How Can an Emphasis on Ethics and Social Responsibility Improve Profits and Benefit a Business?

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Group 1_PepsiCo
April 3, 2013
HOW CAN AN EMPHASIS ON ETHICS AND SOCIAL RESPONSIBILITY IMPROVE PROFITS AND BENEFIT A BUSINESS? Introduction
Until a few years ago, most companies had not cared so much about ethics and social responsibility. They only focused on cost and margin to increase their profits. However, nowadays, many successful companies and businessmen have their own foundation and do some good things, for example, the Ford Foundation has allocated millions of dollars for cancer research and the Bill & Melinda Gates Foundation has allocated millions of dollars for the poor’s health. They have contributed society with their wealth. Why are they doing that? Are they doing that for their self-contentment? This paper will take PepsiCo as an example to show how the company overcame its struggles and the association between profits and ethics and social responsibility in a business. Summary of Case Study in the Text Book

The case study in the text book describes how Indra Nooyi, one of the most famous women CEO, provided PepsiCo with big success by focusing on ethics and social responsibility. PepsiCo needed a new strategy to overcome its critical situation, so it hired Indra Nooyi as a chief strategist. She recognized how important ethics and social responsibility was to improve brand image and a good brand image could lead to high revenue. Based on the knowledge and communication skills learned from Yale University, she persuaded the management of PepsiCo to change the following three areas of the company: The first area was a product. Nooyi insisted that the company needed to dispose fast-food holdings and acquire several companies that were famous for making healthy food such as orange juice and oat meal. The change of product line improved the company’s brand value by creating an image that PepsiCo put a premium on good nutrition for customers. The second area was the environment. She believed that PepsiCo had an obligation to protect the...
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