Reference no: EM133093633

The MBA oath in the slides from this module state in part, "My decisions affect the well-being of individuals inside and outside my enterprise, today and tomorrow." One example of a large firm reorienting toward this approach is PepsiCo. In the last few years, PepsiCo has been contracting 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. PepsiCo 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 PepsiCo 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.

Question

If you were a PepsiCo shareholder, would you support this program? Why or why not? What are your other alternatives?