Case 16: Coke and Pepsi in India: Issues, Ethics, and Crisis Management
1. Identify the ongoing issues in this case with respect to global business ethics, issue
management, and stakeholder management. Rank these in terms of their priorities for Coca-
Cola and for PepsiCo.
Initially, both companies faced allegations that their products contained unsafe amounts of
pesticide and that the companies were polluting India’s drinking water. This was an issue to be
managed by both companies that developed into a crisis when many Indian states starting
banning the use of the products. Furthermore, state-mandated warning labels contributed to the
2. Assess the corporate social responsibility (CSR) of Coke and Pepsi in India.
Both companies have recognized their economic, legal, and ethical responsibilities in India. By
accessing the Indian market, both Coke and Pepsi have tapped new consumers to enhance
corporate profitability. To our knowledge, both companies have created a product within the
constraints of Indian law. The criticisms faced by the companies fall within the ethical realm.
3. Are these companies ignoring their responsibilities in India, or is something else at work?
The companies arguably have been attacked due to their foreign roots. One might note that all
the pesticide allegations were the result of testing by special-interest groups—not government-
4. Why does it seem that Coke has become a larger and more frequent target than Pepsi in
India? Does having an Indian-born CEO help Pepsi’s case?
I would argue that having an Indian-born CEO helped remove Pepsi from the focal point of
5. How do companies defend themselves against the nonstop allegations of activist groups that
have made them a target? Is any form of stakeholder management workable?
The steps taken by both companies seem to have met with some success. The response in the
media and the hiring of popular, visible Indian-born spokespeople to support the products seem
to alleviate some consumer concerns. Using grassroots efforts to determine consumer concerns
6. IRC seems to have made it its life’s work to defeat Coca-Cola. Is IRC an interest group that
has just gone too far?
While IRC’s tactics appear to be severe, they have gotten Coca-Cola’s attention. In fact, Coca-
7. What lessons do Coke and Pepsi’s experiences in India present for multinationals in their
global business and society relationships? Enumerate three to five lessons and give examples
from the case to document them.
MNCs must be prepared for the resistance they will meet in the global marketplace from special-
interest groups. Proper research and issues/crisis management should alert companies of the
groups that are the most likely to create problems for an MNC. Companies should be prepared to
respond to these groups prior to entering a new country. Coca-Cola would have been better