Critical Analysis of PepsiCo's Diversity and Inclusion Policies

This report provides a comprehensive analysis of PepsiCo's diversity and inclusion initiatives, focusing on leadership commitment, organizational policies, and HR strategies. It examines PepsiCo's historical efforts, including early integration of African American employees and the appointment of the first female board member. The report explores PepsiCo's diversity and engagement policies, HR initiatives, and retention strategies, including location-free policies. It also compares PepsiCo's approach to that of Coca-Cola. The report highlights the importance of diversity as a business advantage, promoting innovation and employee engagement. The analysis includes a discussion of the role of key leaders, such as Steve Reinemund and Indra Nooyi, in shaping PepsiCo's diversity efforts. The report concludes with recommendations for future improvements to ensure continued progress in diversity and inclusion.

Running head: DIVERSITY AND INCLUSION AT PEPSICO
Diversity and Inclusion at PepsiCo
Name of Student:
Name of the University:
Author note:

1DIVERSITY AND INCLUSION AT PEPSICO
Table of Contents
1. Introduction.........................................................................................................................2
1.1. Background of the study:.............................................................................................2
1.2. What is Workplace Diversity?.....................................................................................2
2. Discussion:..........................................................................................................................3
2.1. PepsiCo, Inc.:...............................................................................................................3
2.2. PepsiCo’s Diversity and Engagement Policies:..........................................................3
2.3. PepsiCo’s HR Initiatives towards Diversity:...............................................................5
2.4. PepsiCo’s Retention Policy.........................................................................................6
2.5. Recommendation:........................................................................................................7
3. Comparison to Coca-Cola’s Diversity Initiatives:..............................................................8
References:.................................................................................................................................9

2DIVERSITY AND INCLUSION AT PEPSICO
1. Introduction
1.1. Background of the study:
The current workplaces are facing seismic changes in dynamics during these recent times
as global markets are on their rise. With workplaces encompassing more of a global outlook,
it will be important for diversity to not be just an added benefit in company policies, but it
needs to becomes more of a necessity in organisational strategies and policies adopted by the
company (Anjorin and Jansari 2018). It is becoming increasingly common for all business
executives to value diversity positively in their workplace, as a greater reach and access into a
bigger pool of employees is always going to be helpful for the organization. This bigger
employee pool is filled with people who have very different world-views and this helps the
company get insight into what the similarly diverse customer pool requires (Ozturk and Tatli
2016). This paper will be analysing the importance given to diverse workplace, specifically
related to gender diversity, at Pepsi Co, along with the policies and strategies that are already
in place and finally, the degree to which these policies are being followed and accepted.
1.2. What is Workplace Diversity?
To put it simply, the definition of workplace diversity can be accurately stated as being
the creation of such an environment that does not have a problem in accepting the differences
among individuals working at the company (Davis, Frolova and Callahan 2016).
Additionally, the company’s policies and strategies are able to appropriately embrace the
strengths provided by the diverse employees and be able to identify what opportunities can be
capitalized on so that these employees’ full potential can be integrated into the company’s
success. It is also important to keep in mind that diversity does not only fall under race or
ethnicity, it can also be related to gender, handicapped individuals, an individual’s

3DIVERSITY AND INCLUSION AT PEPSICO
socioeconomic background, sexual orientation and also according to age (Hunt, Layton and
Prince 2015).
2. Discussion:
2.1. PepsiCo, Inc.:
PepsiCo is an American brand that sells a range of multinational food and snack products
along with their main product line being carbonated beverages. The company’s headquarters
are located in Harrison, New York (Venkataraman, Summers and Venkataraman 2017). The
formation of the company happened in the year 1965 after the company signed a merger of
the Pepsi-Cola Company and the Frito-Lay Inc. Based on the net revenue that the company
generates with its demand being worldwide, puts PepsiCo on the list of being the second
largest food and beverage company in the world (Rama, Han and Hessels 2018).
2.2. PepsiCo’s Diversity and Engagement Policies:
The executives at PepsiCo believe that diversity will no doubt increase the corporate
social responsibility of the company, but it is also a necessary outlook to accept for the future
betterment of the company (Scandelius and Cohen 2016). These executives believe that the
only way that the company will be the strongest is if there is an environment that is fully able
to embrace the whole spectrum that humanity provides. The company has been able to make
great strides in past with being a pioneer among its competitors to incorporate diversity into
its workplace. For example, in the 1940s the company was the first to integrate African
American employees into their sales force. Additionally, in the 1950s the company was first
amongst its competitors to have hired their first female board member. It is great to see that
PepsiCo embraces diversity and engagement to its fullest extent and views it as a business
advantage that will motivate the company’s innovation, improve its reputation in the market

4DIVERSITY AND INCLUSION AT PEPSICO
and also positively impact the levels of engagement that the employees have with the various
different members of the community (Sumedrea 2016).
Steve Reinemund was PepsiCo’s first senior leader that focused on diversity in the
workplace which arose from making sure that the inclusion became the centre of the working
culture of the company. At first, these initiatives were met with a great level of resistance
because a lot of the existing employees at that time had felt that with these new policies,
some people would be promoted based solely on the intention to keep up diversity in the
workplace, and not necessarily due to that person actually deserving the promotion. The
company faces a hiccup in 2002 when they were not able to meet their diversity goals, this
then amplified the resistance by the employees to policies related to diversity. The actions
that Reinemund had taken towards increasing diversity were equally reflected in the role of
all the employees because he had formulated a goal which required all the employees to be
equally motivated to ensuring that the company’s diversity goals were met.
When Indra Nooyi took over as CEO after Reinemund’s resignation, she had her work cut
out for her with regards to increasing diversity in the workplace. However, one thing that
proved to be a great advantage for her is the fact that she knew exactly what it meant to
belong to a minority and still be able to rise to the top. With this experience, she knew what
the challenges were for someone who is a woman and also a person of colour to successfully
integrate themselves in corporate climate that has not yet fully been able to accept the totality
of inclusion in the workplace. Reinemund’s efforts in creating a diverse workplace at
PepsiCo was highly successful in America, but Nooyi’s goal was to ensure that the same was
being followed all over the world at PepsiCo’s workplaces (Branson 2019).
Starting place for Nooyi’s initiative to increase diversity in the workplace needs to start
from the top where the board members should display the range of people that are welcome

5DIVERSITY AND INCLUSION AT PEPSICO
in the company. After all, the board members will be the true reflection of the company’s
efforts. However, it will not be appropriate for Nooyi’s efforts to stop there as her goal is to
make inclusion and diversity a cultural norm at PepsiCo because she believes that this will
ensure that the company is able to be in a desirable position among the surrounding
community it is present in along with increasing their appeal to future and existing
stakeholders.
2.3. PepsiCo’s HR Initiatives towards Diversity:
For an individual to be able to make a conclusion about the degree of success of HR
efforts being made towards diversity, it will be vital to first examine what the HR policies are
that exist at PepsiCo. The main aim of the HR goals is to ensure that all the employees at the
company are able to mutually respect one another along with pushing each other in gaining
positive professional development (Sangwan 2016). Some of the programs and policies that
are followed by the HR department at PepsiCo are as follows:
 Prohibit any workplace harassment and discrimination based on race, sex, age,
ethnicity, national origin or disability.
 Prohibits all forms of forced labour which includes prison, child, military or slave
labour.
 Responsibility to provide the workers with safe working conditions that will not
harm their physical wellbeing.
 Ensure that all employees are getting sufficient remuneration for their contribution
to the company, also making sure that through the association with PepsiCo the
employees are able to reap any benefits that they are eligible for (PepsiCo 2019).
Along with the given policies that are required to be followed, Nooyi has given
PepsiCo’s HR department all the responsibility of ensuring that the company is able to build

6DIVERSITY AND INCLUSION AT PEPSICO
a successful Global Leadership team. There are have been many articles that have accused
the company in not letting the HR department have even one full seat at the Leadership table,
but all these have been disproven with the fact that the people working under the HR
department have been able to occupy almost 4 seats at the table alongside the Chief
Executives and the respective Presidents of the company’s major operating units. Nooyi, after
her shift to becoming the CFO of the company formulated a new vision for the company to
follow called, Performance with Purpose. This vision consisted of three pillars that supported
its goals – human, environment and talent. Being able to align all these initiatives will ensure
that the company’s HR department’s values are transformed into accepting diversity as the
business norm.
HR managers at PepsiCo realize that for the company to be able to attract the cream
of the talent pool, they will need to ensure that the company has just as good of a reputation
that will ensure that the best and brightest of the lot will want to send in their applications
(Salicru et al. 2016). The global talent acquisition team of PepsiCo implements both
traditional and progressive methods of recruitment to ensure that they are able to attract a
diverse workforce. What is very interesting to see is that, with Nooyi becoming a part of
PepsiCo, the HR recruitment teams globally have been able to make hiring female leaders a
very key component in their strategy for recruitment. They have made active efforts to join
female-focused groups such as Mogul and Fairygodboss to ensure that their efforts towards
hiring female workers is not just a statement on a financial paper, but is a reality that the
company is striving towards.
2.4. PepsiCo’s Retention Policy
Executives at PepsiCo ensure that a holistic approach is maintained when considering the
growth of employees along with their development in the company (Gupta and Haque 2015).
The company executives take annual employee satisfaction surveys and ensure that the

7DIVERSITY AND INCLUSION AT PEPSICO
results of these surveys are given a proper platform when discussing how to improve
employee engagement in the workplace. A survey conducted in the year 2016 and 2017 have
given results that show that the employees at the company value the success of the company
as a high priority, and also give importance to ensuring that they have a professional growth
during their time working at this company and finally, the results showed that the employees
are able to see the efforts being made by executives and the senior leadership in effectively
aligning the work given to the employees with the success of the company in the future.
Late last year, PepsiCo’s Indian office had adopted a location-free policy to improve their
employee retention rates. For an employee to be working under the location-free roles would
mean that these employees have the ability to work from anywhere in the country while being
a part of the functional groups present within India. This will also ensure that the company is
taking proper advantage of the full extent to which technology can benefit an organization,
along with being able to be the aspiration for other companies to align their employee
retention policies similar to that of PepsiCo (Chaudhary 2017).
2.5. Recommendation:
After dedicating almost 12 years of her live working as PepsiCo’s CEO, Nooyi had
stepped down from her position. This creates a slightly worrying situation for PepsiCo as the
consumers and stakeholders in the market will be unsure whether under new management,
the company would still be able to ensure that all the efforts that have been made towards
creating a diverse workplace does not go in vain, and is carried into the future. It will the
responsibility of the current CEO, Ramon Laguarta to ensure that existing diversity initiative
are still being held as principle for the company.

8DIVERSITY AND INCLUSION AT PEPSICO
3. Comparison to Coca-Cola’s Diversity Initiatives:
Coca Cola PepsiCo
Diversity Policies
The company has a global
diversity mission in which
they aim to reflect the same
diversity present in the
marketplace, in their
workplace to ensure that
inclusion and fairness is
recognized.
Ensure cultural along with
gender diversity in all roles
present in the workplace.
How well do executives
accept diversity?
Executives are incredibly
welcoming of the concept of
increasing diversity and
ensuring inclusion in the
work place. This can be seen
from the fact that there are
almost more than 7000
global members of the
company that have proven to
be the driving force in
shaping the culture of the
company.
All the executives have
reflected the same thinking
followed by Indra Nooyi,
and they have all been
successful in hiring people
from very different
backgrounds, along with an
increase in the number of
women employees being
hired.
Employee Retention
Techniques
Coca Cola’s employee
retention techniques have
been primarily related to the
programs and policies that
are in place for the company
in terms of wages, training
and promotion opportunities
and the overall employee
motivation and satisfaction
levels.
 PepsiCo has put great
attention on the results of
the employee satisfaction
surveys and has ensured
that future company
policies are able to
successfully address any
issues that may have been
brought forward.
 Implementation of the
“location free” strategy to
ensure that employees do
not have to leave the
company just because they
want to relocate

9DIVERSITY AND INCLUSION AT PEPSICO
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