Coke and Pepsi Case Study
Case Study 16: Coke and Pepsi
1. Identify the ongoing issues in this case with respect to issues management, crisis management, global business ethics, and stakeholder management. Rank order these in terms of their priorities for Coca-Cola and for PepsiCo. Number 1 Priority: The major global business ethics I found in this case study was the whole issue with excessive water usage in their companies as well as the pollution of the water. The book explains that water is very sacred in India. Even though India has some of the worse/polluted water in the world, it still carries a very large significance to Indians. Just because they have poor sewage, pollution, and pesticide use, that doesn’t mean that we can just bring an American company into India and make their water worse. These companies should have done their research and found that water is extremely sacred to them and these problems never would have risen. That is why it is so important for businesses to have cultural knowledge about the countries they enter because something that is not important to us may be the most important thing to another country. Number 2 Priority: Both Coca-Cola and PepsiCo dealt with this crisis very poorly this first time. Instead of taking action and accepting the fact that they were in the wrong, they choose to deny the allegations of CSE and IRC through the media. They should have explained to their customers the problem, why it happened, what they were going to do to fix it, and keep their customers informed of the progress. They did not do these steps but rather, they conducted their own tests within their companies and came to the conclusion that their drinks met demanding European standards. The two companies also tried to play the blame game and explain that other companies in India had high levels of pesticides as well. This is not the correct way to go about the crisis, Coca-Cola and PepsiCo. needed to take responsibility for their actions and explain to their
1. Identify the ongoing issues in this case with respect to issues management, crisis management, global business ethics, and stakeholder management. Rank order these in terms of their priorities for Coca-Cola and for PepsiCo. Number 1 Priority: The major global business ethics I found in this case study was the whole issue with excessive water usage in their companies as well as the pollution of the water. The book explains that water is very sacred in India. Even though India has some of the worse/polluted water in the world, it still carries a very large significance to Indians. Just because they have poor sewage, pollution, and pesticide use, that doesn’t mean that we can just bring an American company into India and make their water worse. These companies should have done their research and found that water is extremely sacred to them and these problems never would have risen. That is why it is so important for businesses to have cultural knowledge about the countries they enter because something that is not important to us may be the most important thing to another country. Number 2 Priority: Both Coca-Cola and PepsiCo dealt with this crisis very poorly this first time. Instead of taking action and accepting the fact that they were in the wrong, they choose to deny the allegations of CSE and IRC through the media. They should have explained to their customers the problem, why it happened, what they were going to do to fix it, and keep their customers informed of the progress. They did not do these steps but rather, they conducted their own tests within their companies and came to the conclusion that their drinks met demanding European standards. The two companies also tried to play the blame game and explain that other companies in India had high levels of pesticides as well. This is not the correct way to go about the crisis, Coca-Cola and PepsiCo. needed to take responsibility for their actions and explain to their