week 10

1. In your own words and using referenced quotes describe what is meant in strategy by ‘Organizational Purpose’ and describe what is meant by Corporate Social Responsibility‘

Organizational Purpose

The ‘organizational purpose’ is the expression or sign of needs of the organizations stakeholders and their relative significance. The needs of stakeholders mostly varied and habitually conflicting. Also, wants, its purpose may perhaps also reproduce basic internal considerations, like preference of the board or organizational code with ethics. From organizational purpose vision and mission facilitates the essential foundation for making strategic choice. The mission, vision and organization purpose describe what the organization needs to be consider for the long term and short term organizational goals, objectives and success. Also describe what the organizational needs to do in order to achieve effectiveness and efficiency.

The definition of organization mission and vision has much as similar with organization’s business. It facilitates and helps to understand the markets in which organization operates and principal behavior it competes. A critical part of this process is the organization questioning its usual thought of what business it is in.

Frequently expressed “organizational Purpose” using the enlisted variables:

       1.      The target beneficiary or customers of the organizational outputs.

       2.      The ethical values and norms of the organization.

       3.      The type of citizens employed by the organization.

       4.      The scope and size of the organization.

       5.      Cost and Quality.

       6.      Structure of the organization.

       7.      Varieties of products and services produced by the organization.

       8.      The workers conditions and relationships.

Corporate Social Responsibility (CSR)

Corporate Social Responsibility is referred as the managing of the overall impact of an organization on community or society. This comprises the through or straight impact of operation and the broad impact of the business ups and downs in value chain, from suppliers to consumers or customers. In addition it covers the voluntary contribution the company makes to the society and wider community.

Corporate Social Responsibility covers the each followings element:

     1.      Security and labour.

     2.      Human rights.

     3.      Corporate governance and Business standard.

     4.      Human disaster liberation.

     5.      Promotion of education and health.

     6.      Economic development and enterprise.

      7.      Protection of the environment.

2. Should organizations focus more on profit and shareholder satisfaction or responsibility and stakeholder satisfaction? Discuss your own thoughts but try to support your ideas with theory or examples.

I think organizations should focus both on profit and shareholder satisfaction as well as responsibility and stakeholder’s satisfaction because both terminologies are essential for organizational goals and objectives. In my opinion profit and responsibility are interlinked with each other, so I am explaining the both shareholder or stake holder perspective.

Shareholder value perspective

The shareholders values highlights profitability over responsibility and perceive organization mainly as instrument of its owners. Shareholder value proponents consider organizations achievement can be calculated by things as dividends and economic profit share price, and see stakeholder management rather than a means than as end in itself. The purpose of an organization at first is to maximize shareholders value, with what is legally permitted. By presenting market based relationships and liberal self interest between all stakeholders and the corporation, chasing maximum values for the shareholders will consequence in societal wealth being maximized.

Stakeholders value perspective

The stakeholder values highlight responsibility over profitability and perceive organization mainly as collations to hand out all parties involves. Stakeholder value supporter consider an organization achievement should be considered by the satisfaction of all the stakeholders and perceive stakeholder management as a means and end. Due to high level of trust between all parties and strongly motivating workers inside the organizations; pursuing mutual interest of all stakeholders is not only more just but also maximize societal health. 

3. Write about your experience with today‘s case study. What answers did you give to the questions? What did you think of the CEO?

 What are PepsiCo’s strategic objectives? Why does the firm exist?

As, we know each and every organization have their own mission vision and objectives. The first and key objective of the organization is to lead and capture market and become the top brand which PepsiCo follows as well. PepsiCo focus more on teenagers or young people, accordingly they are thinking and producing the products targeting the young people. Other objective is to earn and generate $30 Billion income by 2020. Therefore emergent strategy applied by the PepsiCo. They are producing and trying innovating ideas in which customers’ sense composite the finest. As we know they are concentrating Asian market after losing market in U.S.A. Understanding Asian market is large and benefit for the products like food and beverage. In addition PepsiCo is trying to increase the business portfolio and hence increase the product line.

Main aim of the PepsiCo is to lead and be top brand in food and beverage industry. Also, they are planning to provide reward as to motivate their investors as well as shareholders by inspiring their community, customers and workers. Furthermore, by undertaking fair and ethical business, PepsiCo want to be authentic and finest to their stakeholders and shareholders. PepsiCo frequently want to improve different aspects like social, economic, environmental and cultural in which they are operating in order to be more competitive by generating to be better in future.

Other objectives of PepsiCo in to provide better goods and services at affordable cost, also functions best to the customer needs, interest and desire. For example: PepsiCo need to take care in mind to produce more healthy food, snacks and beverage from previous, Hence to increase the market share by planning to gain international expansion and synergies. In addition PepsiCo wants to maintain sustainable growth and competent in distributing system empowering workers and to be responsive.

What are the possible strengths and benefits of the strategy?

Different possible strength and benefits of the PepsiCo strategy are as enlisted below:

v  Leading biggest portfolio of food and beverage.

v  Workers empowerment.

v  Providing opportunity to locals,

v  Increase in market share.

v  Business expansion in more than 200 nations.

v  Targeting different taste and preference according to nation wise.

v  Dedicated and experienced.

v  Balanced beverages portfolio.

v  High nutritious and balanced products.

v  Increasing market share by increasing the product line.

What are the possible weaknesses and disadvantages of the strategy?

Different possible weaknesses and disadvantage of the PepsiCo strategy are as enlisted   below:

v  Extreme competition from rivalry (Coca-Cola).

v   Not leading as a top (number one) brand in chosen industry.

v  Low preferences from customers.

v  High risk to PepsiCo.

v  Less smart and attractive packaging.

v  Shareholders desire and expectations may not be fulfilled.

v  Failure in a product line may lead customers to substitute to another similar product.

Do you think the organization has the right balance between profitability and responsibility?

No doubt, that the main aim of the organization is to achieve more benefits which applies in PepsiCo as well. When, PepsiCo decline of 3% Market share per annum in United States, concentrated more in Asian countries. However, PepsiCo must bear in mind of creating better and innovative products also by propelled named “GOOD FOR YOU” OR “BETTER FOR YOU” which is nutritious and quality products. It also needs to do a lot to balance between profitability and responsibility, so that organizational goals, mission, vision and objectives should be attained.

Charismatic Business leadership is followed by the PepsiCo chairman and CEO named Indra Noovi. The pettiest thing of her is to target to triple in generating revenue by 2020, targeting to establish PepsiCo a number one brand in food and beverage industry. She is a good leader because she is also careful about the responsibility towards the workers, stakeholders as well as customers.

Nevertheless, I feel that she is ignoring the older groups by only targeting the young group. As we know products is consumed by each and every age groups, so organization like PepsiCo need to target every age groups by innovating appropriate products of food and beverage for every age groups.


References:

1. CSR analysis (ISO 26’000), and CSR strategy development and definition of measures,

Spar Management AG, 2009-2010

2.Lectures in social management and CSR concepts, FHNW / Basel, ZHAW /Winterthur,

BFH / Bern ongoing, since 2003

3. Michael H. Zack, “Developing a knowledge strategy”, California Management Review, Vol.41, No.3, Spring, 1999, pp 125-145. ?

4.  Porter, M. E. (1980) Competitive Strategy: Techniques for Analyzing Industries and Competitors. 1 Edition. New York: The Free Press.

5. R. Nelson, “Why do firms differ and does it matter?“, Strategic Management Journal, Winter special issue, Vol. 12, 1991, pp. 61-74.