A Complete Analysis of PepsiCo - Essay Example

?Mr Richard Thompson Executive Director Pepsico. Office of Executive Director April 15, 35 Rowland Street Sidney 2000 Mr P. Williams Executive of the Local Network F3782 PO Box Perth 6000 Dear Mr. Williams Our company is among the key competitors in the beverage industry globally. Our network in countries worldwide is important, a fact that increases our responsibility towards the environment. The protection of the environment is one of the firm’s priorities. In the firm’s mission statement, as published through the corporate website, it is made clear that ‘PepsiCo's responsibility is to continually improve all aspects of the world in which we operate - environment, social, economic - creating a better tomorrow than today.’ (PepsiCo, corporate website, Our Mission and Vision). In the context of the above statement, the firm’s operational activities have been aligned, as possible, with the principles of the Global Compact (U.N. Global Compact, The Ten Principles). Particular emphasis has been given on the 8th and 9th principles of the Global Compact, i.e. the development of initiatives to promote environmental responsibility, 8th principle, and the encouragement of the development of technologies that are environmentally friendly, 9th principle (U.N. Global Compact, The Ten Principles). The approaches currently used by our firm to promote these two principles are the following ones: a) the firm strongly supports environmental responsibility; the following examples reflect the specific trend of the firm: a1) various sustainable projects are promoted in the firm’s branches worldwide aiming to reduce energy used in daily operations, for instance ‘the co-generation system implemented in the firm’s branch in Connecticut; this system produces the electricity required for the entire operations of the particular branch; also, the heat project used in the firm’s facility in Guadalajara, Mexico’ (PepsiCo, Climate Change), a2) the materials used in the packaging of the firm’s products are appropriately selected so that any negative impact on the environment to be minimized (PepsiCo, Packaging and Solid Waste); b) at the next level, the firm promotes technologies that are environmental friendly, as for example: b1) ‘the vending units that use CO2 as a refrigerant’ (PepsiCo, Climate Change) and b2) the firm has promoted green building in all its facilities internationally (PepsiCo, Climate Change). 1. Lessons Learnt The application of the above practices has helped towards the promotion of the 8th and 9th principles of the Global Compact. An indication of the success of the firm’s efforts in the specific field is the following fact: in 2009 the firm was given a series of awards from ‘the U.S. Green Building Council’ (PepsiCo, Climate Change) for its facilities – built in accordance with the green building standards, as set by the above Council. On the other hand, the use of rocks in India for advertising reasons, an initiative, which set the local ecosystem in risk, proved that not all the firm’s practices are aligned with sustainability (The Peninsula 2002). However, the firm’s major competitor, Coke, which also used a similar practice, has also failed in fully aligning its practices with the principles of sustainability (The Peninsula 2002). It should be noted though that the practices of Coke in the area of sustainability, have resulted to important environmental benefits: for example, in 2009 the carbon footprint of the firm was reduced at 11.5% compared to 2007; also, the promotion of green building policies in the firm’s facilities worldwide (Environmental Leader 2010). 2. Recommendations The firm’s current policies in regard to sustainability (referring especially to the promotion of the 8th and 9th principles of the Global Compact) would be further improved through the following practices: a) development of sustainable-related programmes which will be supported by the locals (Ritchie 2000, 51) ; reference is made to community-based sustainable initiatives sponsored by the firm, b) establishment of a scheme of local-committee where people from local community could participate and state their view on the firm’s sustainable practices – referring to the firm’s unit in their region (Dernbach 2002, 698). 3. Benefits The development of the above practices across the organization would result to a series of benefits, both for the organization and for the society. The evaluation of these benefits should be based on their duration rather than on the resources required for their achievement. In other words, the achievement of the firm’s relevant targets in the long term should be preferred instead of trying to minimize cost and resources – a strategy which would have only short-term benefits. 3a. Benefits for the organization For the organization, the above practices would result to the improvement of its relationship with its stakeholders, a fact that could positively affect the organizational performance – under the terms the support of the stakeholders to the organizational activities will be kept high. Moreover, the brand name of the organization would become more powerful, improving the position of the firm in the international market. 3b. Benefits for the society On the other hand, the above practices would result to the decrease of the resources employed in the firm’s operations – more resources would be available for community purposes. Moreover, the environment in the areas where the firm’s facilities are established would be more efficiently protected, a fact that would positively impact the quality of life of the local population. Finally, consumers would have the chance to state their own view on the firm’s sustainable practices; in this way, the communication between the firm and the public will be improved and locals will be given the chance to decide on critical issues of their region. 4. Risks The suggested practices are related to certain risks: a) the willingness of people in local community to support the relevant plans is not guaranteed, b) the views of locals on sustainability may not be appropriate – in terms of their application on an industrial unit but also in terms of their cost. 5. Conclusion The update of the firm’s sustainable practices so that to be fully aligned with the 8th and the 9th principles of the Global Compact would be a challenging task; the willingness of the firm’s leaders and its employees for the success of the relevant policies is not adequate for these plans to succeed; the active participation of the locals is required. It is expected that through the appropriate promotion of the specific initiatives, people in each community will understand the value of the relevant projects. In the meantime, i.e. up to the completion of these projects, the firm’s existing practices on sustainability can guarantee the promotion of the 8th and 9th principles of the Global Compact, in the context described above. References Dernbach, John. 2002. Stumbling toward sustainability. Washington: Environmental Law Institute, 698 Environmental Leader. 2010. Coke Sustainability Report: Carbon Footprint Down Nearly 12%. http://www.environmentalleader.com/2010/06/17/coke-crs-report-carbon-footprint-down-nearly-12/ (Accessed April 15, 2011). Pepsico 2011. Our Mission and Vision. http://www.pepsico.com/Company/Our-Mission-and-Vision.html (Accessed April 15, 2011). PepsiCo. Climate Change http://www.pepsico.com/Purpose/Environmental-Sustainability/Climate-Change.html (Accessed April 15, 2011). PepsiCo. Packaging and Solid Waste. http://www.pepsico.com/Purpose/Environmental-Sustainability/Packaging-and-Solid-Waste.html (Accessed April 15, 2011). Ritchie, Bill. 2000. Criteria and indicators of sustainability in community managed forest landscapes: an introductory guide. Bogor: CIFOR, 51 The Peninsula. 2002. Pepsi~ Coke hauled up for rock damage. http://archive.thepeninsulaqatar.com/component/content/article/348-indiaarchiverest/63808.html (Accessed April 15, 2011). United Nations Global Compact 2011. The Ten Principles. http://www.unglobalcompact.org/AboutTheGC/TheTenPrinciples/index.html (Accessed April 15, 2011). Read More