International Journal of Public Sector ManagementPublic-private partnership: Coca-Cola and the University of BelgradeEmilija Stankovic

Article information:To cite this document:Emilija Stankovic, (2013),"Public-private partnership: Coca-Cola and the University of Belgrade", International Journal ofPublic Sector Management, Vol. 26 Iss 2 pp. 146 - 152Permanent link to this document:http://dx.doi.org/10.1108/09513551311318013

Downloaded on: 17 December 2014, At: 09:59 (PT)References: this document contains references to 8 other documents.To copy this document: permissions@emeraldinsight.comThe fulltext of this document has been downloaded 460 times since 2013*

Users who downloaded this article also downloaded:Leo Paul Dana, Claudio Vignali, (1999),"Lublin Coca-Cola Bottlers Ltd", British Food Journal, Vol. 101 Iss 5/6 pp. 447-455http://dx.doi.org/10.1108/00070709910278424Catherine Webb, (2006),"Avoiding ageism at Coca-Cola: Company initiatives earn Employer Champion status", HumanResource Management International Digest, Vol. 14 Iss 7 pp. 9-11 http://dx.doi.org/10.1108/09670730610708132Victoria Johnson, Spero C. Peppas, (2003),"Crisis management in Belgium: the case of Coca-Cola", CorporateCommunications: An International Journal, Vol. 8 Iss 1 pp. 18-22 http://dx.doi.org/10.1108/13563280310458885

Access to this document was granted through an Emerald subscription provided by 277061 []

For AuthorsIf you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors serviceinformation about how to choose which publication to write for and submission guidelines are available for all. Pleasevisit www.emeraldinsight.com/authors for more information.

About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio ofmore than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of onlineproducts and additional customer resources and services.

Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on PublicationEthics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation.

*Related content and download information correct at time of download.

Dow

nloa

ded

by U

nive

rsity

of

Ari

zona

At 0

9:59

17

Dec

embe

r 20

14 (

PT)

Public-private partnership:Coca-Cola and the University of

BelgradeEmilija Stankovic

University of Kragujevac, Kragujevac, Serbia

Abstract

Purpose – Analyzing the memorandum of cooperation conducted between Coca-Cola HBC Serbia ADZemun and the Faculty of Organizational Sciences (FOS), University of Belgrade, the purpose of thispaper is to demonstrate which multinational companies invest in education. The importance ofcooperation is emphasized, since cooperation has indirect effects on corporate social responsibility andthe external positioning of the Faculty of Organizational Sciences and Coca-Cola, promoting directcooperation between institutions and education.

Design/methodology/approach – The analyses are based primarily on analysis of a memorandumof cooperation signed between Coca-Cola Hellenic and the FOS in the presence of Serbian governmentrepresentatives. Other Serbian legislative acts are discussed that allow the operation of multinationalcompanies in Serbia, providing cooperation process transparency related to higher education.

Findings – This article points out which forms of cooperation exist between Coca-Cola andeducational institutions in Serbia, the effects of such cooperation, and the benefits to local staffdevelopment, especially community development.

Originality/value – The article is based on a special memorandum on cooperation that enablesfamiliarity development with concrete investments by multinational companies in education in Serbia.Positive outcomes of such an investment are discussed.

Keywords Serbia, Education, Coca-Cola Hellenic, Investment

Paper type Viewpoint

IntroductionIn the last few years, increases in cooperation between public and private sectorsconcerning development and infrastructure management have been significant.Although a model of public-private partnership (PPP) is one of the best ways for Serbiato build quality infrastructure and interests of public importance, no project followingthe principle has been implemented so far. Explanations include lack of adequate PPPlegislation, local self-governments limited to property management and non-privatizedcompanies with which the private sector could make partnerships. Nevertheless, manymultinational Serbian companies enjoy cooperation with local communities, investingin education, the public sector domain and other forms of cooperation that arepublic-private partnerships. All of these companies want to achieve success in theglobal market although such success implies responsibility to society.

Socially responsible companies care about the environment. Socially responsiblecompanies care about having positive relationships with employees, employ people withspecial needs, care about the community in which business is conducted, and invest ineducation positively influencing the development of local communities (Ðordevic, 2008).Research conducted in Serbia until 2006 suggests that most companies finance projectsconcerned with education (75 percent), development of the local community (67 percent),

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0951-3558.htm

IJPSM26,2

146

International Journal of Public SectorManagementVol. 26 No. 2, 2013pp. 146-152q Emerald Group Publishing Limited0951-3558DOI 10.1108/09513551311318013

Dow

nloa

ded

by U

nive

rsity

of

Ari

zona

At 0

9:59

17

Dec

embe

r 20

14 (

PT)

healthcare (62 percent), infrastructure, ecology, and sports. Nearly all large Serbiancompanies are socially responsible. Coca-Cola HBC Serbia is aware of the necessity ofcooperation with the state and other institutions to build partnerships and enrich life inlocal communities. The company plays a proactive role identifying local communityneeds and the relationships necessary to build partnerships. In 2005, the Club ofVolunteers was founded. Annually and within the A Day of Good Will project,employees help children who have social and health challenges. Coca-Cola Hellenic (CCH)supports numerous cultural and sporting events, educates young talent, and donates tohealthcare facilities and churches. Coca-Cola’s similar actions in other countries can beseen from the Transition Report Coca-Cola Croatia (Coca-Cola Beverages Croatia, 2003).Together with CCHBC, CCBH and Coca-Cola consider education investment andemployee training the highest priorities. This includes not only skills training but acommitment to career advancement and lifelong learning for employees.

CCH is one of the world’s largest soft drink manufacturers; more than 47,500employees supply soft drinks to over 560 million consumers in 28 countries. As amultinational company, CCH is dedicated to the promotion of sustainable developmentto create value for its own businesses and for the communities in which it operates; thisorientation has significant results for Serbia. Recently, a cooperation agreement wasreached between a leading public university, the Faculty of Organizational Sciences(FOS), and CCH. Such a contract could only be signed with consent from the Serbiangovernment, including compliance with all legal provisions.

As its permanent policy states, CCH assists in the development of local staff. Suchan orientation finds its logical explanation in the fact that the success of anycommunity rests in its people. If people are asked to carry out tasks entrusted to themproperly and efficiently, they must be trained to work in a multinational company,which is very demanding. Investing in the education of talented young people is aninvestment in both the future of the company and in the resources of the localcommunity. The benefits are mutual; the company obtains educated people, trainedaccording to company standards, and the local community enjoys reducedunemployment. CCH employs 1,500 local people; constant company developmentcreates a need for staff who manage operations that are more complex.

Through a partnership with the FOS, CCH enables more students to gain excellentpractical skills while they are still studying so they can engage in professional Serbiandevelopment. The fact that they do not have to go abroad to gain the newest professionalskills increases participants’ desire to stay in the country. It should be noted that aparticipant’s chances of getting a job in a company that includes education results is strongmotivation. Such behavior of CCH presents a willingness of the private sector to transferexpertise to students and make the education process both more complex and improved.

The Serbian government supports cooperation between multinational companies andpublic higher education institutions. FOS is part of the University of Belgrade, withleading faculty in the fields of information systems and organizational management.More than 3,200 students attend 14 accredited academic and vocational study programs.FOS is a higher education institution that places importance on improving practice andengagement through flexible education and research and development projects. Byexamining this and similar agreements under analysis guidelines of the operation ofmultinational companies and legal regulations, the importance of harmonizing work andthe community is espoused. It is important to analyze systemically what has already

Coca-Cola andthe University of

Belgrade

147

Dow

nloa

ded

by U

nive

rsity

of

Ari

zona

At 0

9:59

17

Dec

embe

r 20

14 (

PT)

been done to present mutual benefits from such cooperation. The enormous roleeducation plays should not be discounted; investment by multinational companies in theeducation of young people is of inestimable importance. Students are able to access thelatest findings in the fields of modern management. The company invests in its futureand in the local community simultaneously. Young people remain in their communitiesafter graduation and, inspired by world standards, continue to participate in thedevelopment of the community.

Company establishment in SerbiaCCH is one of 300 filling stations that make the Coca-Cola system the largest beveragedistribution system in the world. Activities in Serbia play a strategically important rolein this system; these companies use all of their skills and resources to provide servicesto consumers. In this way, they help improve the quality of life in local communities;Coca-Cola Hellenic Serbia is the only company of its kind in the country. Since 1997,Coca-Cola HBC Serbia has been developing its business in Serbia, adding newproduction and modern filling lines. Since 2001, CCH group has invested more than$2.7bn in property, factories, and equipment to modernize factory infrastructure.

Education in Serbia: competence and education as a public good and serviceIn signing the Bologna Declaration, Serbia became a part of the European educationalindustry. Education is the responsibility of each European Union (EU) member, butaccording to Article 6, TEU has the power to help. Article 165 UFEU states that the EUmust contribute to the development of quality education in member countries.Although member states themselves are responsible for higher education, they mustnot violate legal responsibility regulations and principles of EU law, such as equaltreatment, freedom to provide services, and freedom of business[1]. Legal rulesgoverning higher education are subject to the general rules of EU law and thejurisdictions of European courts.

Provisions of Articles 56 and 49 UFEU that define freedom to provide services alsolimit EU member states in regulating higher education. However, these restrictions donot apply to the part of higher education that provides services for special publicinterests, only activities regarded as services defined under EU law. This division isfunctional and makes it possible for higher education institutions to offer part of theiractivities on the market as a service, entering into market competition with privatehigher education institutions (Bergan, 2005).

Services defined under Article 57 UFEU are available, but there are fees associatedwith them; remuneration is figured service by service. Following the principles of theEuropean Court, when the state initiates higher education, it fulfills its social, cultural,and educational obligations by not involving itself in activities to acquire profit[2]. TheEuropean Court finds that public education is funded normally from the state budgetso the public nature of such education is unaffected even though tuition fees arenecessary. For these reasons, public education is not considered a service under Article56 UFEU. Nevertheless, there are higher education institutions that operate primarilyfor profit. Classes organized in such institutions represent services under Article 56UFEU because their purpose is providing services for a fee[3]. Furthermore, if oneperson gives lectures, he or she provides classes for higher education. These lecturesare considered a service because the instructor is compensated financially; lectures

IJPSM26,2

148

Dow

nloa

ded

by U

nive

rsity

of

Ari

zona

At 0

9:59

17

Dec

embe

r 20

14 (

PT)

offered in public universities are also considered a compensated service[4]. Therefore,national law regulating fields of higher education must define the distinction betweeneducation as a public good and education as a service, where the service part ofeducation must be identified. EU law sets national legislation to specific requirements.They can be systematized as follows (Rodin, 2011):

. the area in which Member States regulate higher education, in which they mustnot violate general principles of EU law bans such as the prohibition ofdiscrimination and disproportionately affect the freedom of the market,especially the freedom of movement for workers, freedom to provide services,and freedom of place for performing business; and

. the area where the EU has regulatory authority, such as recognition ofprofessional qualifications, where member states must regulate their own highereducation in such a manner that national law does not complicate or prevent useof market freedom.

Market freedom limits member states when they adopt national regulations that apply toprivate higher education institutions; the same goes for state universities and colleges, tothe extent to which their activities can be defined as a service offered in the market for afee. Not an EU member, Serbia has been adjusting its legislation rapidly to conform to EUlaw. Serbia is a part of the European educational industry and has adopted – according tohigher education law – the basic principles of EU law for education.

Cooperation of the FOS and Coca-Cola HellenicIn the presence of Serbian government representatives, FOS and Coca-Cola signed amemorandum of understanding, establishing the theoretical and practical developmentof participating individuals and institutions. This relationship includes developmentaldimensions that monitor compliance in accordance with the interests of both parties.This process must be guided by a precept of strengthening relationships betweeneducational institutions and the economy; it must be a positive example of socialresponsibility. The strategic partnership defined by this memorandum has the statusof exclusivity.

There are several forms of cooperation with activities to achieve cooperation definedby the needs of the parties and by possibilities for inclusion and implementation(Coca-Cola Hellenic Serbia and FOSI, 2009):

. One form of cooperation is student practice – pre-planned and developedinternship programs in various sectors of CCH’s business system.

. Another form of cooperation includes managers in CCH giving lectures at FOS.The program of guest lecturers presents a pre-planned program by which FOSinstructor consultation supports teaching. The program is implemented as aseries of lectures given by managers of CCH business systems. Implementation isconducted by analyzing the market environment, case studies, and solvingbusiness problems from practice in class or additional courses organizedindependently. Students have the opportunity to test theoretical knowledge indirect contact with the managers of a large and well-organized company.Immediate and practical knowledge transferred in this manner is much morepowerful than theoretical knowledge acquired at lectures sanctioned by

Coca-Cola andthe University of

Belgrade

149

Dow

nloa

ded

by U

nive

rsity

of

Ari

zona

At 0

9:59

17

Dec

embe

r 20

14 (

PT)

authority figures. The ability of students to connect with top managers, to askthem specific questions and seek clarification of unclear situations contributes tosuccessful education. Students have the opportunity to learn about real-worldsituations and problems, and to learn how to solve them successfully. Thisrepresents the most useful form of cooperation; it brings the missing element ofpractical knowledge to Serbian education. Students are trained under actualrather than simulated examples.

. Visits to the production plant are another form of useful cooperation. During a visit,complementary lectures are organized and best practices, models, and othersuccessful ways of conducting business are explored first-hand. Visits areorganized in accordance with the agreement between the FOS and CCH; they relatedirectly to the program of lectures at FOS. This type of cooperation also providesstudents with the practical knowledge necessary under a modern education system.

. A useful way of acquiring knowledge is working on real projects; the idea iscaptured by participation of students, FOS teachers, and CCH managers in projectsconcerning real problems and tasks. Budgets for these projects are predefined, andprojects include real business implications. This kind of cooperation isencouraging because it allows students to recognize theoretical knowledgethrough practical experience. Business projects are common in CCH, so a seriousproject approach with a definite duration and budget is possible, includingplanning, implementing, monitoring, and evaluating. Coca-Cola is responsible forpreparation of a project theme, providing resources and logistic support.

. During the program and according to the memorandum, FOS students mustwrite several seminar, research, and graduate papers. A program of papers is agreat opportunity for students who participate in real research projects to use theresults obtained during research. Within its capabilities, CCH offers students anumber of research topics, most of which are of interest for developingbusinesses. There is also the possibility to provide a mentor and support ingathering information within its system. FOS publishes the papers on its websiteand bulletin board with censure support from professors.

. Student work is promoted by a program of public relations, primarily throughpresentations to faculty and in local newsletters, magazines, company newspapers,internet presentations, and other media. Cooperation is expected for two years at atime. Due to successful cooperation, prolonging deadlines for an additional twoyears has been planned. Such CCH behavior within specified forms of cooperationwith FOS in the memorandum serves as a good model for other multinationalcompanies. Investment in education is the best way to acquire good feedback. Thispath is not just about profit, it is also about giving back to the community byeducating young people who, thanks to their quality of education, will work better,be more dedicated, and improve their local community. Investing in education doesnot only mean educating new employees, it also includes educating existingemployees. Naturally, increasing attention is being paid to lifelong learning. InStrategy for Serbia 2020 (2010), education is a priority.

In the strategy, quality is the paramount problem in Serbian education. School classesand learning will be free from traditional, ineffective methods; they will be based on

IJPSM26,2

150

Dow

nloa

ded

by U

nive

rsity

of

Ari

zona

At 0

9:59

17

Dec

embe

r 20

14 (

PT)

modern interaction and active forms of learning that ensure generic knowledge, skills,and competencies are passed to students. The strategy applies lifelong learning, trueadult education, and inclusion of informal education systems. A collection of measurescan be implemented quickly that lead more directly to employment, flexible andadaptive for the labor market.

Analyzing the memorandum, the strategy clearly predicts these favored forms ofeducation. What the Serbian school system lacks, CCH offers to students: practicalexperience in a company, seminar papers based on practical experience, feedback, andparticipation in successful management in lectures, education, and training. Existingstaff integrate lifelong learning in education, offering the opportunity to improve skillsand knowledge through various seminars.

CCH is not the only multinational company that invests in education and actssocially responsible. Phillip Morris International is a company that conducts businessin Serbia. A tobacco factory in Nis was privatized in 2003, with Phillip Morris HollandHoldings BV the major stockholder. From the beginning, the company took part invarious humanitarian actions and donations; it developed education, localentrepreneurship, and culture, and resolved social issues in Nis. Since 2004, thecompany has supported a program entitled “Partnership for Education andDevelopment of Community”, which helps the top students of the University of Nisand their projects. The purpose of the program is to offer scholarships to young peopleto support and enable them to grow faster. Students are rewarded for achievement andengagement in local communities, so young people will stay in Nis and continue tocontribute to the development of their community. Making this connection betweeneducation and local community, Phillip Morris established new scholarship standards,and the company began fulfilling objectives as part of the Strategy for Serbia 2020. Inmid-2011, 20 students from the Faculty of Electronic Engineering, Economics, Law,and Mechanical Engineering were rewarded for academic achievement andengagement in local communities. These students joined the network of 256 existingstudents who received scholarships from this program.

Since beginning work in Serbia, Eurobank EFG has placed a significant premiumon socially responsible behavior, including ecology, healthcare, education, equality,and culture. It believes that investing in young talent is the safest investment.Eurobank EFG rewarded 1,350 top students in Serbia at a cost of e1.3m.

ConclusionThe memorandum of cooperation between Coca-Cola and FOS marks the beginning ofa new era of cooperation between large companies and Serbian educationalinstitutions. With the adoption of the Law on Higher Education (Government of Serbia,2005), a change in the Serbian educational system began, the purpose of which wasalignment with the EU educational system. On signing the Bologna Declaration, Serbiabecame part of the European educational industry. Since changes in education are slow– particularly when combining theory and practice – the memorandum has greatersignificance, providing greater opportunities for students to obtain practicalknowledge while in contact with managers of a powerful company. Cooperation wasstructured explicitly to connect economics and practice fully. This agrees with CCH’songoing commitment to assist in the development of local staff, helping to educatestudents in an area where a manufacturing company conducts business to enable local

Coca-Cola andthe University of

Belgrade

151

Dow

nloa

ded

by U

nive

rsity

of

Ari

zona

At 0

9:59

17

Dec

embe

r 20

14 (

PT)

people to remain and find a job in their community and contribute to the community’sdevelopment. The Law on Local Self-Government (Government of Serbia, 2007)stimulates local economic development projects with assistance from young peoplewho encourage such development with their knowledge.

CCH Serbia is highly focused on developing the local workforce. Investing intalented youth invests in the future of the company and in the community where itoperates. Through a partnership with FOS, the company provides students with theopportunity to gain practical knowledge and continues professional development inSerbia. In just over a year, 500 students, 90 managers, and 170 employees took part inthe program. In 2010, eight FOS students were hired, accounting for 20 percent of thehighly educated staff in the company.

Notes

1. Verdict: C-267/06 Tadao Maruko v. Versogungsantalt der deutschen Buhnen (2008), ECRI-1757, §59.

2. Verdict: Case 263/86, Belgian State v. Rene-Humbel and Marie-Therese Edel (1988), ECR5365, §18.

3. Verdict: Case C-109/92, Stephan Max Wirth v. Landeshauptstadt Hannover (1993), ECRI-6447 §17.

4. Verdict: Case C-281/06, Hans-Dieter Jundt and Hedwig Jundt v. Finanzamt Offenburg (2007),ECR I-12231 §§32-34.

References

Bergan, S. (2005), “Higher education as a public good and public responsibility: what does itmean?”, in Weber, L. and Bergan, S. (Eds), The Public Responsibility for Higher Educationand Research, Council of Europe Publishing, Strasbourg.

Coca-Cola Beverages Croatia (2003), Social Report, Coca-Cola Beverages Croatia, Zagreb.

Coca-Cola Hellenic Serbia and FOSI (2009), “Memorandum on cooperation signed betweenCoca-Cola Hellenic Serbia and FOSI”, June 4.

Ðordevic, M. (2009), International Business of Enterprises in Global Environment, Faculty ofEconomics, University of Kragujevac, Kragujevac, p. 338.

Government of Serbia (2005), “Law on Higher Education”, Official Gazette of the Republic ofSerbia, issue 76.

Government of Serbia (2007), “Law on Local Self-government”, Official Gazette of the Republic ofSerbia, issue 129.

Rodin, S. (2011), “Higher education and freedom to provide services in the European Union law”,in Micovic, M. (Ed.), XXI Century: Century of Services and Law of Services, Institute forSocial Sciences, Faculty of Law, University of Kragujevac, Kragujevac, pp. 829-43.

Strategy for Serbia 2020 (2010), Strategy of Development: Republic of Serbia until 2020,Government of Serbia, Belgrade.

Corresponding authorEmilija Stankovic can be contacted at: emilija@jura.kg.ac.rs

IJPSM26,2

152

To purchase reprints of this article please e-mail: reprints@emeraldinsight.comOr visit our web site for further details: www.emeraldinsight.com/reprints

Dow

nloa

ded

by U

nive

rsity

of

Ari

zona

At 0

9:59

17

Dec

embe

r 20

14 (

PT)