1. The MBA oath says in part, “My decisions affect the well-being of individuals
ID: 426588 • Letter: 1
Question
1. The MBA oath says in part, “My decisions affect the well-being of individuals inside and outside my enterprise, today and tomorrow.” This echoes what John Mackey of Whole Foods has in recent years called conscious capitalism.
One example of a large firm reorienting toward this approach is PepsiCo. In the last few years, PepsiCo has been contracting directly with small farmers in impoverished areas (for example, in Mexico). What started as a pilot project in PepsiCo’s Sabritas snack food division has now spread to over 1,000 farmers providing potatoes, corn, and sunflower oil to the firm. Pepsi provides a price guarantee for farmers’ crops that is higher and much more consistent than the previous system of using intermediaries. The farmers report that since they have a firm market, they are planting more crops. Output is up about 160 percent, and farm incomes have tripled in the last three years. The program has benefits for Pepsi as well. A shift to sunflower oil for its Mexican products will replace the 80,000 tons of palm oil it currently imports to Mexico from Asia and Africa, thus slashing transportation and storage costs.
Questions
b. What other societal benefits could such a pro-gram have in Mexico?
Explanation / Answer
The societal benefits of such a program in Mexico made the farmers not to travel outside for the money making to clear their debts rather sell their corns directly to the PepsiCo on the guaranteed prices which was promised by PepsiCo to pay upfront. This improves the local economies for the stakeholders and enables the farmers to save credit for crop insurance, seeds and fertilizers buying etc. This act by PepsiCo raises the bar in terms societal benefits by helping small communities and farmers and helps PepsiCo to improve their product related nutritional quality. This program helps the local farmers to raise their incomes by raising the living, educational and nutritional standards and reduced the illegal immigration and production of marijuana.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.