Case Study of Pepsico-Free-Samples for Students-Myassignmenthelp

Question: Discuss about the Food and Berverage Company of your chosen Organization. Answer: Introduction Pepsico is one of the largest Food and Beverage Company all across the globe and manufactures different beverages and snack food to achieve the retail sales. In 2007, Indra Nooyi became the CEO of Pepsico and since then it has achieved several accolades and prizes. The company has been ranked in the top 25 best global brands and ranked number one for Green Award by the Environmental Protection Agency. In the present paper, the case study of Pespsico India has been evaluated. In the recent years, the company has realized its responsibility towards the business environment and made several initiatives for the same. These changes have also benefitted the company in terms of financial profitability. Pepsico has expanded the product portfolio and included several healthy food products. It has also washed the image of the company. Previously, the company was known for the carbonated drinks, which are not good for health; however, the recent expansion in the product portfolio has successful ly changed the image of the organization. Along with it, the company has also shifted to the healthy ingredients so that it can offer more healthy products to the customers. The present paper has discussed the extent of obligations of the business organizations for the society. It has also evaluated how much trade-off can be conducted to achieve the obligation towards the society. The Extent of Obligation of the Company for the Societal and Ethical Responsibility Over the years, the company has established its brand by diversifying the product portfolio and designing an effective branding strategy. Pepsico has evolved from a low price leader to a lifestyle drink brand, which has established a substantial market share of the organization. Nooyi adopted the strategy of the performance with Purpose, which states that the private organizations have the responsibility to fulfill the environmental, social and the ethical responsibilities. The performance is the ability of the organizations to deliver superior and qualitative financial performance to the investors of the company (Ruggie, 2017). The purpose refers to the companys commitment to the human sustainability. The company takes initiatives to manage the natural resources, establish sustainable talent and workplace safety and investment in the operational areas of the organization. It can be critiqued that it is the responsibility of the organization to address the social and the environmental challenges. The business organizations are a part of the society. They conduct business with different sections or the stakeholders of the society. The business organizations make profit due to their interaction with the society. Therefore, it is important that they give back, that they take from the society. It is also important for the long term sustenance of the organizations. If there will be no natural resources or water, these organizations will diminish. The existence of the business organizations is linked with the existence of the existence of the society and the health of the environment (McWilliams Siegel, 2001). The environmental and the social concern make the organization a single unit as the employees and the customers works as a single unit towards the welfare of the society. It is also essential in creating a positive feeling towards the organization. The employees believe a sense of purpose and that they are doing something for the welfare of the society. The organization has to develop a positive bond with the customers too, and it can only be achieved with the help of social and ethical initiatives. In the current environment of the intense competition, it is important for the organizations to take some additional initiatives for making a profit (Tantalo Priem, 2016). The level of competition allows the organizations to take the purchase decision according to the manner in which they are contributing the society. The social and the ethical initiatives also allow the organizations to provide media visibility and create a positive workplace environment for the employees. Today, most of the customers prefer to be engaged with the brands, which have taken some social initiatives (Ioannou Serafeim, 2015). Therefore, the companies are not only obliged to work for the social and the ethical issues, but it is a preferable choice for the customers. The Challenge of Resolving the Strategic Tension between Business Performance and Responsibility It can be stated that it is the preferred choice of the organizations to conduct business in an ethical manner. However, there is an underlying tension as there is a conflict of interest between the ethical and the economic interest of the business organizations. A business is developed and grown with the pursuit of the self-interest and economic profitability; however, ethics is the realization that the interest of other people is equally important. There are two sides of the debate regarding the responsibility of the business, as some people argue that the only obligation of the business is to make as much profit as possible; however, the other side of the debate states that the companies have moral responsibilities along with the responsibility of turning up the profit. Both the theories agree that the business organizations have certain responsibilities; however, there is dispute over the extent of responsibilities. The ethical issues in the business organizations refer to the di lemma which arises for the business managers regarding whether to advance the personal interest or the interest of the society (Okpo, 2013). The extent to which the Company can achieve a compromise between these different purposes In the context of large business organizations, the business managers regularly face ethical and moral dilemma. A several number of managers will face ethical issues, in the operations of the organization. If the moral code of the organization is dubious, it will affect the business operations in the long run. Therefore, it is important for Pepsico to achieve a compromise between the social concerns and the financial benefits. It is important for the organization to understand that the Corporate Social Responsibility (CSR) initiatives and the social campaigns can uplift the brand image of the organization (Bridoux Stoelhorst, 2014). On the other hand, immoral and illegal practices can damage the companys reputation. However, the socially responsible changes require significant amount of financial investment. For instance, when Pepsico India switched to rice brand oil, the amount of profitability decreased as it was costlier than the other types of oil. Therefore, there is compromise between the financial profitability and the social initiatives of the organization. However, there is significant difference between the for-profit and not-for-profit business organizations. If Pepsico will not try to achieve the maximum profit from its operations, it will not be justified with the shareholders or the investors of the organization. Milton Friedman has given the famous shareholders theory, which states that it is the responsibility of the business organizations to make the maximum profit. This theory does not agree that the business enterprises should take the social responsibilities and invest in activities, which are that of social interest. The only responsibility of the business organizations is to invest in the interest of the shareholders (Antonelli, D'Alessio, Cuomo, 2017). The sole responsibility of the business organizations is to be concerned about the interest of their investors, while abiding the basic rules of the society. The corporate executives should work in the benefit of the investors and in their capacity as a businessman; they should act in the interest of the employers, even though some other action is preferable for the interest of the community. Along with it, it is challenging to exercise the social responsibility as the business managers have to properly allocate the resources of employer for the social purpose. On the other hand, the stakeholder theory emphasize that the business managers must be considerate of the ethical rights of the different stakeholders and must not violate them. The stakeholders should be focused on the legitimate rights of the different stakeholders. The stakeholder theory emphasize on the moral values, idealism and the long term relationship base on the foundation of organization, society and the community. It means that the business managers should be considerate of the interest of the stakeholders, even if it reduces the profitability if the organization. Therefore, the business organizations should try to maintain a firm balance between the philanthropic activities and the profit pursuits (Carroll, 2015). The managers of the company should not do anything to make a profit, and they should not bend to increase profits through unethical means. Pespsico should try to make a specific budget for the CSR activities so that it should not focus on philanthropic activities. The stakeholders theory ultimately aims for the existence of the organization. Finding a Balance between the long-term objectives and the short-term objectives In the present competitive world, it is a challenge for Pepsico to sustain the present competition and make long-term plans for the growth of the organization. Another challenge in the formulation of the long-term and short-term objective is to align them so that they result in the growth of the organization. The long-term objectives are the strategic plan for the future growth in the upcoming ten to twenty years. It encompasses the management of the natural resource and enhancing the employee welfare in the organization. It creates a sustainable workforce, which is engaged with the organization. It is the primary responsibility of the CEO or the management of the organization. It is a major challenge to articulate the financial goals of the organization with the mission and the strategy of the organization. The business goals, mission and objectives are imposed by the shareholders of the organization. The business practices are also rooted in the values and the philosophies of the top management. However, despite the importance of the strategic objectives of the organization, the financial objectives are so apparent and tangible, that these organizations make profitability the focal point of tension and disputes at a higher level. It is important to gradually mature the principal product line of the organizations and develop the market in the similar manner. The companies can remain successful and maintain a sustainable position, only if develop strategies for the long-term sustenance of a healthy share in the market (Tai Chuang, 2014). Therefore, in order to maintain harmony between the long-term and short-term objectives, it is important that the company do not give maximum priority to the financial returns of the organization (Flammer, 2015). Moreover, the company should be adaptable to the economic and the competitive environment changes. Pepsico also changed to reinvent its image in India. It introduced several products, which can appeal to the Indian taste buds. The CEO of Pepsico has also understood that maintaining the financial objectives of the organization is a never-ending process, in which the competing and the conflicting priorities of the organization should be balanced. Currently, the corporate business environment is very unstable and can rapidly change according to the shift in the power of the market forces. Pepsico should also understand it and build its innovation capabilities. In the recent years, the customers have become highly aware and want to be associated only with the companies, which are concerned about the environment. Therefore, Pepsico is engaging in these activities and using it to connect with the employees and the customers. Pespsico India could be accused of ethical washing rather than a genuine commitment to do the right things With the analysis of the case study, it can be posited that Pepsico India has a genuine commitment to engage in environmentally and socially responsible activities. The CEO and the top-level management of the organization understand that the organization has the responsibility towards the environment and; therefore, several actions have been taken for the same. A few products in the newly introduced healthy product portfolio have not been successful; still the company is continuing them. In addition to it, the company is also concerned about its supply chain and believes that it is the responsibility of the organization to assure that the lower section of the supply chain are treated in an effective manner. If the company has been engaged in ethical washing, and was not genuinely concerned about the welfare activities, it could have been identified from its CSR activities. Although these activities have been crucial in developing a bond with the employees and the customers, the purpose of the organization is not to use them in promotion and advertising campaigns. It has made huge investment in adapting into sustainable operations so that different benefits can be passed to the customers of the organization. Additionally, it has made the changes in the supply chain so that the sustainable actions can be performed by the business organizations. The company has also invested in establishing a dynamic and sustainable workforce. Several efforts have been taken to recruit and select the talented workforce in the organization (Schwartz, 2017). They are also provided training so that they can grow with the organization and develop themselves. Summary In the present, the case study of Pepsico India has been analyzed, which has recently taken several ethical and socially responsible initiatives. It has been argued that these actions of the company are genuine and not made to portray an excellent image. The company has made several initiatives such as expanding the product portfolio, switching to healthy ingredients and developing a sustainable workforce so that it can give back, what it has taken from the community. It is argued that social and ethical initiatives are the responsibility of the organization as they are the part of the society. The stakeholders theory also posits similar belief and states the financial profitability should not be the sole aim of the organizations. References Okpo, O. (2013). 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