The Worlds Most Ethical Companies: PepsiCo - Essay Example

PepsiCo Ethical Review PepsiCo Ethical Review PepsiCo is one the major successful companies currently operating globally. In fact, PepsiCo is the second largest food and beverage producing and distributing company in the world after Coca Cola Company. It is the leading food and beverage producing company in North America (Pepsi, Inc., 2013). PepsiCo Company has a long history of the foundation. The company began in 1898 as Pepsi-Cola Company. Later in 1965, Pepsi-Cola Company merged with Frito-Lay and formed a new company known as PepsiCo Company. In 1998, the company acquired Tropicana to increase its production. It also merged with the Quaker Oats Company in 2001. Currently, the company is distributing and providing food and beverages in more than 200 countries in the World. The PepsiCo Company produces several products that gain a large market share in the market compared to other products. Their main product categories include soft drinks, snacks, side dishes, rice snacks, cereals, energy drinks, coffee drinks and breakfast bars. PepsiCo’s business success is as a result of their moral responsibility and treatment to customers, employees and the environment. The company has appropriate and perfect treatment strategies to customers and employees. In addition, it is sensitive to environmental conservation and prevention of environmental pollution (PepsiCo, 2014). First, PepsiCo Company relates well with its customers. This enhances increased sales and improved relations with the customers. The company is socially responsible and sustainable and has a sound advertising strategy with more than forty slogans and songs. These slogans and songs are keys advertising strategy that the company incorporates. Secondly, the company offers promotion to its customers. This is a good strategy of improving customer relations. Late in 2003, Pepsi joined hands with Apple computers and announced promotion that would give one hundred million songs to Pepsi consumers. These free songs were from Apple’s iTunes music store which is a digital music download provider. The promotion initiative places specific codes in one litre bottles of Pepsi, Diet Pepsi, and Sierra Mist. The winning codes get free songs in the iTunes music store. The promotion is an example of PepsiCo’s strategy of capturing young customers. PepsiCo has three Pepsi zone lounge in California, Florida and Illinois. These lounges feature plasma TVs screens, couches, video games and computer stations. Everything in the lounge is free except the Pepsi vending machine which carries a variety of Pepsi products. This strategy will help to evaluate the effectiveness before expansion. The company provides good and quality products to their customers. They own a wide variety of smaller brands of products. This helps PepsiCo to offer a wide range of products from beverages to snacks to their customers hence satisfaction. The company provides strong brand of products that are worldwide known. Their customers also enjoy their products at low prices. This makes their products affordable to all their customers. They also have various branches of their company in many countries hence their customers can acquire their products at affordable. The company also offers warranties to customer. This is important in case the customer buys products that have expired, in this case the company can replace their products. There is involvement of employees in decision making of the company’s strategy. The employees form part and puzzle of the company. Involving employees in decision making ensures that employees feel appreciated by the company. Therefore, they are ready to dedicate their work to the success of the company. PepsiCo uses this strategy when expanding to news venture areas. Soliciting ideas in various levels of the organization are large sources of cost saving, efficiency and staff morale improvements. The company also offers overtime payment to their worker. This motivates the workers and hence improves the productivity of the company at large. In March 2003, the company settled overtime payments their workers. Workers also receive allowances depending with the level in which the workers are working. The company many branches around the world create many job opportunities. Pepsi has been one of the major companies that assist in upgrading the environment. In 1990, the company committed to using 10% of the recycled materials in its plastic bottles. The company has gone further. The company aims at increasing its recyclability and packaging of the products. Increasing the recycling of post-industrial packaging related to products and making sure containers utilize materials that are compatible with accessible recycling system. The company has created and deployed convenient recycling solutions in the U.S. The solution captures plastic used in manufacturing bottles. In Brazil around November 2012, PepsiCo together with Cludad Saludable and GAIA Social launched a project to increase the recycling rates of Blaxially-Oriented Polypropylene (BOPP) films and PET in Brazil. This involves eight cooperatives in Sao Paulo. In the past five years, PepsiCo Company has reduced the packaging weight of their products by more than 350 million pounds. The packaging weight reduction that the company has achieved is equal to 95 tons of packaging materials each day during the five year period. In 2012, PepsiCo Mexico Foods won the sustainable packaging award for Sabritas’ environmental sustainable efforts. Sabritas’ invested in a stretch wrap system that significantly reduces waste products. The morally conscious decisions have effects on PepsiCo Company’s operations. First, the company has endured beautiful moments in the market due to these conscious decisions. PepsiCo Company’s sales have increased due to these decisions hence profitability of the company. This is as a result of a large customer base that the company has. A decision such as introducing lounge is a milestone in the market. This is because the target group comprises of teenagers. The customers can also acquire quality products at their disposal at affordable prices hence creating cooperate image. The employees endure job satisfaction. This is because they receive reasonable payment in terms of salaries and allowances. The employees hence dedicate their work to the company and hence the company progresses. The workers feel satisfied by the companies offer and hence there are no experiences such as strikes or boycotts. There is greater engagement by the company in the community development activities. PepsiCo creates cooperate image through safeguarding the environment. The community gets appeal of the company products and hence results to increased sales. The company performance is improving compared to the competitors in the market. This is because policies employed help the PepsiCo to compete effectively and fairly with the competitors. The management also has an easy time to run the company. PepsiCo has numerous policies that enable the company to function and produce appropriately in accordance to global laws and policies. PepsiCo has four categories of policies applicable to their operations.These categories cover areas of Environmental Sustainability, Talent Sustainability, Human Sustainability and Corporate Governance. First, the Environmental Sustainability policies are important in ensuring that the PepsiCo Company conserves the environment in all its activities especially in production and packaging of their products. They also assist the organization in protecting and conserving global water supplies and provide easier access to safe water. Some of the Environmental Sustainability policies are Environmental, Health and Safety Policy and Sustainable packaging policy. Secondly, Talent Sustainable policies are important tools that ensure the PepsiCo Company provide quality services and human rights to employees and customers. They also enable the organization to inform the public on social, economic and political issues. For instance, the HIV/AIDS policy ensure that the organization acts appropriately to HIV/AIDS issues like supporting public awareness campaigns. The talent sustainability policies include HIV/AIDS Policy, Human Rights Workplace Policy and Global Code of Conduct. Human Sustainability policies are also crucial in the PepsiCo Company. These policies ensure that the PepsiCo Company produces safe, high quality and best-tasting products especially beverages and foods. In addition, they ensure that products produced by the PepsiCo Company have appropriate quantities and qualities in the required standard. The Human Sustainability policies of the PepsiCo Company include Food Safety policy, Quality Organization, Global policy on Bioengineered Food and Ingredients, Children’s Food and Beverage Advertising policy, Beverages North America School policy, Sale of Beverages to Schools policy and Food Service policy. Although the company has good and functional policies, a comprehensive evaluation of these policies should be carried out to ensure that the policies provide equal benefits to all stakeholders of the organization. For instance, PepsiCo Company violated employees’ rights in various countries. First, the company has a negative attitude towards workers’ unions in various countries worldwide. Contrarily, the Coca-Cola Company is highly appreciating the employees’ union all over the world. For example, in 2002, 52 temporary workers in Argentina were fired from a PepsiCo’s potato chip factory. After, the permanent workers resisted the firing process;the factory deployed security guards to patrol the factory. The company should evaluate the employees’ rights and incorporate rights of temporary workers (Girard, 2005) Secondly, the Talent Sustainability policies should be reviewed, and appropriate amendment should be done. The company should have a comprehensive criterion of supporting political actions. According to Girard (2005), the company offers strategic donations to political leaders during elections to ensure that policies made by the political leaders are favorable and do not affect their activities negatively. For example, in 2004 elections, the company donated $254,826 to senatorial and congressional candidates where 63% went to Republicans and 36% to Democrats. The PepsiCo Company should provide donations equally to political aspirants without discrimination. Lastly, the company should amend and evaluate Human Sustainability policies especially advertisement policies. In 2005, the PepsiCo Company made a false advertisement claiming that their Tropicana orange juice reduced stroke and heart disease risk. However, their claim lacked sufficient and reliable evidence. The company should develop appropriate advertisement policies that prevent the company from posting false advertisement to consumers and enhance research (Girard, 2005). Reference Girard, R. (2005). Corporate Profile: PepsiCo. Polaris Institute. Retrieved from PepsiCo September 2005.pdf Cleary, A, LaBrie, S. &Lachance, M. (2009).PepsiCo.Retrieved from PepsiCo.ppt. PepsiCo (2013).2012 Annual Report.Retrieved from PepsiCo_2012_Annual_Report.pdf. PepsiCo (2014).Policies. Retrieved from http://www.pepsico.com/Purpose/Performance-with-Purpose/Policies Read More