Pepsi Organizational Analysis, Part 1






Pepsi Organizational Analysis, Part 1

Nature of the Organization

Pepsi Co. is the second largest company of its kind. It deals with the production and distribution of beverages and snack food. It has approximately 285,000 employees across the world. Pepsi has a divisional organizational structure (Capparell, 2007). This is because of the various offices that are dispersed in different geographical regions. Apart from this, the different divisions have hierarchical systems. This means that the different human resource offices in Pepsi, are organized in different levels and the highest level is that of the Chief Executive Officer, Indra Nooyi. The orders of the company find their genesis in the top most management and the implementation is done by the lower levels in the hierarchy. The company has adapted a work culture that protects the interest of the employees.

In relation to its structure, Pepsi faces many human resource challenges. One of the biggest challenges is communication between employees. The structure does not encourage communication among the different divisions. Although the CEO exercises authority over the different levels in the hierarchy, she barely communicates with her divisional managers let alone the other employees (Capparell, 2007). This communication break in the communication process may be at the expense of the employees’ motivation. Another challenge that the Pepsi Company faces is that of excess workload on the mangers. This is because of the structure that demands that they handle most of the decision-making processes in the different divisions. This then slows down the implementation process of company goals.

Legal Concerns

One of the legal concerns of Pepsi is protecting the health of its consumer. In the past, the company was sued for manufacturing products that contains harmful substances. This can be detrimental to the company’s image. The allegation was that the company produced beverages that contained benzene. Benzene is a cancer-causing agent (Capparell, 2007). This is in line with the consumer protection laws. The best approach that the company can take to curb is subjecting their products to thorough tests. This will help in protecting the health of the consumers and it will maintain the integrity of the company.

A potential legal concern for the company could be protection of their employees. This is a major legal concern for many multinational corporations. It is important that the health and welfare of employees is fully protected. This is especially in the case of the workers in the manufacturing sector. It is the responsibility of the management to comply with the labor laws. These laws seek to protect the health of workers. This will include providing hazardous free working conditions for the employees. The management is required by the law to set up occupational health and safety management systems.

Human Resource Issues

There are many challenges that face multinational corporations. Some of these challenges also affect the human resource of these companies. The expansion of Pepsi in the international market will see the company experience more of these challenges. One of these challenges is the issue of convergence and divergence. This is to imply that the human resource practices will be similar across the different outlets of the company or each outlet will have a unique human resource management style. A centralized system has been popular in many large companies. This is where the central office dictates the path to be followed. However, research has shown the benefits of allowing the different offices of the company are autonomous.

Another potential issue is that of the diversity of the employees. Expansion of the company in the international market would mean introduction of different practices and culture into the company. This may be a challenge when trying to come up with human resource management strategies. Various conflicts may arise due to the multiplicity of culture. These differences may arise in the area of power relation. There are particular communities that uphold a greater power distance while others believe that power is a concept that should be shared equally. Another area that may cause of friction is that of masculinity and femininity. There are communities that prefer a relational approach to work while others prefer the masculine approach that tends to be assertive.

The approach that should be used in tackling these issues should be employee-based. The approach should focus on the needs and preferences of the employees to motivate the performance and boost the morale of the employees. The management should look for strategies that are advantageous to their workers. The human resource department is the most important resource of the company. Pepsi should incorporate both convergence and divergence techniques when coming up with the resource management methods. In tackling the issue of employee diversity, the management should use a standardized work culture that is unique to Pepsi. This will give the employees a focal point of focus.


Human resource motivation is important for the company’s success (Dessler, 2000). Pepsi must look for measures that will ensure that their employees are constantly motivated. This can be through employee appraisals. The management of Pepsi can also provide equal employee promotion opportunities. This will help in giving motivating to the employees. Pepsi is already giving annual bonuses to those employees who have shown great productivity in their work. These kinds of measures give the employees morale to work harder.

The company should also work on training the employees (Dessler, 2000). This will ensure that they remain competent in their areas of expertise. Moreover it shall ensure that the Subsequently, the competence of the employees will give the company a competing edge. The company should also give the employees regular leave from work. This will give the employees a sense of rejuvenation that will increase their productivity.


Reference List

Capparell, S. (2007). The real Pepsi challenge: The inspirational story of breaking the color barrier in American business. New York: Free Press.

Dessler, G. (2000). Human resource management. Upper Saddle River, NJ: Prentice Hall.

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