Ethics and Compliance

Strategic and financial planning are two separate processes designed to direct and manage a successful business. Strategic planning requires a detailed roadmap with timelines, milestones, and deliverables to accomplish company goals. In the same way, financial planning requires steady and firm discipline to realize company targets. Both processes call for clear objectives, analysis, implementation, monitoring, and adjustments to ensure intentional achievements.

Strategic and financial planning plays a very important role for PepsiCo, especially when it concerns employee benefits, specifically the pension plan. The pension plan is one of PepsiCo’s initiatives and has an impact on the organization’s financial planning. PepsiCo has a very structured plan of action that they use to overcome any potential problems that may arise. This initiative will affect the costs and the sales of the organization, but PepsiCo has steps in place to help ensure the best outcome for every stakeholder involved. They have weighed all of the risks so that any negative effects will be minimal.

The pension plan strategy developed by PepsiCo is a fine example of effective and deliberate strategic planning. PepsiCo built a strong and diverse portfolio to prevail over inflation and other potential economic problems. “Our overall investment strategy is to prudently invest plan assets in a well- diversified portfolio of equity and high- quality debt securities to achieve our long- term return expectations” (PepsiCo, 2011. p 37. para. 8).

PepsiCo periodically analyzed and monitored their investments to ensure pension benefits are payable when expected. “Our pension plan investment strategy includes the use of actively managed securities and is reviewed periodically in conjunction with plan liabilities, an evaluation of market conditions, and tolerance for risk and cash requirements for benefit payments. Our investment objective is to ensure that funds are available to meet the...