Pepsi-Cola Products Philippines Inc.
...vate welfare and public good. The company was giving out prises valuing up to 1 million to people. Although the company intended to gain more market share through this action, it also helped people get more money and live a better life. On the other hand it was also private welfare as only a handful people really profited from this action. Only these few were able to lead a better life and the majority was left out b. Yes I think it is an appropriate good as one cannot always do stuff for the public good. It is not always possible to do good for all on a large scale. You need a lot of resources, power to carry out actions on such a large scale. Instead it would be better to help groups, families and individual. This is relatively easier to do and consequently a lot of people will benefit from such actions. c. What should have been differently i. Truth: - the company should have told the truth in the advertisements, that the chance to win the game is extremely small. This would help especially the poor people in making the more sensible and invert their money in things what they really need. ii. Trust: - the company should have tried to regain trust of the people by explaining to them that the mistake was not on purpose and that they never intended to hurt people’s feelings. iii. Consequences: - The Company should have also tried to explain to the people that if Pepsi would pay the $18 billion to the people, then the company would go broke and would have to close. This would result in thousands of people loosing their jobs. iv. Government: - it should make sure that people understand such campaigns and don’t get seduced by such empty promises through better control over what the companies exactly advertise and what they do. d. Yes Pepsi was justified in not paying the full 1 million pesos: Doing that would mean that Pepsi would have to pay a total of more than $18 billion, a sum that would definitely lead to the company getting bankrupt. As a result of this thousands of people would lose their jobs not only in Philippines but also in other parts of the world where Pepsi operates as the Whole Pepsi organisation would be affected by this huge loss. The share and stock holder might lose a lot of money as a result of this loss at Pepsi. Thus it is a very complicated and damaging chain reaction that would be set of into action if Pepsi paid the money. Pepsi made a mistake in printing the numbers, something it did not intend to do. It kept its promise of giving out the 1 million to people who had the numbers but now you can’t expect the company to pay $18 billion because of an honest mistake. Everyone makes mistakes. e. Europe: - The response would have been different as the people in Europe are not that poor and live a good life. They are not that desperate. They are also well educated and understand such campaigns. South America and Africa: - the response might have been similar to that in Philippines as the people are poor and are desperate to have money. Most of the people are not well educated and hence don’t really understand such campaigns. Asia: - the response here might be not that aggressive as in Philippine as the people are well educated and although also being poor they live in highly developing countries for example India ,China etc, that are constantly attractive huge investments from around the world. Multinational companies are building huge factories here and are outsourcing their functions in these countries. As such the people are not that desperate. f. The firms offer was OK, it could have offered some more money, but whatever it might have offered it would have never been enough for the people. The company had to think about all its shareholders and paying the full amount would have damaged lot of them for example Insurance companies, Company Employees, Banks and financial institutions, Share and Stockholders etc. It was in the best interest of everyone for the company to pay 500 pesos and not the full 1 million. 4. What would I do? Likely the ethical principles violated have to do with trust that they would keep their word, (pay for winners) even if it weren’t profitable. I don’t think the ads said anything about conditions of payment are only if they ‘choose the correct, low probability number to ensure low payoff’. It seems also that they need their customers, particularly since Coke customers will not be affected by Pepsi-Philippines decision not to pay off. I would make sure that the advertisements would mention the risks and possibilities of winning. The people would be aware of the fact that it is very difficult to win. This would help a person not to invest all his hopes and resources in something that is itself a dream. I would also try to explain to the people that if Pepsi would pay the $18 billion to the people, then the company would go broke and would have to close. This would result in thousands of people loosing their jobs. I would try to maintain the good will of the customers. The projected $ loss from loss in reputation may be worse than paying the prizes. Simply from a business and ethical perspective, I would have done something very quickly to maintain the good will of the customers once I knew of the mistake. I would have tried to regain trust of the people by explaining to them that the mistake was not on purpose and that the company never intended to hurt people’s feelings. Maybe in Hong Kong the results would have been less radical or violent. However that wouldn’t mean that the company wasn’t just as wrong for their short-sightedness and carelessness. Their carelessness led to violence and death. Something should have been done differently. Yes. 5. Application of Ch 4 to case 5.1. Personal Traits:- Business decisions are made by individuals or by committees, thus the ethics of business in reality is the ethics of the individuals making up the business. A series of factors influence a persons ethics: personal values, stage of moral development and moral approbation. The extent to which a decision maker’s behaviour reflects personal values depends to some extent on the decision maker’s ego strength, field dependence and locus of control. There the Pepsi-cola company is a big player with a lot of power which can lead to high ego strength and locus of control. This might cause the company to go its own way and set wrong standards and use questionable methods. Stages of development depict the type of rationale used to select options. Moral approbation characterizes the internal need for approval something that is scarcely present in big companies. Each of these traits either supports ethical or unethical behaviour. 5.2. Stakeholders :- A stakeholder is someone who has a stake in an organization or a program. Stakeholders either affect the organization/program or are affected by it. Stakeholders include people who staff a program (e.g., management, staff); people who are affected by a program (e.g., clients, their families, and the community); people who contribute to a program in other ways (e.g., contributors, funding agencies and foundations, volunteers, partner organizations, board members, etc.); and people with a vested interest in the program (e.g., politicians, neighbors, etc.), competitors, suppliers etc. The company did not take into consideration the effects of this campaign on particularly its consumers. The Stakeholders influence decisions in both ethical and unethical directions. 5.3. Organizational Culture and Traits It might be referred to as the common set of assumptions, beliefs and values that has developed within the organisation to cope with the external and internal environment and that is passed on to new members to guide their actions within these environments. It provides a sense of identity among members and promotes a commitment of the members to something larger than self. It also provides for stability of the organisational social system and rationale and direction for behaviour. While organisational culture serves as the overall glue of the organisation specific aspects of its culture are influenced by the organisational traits for e.g. organisational climate and organisational goals etc. 3.4. Dimensions of Decision Making The Decision Processes help to...