Comparative Business Ethics and Social Responsibility of PepsiCo - Case Study Example

Name: Tutor: Course: Date: Comparative Business Ethics and Social Responsibility of PepsiCo Balancing of stakeholders PepsiCo has a responsibility of meeting the needs of different groups of stakeholders within its operations like shareholders, consumers, regulators, special interest groups, and the government. PepsiCo has to meet its organizational goals without leaning too much towards one interest group. PepsiCo has an overall commitment to its community. The success of the company depends on its stakeholders and hence, PepsiCo strives to understand the wants and needs of the consumer in order to ensure sustainability. PepsiCo meets stakeholder’s expectations through integrity, product quality, and honesty in fulfillment of the company’s goals. To achieve these goals on the part of the behalf of the stakeholders, the company ensures that there is effective communication and transparency. PepsiCo current leadership comprehends the crucial role played by stakeholders and the essence of developing effective dialogue in order to assists PepsiCo to deal with conflicts. PepsiCo has ensured that it caters for the needs of shareholders through new product development, entry to new market and increased sales through using celebrity endorsement strategy (Werther & Chandler 32). Shareholders are interest in increased performance and profitability. Celebrity endorser has helped the company grow its market and penetrate into new markets like the Russian market. Pepsi’s celebrity partnerships increased the market share until Coca-Cola market share begun to drop. In order to meet the emerging needs of consumers Pepsi introduced Diet Pepsi in 1964 as a response changing lifestyle towards health. Goals of PepsiCo involved focusing on countries outside the United States, having a net-zero effect on the environment, creating a better working environment, and creating a better working environment (Soule 136). Consumer needs are met through diversification into different brands that address different needs. Increase in Health consciousness has forced the company to develop products have low calories and absent in toxic chemicals. Research has been done to come up with healthier brands that meet the health needs of the consumers. Some of these products include Honest Tea, Vitamin water, Muscle Milk. Interest groups’ needs are met through ensuring that PepsiCo does not engage in any unethical activities. Farmers and government officials have been concerned about environmental pollution by unrecyclable plastic material from the company. Pepsi has resulted into recyclable packaging material and introduced Dream Machine recycling initiative. Consumers earn points when they recycle their bottles. The points can be redeemed for things like coupons, movie tickets, or other goods. Pepsi is committed towards sustainable growth and the community through what it calls “Performance with Purpose”. PepsiCo gives back to its stakeholders and communities while observing high standards, setting and meeting goals, as well as producing attainable outcomes. ‘Performance with Purpose’ consists of employees, the environment and the products. PepsiCo addresses these areas in order to be socially responsible (Cohen 172). PepsiCo has changed its product line to incorporate healthier options that involve reducing sugars, fats and other ingredients that are unhealthy. The products meet consumer needs for easy access. The need for healthier food and convenience is balanced by PepsiCo. Continuous research is done to come up with healthier products and reduce the need for unnecessary editions. PepsiCo response to stakeholder concerns on sustainability and nutrition PepsiCo has done its best to address the concerns raised by stakeholders with regard to sustainability and nutrition to high degree. PepsiCo has addressed sustainability concerns by reducing the negative effects that result from consumption and production of its products. The company ensures water conservation and reduction in waste products as well as reduction of its carbon footprint. The company implements programs to reduce waste and ensure conservation of resources (Soule 135). This entails water treatment and recycling efforts whereby recycled water is thoroughly treated and reused within the company’s products. In 2009, the company saved 11billion liters in the year 2009 alone. PepsiCo has invested in clean energy sources like turbine project in India that supplies more than 75% of the power used in a whole year in its beverage plant in Mamandur. PepsiCo has reduced significantly the amount of plastic used in its beverage containers. The amount of waste send to landfills has consequently reduced to great extent. UK manufacturing facilities of the company do no longer send waste to landfills. In the U.S. Frito-Lay reduced waste material that was sent to landfills by 45% in the two years. The company is creating partnerships with community organizations with an effort to increase recycling efforts. Products sold and manufactured by PepsiCo have resulted into many challenges for the company with regard to health. The company has produced products geared towards health. Health concerns of drinking soda have been fought back by PepsiCo through creation of sodas which have low sugar and calorie content. Some concerns of taking soda include tooth decay owing to acidity of soda, weaker bones, and caffeine dependency. The company has produced alternative products that are healthier such as Baked Cheetos, Baked Lays, and SunChips. The alternatives are healthier all-round. Continual research and product development is important in providing healthier products for future profitability of PepsiCo. Frito-Lay website contains a place devoted to health and describes the ingredients used in Frito-Lay snacks. Consumers are called upon to take pace in moderation in snack food consumption. PepsiCo objective is to invest more in health food and almost $10billion income comes from healthy snacks produced by the company. The company has significantly tried to impress interest groups by ensuring nutrition sustainability. Moreover, PepsiCo is employing the services that have been potential enemies of the organization. Former officials of Mayo Clinic and World Health Organization are some of the employees that are researching healthier ingredients to use in PepsiCo snacks. Zero-calorie natural sweetener has been developed and used in new brands. A growing health-conscious market requires that PepsiCo research for products that are healthier and do not contribute to lifestyle disease (Sims 22). PepsiCo is required to put words ‘Public Water Source’ on the label following concerned raised by watch group Corporate Accountability International which pointed out that PepsiCo was using tap water to fill water bottles and sell it. PepsiCo is coming up with bottles that use less amounts of plastic per bottle with regard to waste issue. The company has focused to decrease its packaging by 350 million pounds by last year. Work Cited Cohen, Elaine, CSR for HR: A Necessary Partnership for Advancing Responsible Business Practices, Melbourne: Greenleaf Publishing, 2010, p172 Sims, Ronald, R., Ethics and Corporate Social Responsibility: Why Giants Fall, Ontario: Greenwood Publishing Group, 2003, p.22. Soule, Sarah, A. Contention and Corporate Social Responsibility, Cambridge: Cambridge University Press, 2009, p.135, 136. Werther, William, B. & Chandler, David, Strategic Corporate Social Responsibility: Stakeholders in a Global Environment, London: SAGE. p32. Read More