PEP­SICO Chief: In­dra Nooyi

For a com­pany whose items fill up your pantry, how would you see a crum­pled bag of Lays blow­ing across your streets? Pep­sico and its foun­da­tion sup­port ed­u­ca­tion, the en­vi­ron­ment and hu­man sus­tain­abil­ity. The com­pany’s ap­proach to deal with com­mu­nity enga

The HR Digest - - Cover Story -

“To­day, a com­pany’s prof­its are in­ex­tri­ca­bly tied to the pros­per­ity of its con­sumers, cus­tomers, em­ploy­ees, com­mu­ni­ties and so­ci­ety writ large,” wrote CEO In­dra K. Nooyi in her let­ter to share­hold­ers. “More than ever be­fore, prof­itabil­ity and sus­tain­abil­ity are syn­ony­mous. Cor­po­ra­tions should em­brace this new way of do­ing busi­ness.”

There’s ev­i­dence that a strate­gic ap­proach is nec­es­sary to­wards both, busi­ness and phi­lan­thropy. If your or­ga­ni­za­tion is go­ing to do phi­lan­thropy, it’s bet­ter if you’re fo­cus­ing on is­sues re­lated to the busi­ness. It means you’re giv­ing back to the so­ci­ety in more than one way.

Although, some con­sumers pre­fer hun­dred per­cent CSR. Take for ex­am­ple, Gold­man Sach’s case; it con­trib­uted to the 2008 fi­nan­cial cri­sis, or Wal­mart, which played a huge role in un­der­min­ing worker com­pen­sa­tion across Amer­ica. It’s easy to see the CSR ef­forts made by cor­po­ra­tions, how­ever, some of these are done to cover the wounds the busi­ness cre­ates on its path to suc­cess. It would be bet­ter if large or­ga­ni­za­tions had a more se­ri­ous at­ti­tude put up to­wards pay­ing taxes and con­duct­ing their busi­ness in a re­spon­si­ble way.

Phi­lan­thropic en­deav­ors by an or­ga­ni­za­tion, can have a pow­er­ful ef­fect on its com­pet­i­tive­ness and over­all per­for­mance. It can in fact be a cost-ef­fec­tive way, and even help im­prove com­pet­i­tive con­text. It en­ables com­pa­nies, whether small or large, to not only use their re­sources, but also ex­tent be­yond by seek­ing ef­forts from non­prof­its and other in­sti­tu­tions. For ex­am­ple, by con­tribut­ing to a univer­sity, the or­ga­ni­za­tion can cre­ate a lo­cal base of ad­vanced skills in the com­pany’s field. More­over, phi­lan­thropy trig­gers col­lec­tive cor­po­rate ac­tion. Due to phi­lan­thropic ef­fort, com­pa­nies are able to forge part­ner­ships with gov­ern­ments and non­prof­its that may some­day solely ben­e­fit them.

In­dus­tries prone to con­tro­ver­sies, such as phar­ma­ceu­ti­cals and petro­chem­i­cals, can as­so­ciate them­selves with phi­lan­thropic foun­da­tions. In the process they can make a way to cre­ate value for the so­ci­ety and them­selves. Some­times, CSR ef­forts aren’t just about a com­pany’s self-in­ter­est.

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