can influence each other.

ANN ARBOR, Mich.—Being a change agent in a large company can be lonely. Acceptance of ideas can be slow and roles can be marginalized. Likewise, external activists looking to force organizational change may see a monolith that seems impossible to move and dismissive of concerns. But in the case study Coke in the Crosshairs, authors Andy Hoffman, Sarah Howie, and Grace Augustine demonstrate how these internal and external forces can produce mutual momentum and drive real change.

Hoffman, the Holcim (U.S.) Professor of Sustainable Enterprise, and his Ross student collaborators use a controversy that brewed in 2006 between campus activists at the University of Michigan and Coca-Cola Co. to highlight these dynamics. The case also shows the power of information technology, as an activist upset with Coke's business practices in India rallied college students in America to exert pressure on the company. The case recently won first place in the 2011 oikos Global Case Writing Competition.

In this Q&A, Hoffman talks about his front-row seat to this confrontation and how what some activists deemed a defeat was actually a victory.

Why did you choose this incident with Coke for a case study?

Hoffman: I was on the University's Dispute Review Board during this controversy. It was a very painful experience, a very challenging experience, but a very educational one.

What made it difficult?

Hoffman: It was antagonistic. The student activists were very aggressive. I brought up an issue with the panel once and the student newspaper ran an op-ed chastising me and calling the University's Erb Institute for Global Sustainable Enterprise an unholy alliance.

What are some of the key lessons you hope people draw from this case?

Hoffman: It really speaks to the systemic aspects of change. You can have people inside an organization who want to address an issue, and people outside the organization can create the energy and drive to force it. In this case, some people inside Coke already wanted the company to pay more attention to water issues. Too often, however, we talk about companies like Coke as monoliths. We have to remember that organizations actually comprise a network of real people, and many of them do want to see change. Anytime you have a catastrophe — from the BP oil rig explosion to the Space Shuttle Challenger — you have people inside the company saying, 'I warned you about this and you didn't listen.' If activists start to recognize that, they can leverage that reality to affect change. There are change agents inside most companies. And, by the way, those are the students we want to graduate from Ross: the kind who do well in their companies, but who also hold some beliefs that vary from the norm.

Now, there are always people outside of a company taking shots at it. The question from a corporate perspective is, when do you respond to and when do ignore external pressure? Coke didn't take this issue seriously at first. But that's easy to say now. Sometimes if you respond, you can instantly legitimize a controversy. Once, Caterpillar found itself pulled into the Israeli-Palestinian conflict. The Israeli army used Caterpillar equipment for demolition and people tried to hold the company responsible. It didn't work. So you can't engage everything. You have to do it very carefully.

On the sustainability front, I do think it's fascinating that Amit Srivastava, a guy with a laptop in Southern California, was able to mobilize resources to really hit Coke hard. That to me is a sign of changing times. To address an environmental issue in India, he was able to mobilize college students in America to force change. A Wall Street Journal article showed the great disparity in resources between Amit and Coke, yet demonstrated how much of an impact Amit still had on the company. The day is over when companies can walk into a developing country, pay their taxes, extract the resources, and walk out. We live in a world where technology makes things transparent in a way they were not before.

The case also provokes some interesting questions about the role of universities in society. One University of Michigan regent was angry this happened. He called it 'management by temper tantrum.' So, how far should a university go in pushing an agenda? Would you support it if it raised your tuition?

Talk to me about changes that did come about.

Hoffman: We've since seen a significant change in the culture of Coke. The organization is really pushing itself as a global citizen and thinking of itself as a water company. But some of the activitists did not see their efforts as successful. I met with one student who thought the outcome was a total failure because Coke wasn't banned from campus. I felt she missed the point. I told her, 'You were able to get a major multinational to open itself up to a third-party audit that was made public before they knew the results. That's huge.' And out of that the company has really started to think about water in a serious and sustainable way. The opportunity here was to leverage Coke to change, not push them away. And there are wider implications that continue to ripple out. I think other water-intensive beverage producers said to themselves, 'There but for the grace of God go I,' and they have changed their policies, as well.

For more information, contact:
Terry Kosdrosky, (734) 936-2502,