IntroductionBusinesses are at the core of all the activities of.docx

Introduction
Businesses are at the core of all the activities of the World
today. Individuals, corporate entities as well as governments are
engaged in business activities with each other (Sen, 2008). Each
of these persons is in business for a common goal of profit
maximization. In their endeavor to pursue this goal, managers
often find themselves in a dilemma. The dilemmas stem from
the presence of conflicts of interest for the managers (Paliwal,
2006). At times, they are faced with personal needs where they
have personal interests in the subject matter in their line of
duty. For them to avoid such instances, it would be prudent of
them to uphold the organizational values and code of ethics.
Ethics in business
Ethical practices are crucial not only in the business World but
also in enhancing the quality of life we live, our morals and
principles. Being ethical is at the core of how the society
perceives organizations, whether for-profit or not-for-profit
(Reddy, & Appannaiah, 2010). In this study, we will focus the
ethical side of two organizations, profit making one and a not-
for-profit one. We will use Pepsi Company as our profit making
firm, and World Vision will suit our not-for-profit bill. In this
study, we will analyze how each of these organizations carries
out their activities with regards to ethics. We will attempt to
explain their ethical dilemmas and how each of them has
handled its case and the consequences of their actions. We will
also look at the ethical philosophies that back up the ethical
decisions of each organization. In this section, we will discuss
their ethical philosophy and whether it was adequate to address
their ethical dilemma. We will then make suggestions on the
way forward for each organization on how they can ensure that
they conduct their operations in an ethical manner for the good

of all the stakeholders.
World Vision
This is a Christian Based not-for-profit organization that seeks
to improve the lives of the less fortunate in the society
especially children. This organization depends on donors to
contribute funds that are pooled together to support and
empower children in ninety-seven countries. It is an
organization that has come far in terms of growth, having been
founded in 1950 by Reverend Pierce. The organization has
various stakeholders who enable it to efficiently fulfill its
mandate in improving the lives of young children. Its focus is
on the empowerment of these bright children from developing
nations by giving them hope for a better future through
education. The firm offers sponsorship programs that enable
these children to access quality education and access to other
basic needs. Upon being founded, the firm waited for three
years to raise funds to sponsor its first beneficiaries of
sponsorship to needy children. Besides offering sponsorship, the
organization has been at the forefront of humanitarian efforts to
places that require such help. For instance, its arms in Liberia,
Ethiopia, Malawi, and India have been responsive to the
humanitarian crisis in those countries raging from natural
calamities such as floods and famine. The organization works
tirelessly in its endeavor to provide relief food, shelter and
clothing to victims of hunger and floods. Despite its good vision
and mission and a good moral evangelical background, the
organization has not stood out of controversies. The
organization has faced several controversies regarding its way
of operations. In the recent past, the organization has been
accused of among others; political interference in foreign
countries, corruption of its officials and inadequacy of child
sponsorship in addressing the societal needs. As we break down
into each of these dilemmas and ethical issues for the
organization, it will become clear why it is under criticisms for

unethical behavior.
Corruption
More often officials of organizations find themselves in a
compromising position regarding their take on several issues.
This stems from the conflict of interest where they have a
personal interest on the subject matter. This personal interest
hinders objectivity while exercising their mandate to make
decisions on behalf of the firm. The personal interest makes
these officials blind to the point that they want to engage in
activities that will benefit them at a personal level as opposed
to the objectives of the organization (Reddy, & Appannaiah,
2010). Corruption is like a cancer that is malignant in our
society. It eats up the very core of our moral values and leaves
the society more vulnerable to issues such as poverty, diseases,
and illiteracy. It is an addictive vice that makes its perpetrators
repeat it often as its benefits are highly rewarding. This vice
makes the perpetrators more greedy and more committed to
achieving their goal in looting monies meant to help the needy
in the society. It leaves these needy in an awkward situation
where they have no one else to turn to, and their hope is
dwindled in their attempt to survive and make a living out of
their efforts. Their efforts are thwarted by these corrupt
officials with monies aimed at improving their living standards
being diverted to other accounts for personal gains. These
corrupt officials have no mercy for the needy as they loot public
funds that are meant to give hope to these needy people. By
being corrupt, they are not only affecting the present state of
these people but also their future. For instance, in Malawi and
Liberia, allegations of senior officials being engaged in
corruption led to an audit into the organization's accounts where
they were found to be corrupt. They were using their power and
influence to divert foodstuff and other supplies for other uses
instead of helping the needy. They were going against the
organization's objectives of improving the living standards of

the needy.
Child sponsorship
The organization has faced widespread criticism regarding its
sponsorship of some students. Critics argue that the sponsorship
is discriminative as it only singles out a few needy kids while
leaving the rest as hopeless as before. To make matters worse,
the kids whoare left behind feel like they were not as good
enough or as deserving of the organization's help. In Ethiopia, a
foreign journalist once interviewed a beneficiary who did not
even know she was a beneficiary of World Vision. All she had
received from the organization was a pen and a school bag some
years ago. Despite this fact, her file at World Vision indicated
that she had been receiving aid and that she had learned how to
speak English yet she could barely utter any English words.
This tells of many similar cases in developing countries where
the officials divert the financial aid to elsewhere while leaving
the beneficiaries in dire need of basic needs. The
misrepresentation of facts regarding beneficiaries' records is
also to blame for leaving such children vulnerable to early
marriages and unwanted pregnancies in the developing World.
In doing this, they do little to foster any hope among these
children.
Political Interference
The organization's arm in Australia has been previously accused
of funding terror groups such as the Union of Agricultural Work
Committees. It was alleged that the organization funded this
terror group through its Australian office, claims that the
organization denied. This did little to restore its tainted image
as such firms are expected to take a neutral stand away from
politics. They are supposed to improve the welfare of the people
(Reddy, & Appannaiah, 2010) through the charity as opposed to
funding uprisings and terror groups.

Pepsi Company
This is a multinational company that has business interests in
the beverage and food industry. The company has grown
through numerous mergers and acquisitions into the current
PepsiCo Inc. This company has set its footprints in the food and
beverage industry in all the continents of the World. It is a
making profit company whose main objective is to maximize
profits for the sake of shareholders (Reddy, & Appannaiah,
2010). This company has come a long way in terms of growth. It
has grown in assets, equity, the number of subsidiaries and
customer base. It is currently among the World's largest food
and beverage companies. So big has been its success that it has
dominated the Russian food and beverage industry through its
Russian subsidiary. Its main competitors include CocaCola and
RC Cola.
Ethical principles contribute to good business operations. When
a business upholds ethical behavior, it influences how outsiders
perceive its actions. . An ethical company is more likely to
attract new customers while retaining previous ones. It can
enhance customer loyalty (Paliwal, 2006). Ethics enhances
customer's confidence in the way a company handles its
business operations, thus locking in the customers in the
business. It also enhances customer satisfaction through good
governance and good practices as per the provisions of business
ethics.
Unfortunately for PepsiCo, its ethical walk has not been as rosy
even if it has won ethical awards on several occasions. This is a
contrast to the ethical values that the company has exuded over
the years. It has been at the forefront of good business practices
by ensuring ethical behavior while carrying out its business

activities and also in its dealings with its stakeholders.
Although this has been the case, the company failed to consider
some stakeholders in its research for taste testing. The company
has faced allegations of unethical practices stemming from its
operations. For instance, the company has been accused among
others of contributing to the high carbon emissions through the
use of plastic bottles in the packaging of its beverage products.
The company has also faced allegations regarding the use of
aborted fetal cells in its taste testing studies.
Use of aborted fetal cells in its taste testing research
This is the biggest ethical issue that has ever faced this
multinational. Despite the fact that it has received numerous
awards for being ethical in its business operations, the company
suffered a major blow for using aborted fetal cells in its
research. This was followed by a boycott by pro-life activists
calling for a massive slowdown in the purchase and
consumption of PepsiCo's products. The criticism leveled
against the company was that its business processes lacked
moral values of Christian values. Many religious groups advised
their members against consuming PepsiCo's products as they
had no respect for human life. The company reacted to these
claims by denying that it had used the original cells from
aborted fetuses. The company argued that it used cells from the
original cells of the fetuses thus distancing itself from these
allegations. This did little to salvage its damaged reputation,
especially to the pro-life lobby groups. For these lobby groups,
the company acted unethically by supporting abortion
indirectly. The maxims of equity state that no man shall benefit
from another's misfortune. These lobby groups perceive the
aborted fetuses as human beings who were denied a chance to
live their life. They argue that based on equality, every human
should be accorded a right to live, as life is sacred. They
support the notion that life should be protected at all costs
(Reddy, & Appannaiah, 2010). By using the cells from aborted

fetuses, the company crossed the line in the protection of human
life by becoming a beneficiary of abortion. They argue that
although the company did not directly conduct the abortion, it
procured some cells of these fetuses for the sole purpose of the
research. In their view, the lobbyists accuse the company of
condoning and upholding abortion for purposes of research and
development of new products for its selfish gain of enhancing
its beverage flavors. That was the main reason behind the
boycott for PepsiCo's products.
Ethical Evaluation
For each of these two organizations, the allegations laid against
them were true and founded. The two organizations did little to
avert the criticism levied against their actions.
For PepsiCo, it failed to engage its customers who are at the
very core of its business in its research project. The company
failed to take the views of the customers with regards to their
perception on the issue of abortion and its intended use of cells
from aborted fetuses. The company failed miserably to engage
the customers yet they are because the success and growth of
the company. It is this failure on their part that threatened to
ruin this company's reputation. The claims by the lobby groups
were well founded as their faith as per their religion, and
biblical teachings forbid abortion. This is also the reason such
people fail to condone any actions that are perceived to uphold
abortion while lowering the sanctity of life. Therefore, the
company created this dilemma in its mission to find out how
such cells would influence and enhance the different flavors. I
would say that the company deserved the criticism as it was
reckless in its actions and decision to use cells from aborted
fetuses in taste testing research.
In my view, the company should have averted such criticism by
taking an anonymous research among beverage customers to

find out their perception about the use of cells from aborted
fetuses in taste testing research. This anonymity would have
saved the day for the company instead of embarrassing and
damaging its reputation openly and opening itself to criticism
by the various pro-life lobby groups. The company failed to act
ethically by overlooking the feelings and the perception of this
group of stakeholders. PepsiCo owed the customers an apology
following the use of cells from aborted fetuses in its taste
testing research.
As for World life, most of its problems are not foreseen. The
organization is based on religious teachings where they spread
the love to the less fortunate in society through humanitarian
support. For such an organization that does not discriminate
stakeholders and beneficiaries, it is ironical that some of its top
managers would engage in corruption. This is because they are
well remunerated, and yet they are leading an evangelical based
organization that helps the needy. It is ironical that while the
donors make generous contributions to help the needy, there are
other people who are not needy physically but mentally. It beats
logic to find out that a top manager who has a promising career
and is highly regarded in the society would engage in such
demeaning acts (Reddy, & Appannaiah, 2010). By diverting
help that was meant for the needy, the officials failed to act
ethically. The organization could have done very little to curb
such actions as those were personal decisions on the part of the
individuals to engage in corrupt practices. By failing to impact
positively on the needy, the officials failed in their work, and
they are to blame entirely for their actions. The organization
ought not to suffer damage in its reputation for the mistakes of
the few selfish individuals. World Vision owed the donors an
apology and a re-assurance that such cases would not be
repeated elsewhere shortly. The organization also owed the
needy citizens of those countries the promised relief food and
other supplies as they had depended on the relief to improve
their living standards. The organization should have taken the

necessary steps to ensure that such selfish officials are
prosecuted in a bid to deter others from engaging in corruption.
Critique for World Vision
This is an organization whose objectives are based on pluralistic
deontology. In this approach to ethics, the organization has to
apply the seven duties before deciding which duty to act upon.
The seven duties include justice, improvement of character, the
fulfillment of promises, self-improvement, gratitude, non-
maleficence, and reparation (Hooker, 2012). The organization,
being an evangelical based firm has a duty to provide for the
needy as enshrined in its objectives. In doing, is it seeks to
fulfill its promise to impact positively on the needy by
providing them with the basic amenities such as food, shelter,
clothing, water and education. The organization plays a
humanitarian role in countries and regions that have been hit by
a humanitarian crisis.
The organization shows gratitude to its donors by thanking them
for their generous donations. It also offers self-improvement
programs through sponsorship to the needy students. This self-
improvement offers these children a chance to rise against
poverty by giving them hope for a better future. These children
later grow up and become successful people in the society.
Upon finding out that some of its officials were guilty of
corruption, the organization ought to have played a reparation
duty. This would have ensured that the needy people who were
meant to benefit from the diverted foodstuff and other supplies
have received these donations.
The organization's corrupt officials must have learned how to
apply the utilitarianism approach to getting rich. They did not
mind about the needy people when they diverted the relief
foodstuff by selling it for monetary gains. This approach is not
the best for the organization. The most suitable approach is the

pluralism deontology.
Critique for PepsiCo
This is an organization that takes the utilitarianism approach to
ethics. The company does not seem to mind a lot about the
perception of its customers. The management of the company
knew that some of its customers were pro-life yet it gave the
research a green light to use the cells from aborted fetuses.
Although they knew that some of the customers would not
accept this, they still went ahead with their plans. To them, the
end justifies the means. Thus, the management does not care
what method the company will use to reach its destination. They
are ready to fly, walk, run, crawl, cycle or to drive as long as
they reach their destination.
This approach is dangerous as it shows the lack of tolerance for
other people's views. The company is not tolerant to the
religious views, and that is why it distanced itself from the
claims that it was supporting abortion. By doing so, the
company showed utter disregard for human life.
The company also seems to have taken the moral relativism
approach to its ethical issues (Baghramian, 2004). By failing to
consider the feelings of the religious customers, the company
must have intended that the different stakeholders have
different perceptions about abortion (Lukes, 2008). Their hope
was that the few who were opposed to abortion would not voice
their concern for fear of being the minority. The managers must
have been shocked following widespread criticism by Christian
lobby groups for a boycott of the company's products. The
moral relativism and utilitarianism approaches are not the best
for this organization. The most suitable approach would be
pluralism deontology.
Running an ethical business means taking into consideration the

views of the various stakeholders to ensure equitable treatment
and inclusivity for all (Carroll, & Buchholtz, 2003). It means
following due diligence and care to protect and uphold best
practices in the specific profession as well as for the sake of the
organization (Cory, 2005). The best way that these two
organizations can ensure ethics is by considering the power of
diversity and the needs of all the stakeholder and addressing
how to meet these needs.
References
Baghramian, M. (2004). Relativism. London: Routledge.
Carroll, A., & Buchholtz, A. (2003). Business & society:
Ethics and stakeholder management (5th ed.). Mason, Ohio:
Thomson/South-Western.
Cory, J. (2005). Activist business ethics. Boston: Kluwer
Academic ;.
Hoang, P. (2007). Business & management. Melton, Vic.:
IBID Press.

Hooker, B. (2012). Developing deontology new essays in ethical
theory. Malden, MA: Wiley, Blackwell.
Lukes, S. (2008). Moral relativism. New York: Picador.
Reddy, P., & Appannaiah, H. (2010). Business management
(Rev. ed.). Mumbai [India: Himalaya Pub. House.
Roth, J. (2005). Ethics (Rev. ed.). Pasadena, Calif.: Salem
Press.
Sen, M. (2008). Business management. Jaipur, India: Oxford
Book.
Paliwal, M. (2006). Business ethics. New Delhi: New Age
International.

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