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Objective 1: the origin, reference, and methodology of the social sciences by analyzing philosophy. Drink Coke and be nice Coca-Cola s CEO espouses a gentler business plan William J. Holstein US NEWS 6 / 9 / 97 The article began by speaking about Chairman and CEO of Coca-Cola Roberto C. Goizueta.
He has managed to increase the company s market value from $ 4 billion to $ 165 billion since he took over in 1981. Coke has also dramatically increased it s market value over pepsiCo up to 43 % today and a forecasted 50 % by 2001. Unfortunately as profits increase labor is downsized. When company executives vow to maximize shareholder value, many Americans see it as layoffs. In the publics mind shareholder value has become equivalent to pain for employees. Goizueta s new philosophy takes into consideration the effect of public backlash and its underlying causes.
He urges fellow CEOs to take a broader view beyond maximizing shareholder value. He stipulates that increasing the value of shares is the number one priority but that it should be done over time and in a way that benefits employees, customers, business partners, and the community. He has even changed the term shareholder with share owner to emphasize that shares should be held for long terms and not sold repeatedly. Michael Use professor of management at the University of Pennsylvania s Wharton School says There is one political and intellectual tradition that says narrowly focusing on shareholders value is the highest calling, But if you don t actively and self-consciously take into account the concerns and interest of customers, employees, and the community, your making a mistake.
Goizueta s views are rooted very deeply and personally within his past. Owning shares is so important to him that he has made sure many employees own shares within the company. Cynics now say that Goizueta can afford to focus on the community and implement a new business philosophy because of Cokes dominant position in the market place. I believe that what Mr. Goizueta is attempting to accomplish is big step towards company growth.
Focusing on the client and the community is a perfect way to make yourself rise above the rest of the crowd and attract more business. And even more reassuring is that it looks like he knows how to manage his business, seeing as the companies value rose significantly since he has been CEO. The article also focused in more depth why he takes stocks and bonds so personally. As the article mentions he worked in Cuba at a Coke factory as a technician and came here to the US fleeing from Fidel Castro s reign over Cuba.
All that he had were $ 8, 000 in Coke share that his father had purchased for him. From that he managed to rise up Cokes administrative ladder and became CEO. I personally see that as a motivational story and can see why he would take interest into the staff and communities interest when looking into maximizing shareholder values.
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Research essay sample on Coca Cola Shareholder Value
