19 Jan 2010

Sample Essay: Diversity Action Plan- Pepsi Co


PepsiCo is a transnational organization that has a large consumer base all over the world. Due to future trends in population growth, it will be more important than ever for organizations to prepare for the challenges and opportunities presented by diversity. Issues like water scarcity, health consciousness, and access will be prime concerns for organizations like PepsiCo. With the growth of population, the major population growth is projected to be in Asia, notably in China and India.

To produce more bottled and can drinks for the growing population, PepsiCo needs water supply. Since the world is seeing a decrease in its available potable water level, PepsiCo could tap areas where it can draw enough water to produce both aerated soft drinks and mineral water.


The growing importance of transnational companies in the global market has resulted in risks to the community interests, such as protection of human rights and the environment. However, transnational enterprises could in the course of their activities effectively contribute to the enforcement of these community interests (Nowrot, n.d).

Both PepsiCo and Coca-Cola have had their share of litigations against causing environmental and health risks and water contamination. Under such negative publicity, PepsiCo might do well to stay away from impeding in the heavily populated areas and remove the already scarce water. With the world population set to grow, the need for fresh water and aerated drinks will only increase. In such a situation, the best possible solution for the company would be to increase its sales through innovative practices.

World Bank and Water resources

When the World Bank came up with the idea of establishing a separate body to handle the water resources across the globe, it did so with the intention of providing practical solutions to meet the demand of those who lived without proper drinking water. The World Bank identifies countries and basins where there is an abundance of water resources, but not distributed uniformly. With government approval these water resources are tapped for human consumption and irrigational purposes.

The policy proposed in September 2001 on water resources, saw the World Bank seek the assistance of the private sector. The World Bank felt that the transition in the management of water resources, private investment and management would play an increasing role in managing finance and changes (WRM, 2007).

By associating itself with the World Bank, PepsiCo will have access to enough water for its production, while getting the support of the investing partners to minimize financial implications. This is among the best possible solutions that PepsiCo could enjoy while meeting the growing demand of its aerated drinks and mineral water.


Figure Courtesy: UN World Population Prospects, 1993,  http://www.ifpri.org/2020/BRIEFS/NUMBER05.HTM

The world’s population, today numbering some 5.5 billion people, may approach 12 billion by the end of the next century (Figure 1). By the year 2020, 26 years from today, it will most likely have increased by about 2.5 billion to a total of 8 billion people, an increase of nearly 100 million a year. Over 93 percent of this growth will take place in the developing countries as shown in Figure 2 (Nygaard, 1994).

Considering the above statistics, it can be gauged that the market audience for PepsiCo will be tremendous, and its involvement in national and international water resource management will help the company establish its brand identity in the global market.

PepsiCo can avail financial assistance from the World Bank and other financial institutions and develop water resources for human consumption and also indulge in corporate social responsibilities by protecting water misuse and safe-guarding the environment.


Nowrot Karsten, Share the World’s Resources: Transnational Enterprises and Global Public Goods, http://www.stwr.net/content/view/92/37/

Water Resources Management (WRM), 2007, The World Bank, http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTWRM/0,,contentMDK:20441076~hlPK:1307119~menuPK:1304484~pagePK:148956~piPK:216618~theSitePK:337240,00.html

Nygaard David F, 1994, 2020 Vision Brief 5, World Population Projections, 2020, http://www.ifpri.org/2020/BRIEFS/NUMBER05.HTM

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