Introduction
Corporate concern about ethics has grown in prominence in recent times as business entities strive to incorporate moral values and principles into their operations. Companies no longer focus singly on profit maximisation and expansion of their businesses, but they also explore ways of treating the consumers, employees, and the environment in a morally praiseworthy manner (Shaw, 2011).
It is a common practise in the contemporary organisations to find special departments that are exclusively established to cater for the ethical needs of the organisations. As a matter of fact, various independent bodies evaluate the extent to which organisations employ ethical management and practise with the view of recognising their efforts and influencing improved services.
Companies are also realising the connection between their ethical practices and management, on the one hand, and the profit margins they register each financial period, on the other hand (Shaw, 2011). This paper seeks to discuss the ethics concept in business by specifically analysing PepsiCo’s practise in the same area.
PepsiCo Ethics: Morally Responsible Actions
Environmental management
PepsiCo has an established elaborate policy on the environment, health, as well as safety management. The policy seeks to ensure that the company caters for its immediate business environment effectively. The policy comprises of eight critical points that include ownership culture, business integration, regulation compliance, as well as resource allocation (PEPSICO, n.d.).
It additionally entails the aspects of performance measurement, continual improvement, together with stakeholder collaboration and annual review.
In terms of ownership culture, for instance, the company’s policy identifies the need to build and sustain a proactive culture through driving environmental ownership, individuals’ health and safety, and managing the overall environmental aspect at the organisational level. The company engages, consults, as well as trains its people to influence active participation to enable these plans achieve realistic goals.
Another important aspect of the environmental management programme is the issue of stakeholder collaboration. PepsiCo works in collaboration with its business partners, such as the contractors, suppliers, licensed bottlers, along with the local communities and customers to limit the health, environmental, and safety outcome related to its daily operations (PEPSICO, n.d.).
PepsiCo also works with a different group of stakeholders that comprises of governments, academia, other interested stakeholders, in addition to business associations and non-governmental organisations for purposes of striving to widen effective and sustainable resolutions with regard to health, environmental, and safety confrontations or challenges, all of which face the company’s operations.
Ethical Consumer Treatment
PepsiCo also strives to ensure that it treats its customers in morally acceptable ways without allowing inhumane practices to penetrate through its corporate human resource practises. The beverage and food company definitely deals with a large number of consumers that may prove too tricky to handle or manage effectively because it is a large multinational firm with a presence in almost all the continents in the world.
The firm has established a global code of conduct that generally identifies the main objective of conducting business in the right way as a part of its corporate mechanism aimed at ensuring that customers of the firm are treated in a moral way (PEPSICO, n.d.).
Employees are expected to adhere to these codes of conduct and embrace the underlying principles as a way of ensuring that the company achieves and sustains its objectives for long (PEPSICO, n.d.).
The code includes a requirement to show total respect at the workplace, an obligation to always act with integrity within the marketplace, as well as the expectation that all workers ensure ethics in the business activities that they undertake.
Additionally, and more importantly, workers are required to perform their respective tasks in more responsible ways for the purpose of fulfilling the shareholders’ expectations effectively (PEPSICO, n.d.). The company revises its acceptable practises more often to incorporate changing laws that may, in one way or the other, affect on its corporate operations as a way of making the corporate code of conduct more effective.
Moral Action towards Employees
PepsiCo fully supports and expresses a commitment to its entire workforce. The company encourages a diverse corporate culture where any qualified individual from whatever race, tribe, nationality, or gender can apply for job positions in the firm and be considered for employment without any discrimination.
The company looks at this goal as an important one that encourages creativity amongst the workers, while also offering a chance for benefitting from new and unique perspectives (PEPSICO, n.d.).
Pepsi realises the key role that its employees play towards ensuring that the company attains its objective towards the customers. In particular, its corporate philosophy identifies the importance of the firm maintaining mutual respect, workplace safety, and integrity.
Pepsi’s inspiration of a collaborative culture focuses on recruiting, as well as retaining world-class talent by ensuring that its workers achieve employment satisfaction or what the company refers to as “Talent Sustainability” (PEPSICO, n.d.).
A perfect example of actions employed by the firm in encouraging employees to speak out entails the provision of an Organisational Health Survey that is conducted every two years with a view of obtaining opinions concerning the organisation and the general workplace.
Effects of the Morally Conscious Decisions on the Company’s Bottom line
Customers. Trust
The morally acceptable practices and decisions of the company are likely to enhance customer trust and confidence towards the company.
Because the employees are showing greater dedication in serving the customers, the latter feel comfortable to conduct business with the firm than would be the case had the workers not been considering ethical and moral practises.
As this trust is developed and maintained by many potential customers, the company eventually succeeds in enlarging its profit margins because of high sales that translate into higher revenues.
Employees
Motivation
The moral actions directed towards the workers by the firm enhance the level of their motivation. The workers feel they are highly valued and consider themselves as owners of the firm. They are willing to increase their output because they are aware that their collective hard work will, in turn, mean that they will receive more benefits from the employer.
As the employees’ motivation increases and they express their willingness to work even harder for the firm, they enhance the chances of profitability because more consumers get served satisfactorily. This increases their trust towards PepsiCo.
Satisfaction
PepsiCo is likely to achieve a workforce that is highly satisfied with its mandate due to its continued employee moral programmes. Workers who are fully aware that their needs, both material and emotional, are well taken care of are less likely to consider changing employers. Instead, a huge percentage of them would prefer working with the same satisfying employer until they attain their retirement ages.
This is critical for PepsiCo because it will no longer face the need for undertaking employee recruitments after every short while. As a matter of fact, high employee turnover rates disrupt the overall planning and operation of the firm because the management has to keep training new employees who only last for a short while before quitting in search for better employers.
Community
Collaboration
The firm is likely to receive greater support and positive collaboration from the societies because PepsiCo is expressing a willingness to support the local communities through numerous environmental management programmes.
For instance, foreign governments will be willing to issue the firm with operation licences in their respective territories because they realise the benefits that the society will achieve in the long run. This kind of goodwill from the communities allows the company to expand its market and improve its revenue capabilities.
Critical Review of PepsiCo’s Ethical Policies
PepsiCo identifies six critical guiding principles that form the basis of its ethical policies and management. They include care for customers, the sale of products that attract pride, speaking the truth, and balancing the short-term plans with the long-term ones (PEPSICO, n.d.). Additionally, the firm emphasizes diversity and inclusion, while highlighting the need to respect others as a way of achieving success as a whole.
The company has divided these six critical guiding principles to address all its significant areas of business. In particular, the principles address issues about customers, products, verbal communication with the shareholders, and overall future ethical plan of the organisation (PEPSICO, n.d.).
It also addresses the issue of employment with regard to a diverse workforce and the employee conduct and behaviour not only towards the customers, but also towards the employees (PEPSICO, n.d.).
PepsiCo Ethical Issues Needing Improvement
Environmental Management
Given its wide array of products, PepsiCo also uses a lot of packaging materials that end up impacting negatively on the general environment (Wilburn & Wilburn, 2013). The company should consider addressing this area by devising alternative packaging materials that will not pose environmental hazards to the communities at large.
Customers
A great portion of food products manufactured and marketed by PepsiCo are junks. These foods are responsible for the increasing dangerous health conditions, such as obesity and high blood pressure. The company should not only regard the high profits that it rakes from the sale of these foods, but it should also consider introducing healthier foods (Hall, 2007).
Employees
There are instances of deserving workers being omitted from planned promotions and other employee benefits because of a large workforce that is evident at PepsiCo. The company’s human resource management must ensure that it utilises effective computerised systems to eliminate these unfortunate incidences.
Conclusion
PepsiCo, which is a leading global manufacturer of assorted products like foods and beverages, has incorporated numerous ethical practices in its business strategy as a means of achieving greater acceptability. Its ethical practises benefit the local communities, employees, as well as its customers. A code of conduct has been established to direct the actions and activities of its employees.
This code of conduct has been designed in a way that ensures workers serve customers in the most morally acceptable ways. On the other hand, the firm also observes an elaborate plan that ensures its workforce is handled in the most morally satisfying ways.
This enhances their motivation and has the potential of influencing the attainment of more profits and revenues. However, the company ought to consider the environmental impact that its packaging causes. A large percentage of its food products are also mainly junks, putting the health conditions of many of its consumers at risk.
References
Hall, J. (2007). The ethical opportunity. Journal of Brand Management, 14(5), 365-367.
PEPSICO. Global code of conduct. Web.
Shaw, W. H. (2011). Business ethics: A textbook with cases. Boston, MA: Wadsworth.
Wilburn, K., & Wilburn, R. (2013). Using Global Reporting Initiative indicators for CSR programs. Journal of Global Responsibility, 4(1), 31-60