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System04002

Societal and Ethical Responsibility 1
Table of Contents
Introduction................................................................................................................ 2
The Extent of Obligation of the Company for the Societal and Ethical Responsibility 2
The Challenge of Resolving the Strategic Tension between Business Performance
and Responsibility...................................................................................................... 4
The extent to which the Company can achieve a compromise between these
different purposes...................................................................................................... 4
Finding a Balance between the long-term objectives and the short-term objectives. 6
Pespsico India could be accused of “ethical washing” rather than a genuine
commitment to do the right things............................................................................. 8
Summary.................................................................................................................... 9

Societal and Ethical Responsibility 2
Introduction
Pepsico is one of the largest Food and Beverage Company all across the globe and manufactures
different beverages and snack food to achieve the retail sales. In 2007, Indra Nooyi became the
CEO of Pepsico and since then it has achieved several accolades and prizes. The company has
been ranked in the top 25 best global brands and ranked number one for Green Award by the
Environmental Protection Agency. In the present paper, the case study of Pespsico India has
been evaluated. In the recent years, the company has realized its responsibility towards the
business environment and made several initiatives for the same. These changes have also
benefitted the company in terms of financial profitability. Pepsico has expanded the product
portfolio and included several healthy food products. It has also washed the image of the
company. Previously, the company was known for the carbonated drinks, which are not good for
health; however, the recent expansion in the product portfolio has successfully changed the
image of the organization. Along with it, the company has also shifted to the healthy ingredients
so that it can offer more healthy products to the customers. The present paper has discussed the
extent of obligations of the business organizations for the society. It has also evaluated how
much trade-off can be conducted to achieve the obligation towards the society.
The Extent of Obligation of the Company for the Societal
and Ethical Responsibility
Over the years, the company has established its brand by diversifying the product portfolio and
designing an effective branding strategy. Pepsico has evolved from a low price leader to a
lifestyle drink brand, which has established a substantial market share of the organization. Nooyi
adopted the strategy of the “performance with Purpose”, which states that the private
organizations have the responsibility to fulfill the environmental, social and the ethical

Societal and Ethical Responsibility 3
responsibilities. The performance is the ability of the organizations to deliver superior and
qualitative financial performance to the investors of the company (Ruggie, 2017). The ‘purpose’
refers to the company’s commitment to the human sustainability. The company takes initiatives
to manage the natural resources, establish sustainable talent and workplace safety and investment
in the operational areas of the organization.
It can be critiqued that it is the responsibility of the organization to address the social and the
environmental challenges. The business organizations are a part of the society. They conduct
business with different sections or the stakeholders of the society. The business organizations
make profit due to their interaction with the society. Therefore, it is important that they give
back, that they take from the society. It is also important for the long term sustenance of the
organizations. If there will be no natural resources or water, these organizations will diminish.
The existence of the business organizations is linked with the existence of the existence of the
society and the health of the environment (McWilliams & Siegel, 2001).
The environmental and the social concern make the organization a single unit as the employees
and the customers’ works as a single unit towards the welfare of the society. It is also essential in
creating a positive feeling towards the organization. The employees believe a sense of purpose
and that they are doing something for the welfare of the society. The organization has to develop
a positive bond with the customers too, and it can only be achieved with the help of social and
ethical initiatives. In the current environment of the intense competition, it is important for the
organizations to take some additional initiatives for making a profit (Tantalo & Priem, 2016).
The level of competition allows the organizations to take the purchase decision according to the
manner in which they are contributing the society.