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Questions 1) In your Judgment did Pepsi Co have a moral obligation to divest itself of all its Burmese assets? Which approach to ethics – utilitarian, rights, justice, caring or virtue- is more appropriate for analyzing the case events in this case? By doing business in Burma they were actually supporting the military rule to strengthen their dominance through taxes and other means. Their brand image was getting deteriorated which was not acceptable for a big company like Pepsi Co. Though they were making profits in Burma, they were losing their share and support from the stakeholders.Answer: In our Judgment, Pepsi Co did not have a moral obligation to divest itself of all its Burmese assets. They was losing the support and trust of their stakeholders due to their business operations in Burma. As a result they were supporting more illegal practices in Burma which was ruining the country. Pepsi Co being involved in counter trade was promoting forced labor throughout the agriculture sector. Being morally right in their conduct they could not do their business at the sacrifice of human rights and getting opposition from their stake holders.. They could not overlook their responsibility towards their stakeholders.
They were not bounded by any constitutional provisions guaranteeing fair public trails or any other rights Workers restricted to form trade unions and were subject to arrest If unofficial labor associations were formed.
Pepsi Co was making huge money In Burma but It was helping the military rule to strengthen in the country which was major responsible for all the illegal practices In ten country.
Pepsi Co responded favorably to the invitations of COLORS and other companies from US also started doing business in Burma.
In 1991, Pepsi Co decided to enter a joint venture with Manner Golden Star Co, a Burmese owned company by Burmese businessmen named Then Tuna.
Manner Golden Star would own 60 percent of the venture.
This Included setting up a bottling plant with 10 year license to bottle and distributes Pepsi Co-owned products in Burma, Including Pepsi Cola, 7 up, and Miranda soft drinks.
Their brand was deterring and they were losing continuous market share in other parts of the world (e. So it becomes moral obligation for Pepsi Co to withdraw its operations in Burma.
This is a digitized version of an article from The Times’s print archive, before the start of online publication in 1996.
The case mentions about how Pepsico had to withdraw all its assets from Burma despite the fact that they were doing very well in this country.
In July 1988, decline In economic conditions led to large-scale and bloody rioting In cities In Burma. Saw Magnum replaced the Government with the State Law and Order Restoration Council (COLORS), a group of military officers.