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PepsiCo: Restoring the Company’s Image Term Paper

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Updated: Mar 13th, 2022


One of the major problem within PepsiCo entails paying workers less than minimum wage set by the government, despite working for long hours. The problem was discovered while going through the company’s payment schemes and comparing with other similar companies and the stated government regulations concerning salary renumeration.

PepsiCo is a multinational company and such unethical behavior though may profit the company in the short run, leads to tainting company’s image in the long-run which ultimately results into greater losses. According to utilitarianism views, ethical actions are evaluated through their impact on all the stakeholders. Interview done on few of the workers revealed that they were being paid minimal wages and at the same time working in poor conditions without recommended full protective gear.

These conditions made the workers a party to the company’s exploitation which is against the rule of law governing business ethics. Also discovered was the fact that any complain by workers concerning the lowered salaries have always earned them indefinite leave denying the workers freedom of expression. However, workers also have the right to better their interest in line with the governing rules and regulations (Nimgade).

Multinational company like PepsiCo should adhere to the international business ethics which provides for good relationships between companies and individuals. All the operations and behaviors within the company’s premises should uphold the cultural value system as well as the accepted ways concerning business operations within the society.

The company has detailed ethical duties towards the employers, employees and all other stakeholders within the public domain. Therefore this calls for PepsiCo to operate beyond their own self interest of gaining through exploitation and infringing on others rights (Nimgade).

The other problem is that PepsiCo markets one of its recently produced beverage product without clear descriptions in the developing countries. Good percentage of the beverage is alcoholic, an ingredient not specified by the company and at the same time recommends and markets the drink as fit for all ages including children. The drink is at the same time sold at higher price within the developing countries.

According to international business ethics, alcoholic drinks should not be sold to the under-age especially teenagers. Unethical marketing of alcoholic drink as non-alcoholic within developing countries presents a good example of inflicting injury on the population knowingly and willingly (Nimgade).

By following Kant’s rule, the company should provide quality and at the same time safe products to the global market. The nature of their marketing strategy within the developing countries involved promoting the product amongst teenagers especially within learning institutions enabling PepsiCo to get good market base.

The marketing department promoted the product as a substitute to energy drinks making widespread development of an alcoholic generation within these countries. Such kind of action is detrimental and therefore PepsiCo should really be concerned with the preservation, safety and health status of various consumers through giving the whole truth about their products by appropriate labeling as well as marketing (Nimgade).

Solution to the problem

From the perspective of international ethical standards robust leadership is required for organizational change to be a success. Mature leadership would largely assist in re-aligning organizational systems as well as stakeholders behaviors towards business core values and vision. The level of effectiveness achieved would be based on the extent of ethical leadership embraced.

Upgrading of the company’s ethics requires the management to impose codes of conduct which champions for the fact that all people should be treated with respect. There is a necessity for leadership training on business ethical issues since strategic decisions are made by leaders.

Corporate moral excellence should be largely considered for the development of the company’s ethical culture. At the same time great care should be taken when marketing the product in developing countries to avoid value conflict between the company, consumers and government bodies within the stated country.

The business should have the capability of respecting human dignity and the basic human rights; hence people should be treated the same way irrespective of their background countries. According to OECD rules, all international businesses are subject to the various laws, regulations of the countries they operate in. This therefore, makes PepsiCo subject to the respect of consumer rights in spite of the results. Concerning consumer safety, the company should consider human life more important than making profits (Nimgade).

Respect to employee rights is paramount to every multinational company such as PepsiCo. The problem on pricing could well been caused by the company’s desperation towards maximization on returns. Such kind of move can always be resolved through excellent leadership and management skills. Violations of such kind would best be handled by reinforcing penalties on various heads of departments involved (Nimgade).

Improvement of management system

PepsiCo Company should consider operating under strict and valuable corporate governance principles. The company should come out clear on various rules and regulations concerning chemical composition of their beverage drinks. The established rules and regulations would enable easy monitoring of the production and quality control processes.

Having full control on the external issues at times prove difficult, since it is not easy to enforce and ensure acceptable conduct of the various managers operating within different geographical regions. There should be company’s regulation touching on explicit labeling on all their beverage products. (Nimgade).

The code of conduct guarding company integrity should be very clear concerning employment and marketing procedures. Majority of the rules condemns unethical actions towards all stakeholders and clarifies the various company responsibilities through robust management capabilities (Nimgade). All marketers working for PepsiCo would be required to organize clear, informative and descriptive messages on all the products from PepsiCo.

Such clear communication would boost international selling processes since majority of the developing countries would not feel their people are given raw deal by PepsiCo.

There will be workshops organized to offer detailed training for all managers and at the same time offer chances where companies would together share their various challenges and ways through which they could overcome at international levels. The trainings are also aimed at improving the various human resource management systems used in every sector (Nimgade).

Clear definition of the code of conduct is essential within the company’s operation systems. The various multiple channels of communication would be utilized to ensure the message reaches every stakeholder. The principles of corporate conduct have always been discussed between management and all other employees as well as partners on a regular basis.

During such meetings both acceptable and unacceptable behaviors would be critically analyzed and clearly communicated to corporate employees and other stakeholders. Control systems are set to ensure adherence to the given code of conduct. Clear signs of incidences have always been detected from the beginning and necessary corrective actions taken as per the company’s board agreement, since a compromise to the company’s policies always lead to disastrous results.

The parties involved in any violation are made aware of the consequent results including the actions which could as well lead to complete dismissal. All employees and partners have been granted freedom of discussing ethical issues within the business premises and strictly follow established principles involved in whistle-blowing to identify and rectify the specific concern (Nimgade).


PepsiCo as one of the multinational company’s will not compromise their principles of operation when transacting their businesses. The watchdog community is normally very vigilant in exposing such like actions hence companies need to be more careful with industrial laws. PepsiCo resolves to above all else stand for ethics as their first principle safeguarding all other actions.

This would help in restoring the company’s image hence making it possible for PepsiCo to compete favorably within the market place. In light of all these, the management team wishes to appeal for calm amongst all employees since all unethical issues would be dealt with and the necessary legal actions taken to correct such incidences.

Foreign managers will be carefully selected considering the various technicalities involved such as value congruency. The company will apply the Aristotelean rule which asserts that individuals are equal and therefore should receive equal treatment unless under extreme situations not relevant to their conditions (Nimgade).

Works Cited

Nimgade, Ashok. “American Management as Viewed by International Professionals”. Business Horizons (1989): 98-105. Print.

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