2. Environmental sustainability. PepsiCo has instituted various initiatives to ensure that its operations
don't harm the natural environment. The company has programs in place to reduce water and
energy use, increase recycling, and promote
sustainable agriculture. The goal is to transform
PepsiCo into a company with a net-zero impact
on the environment. Ms. Nooyi believes that
young people today will not patronize a company
that does not have a strategy that also addresses ecological sustainability.
3. The whole person at work. PepsiCo wants to create
a corporate culture in which employees do not
"just make a living, but also have a life."
Ms. Nooyi argues that this type of culture allows
employees to unleash both their mental and emotional energies.
PepsiCo's vision of performance with a purpose
acknowledges the importance of corporate social
responsibility and stakeholder strategy. Ms. Nooyi
is convinced that companies have a duty to society to
"do better by doing better." She subscribes to a
triple-bottom-line approach to competitive advantage,
which considers not only economic but also
social and environmental performance. Ms. Nooyi
declares that the true profits of an enterprise are not just
"revenues minus costs" but "revenues minus costs minus
costs to society." Problems such as pollution
or the increased cost of health care to combat
obesity impose costs on society (externalities)
that companies typically do not bear.
As Indra Nooyi sees it, the time when corporations can just pass on their externalities to society is nearing an end.
After reading this chapter, you will find more about this case, along with related questions, on page 48.