The implications for relationships with Coca-Cola’s shareholders continue today. Shares on all exchanges were down during the period of June 15–June 24. Coca-Cola’s 1999 second quarter earnings dropped 21% off the previous year’s earning. Third quarter and fourth quarter earnings were also lower than in 1998. Immediately following the resolution of the crisis, CEO Ivester promised, “we’ll spend whatever is necessary to regain the confidence of the Belgian consumers.”57 However, Coca-Cola found itself once again in trouble in Belgium. In October of 1999, Alan Cowell of TheNew York Times reported, “the company confronted another flurry of health scares when four Belgian children reported illness from drinking Coke. Prosecutors cleared the company of responsibility in these incidents but the publicity reminded customers once again about the mass illnesses in June.” 58 No matter what it did, it could do little to regain the trust and support of publics in France, Spain, and Belgium.
The implications for Coca-Cola are not merely visible in the damaged relationships between the organization and its Western European publics. The internal structure of the organization has also been damaged from the poor handling of the crisis. On December 7, 1999, CEO Ivester announced his resignation. The new CEO will be Douglas Daft, an Australian who has extensive international experience. TheWall Street Journal columnists, McKay and Deogun, wrote, “Mr. Ivester was widely criticized for his perceived arrogance after school children in Belgium became sick from drinking contaminated products, resulting in the largest recall ever of Coke products.” 59 It may not have been Ivester’s arrogance so much as his organization’s inability to accurately understand and react to the complex cultural dynamics of the European marketplace. Given the high levels of uncertainty avoidance and power distance in Belgium, France, and Spain, it makes sense that those nations would respond quickly and severely to any threats to public safety. Coke’s promise to discover problems with its bottling operations no doubt placated the lower uncertainty avoidance nations of Norway, Sweden, and Denmark, but these promises were not enough to satisfy cultures that seek order, predictability, and adherence to rules and laws.
The summer tainting case is over now. A “Coke’s Back” advertising campaign is underway in the region. This upbeat campaign seeks to regain market share, and hundreds of Coke representatives have been hired to speak with consumers at grocery stores. Coca-Cola continues to fight to regain market share and rebuild relationships with its European publics. Improved quality controls are now in place, and the company is spending millions trying to rebuild its relationships with its publics. Public relations efforts include “road shows and beach parties, rock concerts and free handouts to refurbish the European image of Coca-Cola, the world’s most famous brand.”60
Marketing efforts have also changed. Coca-Cola has a new business strategy that attempts to better understand the unique cultural and economic issues in many nations of the world. Coca-Cola’s previous one product, one global strategy, will now be modified under new CEO Daft. In an interview with TheNew York Times, Daft summed up the Belgian situation, “maybe there was no one there who understood the environment. Or, if we had people who understood the environment, we didn’t listen to them.” 61 It appears that Coca-Cola now understands the importance of understanding its international publics. On January 29, 2000, the company issued a news release that claimed a new realignment strategy as a:culmination of a careful review during the past six months of each of our business functions. The world in which we operate has changed dramatically, and we must change to succeed. This realignment will better enable the Company to serve the changing needs of its customers and consumers at the local level and ensure that Coca-Cola complements the local culture in every community where it is sold. Our success depends on our ability to make billions of individual connections each day in every community around the world. With the pace of change in global markets increasing every day, we have to redouble our efforts to remain close to the customers and consumers we serve.62
The new marketing strategy and the elimination of 6,000 jobs in the United States and abroad attempts to move the power from Atlanta, Georgia, to a more local focus in its many international operations.63 The new strategy is a reflection of the desire to better understand Coca-Cola’s international publics and a recognition that the centralized bureaucracy in Atlanta is not flexible enough to handle the global marketplace. It is a step in the right direction; however, because of cultural variation and its impact on public response to crisis, the citizens of Belgium, Spain, and France still need time to trust Coca-Cola again.
What can international organizations learn from the Coca-Cola tainting scare in Europe? First, cultural variability is a fact of life and understanding it may help organizations better predict how international publics will respond to organizational messages. Organizations that seek entry into the global marketplace should learn about the cultural and societal factors that guide the behaviors of their host publics. Cultural variability, recent events, and societal tolerance of risk are also important topics to learn. Second, international organizations need people from the host nations to act as “cultural interpreters.” This model of public relations, coined by Anastasia Lyra in her thesis on public relations in Greece, shows that every organization needs trusted and informed experts to explain the cultural and societal norms of their home country.64 Finally, and perhaps most important, organizations need to avoid ethnocentrism in their communication strategies with international publics. The belief that what works in Atlanta will work in Brussels can no longer guide successful organization–public relationships. As Coca-Cola learned, the world is not “one market, one strategy.” Instead, the world is a complexity of cultures and variations that affect how publics respond to organizational messages and organizational crises.