Goizueta, Roberto Crispulo
Roberto Goizueta served Coca-Cola Company as Chairman and Chief Executive Officer from 1981 until his death from lung cancer in October 1997. During that time, Coke’s value rose from $4 billion to $145 billion and helped create tremendous shareholder value in the community of Atlanta, Georgia – for individuals, corporations, and nonprofits.
During his tenure as leader of the company, he introduced Diet Coke, New Coke, and Coca-Cola Classic; heavily influenced new types of corporate sponsorships for sporting events; helped to bring the Olympic Games to Atlanta, directed a new “strategic philanthropy”, helped bring the number of eight ounce servings of Coke poured everyday around the world to one billion, and established a foundation from his personal wealth with an endowment of $38 million (Greising 1998).
Born in Cuba in 1932, Mr. Goizueta attended Yale University and returned to Havana to work as a chemical engineer for a Coca-Cola subsidiary. He and his wife fled Fidel Castro’s regime in 1960, soon moved to Atlanta, and he became a vice president at the age of 35. His time as a refugee influenced his drive, business strategy, and management style – he has been quoted by Newsweek (Kaplan 1997) as saying, “Once you lose everything, what’s the worst that’s going to happen to you?”
Mr. Goizueta brought one hundred shares of Coke stock with him to the United States, and never sold it. As he eventually ran the company, he would often refer to “shareowners” instead of shareholders – his primary goal was to create value for those individuals who held a small piece of Coca-Cola (Greising 1998). He was also driven by an “economic value added” strategy: an attention to the bottom line and earning on investments based on current values (Greising 1998, 75).
Goizueta, who was estimated by Forbes to be worth about $1.3 billion at the time of his death (Enrico 1997), was admired for his legacy as a successful immigrant. Martin Martinez, then interim president of the National Hispanic Corporate Council said, “It meant something for us to say that one of the most famous companies in America—or the world for that matter—was run by another Latino.” (Enrico 1997, 03B)
Mr. Goizueta heavily influenced the world’s taste for Coca-Cola. Under his leadership, the company increased its share of worldwide soft drink sales from 35% to 48%. He entered into entered into joint ventures with bottling companies all over the world that helped solidify Coke’s presence in many different countries (Enrico 1997).
Ties to the Philanthropic Sector
Although Mr. Goizueta did not give much of his personal fortune during his lifetime, according to his critics (his $38 million gift to his own charitable trust in 1996 represented 3% of his net worth [Greising 1998]), his leadership at Coke and its meteoric rise in value indirectly benefited the city of Atlanta.
In 1997 at the time of his death, approximately 16% of Coke stock was held in the Atlanta metro area (Deogun 1997). He was quoted on Coke’s annual report as writing, “Governments are created to meet civic needs. Philanthropies are created to meet social needs. And companies are created to meet economic needs.” (Deogun 1997, 1)
Coke stock in the endowments of Emory University and Agnes Scott College grew tremendously. The Robert W. Woodruff, Joseph P. Whitehead, Lettie Pate Evans and Lettie Pate Whitehead foundations together, based on heavy investment in Coke, increased their giving from $5 million to $220 million (Deogun 1997). The foundations have given to museums and helped to build Centennial Olympic Park in downtown Atlanta.
Goizueta was a believer in “strategic philanthropy”, as evidenced by Coca-Cola’s corporate gift to the Boys & Girls Clubs in 1997. Wanting credit for the company, he won the privilege to push Pepsi out of clubs across the country in exchange for a $60 million commitment over ten years. He also directed Coke marketers to tie fundraising campaigns for the Boys & Girls Clubs into their own promotions (Greising 1998).
Key Related Ideas
Strategic philanthropy is a term used to describe corporations’ efforts to mix marketing and giving to charitable causes. Often companies desire something in return for their gifts, such as name recognition or product placement.
Indirect philanthropy is a phrase used to describe a corporation or person’s economic effects on charitable causes in the community in ways other than giving gifts. Roberto Goizueta’s leadership helped Coca-Cola grow in value, which in turn brought economic value into the Atlanta community and increased the portfolios of many Georgia foundations (Saporta 1997).
Shareholder value is the term applied to a business model that stresses an individual’s stake in the company, not just overall profits and losses. Mr. Goizueta always held tightly to his focus of helping those who have invested in Coca-Cola to get a return on what they’ve given. He believed that this was an ethical business practice.
Important People Related to the Topic
- Robert W. Woodruff (1889-1985): Former Chairman of Coca-Cola and founder of the Robert W. Woodruff Foundation, he helmed Coke until Mr. Goizueta’s tenure as CEO and became one of Coca-Cola’s biggest beneficiaries in terms of stock value.
- Warren Buffett (1930--): Owner of Berkshire Hathaway Inc, Coca-Cola’s biggest investor, and personal friend of Roberto Goizueta.
Related Nonprofit Organizations
- Emory University, which has an endowment built mostly from Coca-Cola stock, has benefited greatly from Coke’s investments in the Atlanta community (www.emory.edu).
- Boys & Girls Clubs of America, which received a generous gift from Coca-Cola under Goizueta’s direction and participated in their strategic philanthropy (www.bgca.org).
- Goizueta Foundation, which was established through a $38 million dollar gift from Mr. Goizueta and funds charitable organizations in Georgia. Its mission coincides directly with his business and philanthropic philosophies (www.goizuetafoundation.org).
Related Web Sites
The Coca-Cola Company’s website at www.coca-cola.com contains information about the company’s history, its current operations, and its charitable giving activities.
The Robert W. Woodruff Foundation’s home page at www.woodruff.org provides insight into another Coca-Cola-based foundation and its charitable works.
Bibliography and Internet Sources
Greising, David. I’d Like The World To Buy A Coke. New York: John Wiley & Sons, Inc., 1998. ISBN: 0471194085.
Saporta, Maria. “Roberto C. Goizueta: His Leadership.” The Atlanta Journal-The Atlanta Constitution 19 October 1997: C-02. In Factiva [database online]. Accessed 15 October 2004. Available from Indiana University Libraries.
Deogun, Nikhil. “The Legacy: Goizueta Spearheaded Coca-Cola Stock Rise, And Its Home Thrives.” The Wall Street Journal Europe 20 October 1997: 1. In Factiva [database online]. Accessed 15 October 2004. Available from Indiana University Libraries.
Enrico, Dottie, and Chris Woodyard. “From immigrant to ‘giant of American industry’ A world leader in business and a role model in life.” USA Today 20 October 1997: 03B. In Factiva [database online]. Accessed 15 October 2004. Available from Indiana University Libraries.
Kaplan, David, and Daniel McGinn. “The end of an era: a management legend, Coca-Cola’s remarkable Roberto Goizueta succumbs to lung cancer.” Newsweek 27 October 1997: 44. In Factiva [database online]. Accessed 15 October 2004. Available from Indiana University Libraries.
Saporta, Maria. “Coke’s Legacy in Atlanta Venerable Company the Bedrock of Economy.” The Atlanta Journal-Constitution 9 May 2004: F1. In Factiva [database online]. Accessed 15 October 2004. Available from Indiana University Libraries.This paper was developed by a student taking a Philanthropic Studies course taught at the Center on Philanthropy at Indiana University. It is offered by Learning To Give and the Center on Philanthropy at Indiana University.