Pepsio's Ethical And Socially Responsibility - Essay Example

PepsiCos Journey toward an Ethical and Socially Responsible Culture PepsiCo is an international organization offering 13 different brands in foods and beverages, though Pepsi is the most famous among them all. The case of PepsiCo is a useful study for modern business organizations for variety of reasons. It is a success story of a humble beginning of cold beverage which was commercialized across the globe and provided multiple generations a choice of drink which is affordable, convenient and perceived to be useful as well.

In today’s business environment, the practices adopted by PepsiCo provide an insight into how to involve key stakeholders in defining organizational priorities. The modern 21st century has high focus on corporate social responsibility whereby commercial, profit oriented organizations are required to share their profits with the communities they serve. The concept is promoted as paying back to the society which is the major profit generating origin for commercial organizations. The contemporary response upon corporate social responsibility obligations and initiatives has been quite negative when money spent on these activities was included in the cost budget with no identified revenue or profit contribution.

Organizations like PepsiCo changed this perception and marked corporate social responsibility as an investment whose return is provided in terms of customer loyalty, employee loyalty, better corporate image and increased market penetration. The literature is rich in explaining the benefits achieved through these factors and industry has uncountable evidences for them. Apart from conventional corporate social responsibility practices like spending on environmental cleanliness, waste reduction, recycling, donation for education, health and welfare of the deprived sector of society, PepsiCo included its business goal in its corporate social responsibility agenda.

As mentioned in the case, it wants food and beverages to be available to consumers with convenience and affordability. Coupled with this objective is PepsiCo’s guiding principle; sell only products we can be proud of (Ferrell, Fraedrich, and Ferrell, 557), speaking of its commitment to high business standards. The fine balance between short term and long term objectives and between profit generation activities and socially responsible behaviour is the key, which the modern organizations should adopt.

As mentioned in the case, PepsiCo is criticized for its contribution to obesity and its sweetening ingredients that pose serious risk to teeth health. As a response, PepsiCo is determined to create and maintain balance between convenience of access and health friendliness. It shows that no product is perfect and business always has the trade off between its interests yet defining standards for acceptability of less pleasant aspects and making them transparent to the consumers can help business organizations win loyalty of customers.

Today’s business environment is facing cut throat competition, the challenges related to financial performance, stakeholders’ satisfaction and sustainability measures are severe enough to invite adoption of industry best practices. PepsiCo’s case provides a deep insight in useful and effective business practices not only for food and beverage industry but also for every organization in general and transnational ventures in particular. By spending on social causes instead of marketing and advertising activities, PepsiCo’s management prove their commitment towards society service.

Works Cited Ferrell, O., John Fraedrich and Ferrell. Business Ethics: Ethical Decision Making & Cases. USA: Cengage Learning, 2014. Print.