MEETING THE DIVERSITY

CHALLENGE AT PEPSICO
By:
ANTHONY AMBROSE
THOMAS
()

OMPANY BACKGROUND INFORMATION

PepsiCo began in 1965 with the merger of Pepsi-Cola and Frito-Lay

PepsiCo Inc. (PEP) is a leading food and beverage company that

manufactures and distributes its products in more than 200
countries.

PepsiCo has been recognized for leadership and performance,

diversity and inclusion, environmental stewardship, and supporting
the communities where they live and work

The company reports over $50 Billion dollars in annual revenue,

and is one of the top members in the fortune 500

Pepsi-Cola brands include Pepsi, Mountain Dew, Sierra Mist, SoBe,

AMP Energy, IZZE, Propel, Mug, and Aquafina, among others

ABOUT STEVE REINEMUND

Steve Reinemund, Former Executive
Chairman and Chairman of the Board,
PepsiCo between 2001 and 2006
During his CEO tenure at PepsiCo,
revenues grew by $9 billion, net
income rose 70%, earnings per share
were up 80% and PepsiCos market
cap exceeded $100 billion
He led the acquisitions of several
other food and beverage companies
includingQuaker
Oats,Naked
Juice,Izzeand Stacys Chips.

ABOUT THE CASE

This case profiles PepsiCo's diversity journey under the
leadership of Steve Reinemund who instituted diversity
as one of the company's strategic imperatives
It

demonstrates

the

ways

in

which

Reinemund

partnered with his leadership team and employees

throughout the organization to make diversity a key
factor in PepsiCo's culture and performance
PepsiCo was one of the first companies to recognize
the

importance

of

people

workplace and target market

of

colour

within

the

 Reinemund

recognized

that

the

workforce

that

PepsiCo had did not successfully represent that

demographics that they were marketing their products
to
To

combat

this

growing

gap,

Steve

Reinemund

appointed a new vice president of human resources,

Peggy Moore, to help promote diversity within PepsiCo
In the year 2000, Steve Reinemund and his vice
presidents developed the first Hispanic Advisory
Board, and creating new metrics to ensure that
diversity goals in terms of hiring were met

NEW METRIC: PULSE

SURVEY
The impact of inclusion training was measured through
the annual Pulse Survey, where from 2003 to 2005
there was a 38.8% increase of employees indicating
that they felt the culture of PepsiCo was more inclusive
It was measured successfully through raw figures of
increased

diversity

in

hiring,

and

implementation of inclusion training programs

through

CHALLENGES FACED
These new metrics were met with great resistance, as
diversity of the workforce became part of the forefront
of hiring and promotion decisions
Many people were angered because they viewed the
new policies as potentially promoting someone based
on the fact that they were diverse, when they could be
less qualified
Resistance was further met when, in 2002, PepsiCo did
not meet its diversity goals
Steve Reinemund had previously attached diversity
initiatives to bonus compensation, and due to the goals
not being met, limited the bonuses

CHANGING OF THE GUARD : 2006

Announcing Steve Reinemund retirement and naming
Indra Nooyi as his successor raised many questions for
the future of diversity in PepsiCo
One difference that Indra Nooyi brings to the table is
her experience with rising to the top as a minority
This knowledge allows her to have a first-hand
experience of how her minority status as both a
woman, and a person of color plays out in the
corporate climate of inclusion
Furthermore, as a person that is Indian-born; she
possesses potential knowledge about different cultures
that can be integrated into PepsiCos global strategies.

UNDERSTANDING FROM THE

CASE
This case has shown how diversity plays an important
role in an Organization
It also shows the marketing strategies applied by the
Company by placing executives/managers of similar
caste/religion/color in places with such population
This helped increase sales but also helped the
Company to build a good rapport with the target
customers and this in turn generated brand loyal
customers and customer retention

 Indira Nooyi was the first lady to be a part of the board

of directors at PepsiCo. This is one of the biggest
example of how the Company was trying to get over
the discriminations based on colour, gender, caste, etc
In her era, PepsiCo. Could see tremendous growth and
active participation of employees of all levels of
management.

RECOMMENDATION
The global diversity strategy goals should become
more aggressive
Focus on is the progression of women in countries
outside the United States
Using a mentorship program and monitoring measures
that Reinemund put in place, Nooyi can ensure that
women

in

other

countries

become

strong

and

successful leaders in PepsiCo

Take the Pulse survey a step further and get it into a
high percentage where inclusiveness becomes part of
the cultural norms

CONCLUSION

PepsiCo is a company that has made great strides for

diversity before it was required.
Through the 1990s and early 2000s PepsiCo became
even more dedicated to several different cultures
They diversified both their products and workforce to
cater to all different consumer markets
Steve Reinemund left huge shoes to fill, but Indra
Nooyi has the potential to make PepsiCo a leader in
diversity and inclusion a crossed many cultures, and
nations.

THANK-YOU