The Impact of Indra Nooyi on PepsiCo's Sustainability and Greenwashing

This report examines the concept of sustainability, focusing on Indra Nooyi's contributions to PepsiCo and the company's "Performance with Purpose" strategy. It explores various leadership theories relevant to sustainable decision-making, including trait, behavioral, and transformational leadership. The report then delves into the issue of greenwashing, providing examples from companies like Nestle, Kauai Coffee, and Reynolds American. It analyzes the social impacts of these practices and offers short-term and long-term management recommendations for the companies to align with the "Performance with Purpose" model. The conclusion emphasizes the importance of women's empowerment, fair management systems, and the impact of businesses on public perception in establishing a sustainable environment.

Sustainability

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2............................................................................................................................................2
TASK 3............................................................................................................................................3
TASK 4............................................................................................................................................3
CONCLUSION................................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Sustainability is defined as a process or state that meets the needs of the present without
compromising the ability of future generations to meet their own needs. It leads to living with the
resources of the planet without damaging the environment mow or in the future. Through
adoption of sustainability an economic system that provides for quality life while renewing the
environment and its resources (Du, 2015). In this project contribution of Indra Nooyi is
represented for growth and development of one of the most leading organisation known as
PepsiCo. She is one of the most influencing women entrepreneur who plays significant role in
contributing to the growth of global and local economy. Nooyi's key contribution includes
promoting and supporting socially responsible business practices. “Performance with Purpose” is
one of the multiyear growth strategy implemented by CEO of PepsiCo.
TASK 1
Leadership is refers as an ability of individual or an organisation to guide individuals,
team or an organisation towards fulfilment of goals and objectives. Leadership theories are
schools of thought that brought forward to explain how and why certain individuals become
leaders. Certain leadership theories that helps in analysing the importance of sustainable
decisions as “Performance with Purpose” are defined as follows-
Trait Theory: This theory of leadership believes that people are either born or are made
with certain qualities that will help them to excel in leadership roles. Qualities such as
intelligence, sense of responsibility, creativity and other values helps in putting an individual in
shoes of a good leader (Epperson, Prochaska and Henriksen, 2018). This leadership theory helps
to develop a sense of responsibility when this quality in a leader is missing. As “Performance
with Purpose” defines one of its purpose to create a company that do right thing with
environment by plastic recycle, water use, reducing carbon footprints and helping farmers. A
good leader will help in establishment of organisation which gives importance to sustainable by
environment protection.
Behavioural Theories: As per this leadership theory behaviour of a leader reflects their
mental and psychological reactions in terms of some particular situations. A leaders behaviour is
important to influence its followers. As per this theory leaders are of two type one is
concentrated with the task and others those are concentrated with the people (Fairchild, 2016).
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Indra Nooyi is a great leader and and she was more concerned with people and provides
all her focus to generate an sustainable environment. As “Performance with Purpose” become
one of the most important goal in her leadership which helps taking sustainable decisions of
providing a balance among fun products and good products that are served by businesses to
society (Fenton, 2018).
Transformational Leadership Theory: This theory states that the process by which a
person interacts with others and is able to create a solid relationship that results in a high
percentage of trust. In long run it helps in increasing motivation among leaders and followers.
“Performance with Purpose” is totally based on how sustainability can be introduced in an
organisation. To enjoy sustainability PepsiCo serves a purpose towards its employees by
providing them a life as they come to work for their living. A support system is provided to
employees to feel workplace as their second home and in future tries to be with the company.
Thorough this human resources productivity will be high and sustainability is enjoyed by
PepsiCo (Islam, 2017).
TASK 2
Green washing is a practice of making an unsubstantiated or misleading claim about the
environmental benefits of a product, service, technology or company practice. Green Washing
can make a company appear to be more environmentally friendly that it really is (Companies
Accused of Green washing, 2019). In the current scenario there are large number of Fast Moving
Consumer Goods (FMCG) companies which are using sustainable positioning as their green
wash strategy. Some of the companies are as-
Nestle: In a report that is generated on Earth Day 2019 it was claimed that claim made by
Nestle for serving coffee made with cocoa beans is not actually made with the beans that are
claimed to be used in this process. Labelling of chocolate products using the phrase such as
“sustainably sourced” and “supports” farmers to make consumer believe that cocoa used are
produced following environmentally and socially responsible standards (Jonikaite, 2016). In
actual terms this comes from farms that use child labour and slave labour and company supply
chain has no “environmental standards in place”. Management decision of Nestle is not
following “Performance with Purpose” as considering environment benefits and helping farmers
are one of the prime purpose for sustainability.
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Kauai Coffee: Claim made by this organisation is serving “100% compostable” coffee
pods. This was termed as green washing out of single serve. The product is served by claiming
that great taste can be enjoyed and convenience of single-serve coffee without worrying about
environmental impacts. It certified 100% compostable pod is compatible with all K-Cup brewers
and is designed to go back to the land not the landfill. Some of the significant limitations was not
disclosed to consumers (Laszlo and Zhexembayeva, 2017). Organisation is enjoying sustainable
position using this strategy but as per “Performance with Purpose” management decisions are not
based on what better a company can do for society by serving fun products with good products.
Reynolds American: Natural American Spirit has been advertised in magazines as an
“eco friendly” smoke. This was accused as green washing by a campaign as cigarette smoke
spews more than 7000 chemicals into the environment and hundreds of toxic chemicals are
mixed with the environment causing cancer. “Performance with Purpose” is not followed by the
organisation as polluting environment is not suggested as a purpose which gives sustainable
development (Stoll, 2015).
TASK 3
Social impacts that are created by these organisation hinders position and image of
business as green washing is performed by these organisations to enjoys sustainability (Masri,
2019). Nestle gives a social message that child labour and slavery is acceptable. For example- in
producing cocoa beans in farms children are employed and this is not a purpose that was served
to be used by organisations just for sustainability and misinterpretation is provided to society.
Using the products that are not bio degradable but presented to be one then other organisations
and public will also maximise use of products that are not environment friendly.
Kauai Coffee has provided a negative impact to society for providing goods that are
dangerous for environment and manipulated it as organic goods. For example serving 100%
compostable goods will actually creates negative impact on society to not consider society
welfare on priority basis.
Reynolds American is serving with goods that are polluting environment and pretending
it to be good. This creates a negative impact on society by assuming that cigarettes are not
polluting environment.
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TASK 4
Short- term and long -term management recommendations for these companies will focus
on the idea “ Performance with Purpose ”. As in short run Nestle organisation needs to
understand that a business needs to contribute much more then financial returns towards society
to bring sustainability and improve performance. For Kauai Coffee in short run more focus will
be provided on social benefits rather then financial contribution for creating a positive image to
enjoy sustainability (Montabon, Pagell and Wu, 2016). Management of Reynolds American
organisations must focus that not even in short run purpose of the company gets hampered for
enjoying sustainability by green washing.
In long run all the products that are served by the Nestle must achieve performance target
by serving purpose of the products. Policies designed by management to be implemented in
organisation to manage its production, human resource and marketing all must be based on the
purpose of sustainability. Sustainability can not be achieved in one short by Kauai Coffee and
small efforts that are made in short run by management will help in achieving long term
sustainability (Reynolds and Frank, 2016). Management of these organisations design policies
that supports sustainable decisions as performance with purpose. Policies for serving consumers,
designing products, managing employees all are made in such manner that eventually in long run
business is established to give sustainable development (Stacchezzini, Melloni and Lai, 2016). In
long run Reynolds American needs to understand social welfare comes first and no misleading
information should be provided for achieving sustainability.
CONCLUSION
From the above project report it has been concluded that women's empowerment plays
important role in contributing towards growth of the global and local economy. The concept of
“Performance with Purpose” forms an important basis to introduce sustainability in the company.
Organisations which are using sustainable positioning through green wash strategy needs to be
evaluated on the basis of purpose served that provides sustainability by following fair system in
the management. Business organisations have huge impact on large public group as they
demonstrate their products in multi-pal ways beneficial to use and induces consumers to buy
them. When negative impact is created by businesses specially FMCG companies then it will
leads to provide a wrong social message that is not acceptable to establish a sustainable
environment.
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REFERENCES
Books and Journals
Du, X., 2015. How the market values greenwashing? Evidence from China. Journal of Business
Ethics. 128(3). pp.547-574.
Epperson, A. E., Prochaska, J. J. and Henriksen, L., 2018. The flip side of Natural American
Spirit: corporate social responsibility advertising. Tobacco control. 27(3). pp.355-356.
Fairchild, S. A., 2016. Make-Whole or Make-Short: How Courts Have Misread Title VII's
Limitations Period to Truncate Relief in EEOC Pattern-or-Practice Cases. Am. UL Rev.
66. p.195.
Fenton, D., 2018. Green advertising and its influence on brand loyalty in the FMCG market in
Durban North (Doctoral dissertation, The IIE).
Islam, M., 2017. Critical evaluation of the supply chain of Nestlé Bangladesh Limited.
Jonikaite, G., 2016. Greenwashing and its effects on today’s consumer with specific examples of
Fiji and Nestle from bottled water industry (Master's thesis, University of Malta).
Laszlo, C. and Zhexembayeva, N., 2017. Embedded sustainability. In Embedded
Sustainability (pp. 116-140). Routledge.
Masri, H. M., 2019. Evaluating post-harvest practices on the quality and safety of Kona
coffee (Doctoral dissertation, Virginia Tech).
Montabon, F., Pagell, M. and Wu, Z., 2016. Making sustainability sustainable. Journal of Supply
Chain Management. 52(2). pp.11-27.
Reynolds, C. F. and Frank, E., 2016. US preventive services task force recommendation
statement on screening for depression in adults: not good enough. JAMA psychiatry.
73(3). pp.189-190.
Stacchezzini, R., Melloni, G. and Lai, A., 2016. Sustainability management and reporting: the
role of integrated reporting for communicating corporate sustainability
management. Journal of Cleaner Production. 136. pp.102-110.
Stoll, M. L., 2015. Greenwashing and Green Marketing Virtues. Handbook of Virtue Ethics in
Business and Management, pp.1-10.
Online
Companies Accused of Green washing. 2019. [Online]. Available through:
<https://www.truthinadvertising.org/six-companies-accused-greenwashing/>
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