Why MNCs prefer to pay attention to the economic aspects of business decisions

Pepsi in Burma – A Globalization Catastrophe

Why MNCs prefer to pay attention to the economic aspects of business decisions

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 & 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 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 till mid-2003.

Issues:

» Why MNCs prefer to pay attention to the economic aspects of business decisions and ignore the social considerations involved?

» The need to balance economic and social benefits in corporate decision making

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