PepsiCo are strongly involved with its stakeholders and aims to continue the successful working relationships. Organisational culture is based on values and guiding principles and strong emphasis is placed on its people. Through both its stakeholders and its organisational culture, PepsiCo believes this will help achieve their strategy of sustained growth. Introduction Before dealing with the organisational context of PepsiCo’s stakeholders, it is useful to provide a definition of this term.
Stakeholders can be defined as groups or individuals who hold an interest in an organisation to further their own goals, but also where the organisation, in return, is dependent on those groups or individuals. This may be seen as an inter-dependent relationship. Both will have an interest in the success of the other which in turn, will help deliver intended results for both parties. When examining PepsiCo it is important to acknowledge that the organisation has many internal and external stakeholders.
These stakeholders can vary from those with minority interests, such as members of the public, to major stakeholders, such as the Chief Executive Officer. It is unlikely that minority stakeholders will have a significant degree of influence in the firm’s strategy. Instead, it will be the major stakeholders who are able to influence the organisation’s strategy. Below is a diagram of the Stakeholder Mapping: Power/Interest Matrix (figure 1).
This concept is being used to demonstrate the level of interest and influence from the different stakeholder sector. Stakeholder Mapping: Power/Interest Matrix Figure 1 Level of Interest Low High Minimal Effort ; General Public Keep Informed ; Employees ; Suppliers ; Partners ; Environmentalists Keep Satisfied ; Customers Key Players ; Chairman and CEO ; Board of Directors ; Governments ; Shareholders Low 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 Schein1 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 Johnson2 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. “3 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.