PEPSICO CROSS CULTURAL MANAGEMENT

EXECUTIVE SUMMARY

As PepsiCo operates in about two hundred countries and territories, a proper training plan is
necessary to meet all the possible challenges and opportunities associated with managing across
cultures. It should include the following components:

o designing effective learning strategy to manage short- and long-term professional

Trainings do not require any extra personnel and can be performed by specialists of PepsiCo
Universities. As for associated costs, they are not expected because the following trainings will be
part of professional development.

INTRODUCTION

PepsiCo, Inc. is a global company that works across a significant number of cultures, so it developed
a specific strategy towards arising opportunities and challenges. The aim of this paper is to prepare
the executive summary that would contain a training plan, associated costs and necessary human
resources. Besides, it will discuss what key concepts the organization is using to manage across
cultures. Another component of the research is studying the impact of cultural identity on PepsiCo.
Human resource management is also influenced by cultural peculiarities, so the company’s policy in
this area will also be analyzed. Finally, the ways of overcoming cross-cultural barriers will be offered.
In particular, the role of language, education and training will be determined.

CRITICAL CONCEPTS IN MANAGEMENT ACROSS CULTURES

To achieve high productivity, global managers need to understand how to interact with their
colleagues and companies around the world (Steers, Sanchez-Runde, & Nardon, 2010). PepsiCo, as a
global company, also needs to deal with numerous challenges. First, PepsiCo works on designing an
effective learning strategy to manage a short- and long-term professional development for its
managers because working on the global level requires continuous learning and improvement due
to the constant changes. The following process consists of two steps. The first step is a research of
new trends towards managerial roles. Then managers try to create a learning model, which would
help in the development process (Harris, Moran, & Moran, 2004).  Second, global managers,
including managers of PepsiCo, face the challenge of understanding the ways, in which various
cultures work, their unique features and methods of successful work under these conditions (Steers,
Sanchez-Runde, & Nardon, 2010). For example, global managers need to know the things that are
allowed and prohibited in each culture. In particular, PepsiCo’s managers paid specific attention to
the customs that deal with work of females in the Middle East. If they had not studied this aspect,
they would not have achieved an inclusion and diversity in their offices there. Besides, they would
have problems with local communities because rules concerning female work are quite strict there.
There are also minor peculiarities that the company is supposed to consider. For example, French
and German citizens address to the European Union as ‘we’, whereas British address to it as ‘they’.
However, they all are the members of this organization. Working in Russia, PepsiCo needs to be
ready to have problems with state authorities caused by competitors that paid public officials for
that (Steers, Sanchez-Runde, & Nardon, 2010). The third challenge is designing efficient strategies
for interacting with employees from other cultures that might work with information in unusual way
or treat their duties and roles differently. For instance, Koreans traditionally need to sit at their
desks at the workplace. If they do not do this, it means they do not work (Steers, Sanchez-Runde, &
Nardon, 2010). However, employees from other cultures would consider this rule strange. The
fourth challenge is realizing the needs of different stakeholders in the company and the process that
takes place there, which is essential for reaching the desired goals (Steers, Sanchez-Runde, &
Nardon, 2010). Stakeholders may include workers, investors, customers, partners, and
governments. For example, PepsiCo’s managers developed an understanding of the culture of the
Middle East and tailored to specific working conditions for women working there. Cultures of
Western Europe focus on supporting the equal rights of people with different sexual orientation.
PepsiCo has responded to this need, too. In 2012, it was awarded a perfect 100/100 on its corporate
equality index for LGBT efforts by Human Rights Campaign (PepsiCo).

CULTURAL IDENTITY

            Cultural identity has a significant impact on PepsiCo. In particular, the company has different
image and positioning across cultures because it tries to respect cultural identity of each country,
where it operates. For example, it refers to considering individual needs of all the cultures. To
achieve this, PepsiCo’s managers make a careful research before entering the market and offer
services that are interesting for every particular culture. The company values its customers, so it
tries to determine needs of customers faster than the rest of competitors and then develop the
ways of satisfying these needs delivering qualitative beverages (PepsiCo).

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HUMAN RESOURCES

PepsiCo operates in more than two hundred countries and territories, so it stands for diversity and
inclusion when managing its human resources (PepsiCo). Moreover, these two aspects are believed
to be fundamental components of the company’s success. In particular, provision of an inclusive
workplace culture that appreciates various approaches allows PepsiCo to create staff engagement as
well as encourages originality and innovation. One of the examples of inclusion of human resources
is the Company’s policy in the Middle East. Thus, PepsiCo developed specific programs to promote
women there. Today, female employees have workplaces that respect local traditions. It is especially
important for women in Saudi Arabia, where only about five percent of females work. It is the
lowest rate in the world (PepsiCo). Such negative statistics is caused by local customs and
unwillingness of companies to find the ways of overcoming the issues to give women the possibility
to work and advance. As for PepsiCo, it has twenty five females employed in 2011 and 2012. They
work in the management as well as in the front-line positions (PepsiCo).

Apart from that, promoting inclusion and diversity, PepsiCo stands for equality (PepsiCo). The
company operates on the territories with different laws and regulations but it tries to follow all of
them because it is the way to demonstrate respect to the variety and abilities of all people from all
the cultures. For PepsiCo, a variety includes such unique characteristics as personality, color, race,
religion, gender, lifestyle, age, nationality, disability, sexual orientation, thought processes,
ethnicity, marital status, veteran status, work experience, etc.

Therefore, PepsiCo is a global company, which operates in different countries and hires people from
various cultures. It has a respectful policy towards its employees. This allows the company to
provide inclusion and diversity, which is essential for high productivity of its staff (Bonache, Trullen,
& Sanchez, 2012). The organization respects local customs, laws, and regulations, particularly
towards women in the Middle East; but at the same time, it has corporates values, which are
common for all the divisions.

OVERCOMING CROSS CULTURAL BARRIERS (LANGUAGE, EDUCATION, AND TRAINING)

To overcome cross-cultural barriers, the company provides education and training to its employees.
PepsiCo University includes five universities, such as Finance University, Global Procurement
University, Global R&D University, and HR University (PepsiCo). Significant advantage of the
following professional development is that employees from different cultures may interact, share
their visions, and get to know much information about each other. In the future, it will help them to
work together without any cross-cultural barriers. The common language of the company is English,
but PepsiCo also values other languages. For example, during conducting an Organizational Health
Survey, it had to prepare survey translations into forty eight languages (PepsiCo, n.d.). Such
language policy permits employees to communicate with each other forgetting about potential
cross-cultural barriers.

CONCLUSION

PepsiCo is a global company that has a respectful attitude to other cultures trying to satisfy their
individual needs, so it looks differently around the world, which I saw clearly even prior the
research. After making the following study, I learned that PepsiCo’s policy is based on two aspects,
such as inclusion and diversity. It means that the organization respects unique characteristics of
each employee. An inclusive workplace allows increasing creativity and engagement of the staff.
Diversity helps to get a better understanding of buyers. Language policy and continuous professional
development helped PepsiCo to deal with cross-cultural barriers within the organization as well as
develop better understanding of customer needs. To reach an effective use of opportunities and
challenges associated with managing across the cultures, it is necessary to design a training plan.
This plan should include recommendations for dealing with major challenges that global managers
have to deal with. Besides, it is necessary to calculate associated costs and determine human
resources that would conduct training. Overall, I believe that PepsiCo effectively manages across
cultures, which is proved by its high sales and numerous offices around the world. Such success
among customers and staff means that the company managed to determine and satisfy their
individual cultural needs.