Strategic CIO // IT Strategy
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8/16/2006
07:57 AM
Paul McDougall
Paul McDougall
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Pepsi Outsources CEO Job To India

Among the more frequent suggestions I hear from American tech workers opposed to outsourcing is this: "Why don't they just outsource the CEO?" Well, one major U.S. multinational just did…sort of.

Among the more frequent suggestions I hear from American tech workers opposed to outsourcing is this: "Why don't they just outsource the CEO?" Well, one major U.S. multinational just did…sort of.This week, PepsiCo's board tapped Indian-born and -educated Indra Nooyi for its top job. Nooyi was born in Madras and attended business school in Calcutta before completing her studies at Yale. She's been with Pepsi since 1994 following stints at Motorola and Johnson & Johnson.

Characterizing this move as 'outsourcing' is a bit tongue in cheek, but I think the decision is remarkable for a number of reasons. For one, it shows that Pepsi "gets" the flat world. It understands that the only market that matters is the global marketplace, and that to play well in it businesses need to hire the best and brightest--at every level--regardless of nationality, race, or gender.

That's true all the way from the corner office down to lower-level tech and line of business positions.

Nooyi's appointment as Pepsi CEO also puts the lie to the notion that businesses in the West view India merely as a source of low-wage, commodity workers. There are many high-level executives of Indian origin working in leading American corporations, but Nooyi immediately becomes the most high-profile of these talented individuals.

Finally, Pepsi's choice of Nooyi as CEO shows that multinational corporations don't exist simply to suck profits and resources from developing countries (condolences if you spent $40,000 at Berkeley learning otherwise).

Rather, Pepsi's decision is proof that multinationals offer economic opportunity on a global basis. Indeed, Pepsi is now behaving along the lines of what IBM CEO Sam Palmisano recently called "the globally integrated enterprise," a new form of industrial organization that creates lasting wealth and meaningful jobs around the world. CEO probably fits in there somewhere under the "meaningful job" definition.

Outsource the CEO? Pepsi has answered that challenge.

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