Case Study Analysis Essay

884 Words Sep 22nd, 2013 4 Pages
A
Case study
On
PepsiCo Burma connection

Executive summary: The case mentions about how PepsiCo had to withdraw all its assets from Burma despite the fact that they were doing very well in this country.

In July 1988, decline in economic conditions led to large-scale and bloody rioting in cities in Burma. In Sept 1988, the army under General U.Saw Maung replaced the Government with the State Law and Order Restoration Council (SLORC), a group of military officers. In 1990, SLORC proposed a new government and allowed free elections with the confidence that it would win, but 80% of the seats were won by the civilian opposition party led by Suu Kyi. But it refused to turn over the power to the civilian government. It outlawed
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PepsiCo was making huge money in Burma but it was helping the military rule to strengthen in the country which was majorly responsible for all the illegal practices in the country. Many other US companies withdraw its operations from Burma since their image was getting deteriorated for supporting the military rule. PepsiCo was also continuously getting opposed from its home country US and was getting constant pressure from its stakeholders to stop its business activities in Burma.

Finally in 1996 PepsiCo took the step of moving all its assets out of Burma and sold its 40 % stake but it did not mention whether they will continue to supply its syrup to the bottler based in Burma. Indeed this was a smart and vague move taken by PepsiCo.

Questions
1) In your judgment did PepsiCo have a moral obligation to divest itself of all its Burmese assets? Explain your answer. Which approach to ethics – utilitarian, rights, justice, caring or virtue- is more appropriate for analyzing the case events in this case?
Answer: In our judgement, PepsiCo did not have a moral obligation to divest itself of all its Burmese assets. The reason being:
1).They was losing the support and trust of their stakeholders due to their business operations in Burma. Their brand was deterring and they were losing continuous

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