Big business has been moving into Russia ever since the fall of communism. Many of the world’s largest corporations have invested billions there with varying degrees of success. PepsiCo was among the first companies to move to Russia, and today it operates numerous factories around the country. The company’s Frito-Lay factory near Moscow hires and develops a growing workforce that specializes in potato products. Employees at the factory are responsible for transforming 40 thousand tons of potatoes each year into delicious Frito-Lay snacks. Since Russia is a developing market, multinational corporations like PepsiCo must develop programs that guarantee workers the same kinds of rights, training, and protections that domestic employees receive in the United States. Management’s efforts appear to be paying off. In a recent two-year period, the company’s Russian workforce tripled to 1,500 people. Moreover, the high level of employee satisfaction reported by Russian employees indicates that the company is making all the right moves.
Issues for Discussion:
Why might PepsiCo need to develop ethics programs for its overseas factories?
How might the legal and political environment of Russia affect the way PepsiCo develops ethics programs in that country?