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Case
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Reference no. 703-017-1
Authors: A Mukund
Published by: IBS Center for Management Research
Published in: 2003

Abstract

The case deals with the experiences of the global cola major, PepsiCo, in Burma during the 1990s. It gives a brief profile of the political, social and economic crisis in Burma under the military rule of the State Law and Order Restoration Council (SLORC). The case discusses why the SLORC opened the Burmese economy and why Pepsi rushed to do business with this country. It then describes the widespread, global opposition by students, human rights activists, politicians, governments and various other parties to the support provided by multinational companies (MNCs) (focusing on Pepsi) to Burma''s rulers. Finally, it explores Pepsi''s partial pull-out from Burma in 1996, the resulting protests, followed by the complete pull-out in 1997. The case also provides a brief update on Burma''s crisis until mid-2003. The case is structured to enable students to: (1) understand why multinational companies enter into ''highly controversial'' economies that have immense market potential; (2) understand why MNCs prefer to pay attention to the economic aspects of business decisions and ignore the social considerations involved; (3) analyse the need to balance economic and social benefits in corporate decision making, particularly in international operations involving various stakeholders; (4) appreciate the impact of business decisions on the corporate image when expanding into overseas markets; and (5) understand the role big private sector corporations can play in the development of the economies in which they operate, and the financial and social implications (reputation, goodwill) of doing so. The case is aimed at MBA/PGDBA students and is intended to be part of the business ethics and corporate governance curriculum.
Location:
Industry:
Size:
Large
Other setting(s):
1990s to 2003

About

Abstract

The case deals with the experiences of the global cola major, PepsiCo, in Burma during the 1990s. It gives a brief profile of the political, social and economic crisis in Burma under the military rule of the State Law and Order Restoration Council (SLORC). The case discusses why the SLORC opened the Burmese economy and why Pepsi rushed to do business with this country. It then describes the widespread, global opposition by students, human rights activists, politicians, governments and various other parties to the support provided by multinational companies (MNCs) (focusing on Pepsi) to Burma''s rulers. Finally, it explores Pepsi''s partial pull-out from Burma in 1996, the resulting protests, followed by the complete pull-out in 1997. The case also provides a brief update on Burma''s crisis until mid-2003. The case is structured to enable students to: (1) understand why multinational companies enter into ''highly controversial'' economies that have immense market potential; (2) understand why MNCs prefer to pay attention to the economic aspects of business decisions and ignore the social considerations involved; (3) analyse the need to balance economic and social benefits in corporate decision making, particularly in international operations involving various stakeholders; (4) appreciate the impact of business decisions on the corporate image when expanding into overseas markets; and (5) understand the role big private sector corporations can play in the development of the economies in which they operate, and the financial and social implications (reputation, goodwill) of doing so. The case is aimed at MBA/PGDBA students and is intended to be part of the business ethics and corporate governance curriculum.

Settings

Location:
Industry:
Size:
Large
Other setting(s):
1990s to 2003

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