After W-L, Inc. Mr. Gonzalez moved to PepsiCo in Rio de Janeiro Brazil. His first role was to lead the move of the Latin America HQ from Rio to South Florida. Mr. Gonzalez was in charge of taking care of every aspect of the move which included building policies to pay those moving and those staying. PepsiCo had a policy for traditional one-to-one moves but it did not have any policy for a massive move such as this. The 35 families in Rio were all paid as expatriates which meant they had free housing, free home leaves, Cost of Living Allowances, paid schooling, fully paid cars, travel in First Class everywhere, etc. As an American Company, PepsiCo did not pay expatriate benefits to executives in the US.

The Actors:

The most successful Division CEO in PepsiCo at the time
34 Executives used to being pampered by the Company in Brazil
8 local employees mostly low level administrative staff
Corporate PepsiCo who established Policies across the Corporation

The Stakes:

The security situation in Brazil was critical. The prior vacation season had seen multiple house break in. The CFO of Citi Bank had been kidnap in Sao Paulo and returned safely after negotiators got his release.

The overhead cost of the office was extremely high due to the hyperinflationary environment in Brazil at the time.

The extra time that it took to travel intra Latin America which required a trip to Miami to go to any of the Capitals in Latin America. The cost represented that each employee had a minimum travel cost that was 150 % of his/her annual base salary.

The Situation:

The Pepsi Cola Latin American Division was the best performing unit inside of the whole of PepsiCo. The Executives were all experts in their Franchise fields. Therefore, the Corporation was willing to flex on the treatment of this unique move.

The Solution:

Mr. Gonzalez built a relocation and severance package to convert all the expats into the American system and to treat the 8 administrative employees in Rio, they would lose their jobs. He presented the plan to the Head of HR and to the Division President. He got their approval but since it would impact the executives he was asked to present to the VPs for them to accept the conditions which will severely impact their income vs. getting a Green Card and eventual US citizenship if desired by them. He was asked not to make waves as this was very sensitive and the company did not want to lose these executives. He had this meeting in the Conference room of the Divisional CEO while the CEO worked in his office.

Mr. Gonzalez presented this very generous package for the Executives who would get a three-year transition payments on the housing and car cost, plus they would retain home leaves to their country of origin, but they would not have schooling privileges for their children, the Company will support obtaining visas for the maids, which was very important for the wives of the Executives. The terms were so good the Executives agreed in principle. However, when he presented the severance terms for the Brazilian associates an executive violently opposed it. After Mr. Gonzalez tried multiple ways to convince this executive, he lost his temper and answered to the executive that his point was “Immoral” because he was trying to take money from the administrative staff to give it back to the executives. This ended the meeting abruptly.

The shouts had been heard around the office. Mr. Gonzalez had to go and report to the Head of HR and to the Division CEO. He had been asked not to create waves and he had just done exactly that. This executive had responsibility for many people and was critical to the Corporation. The Head of HR did not know what to do. While he agreed that the executive had behaved badly, calling him “immoral” was going too far. Then the CEO called a face-to-face meeting to find out the results of the meeting.

The CEO already knew what had happened because the executive had gone to see him to complain about how he had been treated. The CEO who had heard the meeting from his office had told the executive he expected more from him as a senior person to the new guy, Mr. Gonzalez. He went further and demanded that the executive apologize to Mr. Gonzalez because he had gotten great conditions for the executives that went beyond what the Corporation would have done without him. Furthermore, his proposal for the administrative staff was very good and fair to recognize their loyalty and service to PepsiCo.

When Mr. Gonzalez and the Head of HR went into the CEO’s office, they were concern because of the gravity of this issue. However they were given the good news that the executive had to apologize not only to Mr. Gonzalez but to the staff that had heard the fight.

This is another example that in a game with multiplayer’s interests one must find a solution that maximizes benefits to all while minimizing the losses to all. This basis level of solution got Mr. Gonzalez the support of all Actors except one. However, that was enough to carry the day.