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These pressures manifest in unexpected ways. If the quest for profit proves compatible with official objectives, so much the better if not, then executives will try to manufacture opportunities to pursue their narrow interests. The constant pressure business executives exert as they dig for profit can wear away at even the supposedly rock-solid foundations of national policy. Yet it is the Donald Kendalls, not the Henry Kissingers, who steer much of international relations. There’s no mystique in that ambition, which may explain why it’s written about far less often than the deals of politicians and diplomats. International business executives and their attendant lawyers, accountants, and fixers handle the complexities of cross-border trade and investment, but such complex deals still chase a simple goal: making money. Most of what happens among countries concerns something far simpler and more direct: business. Yet formal interactions between governments are only a small part of international relations.
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Theorists can make international relations seem far removed from everyday experience: nuclear strategy, treaty negotiations, human rights principles. Bluff, hearty, and ambitious, Donald Kendall started as a worker in a Pepsi-Cola bottling plant, but he swiftly climbed the corporate ladder, becoming head of the company’s international division by 1957 when he was only in his mid-30s.Īs a corporate executive engaged in international business, Kendall filled a role sometimes slighted by scholars. The Pepsi navy begins with one man’s driving ambition to sell soda to Soviets. In the end, almost nobody got what they wanted. Soviet officials saw the deal as part of a larger strategy of external trade that could help revitalize their creaking economy. policymakers to gain a major advantage in its rivalry with Coca-Cola. The rusting submarines were one way in which Soviet leaders and Western corporations could establish world peace and a new, post-communist prosperity led by business.Īmerican leaders hoped that exposure to Western business could transform the Soviet Union into a country just like theirs. It’s from the brief moment right before, when the Soviet Union looked likely to survive even though the Cold War had ended. The Pepsi navy isn’t a story from the era of Soviet collapse. PepsiCo acquired the rusting fleet as part of a multibillion-dollar bet on the long-term stability of the Soviet Union, an enormous market that had little to trade immediately besides raw material and the promise of future profits. The multinational firm and the country founded by Vladimir Lenin were business partners, and in 1989 Pepsi executives were bullish on Soviet prospects. The Pepsi navy is sometimes portrayed as an embarrassment for the USSR. Most interpretations of the story get its meaning wrong, too. PepsiCo was more a middleman than a maritime power. What’s more, the ships themselves were immediately turned over to a Norwegian shipyard to be scrapped. The Pepsi navy no more conferred military power than a rusting Model T could have been a Formula 1 contender. What PepsiCo acquired were small, old, obsolete, unseaworthy vessels. Yet in any real sense the story is false. According to an analysis of Jane’s Fighting Ships 1989-90, a country operating a squadron of 17 submarines would have tied with India for possessing the seventh-largest fleet of attack submarines. In recent years, an internet legend has grown up around this deal, which holds that Pepsi briefly possessed the sixth-largest fleet in the world. We also own a revolutionary event ticketing platform, Central Florida TiX.In 1989, PepsiCo Inc., the maker of Pepsi, acquired 17 submarines, a cruiser, a frigate, and a destroyer from the Soviet Union. We publish the hyper-local, award- winning, monthly publications, Haven Magazine and LKLD Magazine. Full-service digital agency, but that's not all.