Figure 1
Level of Interest
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High
The diagram illustrates the major stakeholders in PepsiCo are the CEO, the Board of Directors, and the shareholders. It may also be argued that national Governments of where the firm operates are key stakeholders, as a change in legislation that impacts the firm, may require it to alter its strategy within that particular geographical location.
Major stakeholders can also be termed “Key Players”. They hold the highest level of influence in the organisation and have the power to change the company’s strategy. Each “Key Player” will be involved in any change to the firm’s strategy and each may have differing views depending on their own long/short term goals. Taking into account ideas and aims of stakeholders is important and is certainly demonstrated by PepsiCo who state that listening to their stakeholders is vital to their success and enables them to move forward with their strategy. PepsiCo have acted on recommendations from their stakeholders including the adoption of the Global Reporting Initiative and recycling initiatives. Through this relationship with its stakeholders, PepsiCo continues to forward its strategy.
The second point of this question requires the examination of organisational culture. This can be defined as the views and beliefs shared by people within the organisation and which is the driving force of the company. It has been stated by Schein that organisational culture can be defined as the “basic assumptions and beliefs that are shared by members of an organisation that operate unconsciously and define in a basic taken-for-granted fashion an organisation’s view of itself and its environment.” Gerry Johnson argued that it is through the organisation of a culture that its strategy is moulded.
With specific reference to PepsiCo, the firm has shown the importance of its organisational culture. While the organisation clearly states its aspirations to be the world’s premier consumer products company, it also enforces that its culture will be one of honesty, openness, fairness and integrity. The firm highlights within its Values Statement that they are committed to “deliver sustained growth, through empowered people, acting with responsibility and building trust.”
In order to achieve sustained growth, it may be argued that a significant aspect of the firm’s culture is its diversity. This can be shown through PepsiCo’s entry into markets, other than its leading Pepsi brand. While building on their portfolio of beverages, the firm has also entered the food market with its Frito Lay and Quaker brands. PepsiCo is also the owner of Walkers Crisps in the UK, and has shown to have successfully entered the ‘evening snacks’ market.
The success of these brands has demonstrated PepsiCo’s culture of commitment to growth and expansion of the organisation on a global basis, thus moving forward with the company’s strategy and not being averse to the risks of entering a new market.
However, it is also part of PepsiCo’s culture to produce products of the highest standard. The organisation emphasises as part of it commitment to growth that it should only sell products they can be proud of. This aim is filtered through each of the company’s departments. It is through this type of organisational culture that PepsiCo can help grow its market share and this is represented in the firm’s established Guiding Principles; (i). Care for customers, consumers and the world we live in; (ii) Sell only products we can be proud of; (iii). Speak with truth and candour; (iv). Balance short term and long term risks and benefits over time; (v). Win with diversity and inclusion and; (vi). Respect others and succeed together.
Perhaps the most revealing fact of PepsiCo’s culture is its vision. This is encapsulated by the “>” symbol which signifies more or better than. For PepsiCo, it is this symbol which encapsulates the firm’s vision and strategy as it represents their culture of making “Tomorrow better than today.” This vision is applied in a sustained aim as the firm has stated that it is their responsibility to “continually improve all aspects of the world in which we operate – environment, social, economic – creating a better tomorrow than today.”
On a daily basis, the organisation culture of PepsiCo does seem to represent its future vision. The culture of the workforce is geared towards helping employees reach their full potential. The firm prides itself on growing talent from within the company and promotes a culture of freedom to act and think in ways that will help the organisation get the job done, while being aware of the rest of the company’s needs. While the firm seeks to reward its employees through promotions and other incentives, it also promotes a culture of inclusion by allowing everyone to reach their potential in order for the best ideas to come forward.
Another example of PepsiCo’s organisational culture is its drive for innovation. The organisation places great emphasis on innovation, whether this is achieved by introducing new flavours in their snacks (eg. launching the Doritos a la Turca chips in Turkey), or launching more nutritional products such as Aquafina, so as to accommodate a more health-conscious population. Through this organisational culture, PepsiCo is working towards achieving rather than constraining its strategy.
Conclusion
It is through the type of relationship with its stakeholders and the organisational culture of PepsiCo that enables them to argue that their quest for sustained growth will be achieved. One can certainly suggest that the firm’s proactive approach with its stakeholders and its culture of innovation, inclusion and openness is helping to achieve its strategy of making “tomorrow better than today.”
Reference
Organisational Culture and Leadership 1992
Strategic Change and the Management Process 1987
Johnson, G & Scholes, K & Whittington, R 2005, Exploring Corporate Strategy, 7th Edition
Annual Report 2004, PepsiCo Annual Report 2004, PepsiCo Company website, viewed 1st March 2006,
Bibliography
Annual Report 2004, PepsiCo Annual Report 2004, PepsiCo Company website, viewed 1st March 2006,
, Report Reviews: PepsiCo’s reporting: A sustainable advantage, Ethical Corporation, Viewed 1st March 2006,
Barbara Murray, PepsiCo, Inc, Hoovers A D&B Company, 3rd March 2006,
Organisational Culture and Leadership, 1992, p6
Strategic Change and the Management Process, 1987
PepsiCo annual report 2004 p25
PepsiCo is also the owner of Tropicana, 7-Up and Aquafina.
PepsiCo annual report 2004 p24.