Sustainable Development Assessment Case Study

PEPSI CO. Company

Pepsi Co Company is mainly made up of seven divisions in total consisting its branches in: PepsiCo Beverages North America, Latin America, Frito-Lay North America, Europe & Africa, Quaker Foods North America, Asia Pacific and Middle East & South Asia (PEPSICO, 2020). The products of Pepsi Co are enjoyed by a huge number of consumers world-wide nearly about more than one billion in more than 200 countries and territories around the world. In 1965, Donald Kendall, the CEO of Pepsi-Cola and Herman Lay, the CEO of Frito-Lay revealed their vision which led to what quickly becoming known as one of the world's leading food and beverage companies: PepsiCo. This vision of their have come true but still having such great consumers, they have to be unique, disciplined, innovative and sharp in their sustainability plans and strategies. According to recent records, PepsiCo have generated more than $70 billion as their net revenue in the year 2020 (PEPSICO, 2019). Their brand is mainly driven by a complementary food and beverage portfolio that includes Frito-Lay, Gatorade, Pepsi-Cola, Quaker, Tropicana and SodaStream.

PepsiCo’s Organisational Culture

In simple words, a firm’s organizational culture presents its traditions, values, and ways through which the staff members, employees and the workers perform in the organisation and how they are contributing towards the achievement of the organisational goals within the set time period with the highest quality of work and results as expected by the management. According Sehrawat (2019), the organisational culture of Pepsi Co mainly indicates the company’s internal and external commitment towards maximizing the existing strengths and developing new and fruitful strengths of the company’s human resources. The three main present features of their organisational culture says –

Performance with Purpose, where they commit to perform purposefully for the company, customers, communities & the planet along with their corporate social responsibilities.

Real World Leadership, where their organisational culture promotes employees to leadership positions based on what the investors, employees, communities and customers really needs.

Frank (2020) said that Collaboration, where the integral part of PepsiCo is their teamwork as per their organisational culture which incorporates its collaborative efforts and strengths too.

PepsiCo’s Sustainable practices

It can be undoubtedly said that PepsiCo is one of those enterprises that have great sustainable management practices in them which enables its executives to effectively drive towards a sustainable culture. Specifically in the coming years, PepsiCo has some effective sustainable plans which they are incorporating in their organisation for a sustainable development –

Torkornoo and Dzigbede (2017) revealed that expanding their Sustainable Farming Initiative (SFI) to approximately 7 million acres from the current status by the year 2025 which will cover all the crops that collectively comprised of nearly about three-quarters of its agricultural-based spending.

Extending their Supplier Code of Conduct to all the franchisees and joint venture partners.

Investment of about $100 million in partnership with the PepsiCo Foundation to give support to all those initiatives which will benefit nearly around 12.5 million women and girls worldwide by 2025 (Busco et al. 2017).

Continue to develop the workforce into a diverse, inclusive and engaged form reflecting their continued focus on achieving gender equality & parity in PepsiCo's management operations, roles and pay equity for women.

PepsiCo’s Current challenges

Currently the Covid-19 pandemic situation is the most common and biggest challenge for not only PepsiCo but for all the business organisations out there round the globe. Apart from this, there are some other major challenges that are the present concern for PepsiCo –

Sales growth – Beba and Church (2020) declared that due to a long locking down of the world for the reason of social distancing in the pandemic period, they are presently facing rising cost issue since there will be less direct cash returns to shareholders in the ear 2021 as compared to the 2020 period.

Right on pace – The rival company Coca-Cola might enjoy a more dramatic rebound in this period for that mainly thanks to all the facts that its portfolio is more focused on their on-the-go beverages. On the other hand, for the downward side, PepsiCo is still making plans to spend almost nothing on their stock buybacks in this year as they were focusing mainly on their investments in the business though this could also give a faster annual growth as compared or even better from the last two fiscal years for around 5% increase (White et al. 2020).

PepsiCo’s Power and Political processes

PepsiCo have always given their best possible contributions to the political aspects such as the PepsiCo Concerned Citizens Fund (CCF) which receives all the voluntary employee contributions to make the political campaign contributions for the U.S. federal and state political parties, committees and candidates (PEPSICO, 2020). The PepsiCo’s CCF and other corporate contributions always provided an important opportunity for the PepsiCo Company and their employees for participate in the democratic process. All these contributions and supporting initiatives of the U.S. or state candidates, political parties or other political committees under the CCF or the other corporate funds must be made in accordance with the applicable campaigning finances and other disclosure laws (Rama et al. 2018). PepsiCo’s employees must obtain the approval of the corporate vice president, Public Policy and Government Affairs, before making any kind of political contributions of the company’s corporate funds. All these contributions must be properly reviewed by the corporate law department and also bt the external expert counsel to ensure legal compliance.

PepsiCo’s Stakeholders

The corporate social responsibility initiatives of PepsiCo primarily reflect all those needs of the business growth and development as well as the concerns of the stakeholders, thereby always give a supporting hand with a holistic approach to the global business management (PEPSICO, 2019). PepsiCo’s major stakeholder groups, arranged according to the company’s prioritization are as follows:

Consumers and customers - They are on the top priority list in the list of PepsiCo’s stakeholders list. PepsiCo’s consumers and customers as stakeholders have the highest priority in PepsiCo’s corporate social responsibility strategy making and planning process. This group of stakeholder mainly determines all the financial standing of the company in terms of the revenues.

Communities – They are also an important stakeholder for PepsiCo since they are majorly thrusted in the list corporate social responsibilities for ensuring that it must always put a positive impact on the society (Farache et al 2018). The interests of Community stakeholder include corporate support for all the community development programs that the PepsiCo Foundation provides financial assistance for.

Employees – The Employee stakeholder group is mainly interested in all those career development and fair compensation which addresses such concerns like PepsiCo’s “Talent Sustainability” policy goal which is aimed “to provide a safe and inclusive workplace globally”.

PepsiCo’s Corporate Social Responsibilities

Some of the major CSR initiatives of PepsiCo can be listed as –

Quality & Food Safety Programs that have been developed by PepsiCo are mostly focused and dedicated towards the production of the safest, highest-quality and best-tasting beverages and foods and distribute them in every part of the world.

PepsiCo’s Healthcare Reforms give values to the health and well-being of the associates, partners, customers and consumers offering a wide range of benefits all of which encourages wellness, promotes healthy living in daily life and gives associates and their families tools and information to take educated healthcare decisions for themselves and families.

PepsiCo Company is focused and committed towards being an environmentally responsible corporate company citizen through their Sustainable Packaging Council (SPC), Global Sustainable Agriculture Policy, Environmental Policy and many more (Kleinman et al. 2017).

PepsiCo’s Solid Waste Management Programme & initiatives in association and partnership with the Exnora which is an environmental NGO generated with partnership and provided a clean environment to more than 450000 people.

PepsiCo’s Ethical business practices

PepsiCo’s Global Code of Conduct was issued and got effective from October 1, 2012 and has always been amended periodically from which the most recently done amendment was effective on August 1, 2021 to address the changing laws or procedures that are impacting their business operations. Some of the ethical business practices under the Global Code of Conduct of PepsiCo Company can be enlisted as –

There should be given equal respect to all the employees whether superior or subordinate in the office environment and it must be followed strictly in the organisational culture of PepsiCo.

As stated by Jallow (2021) it is mandatory for PepsiCo under the Global Code of Conduct that they must create a trustworthy image with a purpose of the brand of the company in the marketplace among the competitors, suppliers, retailers and the consumers.

Church (2019) opined that they always preferred to be fair and honest in their competitive nature with the rivals which made them create goodwill in the market and helped in making more entrusted business relationships with dealers and suppliers promoting more partnerships too.

Findings

This case study about the sustainable development plans programs and strategies of the PepsiCo Company can be summarised as being a top food and beverage brand have always given their best possible contribution in all the aspects whether it is towards the political policies and power utilisation or it is for the protection and sustainable growth the environment being an active citizen of the community. PepsiCo have always performed all their corporate social responsibilities with full dedication, focus and sincerity towards the community, suppliers, stakeholders, consumers and the society itself. There organisational culture represents their internal corporate environment and how the employees fulfil their duties for the shared company goals. PepsiCo’s current challenges can be redeemed by their future planned sustainable practices and strategies.

The main current challenge is to be on the right track and pace and return effectively in the market after the Covid-19 pandemic crisis and this can be done quickly with their strictly effective and efficient ethical business practices. This case study analysis of PepsiCo Company showed that with some proper practices and appropriate strategies, PepsiCo can be back on track in the market with the competing rivals with a great sustainable growth and development.

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References

Beba, U. and Church, A.H., 2020. Changing the game for women leaders at PepsiCo: From local action to enterprise accountability. Consulting Psychology Journal: Practice and Research, 72(4), p.288.

Busco, C., Fiori, G., Frigo, M.L. and Angelo, R., 2017. Sustainable Development Goals: Integrating sustainability initiatives with long term value creation.

Church, A.H., 2019. Building an integrated architecture for leadership assessment and development at PepsiCo. In Evidence-based initiatives for organizational change and development (pp. 492-505). IGI Global.

Farache, F., Tetchner, I. and Kollat, J., 2018. CSR communications on Twitter: an exploration into stakeholder reactions. In Corporate Responsibility and Digital Communities (pp. 145-163). Palgrave Macmillan, Cham.

Frank, L., 2020. The impact of organisational culture on the involvement of indirect procurement by their internal stakeholders: A case study from the FMCG industry (Master's thesis, University of Twente).

Jallow, D., 2021. A Strategic Case Study on PepsiCo. Available at SSRN 3828353.

Kleinman, G., Kuei, C.H. and Lee, P., 2017. Using formal concept analysis to examine water disclosure in corporate social responsibility reports. Corporate social responsibility and environmental management, 24(4), pp.341-356.

PEPSICO, 2019. MISSION & VISIO, available at: https://www.pepsico.com/about/mission-and-vision

PEPSICO, 2020. ABOUT THE COMPANY, available at: https://www.pepsico.com/about/about-the-company

Rama, Z., Han, H. and Hessels, E., 2018. When Brands Go Political: A PepsiCo Case. LBMG Corporate Brand Management and Reputation-Masters Case Series.

Sehrawat, S., 2019. Pepsico’s Sustainable Strategies. Journal of Management, 6(2).

Torkornoo, H. and Dzigbede, K., 2017. Sustainability Practices of Multinational Enterprises in Developing Countries: A Comparative Analysis of Coca-Cola and PepsiCo. Full Issue V11N2, 11(2), pp.19-30.

White, M., Nieto, C. and Barquera, S., 2020. Good deeds and cheap marketing-The food industry in the times of COVID-19. Obesity (Silver Spring, Md.).