The New Talent Acquisition Frontier - Case Study Example

Benchmark Progress towards Sustainability of the of the No. Executive Summary The brand value and profit generation of a modern corporate company depends on its sustainable activities in business. In the current era, consumption and production activities in business are considered to be appropriate, only if such activities do not harm the aesthetic value of the environment. This paper will analyze the sustainability initiatives of two popular multinational companies Coca Cola and PepsiCo. The sustainability activities of the two companies will be judged according to the Harts Sustainability Framework, 1979. This framework will make the estimate and compare the eco friendly initiatives of the two companies on the basis of four dimensions, namely pollution prevention, clean technology, base of pyramid (indicating crystallizing growth of the two companies) and product stewardship. The paper will conclude that PepsiCo is the leader in terms of sustainability activities, when compared with that of Coca Cola. Finally some specific recommendations will also be provided, on the basis of which any company can improve its sustainable activities. Contents Executive Summary 2 Contents 3 Introduction 4 Hart’s sustainability framework 4 Company profile of PepsiCo 5 Company profile of Coca Cola 5 Sustainability strategy for PepsiCo 6 Sustainability strategy for Coca Cola 6 Hart’s Sustainability Analysis of PepsiCo 7 Hart’s Sustainability Analysis of Coca Cola 8 Leader among the two 9 Recommendations 10 Conclusion 11 References 12 Appendix 14 Introduction In the recent times, the concept of “Triple Business Line” has become very important. According to this policy, the company can aim to improve its business by abstaining from harming the people, planet and profitability (Butje, 2005). Modern day business enterprises are increasingly investing in sustainable practices as they have realized that in order to achieve competitive advantage these practices are indispensible. The organizations are also getting highly engaged in corporate social responsibilities for creating a better impact on the community (Hawkins, 2006).). This paper discusses about Hart’s sustainability framework, which stresses on the importance of sustainability in global business. The first part of the essay briefly discusses about the model that has been proposed by Stuart Hart and Marks Milstein. This model has been extremely advantageous in understanding the particular benefits that can be enjoyed by a company by following the sustainable strategy. Then this framework is used to understand the sustainability measures that have been adopted by two of the largest beverages companies, PepsiCo and Coca Cola Company. The idea is to determine the market leader between these two companies. Hart’s sustainability framework Stuart Hart along with Marks Milstein devised the model of sustainability value framework, which linked societal challenges to sustainability in a global economy with value of the shareholder. Hart had adapted a framework of natural resources that can be adapted by firms to gain competitive advantage. This is because Hart believed that organizations will be constrained in decisions taken by them in the future because of environmental considerations (Loucks, et al., 1998). So, future success of a company will depend on the extent to which it had adopted economic activities that are environmentally sustainable. Figure 1 in the Appendix shows the Harts Sustainability Model. The framework foregrounds four coordinates and each coordinate highlights the strategy that can be followed by a business organization and corresponding advantages that can be enjoyed by them if they follow those strategies. This model shows that there are four main strategies, which need to be considered by the business; namely clean technology, sustainable vision, pollution prevention and product stewardship. If an organization follows these strategies, then the corporate benefits that can be enjoyed by them are innovation and repositioning; growth trajectory; cost and risk reduction; and reputation and legitimacy, respectively. Hart strongly believed that global challenges that are encountered by businesses in creating sustainable development are a multifaceted issue, which includes not only economic considerations, but also social and environmental ones (Hart & Milstein, 2003). Company profile of PepsiCo PepsiCo is an American multinational company (headquartered in New York) that focuses on food and beverages. It was founded in 1965 with the merger of Pepsi Cola and Frito Lay. The company has partnerships of contract manufacturers, bottlers and various other partners through which it sells; markets; and distributes its products. Presently, the company has its presence in over 200 countries. The basic business structure of the company can be divided into four major groups: PepsiCo Americas Foods (PAF) PepsiCo Americas Beverages (PAB) PepsiCo Europe PepsiCo Asia These four business divisions conduct the global business across geographies. The primary business of the company spans over manufacturing, marketing and selling salty and sweet grain-based snacks, non-carbonated and carbonated beverages, dairy products and other type of snacks. The organization has 22 brands in different product category. The company generates revenue in billions of dollars across various countries from sales of products operating under the different brands (Reuters, 2014a). Company profile of Coca Cola Coca Cola is also an American multinational company (headquartered in Atlanta, Georgia) with a huge scale of operation. The company was incorporated in 1892. Since inception, the company has ventured into producing a range of innovative beverages. Coca Cola emphasizes on manufacturing, retailing and marketing of non-alcoholic beverages. The company manufactures and distributes both sparkling and non-sparkling beverages. The company is best known for its carbonated beverage soft drink known as Coca Cola. The business of the company is spread across various continents such as, North America and Latin America, Eurasia and Africa. The company has bottling partners that contribute in distribution and selling of products. The organization manufactures the products and then sells it to wholesalers, distributors and bottling partners who distribute them to the retailers (Reuters, 2014b). Sustainability strategy for PepsiCo PepsiCo follows high sustainable standards not only in environmental sustainability, but also in human resource sustainability. The environmental sustainability standard of the company stresses on improving the use of water in production techniques by 20% by the end of 2015. The company sustainability report published in 2010 had shown that PepsiCo had already enhanced its water-use efficiency by 18%. The second issue for the company was to better efficiency of fuel-use. It had aimed to reduce fuel-use intensity by 25% to comply with better production technologies (PepsiCo, 2010). An organization can improve its environmental performance with the use of recyclable products and thermal energy, instead of fossil fuel based energy. PepsiCo has been using renewable fuels and recycled water in its Casa Grande facility, which signals a great progress towards incorporating sustainable technology. The organization has taken its recyclability commitment very seriously and has emerged as an industrial leader in the recycled polyethylene terephthalate (PET) (PepsiCo, 2010). This policy has been actively followed in the United States and the company is determined to expand this practice in other international markets. The human resource sustainability of the company is based on four pillars, namely talent acquisition, talent management, accessible learning framework and inclusionary culture, for supporting the present and future talent. The company has been recognized for its sustainable practices by Dow Jones Sustainability index (DJSI), North America, for the seventh consecutive year. PepsiCo is also one of those companies, which had identified the link between society and corporations (Chun & Evans, 2013). The basic sustainability goals of Pepsi Co are provided in the Appendix in Figure 3. Sustainability strategy for Coca Cola Coca Cola is one of the market leaders in sustainability commitment. In the recent times, two major commitments of the company have been to reduce carbon footprint throughout the value chain and achieve zero waste sustainable packaging methods. The company is also striving to improve water wastage in its production for attaining better environmental standard. The reduction of carbon footprint has a direct impact on the environment and climate. The organization is also striving to achieve a better environment in the workplace. Using reusable and recyclable materials in production and packaging process can lower carbon footprint in the value chain. The company even has an ambitious target to propagate utility of recycling among consumers for better results. In 2008, the company had declared that it would build 15 new heat and power combined plants in an effort to promote greener initiatives by 2009. These types of cogeneration facilities not only enhance efficiency of energy production, but also reduce emissions, including greenhouse gases. The company had also signed a contract with the alternative transportation system company, ZAP in Uruguay and uses compact trucks of this company for distribution of beverages. The rationale behind this was to scale down fuel consumption in the distribution system as compact trucks of this company use one-fifth of the fuel, compared to that used in traditional models. The company has plans to expand this strategy to the larger cities for diminishing the problem of traffic congestion, environmental pollution and shortage of parking lots (Chiras, 2012). It can be seen that both these companies have used sustainable technologies in the production process so as to arrest the adverse environmental impacts, thereby making it difficult to determine the best between them. In order to find out the better performing company between the two, this paper now employs Hart’s framework. Hart’s Sustainability Analysis of PepsiCo Pollution Prevention (lowering risk and cost): The environmental sustainability commitment of the company has allowed it to save more than $15 million in costs that was incurred in water usage. The company has estimated that through environmental sustainable production techniques that aim at reducing pollution, it can make incremental cost savings of $1.5 billion by the end of 2014 (PepsiCo, 2013). Energy and water conservation technology that are implemented by the company is expected to cut down pollution and save its costs. The greenhouse gas emissions of the company had not shown much increase since 2008, implying that the company has been effectively arresting pollution. The improvement in energy efficiency has enabled the company to save $70 million in 2012 (PepsiCo, 2013). Product Stewardship (increasing legitimacy and reputation): PepsiCo has been immensely successful in its water stewardship programs. The company has constantly reduced its water usage and has remarkably brought down water usage by 20% since 2006 (PepsiCo, 2013). The organization has also been able to provide safe drinking water to more than 3 million people, thereby winning Stockholm Industry Water Award and U.S. Water Prize in 2012. This has made the organization more legitimate and contributed positively towards its reputation. The packaging weight of the products has also been lessened effectively, thereby upholding commitment of the company in every step of environmental stewardship. Clean Technology (improving repositioning and innovation): PepsiCo has been using clean technology not only in the process of production, but also in that of distribution. The company has already brought down the level of its fuel and water consumption. In an attempt to lower the level of environmental pollution, the company has joined National Clean Fleet Partnership in 2011 (U.S. Department of Energy, 2013). The company has been actively using this clean fleet in its U.S.A. transportation to achieve better results. Base of the Pyramid (crystallizing growth): PepsiCo is actively involved in providing strategic grants in regions where it operates through the PepsiCo foundation. In 2006, the company had opened a potato chip factory in West Bengal, India (one of the relatively poor states), to help poor farmers with the contract farming arrangements, instead of sourcing potatoes from a richer state (C. Wilson & P. Wilson, 2006). The other humanitarian works introduced by the company include Food for Good (to provide nutritional food to poorer communities), Diplomas Now (to promote education) and various disaster relief programs (PepsiCo, 2012). Figure 4 in the Appendix shows the various eco friendly activities and achievements of PepsiCo in the market. Hart’s Sustainability Analysis of Coca Cola Pollution Prevention (lowering risk and cost): The organization has been using methods like, efficient packaging; reduce water; and energy consumption to reduce environmental pollution. The estimated cost saving of the company from lightweight packaging technologies is $180 million dollars. The following chart shows the level of reduction of CO2 emissions of the company. The company has already achieved 25% reduction in the waste materials. In several places, the company has been working with the local governments so as to preserve natural hot springs (Coca Cola Enterprises, 2011). Between 2008 and 2012, 300 such programs have been implemented. The achievements of Coca Cola in terms of carbon emission Product Stewardship (increasing legitimacy and reputation): The water stewardship commitment of the company is very strong and present level of achievement shows that the company has been able to increase their level of production by 12%; yet, water usage has fallen by 5%. This reflects a commendable performance of the company in water stewardship (Coca Cola Enterprises, 2011). The company enjoys a good reputation among the business groups for their efficient business practices. Clean Technology (improving repositioning and innovation): The company has been using efficient and clean technology in its production. The company has put honest efforts to reduce carbon emissions in not only production, but also in methods of transportation and technology. In order to reduce adverse environmental impacts of the operational facilities, the company has been planning to use recycled goods in production process. This hugely lowers the adverse impacts on the environment. The cleaner technology is innovative and provides competitive advantage to the company. Figure 9 in the Appendix shows that the company has significantly reduced the usage of water over time through superior use of technology. Base of the Pyramid (crystallizing growth): Coca Cola has been actively promoting charitable and humanitarian activities to improve the lives of millions of agents in the supply chain. The company has helped farmers of China and Africa to attain a better livelihood (Liu, 2012). These labor intensive economies have benefitted highly from practices of the company. By 2012, the company had successfully planted 8000 vending machines to aid the disaster relief programs (Coca Cola, 2012). The sugar farmers of poor developing countries have benefitted from the company. The three pillars of leadership for Coca Cola are given in the Appendix in figure 5. Figure 6 and 7 briefly shows the various sustainability activities of Coca Cola. Figure 8 in the Appendix shows the composition of donations provided by Coca Cola in 2012. Leader among the two After analyzing the organizational practices, it seems that both the companies are performing extremely well as per the environmental standards. However, few evidences have shown that PepsiCo has performed slightly better than Coca Cola in achieving the environmental standards. A few facts from reports of the former are sufficient to validate this claim. The sustainability report of PepsiCo has shown different aspects where PepsiCo has already surpassed the goals it had set before time. For instance, it has been found out that as far as water reduction commitment in production is concerned, PepsiCo had achieved this goal four year ahead of its schedule. In fact, introduction of “Performance with purpose” has shown that the company has been setting trends in the business in which it operates. Again, in its commitment towards providing safe drinking water to millions, PepsiCo had achieved this goal three years ahead of its target. Coca Cola, on the other hand, is on track and is likely to achieve its goals in the near future. Even in terms of greenhouse gas emissions, the company had achieved its goal before time, resulting in enormous cost savings. The various awards and accolades that have been won by PepsiCo also suggest that it deserves to be an industry leader. The winning of DSIJ prize for seven consecutive years is a clear indication that PepsiCo had been performing better to meet the environmental standards. Apart from this, various other awards like, Energy star of the Environmental protection agency and Forbes, had recognized PepsiCo for its sustainable works. Recommendations A company can improve its sustainability in business operations in the following way: Firstly, creation of an integrated public policy that encompasses all the activities of the company like carbon pricing, new energy generation, or greenhouse emissions. Secondly, involving the customers in the sustainability measures, like setting up company websites and educating the people about the need of sustainability. Thirdly, integrate the sustainability feature in the corporate business model itself. This allows the company to carry out its business in a responsible manner. When the companies are using sustainable business practices then they can leverage the sustainability to create a variety of products for the market which can help them to improve their financial benefits. Finally, greater involvement in the community development can improve both the reputation and the financial returns of the company. Most of the companies have realized that business development without community development is not sustainable in the long-run. Conclusion This project has employed Hart’s sustainability framework to understand the sustainable standards that are adopted by two of the fiercest competitors in the food and beverages industry. It was observed that both of these companies had employed sustainable environmental practices in all four dimensions, which have been described by Hart. This has proved to be immensely beneficial for both companies as they have emerged to be the top performers in their business genre. This implies that the understanding of Hart was absolutely correct and companies do need to rely on economic, environmental and social standards to gain competitive advantage. Determining the market leader between these companies has been a difficult task. Yet, the fact that PepsiCo has achieved most of its environmental goals ahead of the schedule indicates that among these two companies, PepsiCo is the market leader. References Butje, M. (2005). Product Marketing For Technology Companies. London: Routledge. Chiras, D. D. (2012). Environmental Science. Burlington: Jones & Bartlett Publishers. 7 Chun, E. & Evans, A. (2013). The New Talent Acquisition Frontier: Integrating HR and Diversity Strategy in the Private and Public Sectors and Higher Education. Virginia: Stylus Publishing. Coca Cola Enterprises. (2011). Our sustainability plan. Retrieved from http://j.cocacola.co.jp/positively/pdf/2013/ccjc2013_e_all.pdf Coca Cola. (2012). Sustainable Packaging. Retrieved from http://www.coca-colacompany.com/sustainabilityreport/world/sustainable-packaging.html#section-managing-packaging-to-manage-risk Coca Cola. 2013. Sustainability Report 2013. Retrieved from http://j.cocacola.co.jp/positively/pdf/2013/ccjc2013_e_all.pdf Hart, S. L. & Milstein, M. B. (2003). Creating sustainable value. Retrieved from http://www.stuartlhart.com/sites/stuartlhart.com/files/creatingsustainablevalue.pdf Hawkins, D. E. (2006). Corporate Social Responsibility: Balancing Tomorrows Sustainability and Todays Profitability. Basingstoke: Palgrave Macmillan. Liu, C. (2012). Multinationals, Globalisation and Indigenous Firms in China. London: Routledge. Loucks, O.L., Erekson, O. H., Bol, J. F., Gorman, R. F., Johnson, P. C. & Krehbiel, T. C. (1998). Sustainability Perspectives for Resources and Business. New York: CRC Press. PepsiCo. (2010). Performance with Purpose. Retrieved from http://www.pepsico.com/Download/PepsiCo_2010_Sustainability_Summary.pdf PepsiCo. (2012). PepsiCo Performance with purpose. Retrieved from file:///C:/Users/user/Downloads/PepsiCo_2011-2012_Sustainability_Summary.pdf PepsiCo. (2013). PepsiCo Announces Strategic Investments to Drive Growth. Retrieved from http://www.pepsico.com/Download/2012_Outlook_Release.pdf 8 Reuters. (2014a). PepsiCo INC. Retrieved from http://in.reuters.com/finance/stocks/companyProfile?symbol=PEP.N Reuters. (2014b). Coca Cola INC. Retrieved from http://in.reuters.com/finance/stocks/companyProfile?symbol=KO.N U.S. Department of Energy. (2013). National Clean Fleets Partner: PepsiCo. Retrieved from http://www1.eere.energy.gov/cleancities/pepsico.html Wilson, C. & Wilson, P. (2006). Make Poverty Business: Increase Profits and Reduce Risks by Engaging with the Poor. Sheffield: Greenleaf Publishing. Appendix Figure 1: Harts sustainability framework (Source: Hart & Milstein, 2003) Figure 2: Achievement in carbon emission reduction (Source: Coca Cola, 2013) Figure 3: Sustainability Goals of Pepsi Co (Source: PepsiCo, 2013) Figure 4: Sustainability of Pepsi Co (Source: PepsiCo, 2013) Figure 5: Three Pillars of Leadership for Coca Cola (Source: Coca Cola, 2013) Figure 6: Coca Cola Sustainability Initiatives (Source: Coca Cola, 2013) Figure 7: Sustainability Activities of Coca Cola (Source: Coca Cola, 2013) Figure 8: Charitable Donations of Coca Cola (Source: Coca Cola, 2013) Figure 9: Reduction in Water Usage Coca Cola (Source: Coca Cola, 2013) Read More