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Management and Leadership
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Table of Contents
The Effects of Leadership Styles and Skills on Pepsico’s Team and Organizational Objectives.................2
Introduction.................................................................................................................................................2
Key words...............................................................................................................................................3
Leadership Styles Required in Different Situations.....................................................................................3
Pepsico’s Prevailing Leadership Styles.......................................................................................................6
Pepsico’s Ethical and Value-Based Approach to Leadership....................................................................10
Conclusion.................................................................................................................................................13
Bibliography..............................................................................................................................................15
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The Effects of Leadership Styles and Skills on Pepsico’s Team and Organizational
Objectives
Introduction
Leadership and organizational success go hand in hand. Those tasked with defining the
organizational goals, developing a vision, and making strategic decisions have a critical mandate
in ensuring a firm aligns operations to its objectives. Furthermore, they define the organizational
culture, core values, and em0ployee relations, which are essential elements in sustaining a firm’s
growth. Leadership skills and styles are essential in delivering specific organizational objectives;
they define the difference between a firm’s ability to achieve its goals or failure. Research
indicates that successful companies like Netflix, Apple, Google, Microsoft, Tesla, and Amazon
credit their growth to top management's leadership skills and styles. Leaders with the ability to
leverage their power and authority to enhance organizational performance are successful.
Additionally, capitalizing on creativity, unique approaches, and management best practices make
a difference between a successful leader and leading firms downhill.
This paper seeks to gain insights into leadership management by analyzing Pepsico, one
of the most successful foods and beverage companies. Pepsico’s growth over the past decade is
attributed to the leadership style and management of Indra Nooyi, the company CEO for 12 years
before taking over the organization’s leadership in 2006, Pepsico was registering losses, and the
company’s market and the competitive position was declining rapidly (Sukri and Shasrini, 2020).
Her ability to help the company make a turnaround while developing robust frameworks that
support the firm’s success to date makes Nooyi the most suitable subject of study for this article.
It will explore the role of leadership styles and skills on organizational teams and objectives.
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Through her leadership role at Pepsico, this paper looks to discuss the leadership styles required
in different situations while focusing on the set objectives. Additionally, a critical review of
leadership styles in relation to organizational objectives is highlighted in the paper. It articulates
how leadership styles define the corporate culture, team spirit, and commitment to company
goals. Another crucial aspect discussed in the article is the firm’s leadership approach when it
comes to ethical value-based standpoint. Analyzing the legal, regulatory, and ethical frameworks
with stakeholder needs and expectations regarding leadership in mind will help shed light on the
issues in question. This analysis will contribute to the body of knowledge on leadership
management.
Key words
Leadership styles, Organizational goals and objectives, value based leadership, ethics, leadership
attributes, organizational performance, participation and collaboration, Pepsico, Indra Nooyi,
Leadership Styles Required in Different Situations
The most critical aspect of leadership is the ability to articulate the set goals and
objectives. Therefore the adopted leadership style should consider the shareholder value,
consumer expectations, and employee engagement. It should align with the three-fold
organizational purposes, including profits, society, and environment. The adopted leadership
style should fit into the organizational goals given that different ventures require different
leadership styles. The leader’s ability to tap into their core values and personal traits are vital in
enhancing their efficacy in achieving the set objectives (Deshwal and Ashraf Ali, 2020).
Additionally, their educational background and experience augment their leadership style. One
of the most plausible approaches in this regard is value based leadership. It is not dependent on
the leader, rather their ability to influence the origination to adapt to a set of values that are
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critical in accomplishing the set goals. Such leaders are authentic, practical and encourage
certain activities to make everyday theme practice within a firm (Cui et al., 2020). They also play
a critical role in developing a corporate culture that fosters a set of values tailored to ensure that
it attains its set objectives. The workplace culture becomes the primary driver towards the
philosophy that guides the organization and hence fostering productivity and performance.
Closely related to value-based leadership is situational leadership. While the foundation
for these leadership styles stems from different philosophies, they converge in application and
efficacy. Situational leadership applies to leaders who are not only flexible but also quick
problem solvers (Hendrikz and Engelbrecht, 2019). This leadership style is not dependent on a
particular set of skills or practices, rather the ability to change tact to fit specific situations. The
primary aspect of this leadership style is achieving the set organizational goals by tackling the
situation at hand. Therefore the leader addresses issues by changing their tactics to address the
problem at hand. For example, organizations that rely on teams and departments' efficacy
experience constant changes in team formation. Deshwal and Ashraf Ali (2020 p 36) explain that
leaders using situational leadership style have to adapt to these changes, weigh in the labor force,
and choose the most suitable leadership technique to ensure the teams achieve the set
organizational goals. Situational leadership requires the leaders to understand the strengths,
weaknesses, skills, and motivational factors driving the organization’s workforce towards a
common goal. They then employ leadership techniques that create an environment that fosters
productivity, progress, and prosperity (Shi and Ye, 2016). In many cases, these leaders are
flexible, using their adaptability to create a community built on values such as integrity,
accountability, and cohesion.
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Despite the different characteristics defining various leadership styles, they all boil down
to the ability to direct and motivate employees. This is the foundation for empowering the
workforce to focus on achieving organizational goals. As indicated by the six leaders' emotional
leadership styles model, the leader’s personality and character traits play a central role in
defining the technique they choose to lead (Esowe et al., 2017). Autocratic leaders focus on
efficiency and results and hence using any means available to achieve the set vision. In many
cases, those who use this leadership style disregard their subordinates and take up a lone ranger
to make decisions. Also known as commanding or authoritarian leadership style, consensus and
consultation are minimal, with the leaders making decisions based on their experience and
thought processes. In many cases, such leaders look to avoid the bureaucracy involved in long
decision-making processes. They flourish in structured organizations requiring close supervision
for optimum efficiency. The autocratic leader’s ability to communicate plays a crucial role in
directing and delegating duties (Stephan and Pathak, 2016). Their ability to make decisions
eliminates the need for employee autonomy with the structures and guidelines put in place,
enhancing the efficiency of operations and activities that help the organization attain its goals.
The path-goal theory is another vital model in choosing the most suitable leadership style,
depending on the situation. It takes into account the people’s needs, including employees,
consumers, and shareholders, required tasks, and the working environment (Liphadzi,
Aigbavboa, and Thwala, 2017). Therefore this approach is vital in aligning a leadership style to
the organizational goals. According to Kurt Lewin's theory, it is based on choosing between
democratic and Laissez fairer leadership styles, which are critical. Democratic leadership is
applicable when leaders want to enhance engagement and participation among the employees.
This leadership style entails encouraging feedback and engagement in decision making. It plays
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an integral role in empowering and unifying employees towards a common goal. Cui et al.(2020
p 78) argue that this leadership style is vital in situations where leaders want to encourage
creativity, commitment, and loyalty towards organizational goals and values. Laissez fairer style,
on the other hand, is the opposite of autocratic leadership. It is applicable in situations where
leaders require little supervision and encourage autonomy in decision making. This hands-off
approach is used in situations where the employees are highly trained and have vast experience;
they are also aware of what is expected of them (Taylor, 2016). It is a crucial leadership style in
enhancing employee retention while ensuring that their activities and performance align with the
organizational goals.
Pepsico’s Prevailing Leadership Styles
In light of this article’s focus on Pepsico, it is crucial to look into the organization’s
leadership, especially during Indra Nooyi’s reign as the CEO. The emphasis on this period is
subject to her leadership success and the ability to bring a turnaround in the organization.
Additionally, it augurs with the discussion in this paper given that her leadership style influences
the company even after she stepped down as CEO one year ago. Nooyi employed several
leadership styles to enhance Pepsico’s performance while changing its culture and structure. Her
visionary leadership played a vital role in developing the organization’s objective based on the
‘performance with purpose’ mantra (Church, 2019 p 494). She understood that for Pepsico to
achieve the goal of retaining its leadership position as one of the best food and beverage
companies, it had to implement strategic objectives that aligned with the changes in the business
landscape. Therefore, her visionary leadership style played a critical role in articulating the
company’s core goals and the roadmap it would take to achieve it. She not only developed and
illuminated the vision but also motivated the employees to work towards it while keeping in
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mind that the concept would help the company to increase consumer focus and revenue
generation.
The structural changes need to help Pepsico increase its global presence and enhance its
reputation required all stakeholders' input. Nooyi understood this aspect and hence employed a
democratic leadership style to bring the employees on board and increase partnership (Barrett,
Haug, and Gaskins, 2020). She capitalized on the notion that with minimal resistance to change,
the organization would work as a unit towards the set objectives; she, therefore, encouraged
consultation and feedback from employees when making decisions and completing tasks.
However, it is vital to note that she had the final say regardless of the input from her
subordinates. By encouraging engagement, she helped develop trust, increase employee
retention, and empower the employees to improve performance. The democratic leadership style
was the foundation for the employee’s ability to own the process and commit to their duties and
responsibility. They felt valued and part of the organization’s vision and hence performed
optimally to achieve the organizational goals. She used her charm to motivate the employees
while emphasizing the need to increase employee engagement (Sukri and Shasrini, 2020). Her
compassion and care towards their plights further augmented her democratic leadership, making
her loved and respected within the firm. This was vital in ensuring that employees followed the
path she charted for the organization while contributing willingly to ensure Pepsico achieved the
set vision.
Several aspects of Nooyi’s democratic and visionary leadership style point towards her
authenticity and confidence in her leadership abilities. She used a unique approach based on her
core beliefs and seeing results in Pepsico’s road to recovery. She did not rely on industry
standards rather a strategy tailored to fit into PepsiCo’s situation. According to Sukri and
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Shasrini (2020 p 2), Nooyi was practical in her leadership, visiting stores to understand the
market and interacting with employees to understand their needs. It is, therefore, accurate to state
that Nooyi was an authentic and transformational leader. She employed her character traits,
including courage, consistency, communication, and ability to provide direction to help Pepsico
achieve the success it has sustained to date. These elements indicate that leaders looking to help
organizations achieve their goals need to be proactive. Relying on one leadership style is not the
solution. Understanding the situation and then using the most appropriate leadership to develop a
solution and achieve the organizational objectives is critical (Liphadzi, Aigbavboa, and Thwala,
2017). Furthermore, a leadership style that encourages participation and engagement is crucial in
enhancing trust and motivation towards the set objectives. It lays the foundation for a positive
workplace culture fostering creativity, cohesion, and teamwork. Furthermore, the leader’s
character traits are vital in influencing how employees engage and make decisions.
Leaders can establish trust, mutual respect, and a culture of professionalism by using
leadership styles that augment these elements. Additionally, they should develop skills and have
experience in dealing with uncertainties likely to face the organization. Leaders with values such
as integrity, accountability, punctuality, and honesty are likely to influence their subordinates to
develop such attributes (Liphadzi, Aigbavboa, and Thwala, 2017). Additionally, leading from the
front is critical in enhancing the employee’s ability to follow suit. Trust is subject to
approachability and the leader’s ability to respond to the employee’s complaints and feedback.
Leaders that encourage participation gain trust from their subordinates and hence to transfer the
trust within the organization. Establishing a professionalism culture begins during the hiring
process, with leaders who prefer talented employees encouraging this aspect (Deshwal and
Ashraf Ali, 2020 p 37). However, fostering these elements boils down to the development of
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positive workplace culture. As mentioned earlier, leaders have a mandate to promote certain
values within a firm. By encouraging their practice, the values become part of the organizational
culture and thus aligning them to the corporate goals.
Authoritative, coaching and pace-setting leadership styles are efficient in establishing a
firm's culture of professionalism, trust, and mutual respect. The authoritative leaders are
visionary and follow me kind of leaders looking to provide direction and hence having the ability
to sway their followers towards the required direction (Mohiuddin, 2017). Pacesetters set the bar
and the expected outcomes and then push their employees towards the needed direction. They
employ charm, rewards, or fear to ensure the employees achieve the set standards. Coaching
leadership style is vital in directing the employees and providing incentives to help them achieve
the set targets. It is therefore applicable in encouraging the employees to attain the set values. To
get support within the teams' leaders need to understand the employee needs and involve them in
decision making. By making participants in the activities while encouraging their input, the
employees support the leaders (Mohiuddin, 2017). Furthermore, leaders who consider the
employees’ needs create a conducive working environment and hence fostering the employee
and loyalty towards the organization. This aspect is vital in developing their team's
understanding of the organizational objectives since the team members are committed to the
cause. Participation and engagement make the employees feel part of the organization, hence
owning the corporate vision (Liphadzi, Aigbavboa, and Thwala, 2017). It is a critical element in
ensuring they work towards one direction since the team members are aware of their
organizational success contribution.
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Pepsico’s Ethical and Value-Based Approach to Leadership
Ethical and value-based leadership is crucial in developing an organizational culture that
adheres to core values and regulatory guidelines. It is the foundation for practices anchored on
articulate principles and standards and hence augmenting quality and optimal performance.
PepsiCo has adopted a value based culture supplemented by its leaders, and Indra Nooyi played a
central role in this endeavor. According to Church (2019 p 497), one of the most prominent
values fostered by leaders is trust and responsibility. Not only is the company focused on
building trust within the workplace but also with shareholders and consumers. Real-world
leadership ensures that PepsiCo focuses on its stakeholder needs and hence aligning services and
products to ensure they are satisfied. By providing quality products to the organization and those
that meet consumer expectations, the company has built a reputation and consumer loyalty. This
aspect is also vital in developing investor confidence, which is critical in enhancing Pepsico’s
financial strength. Responsibility is another crucial value leader’s influence within the firm. This
aligns with accountability for decisions and actions and thus ensuring the actions taken by
employees are in line with the company policy and goals (Hendrikz and Engelbrecht, 2019). It
also plays a vital role in making leaders accountable for their mistakes or failures and hence
encouraging decisions and practices that do not contravene company ethics.
Another important leadership value is empowering people. Pepsico is an equal employer
and hence adhering to the equal employment opportunity commission rules and regulations.
Those in charge of hiring are encouraged to embrace diversity and fairness in the process and
thus ensuring the firm has a highly talented workforce. Employee development is one of the
primary employee engagement strategies encouraged by the organization. Pepsico’s leaders have
to foster communication, collaboration, and engagement in a bid to promote creativity and
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commitment (Barrett, Haug, and Gaskins, 2020). Rewards, perks, and stipends are used to
motivate employees to perform to their optimum while engaging them in decision-making
processes to increase involvement. A conducive working environment, reasonable working
hours, and work-life balance are crucial in enhancing performance while encouraging employees
to develop and advance in their careers. Therefore, the firm ensures that its leaders are at the
forefront of improving the employee’s skills, education, and experience. It influences business
leadership and growth, with the performance-based appraisal system playing a vital in making
promotion decisions. Esowe et al. (2017 p 3) state that organizational learning is maintained
through the organization, with employees encouraged to maintain an active learning mindset.
These values align with the ethical underpinnings that define exemplary employee relations.
Pepsico’s leaders have a mandate to advance the company’s values aligning with its
commitment to sustainability. Sustained growth is the end goal, and each member within the firm
has a critical role to play. For example, the leaders encourage forward-thinking strategies to cut
energy costs, with solar energy playing a crucial role in this endeavor. Additionally, leaders are
encouraged to device new ways of minimizing wastage while serving customers with healthy
products. This is vital in enhancing its leaders’ ability to achieve long-term success in terms of
the workforce’s career and the company’s long term plan. Another critical value fostered by the
company’s leaders is collaboration. Teamwork is an integral component in the organization’s
success, playing a central role in enhancing excellent performance. They follow Nooyi's
footsteps, whose reign as the CEO saw the organization adopt synergy with its human resources
rather than relying on individual team efforts. The values advocated by the company aim at
ensuring that its leaders uphold ethical guidelines that govern the food and beverage industry and
those that ensure the firm aligns with the government regulations (Church, 2019). Practicing the
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values that define Pepsico requires ethical traits such as integrity, honesty, accountability,
compassion, and respect. It is the reason the company has been among the most ethical
companies around the globe for the past decade.
The organizational culture and values highly influence Pepsico’s leaders. Additionally,
the legal and regulatory framework plays an integral role in the leader’s practices and underlying
attributes. Moreover, stakeholder needs and expectations is a critical component in influencing
leadership style and skills. The company’s corporate culture defines the everyday practices and
values that define the firm. Therefore the leaders have to adapt to the prevailing culture or
develop a new one like Indra Nooyi. However, culture and values should align with the firm’s
goals and objectives. One of the most critical elements in this endeavor is the consumer needs
and shareholder expectations. Barrett, Haug, and Gaskins (2020 p 33) claim that leaders have to
employ skills and attribute that address these elements, and this is the reason Nooyi restructured
the company, reclassified the products acquired Tropicana and Quaker Oats Company and
emphasized on the production of healthier products (Sukri and Shasrini, 2020 p 6). This aspect
augured with product diversification and cost reduction to increase profitability and the
consequent shareholder value and also focus on consumer needs to enhance satisfaction.
Therefore, stakeholder needs and expectations shaped Nooyi’s leadership; this is the case for
other leaders within Pepsico. They have to align practices and decisions to promote consumer
experience, needs, and attitudes while continually increasing the shareholder value. Legal,
regulatory, and ethical requirements also influence the leader’s actions and practices (Hendrikz
and Engelbrecht, 2019). They have to adhere to Pepsico’s moral standards, United States laws,
and the food and beverage industry regulatory framework.
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Conclusion
Leaders play a central role in organizational success and the employees’ ability to
achieve set goals and objectives. By using their power and authority, they have an influence on
the organization, including its direction and core values. Understanding the employees, working
environment, and expectations are vital in gaining insights into the most suitable leadership style
for a particular situation. Leadership styles are augmented by skills, experience, education, and
attributes. A person’s value system is critical in boosting the leadership style to fit the situation at
hand and align it with the organizational goals. Three of the most notable leadership styles are
democratic, authoritative, and laissez-faire. They align with situations that require collaboration,
close supervision, and autonomy in decision making, respectively. Additionally, value-based and
situational leadership are crucial in aligning leaders to different situations while ensuring that the
decisions and actions taken are in line with the organizational goals.
This aspect is evident in Indra Nooyi’s leadership at Pepsico, whereby she employed
different leadership styles to achieve specific results. She used visionary leadership to develop
the firm’s core goals and communicate it to the subordinates. Democratic leadership style was
her primary driver to enhancing collaboration, teamwork, and support to Pepsico’s vision. Her
charm, confidence, and active listening skills helped build trust and respect and hence enabling
Nooyi to assert her influence on the employees. This was crucial in pointing them to the required
direction and ensuring they were working in unison to achieve the set organizational goals. It
was the basis of values that define Pepsico to date. Strongly embodied in the organization’s
vision are the values of trust and responsibility, sustainable growth, and empowerment.
Additionally, collaboration and adherence to the organizational guidelines are also crucial. These
elements influence the leadership styles and skills that top managers have to follow within the
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firm. Additionally, the leaders have to consider consumer needs and preferences while keeping
stakeholder expectations in mind.
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