Leadership Theories and PepsiCo

This assignment examines various leadership theories, including Leader-Member Exchange (LMX), authentic, and servant leadership, focusing on their applicability to a company like PepsiCo. It analyzes how these theories can foster positive leader-follower relationships and contribute to organizational success. The discussion also emphasizes the importance of effective communication skills and problem-solving for driving strategic insights and change within businesses.

PRINCIPLES AND
PRACTICE OF
LEADERSHIP AND
MANAGEMENT (Part 2)

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
ESSAY- PART 2.............................................................................................................................3
Case study....................................................................................................................................3
Leader member exchange theory (LMX) and Followership.......................................................3
Authentic and Servant Leadership:..............................................................................................6
Competencies, skills and capabilities:.........................................................................................6
Leading change..........................................................................................................................10
Useful for leaders.......................................................................................................................12
Criticism of trait theory..............................................................................................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................15

INTRODUCTION
Leadership plays a critical role in success of every organisation because it is associated
directly with company. In different situations the businesses are used to employ various
strategies in order to overcome issues. In present essay the case study of Jorge Rubio and Pesci
Co. will be analysed. In this, the best suitable option for the company will also be suggested in
effective manner. The report shows trait theory of leadership which is the most helpful for
individuals and team in order to become more efficient and productive at the workplace and
industry respectively. Apart from this, the current study shows various styles of leaders which
are required at PepsiCo Food Mexico. It describes about leadership styles, LMX and
followership, authentic and servant as well as various skills and capabilities of them at the
workplace of PepsiCo.
ESSAY- PART 2
Case study
Leader member exchange theory (LMX) and Followership
In any organization, leadership plays an important role to ensure with the completion of
work by the employees in an efficient manner. Thus there many leadership style which have its
own importance at different situational time (Weidenfeller, 2012). It is the duty of the
organization to come up with the most efficient leadership style so as to ensure the performance
level of the employees. Thus, it is seen that it is crucial for the firm to identify with the needs and
requirements of the employees towards the adoption of the leadership style. According to the
LMX theory it shows that which kind of relationship is at the workplace between leader as well
as individuals. When the leader make and implement any kind of framework and policies then it
the individuals become highly profitable and able to become more skilled and talented. It is very
helpful theory for group of people and team members in order to achieve goals and objectives of
team in effectual manner. The case study determines that Director Jorge Rubio is changing the
working condition of the company so as to attain high profits and giving satisfaction to the
employees. They are working to provide with flexible environment to the employees. Thus for it
they are adopting with different leadership theories and also renovating the workplace so as to
motivate the employees to a greater extent (Wooten And et.al., 2012). According to the case
study, it states that Pepsi Co. is taking several efforts to come up with the environment which

gives greater flexibility to the employees in different contexts. Furthermore, they are practising
with democratic leadership style at the workplace which provides with greater rights to the staff
members to take active participation in taking the major decisions of the company (Selznick,
2011). Further, they are working on the projects so as to develop with the workplace similar to
that of Google company. As they are serving informal environment to the people which makes
them more efficient in there workings and complete the task of the PepsiCo. Further, they
provide with different other facilities to the people such as creative books, games, etc. which
make them happy and satisfied with the organization. Further, they are making the place more
creative so that people can make there bets time while working in the organization. Moreover,
with the passing time, they are adopting with different leadership theories such as traits which
states that the company must not adopt with the single style for all the situations as it will not
provide with the same effectiveness of the work (Wheatley, 2011). Thus, the manager must
evaluate with the environmental situations which will serve them with the need and
determination of the leadership style appropriate for a particular situation. This will help them to
serve with greater satisfaction to the employees and motivates them to perform the task with
greater efficiency. The leader is developing with the strategies regarding the marketing and sales
of the goods so as to enhance with the customer support within PepsiCo. From the analysis it is
been evaluated that there is greater need of leader and the perfect leadership style at the
workplace as it will help to deal with the employees in a proper manner and provide them with
higher satisfaction level in terms of work and the environmental conditions (Spillane, 2012).
Further, Pepsi Co. is taking efforts to develop with the working place which is acceptable for all
and they enjoy while working in the company. This ultimately increases there performance level
to a greater extent. Moreover, the organization ask the employees about there preferences for the
leadership style which they need to be adopted at the workplace. This motivates them and make
them believe that they are important for the company. Further, this help to increase with the
performance level of the employees. In the company there is a greater impact of leadership at the
workplace as there is a need for a person to manage the task and the resources in a proper
manner. Along with this, they help in maintaining with the relations among the people which is a
positive sign for maintaining harmony in the PepsiCo. They are the mediators between the
employees and the higher management. Thus, any query related to the personal or professional
life are been discussed to the leader as they act like a teacher or role model to the employees

(Goleman, Boyatzis and McKee, 2013). The theory is too much helpful for the members and
business entity such as PepsiCo both. Better the relations helps to individuals in order to
complete overall task properly and achieve objectives at the better level on or before time.
Ultimately efficiency and productivity of the company will be increase. Further, the following
are the major benefits of the leader member exchange theory for the individuals who are working
in a team at the workplace of PepsiCo: Initiates action- They are the ones which starts with the work by discussing the policies
and strategies to the people and ask them to complete the task as per the stated norms. So
it can be said that they are the initiator of the work which is to be performed in the
organization.
 Motivation- A leader is playing an important role in motivating the employees by giving
them higher assistance by the means of economic and non-economic support (Zhang and
Bartol, 2010). Providing guidance- They gives the subordinates proper guidance for completing there
work in an efficient manner. They instruct them the way and standards to make them
efficient enough in there workings. Creating confidence- It is considered as the major factor which ensures high performance
level of the employees. Thus, the leader express with the working efforts to the
subordinates and express the roles and guidelines clearly which assist them to complete
there work properly (Neck and Manz, 2010). Communication skills-A leader must possess with good communication skills as they
need to interact with the higher as well as lower level of people. Thus they must be have
fluency in there language so that people may understand there words properly Building morale- They help the employees to increase with there morale by cooperating
them and maintaining high trust among the members. This help to boost there inner spirit
and make them work more efficiently in the organization (Gutiérrez, Hilborn and Defeo,
2011). Co-ordination- This can be achieved by reconciling with the interests of the people to the
organizational goals set by them priorly. Further, the incorporation can be achieved by
means of proper and effective co-ordination that is considered to be the primary
objectives of a leader.

 Builds work environment- It is been seen that the management is making the things done
by the employees so is important to serve with better working condition to them. An
efficient environment assist in achieving sound and stable growth of the company
(Avolio and Yammarino Eds., 2013). Therefore, it is important to maintain human
relations and this must be ensured by the leader. Leader must develop with the personal
contacts with the staff members and need to listen for their problems and given them
efficient solutions to it. It is also required to treat employees at humanitarian terms.
Authentic and Servant Leadership:
Authentic leadership: The leader who has skills and various styles to manage overall
team in effective manner as well as thinks and apply that in the firm such Pepsi co. are known as
authentic leaders. These are very true, honest and very real from the inside by which company
easily able to rely on it. Such kind of leaders are highly productive for the entity as well as make
the individuals very skilled and talented. Along with this, level of integrity, understanding,
managing, behaviour is very high which is the most profitable for the Pepsi Co. The authentic
leadership has various kinds of characteristics which are such as confident, honest, transparent,
optimistic, resilient, thinker, innovator etc.
Servant leadership: Those kinds of leader who are having positive attitude at the
workplace of Pepsi company and serves various kinds of duties to the group is identified as a
servant leaders (Nayab, 2010). Such kind of leadership style is emerged out from the authentic
leadership by which it able become efficient and provide different services. These types of
leaders make and provide very conscious choice and duties to the company and not having
intention to gain something and power. Along with this, servant leaders are willing and desire to
serve highly better and effectual duties to the firm in order to make the entity more productive.
Further, these leaders are never refuse to the business organisation and not become rigid that
cannot do particular task. Key characteristics of the servant leadership are such as empathy,
awareness, stewardship, commitment to build better relations, listening, persuasion, foresight etc.
Competencies, skills and capabilities:
In addition to this, it is highly important for the company to appoint with an effective
leader which is having the skills to lead the employees towards the success of the company.
Furthermore, it is also important to evaluate with the skills and competencies of the leader so as
to ensure with the positive impact on the company (Gaines, 2012). This is important because an

efficient leader will be able to meet with the needs and requirements of the people as well as the
organization. There are various types of skills and talents the leader has which helps to the team
in order to enhance their efficiency and productivity at the working environment of Pepsi Co.
Thus, the following are major skills and competencies which must be availing in the leaders of
Pepsi Co. to ensure with the greater results:
Skill A: Problem solving
Problem Solving skills: In Pepsi Co., Consumer strategic insight plays very important
role as it helps to identify the co-operates about their competitor. This is require to understand
the consumer need for buying the products and their futuristic demands. Every industry must
appoint some employees in order to make important decision related to the firm. This are
required for taking the important decision related to market and for profit earning. It can be also
based on the growth in new sectors or related such investments. Problem solving skills of the
employee must be fast and reasonable as they are very important decision to taken by the Pepsi
Co. Problem solving skills are well explained by Mumford et.al. (2000). Justification: At the workplace of the Pepsi business enterprise when there are any
critical and complex situations arises then the person and employee who have problem
solving skills can resolve it. In case of highly and normal problems the problem solving
skill is useful and appropriate for the company. Due to this, the management is able to
come out with the constraint which arises and by using selected problem Pepsi firm able
to make solution. In the company the employee or group of people is not able to become
more efficient and give responses in order to meet with the objectives. Due to this reason
staff turnover of Pepsi increases which is adverse and complex situation for it. The reason
for arising the respective problem is lower and inadequate leadership and guidance
provided to the team. In this case, after using better and effective leadership styles and
techniques management of the selected company make strategies which lead to make
them more skilled. After providing training and development programs the employees
become more efficient and resolve problem of increasing staff turnover. Hence, it can be
said that problem solving skill is very helpful and significant for the Pepsi company. Positive: Leadership skills are essential for taking such decision. This is the positive
aspects of the firm like Pepsi Co. as there leaders are taking rights decision in order to

compete with the other firms like Coco-cola. This helps the company to make growth in
different sectors of the firm.
 Negative: But there are some negative aspects of leadership as told by Armstrong (2009)
that sometimes this skill are not related to growth of the organization. The decision can
be related to more general and precise. This makes the decision making skills of the
employee in wrong ways as there is no development of the organization. Comparing with other leadership theories: There are various theories like LMX and
fellowship leadership which can be used to explain the comparison what Pepsi co. has
adopted in the company. Leadership style in Pepsi co. is based on the following and
making related decision by all the employees and other staffs. While this style focus on
following single leader or the relationship between the leaders and followers. Decision
made related to consumers will help to understand there needs and increasing market
growth. In problem solving skill highly positive and learning attitude requires along with
the facing new challenges which are needed in the authentic and servant leadership as
well.
Skill B: Interpersonal skill
Interpersonal skills- The core objective of the leader is to interact with other people and
manages there work in a proper manner. Thus, he must possess with greater level of
interpersonal skills so they are able to convey there point to the member in an efficient manner.
They must not hesitate while determining there views to the people. With the help of
interpersonal skills the Pepsi Company is able to interact with new people by which clients will
be increase up to better level. When leader of the company are having such kind of leaders then
it will able to increase number of customers and make the firm highly profitable. Justification: In every kind of business there are several kinds of new customers as well
as clients comes to consumer their services and give the order. It is very necessary to
interact and then communicate with the strangers in appropriate and politely which helps
to attract as well as sustain them at the workplace. In the Pepsi company when there are
new clients are come then employee who having interpersonal skill can easily handle
them. In context to this, group of individuals is also interacted with the leader by which

effective employee relations established. Further, goals and objectives are communicated
at better way and helps to achieve it on or before the deadline. In addition to this, such
kinds of employees not hesitate to face and interact with the new persons. Hence, it can
be clearly and easily said that interpersonal skills are very helpful and profitable for the
Pepsi firm in order to interact with strangers and operate in the respective industry in
existing and new market both. Positive: The advantages will that the organization will easily able to make the market
growth along with the profit as the employee will support such persons. It will also make
the employee to enhance there ability to perform better to make better work environment
in the organization.
 Negative: But there can be weaknesses as the personal decision of individual may also
affect the company and can lead to losses. Due to this skill the company sometimes affect
in adverse manner as well because if an employee is not able to interact and communicate
with the stranger then objectives of Pepsi co. cannot achieve adequately. Comparing with other leadership theories: Also comparison between the LMX and
fellowship leadership in terms of interpersonal skills can be described as they are making
the decision which are imposed by the leaders on the employees while at Pepsi Co. every
individual can make decision related to company's benefits. As per the Followership
theory the leader has to follow all the firm and give response according to that to meet
with the objectives. In addition to this, highly better and positive attitude requires in the
interpersonal skill which helps to interact with the new people or strangers. In the
authentic and servant leadership style also positive attitude plays an key role which is
common in the current skills. Hence, it can be said that interpersonal type of skill is
effective and having same things up to some extent on the basis of such mentioned
theories.
Skill C: Communication skill
Communication skills- A leader must possess with good communication skills as they
need to interact with the higher as well as lower level of people. Thus they must be have fluency
in there language so that people may understand there words properly (Derue and et.al., 2011).
Apart from the above analysed skilled the leader has communication skills also which helps to

the Pepsi company in order to enhance level of profit and sales. When leader has such skills then
can easily lead to the overall team in proper way and make then more efficient as well as skilled.
Furthermore, when communication is better then all the things and targets are clearly
communicated by the leader. Ultimately the individuals able to complete overall tasks and meet
with the objectives and targets of team and Pepsi company also.
 Justification: In the business of Pepsi business enterprise there are several kinds of
problems and situations arises in which communication skills plays an important role.
Without using such kinds of qualities and skills management of the firm not able to
resolve it which lead to affect overall business entity in negative way. In the company
when there are various types of dealers and suppliers are come then appropriate and
effectual communication requires. With the help of adequate communication the
employees able to handle the suppliers and dealers. Apart from this, at the business
environment when the group of people unable to achieve the objectives and purpose of
them in adequate manner due to misleading and not clearing goals which they require to
achieve. In this case, the employee and leader who has highly appropriate communication
skills that will make clear all the things which require to them. Further, the group and
team easily able to meet within the objectives which are given to them.
 Positive: Having better communication style will be helpful as leaders can easily make
communication with the stakeholders in order to make profits and increase the
productivity by motivating the employees. By using communication skills the Pepsi
enterprise able to clear all the things and messages within firm with the organisational
members.
 Negative: But on other side it can demotivate someone's performance and lead to affect
the work environment of the Pepsi Co. At the workplace if an employee is unable to
communicate in the English language appropriately then overall communication process
highly affects in negative way.
 Comparing with other leadership theories: LMX and fellowship leadership in terms
communication skills can be understood from above mentioned factors as this leadership
qualities make differences in the management and they give orders in order to perform
there tasks. Meanwhile, in Pepsi Co., communication style is gentle and every one is
considered equal in the firm to make decision. The various theories of leadership like as

Followership, servant and authentic as well as LMX all the theories are requires and
needed for the Pepsi company for making change in the consumer strategic insight.
Along with this, by using appropriate communication mode and channel it able to resolve
various problems and constraints. Further effectual decisions are taken by it with the help
of such leadership theories and the communication skills both.
From the above all the three skills, communication skill is the best and effective for the
Pepsi company in order to achieve targets and objectives of it in effectual way. Hence, it can be
recommended to the Pepsi company that in needs to focus on communication skills and arrange
seminars which helps to increase such kind of skills in the leader.
Apart from motivational, communication and interpersonal skills there are various styles
and skills a leader has at the workplace. The other skills are described as below: Inspirational and motivational skills- It is considered as one of the major skills as he is
possessing with the duty to lead the employees in positive side so this can be achieved
only by motivating them and inspiring to do the work efficiently. Further, they must
adopt with different motivating theories at the workplace which will ultimately increases
the capability of the staff member at a higher level (Walumbwa and et.al., 2010). These
kinds of leadership skills are helps to the team members in order to motivate them and
inspire as well towards completion of the task allotted. When the leader is highly
motivated then the individuals are easily able to achieve targets as well as compete the
work in appropriate manner. Displays high integrity and honesty- It is import for a leader to work with high integrity
and honesty so as to maintain transparency in there workings. This will further ensures
the high productivity from his side which benefit the company. They must integrate the
organizational goals to that of the personal requirements so that higher efficiency is
achieved. Builds relationships- It is important for the leader to maintain relationships among all the
team members so as to ensure harmony at the workplace. Further, they must come up
with different group activity and other ways which can develop with interaction among
the people (Iyengar, Van den Bulte and Valente, 2011). Solves problems- They must take high efforts to resolve with the problems or issues
faced by the employees in an efficient manner. It is important for the a leader to listen to

the view point of every individual and than take the final decision for resolve the
problem. Assists in Training and Development of Subordinates- A leader is efficient enough in
organizing with the training and development sessions for there subordinates. They
provide with the data related to the modern techniques of work. Moreover, it also makes
possible for them to become a good leader in future run.
 Helps Followers in Fulfilling their Needs- A leader should be able to establish with
personal relationship with his subordinates and help in fulfilling their needs. They must
acquire there requirements and make several efforts to make them satisfy to a greater
extent (Weidenfeller, 2012).
Leading change
Change happens in the business entity over the particular period of time and needs to
adopt by the company in appropriate way. The changes affect to the company in different way,
due to which it is necessary to adopt and implement in the business process such Pepsi company.
In order to lead and implement the changes occurs there are various theories and models and
applied by the manager or leader in the firm. According to Dr. Kotter there are 8 step theory is
helpful for the company in order to lead the changes and run the firm smoothly. Various eight
steps are explained as below:

Illustration 1: 8 step process of leading change
(Source: 8 step process, 2017)
1. Create: At the initial step the leader create urgency and reasons of occurring change at
the workplace.
2. Build: In the second phase it builds the changes with the help of various guidance and
coalition for implementing the proposer changes.
3. Form: Here the leader and management of Pepsi company make vision to achieve goals
by adopting change.
4. Enlist: At this stage, leader enlist various kinds of volunteers who helps to meet with the
potential objectives. In this various kinds of constraints will be comes into consideration
which affects overall plan (8 step process, 2017).
5. Enable: At the fifth phase, various kinds of actions are taken which helps to overcome
and reduce different constraints and obstacles occurs at above step.
6. Generate: Here the Pepsi company try to generate and achieve short term objectives and
feel that it is able to win and apply change.

7. Sustain: At such step of leading change the leader accelerate related to making change
and try to meet with the long term goals. Here the leader move forwards after completing
the sixth stage.
8. Institute: At the eighth and last step the company and leader of Pepsi able to implement
change successfully and run the firm smoothly.
Useful for leaders
Thus the stated skills and competencies are highly important for the leader so as to
manage with the tasks in an efficient manner. Furthermore, these skills will make sure that the
person is having high leadership quality which will assist in achieving the goals and objectives of
the company to a greater extent (Wooten And et.al., 2012). In addition to this, for identifying
with the traits of the leaders availing in the firm, they adopt with the trait theory which
determines the skills which the leaders are having. Furthermore, it is been evaluated by ranking
them from 1-8 so as to state the least preferred candidate for the post. Thus, they also set up with
the basic traits which will help them to appoint with the most efficient leader at the workplace.
Further, it is also required that there is dynamism in the behaviour of the leaders so that they are
becoming comfortable in adapting with different situations. Thus, this will make them efficient
enough in coping with the availing situation availing at the workplace.
In addition to this, they are also focusing on the needs of the customers for the
development of the products. Thus, this will help them to produce with the goods as per the
preferences, requirements and taste of the people. Further, it will directly increase the sales
volume and profit margin of the company (Spillane, 2012). Thus, the leader is developing with
the strategies regarding the marketing and sales of the goods so as to enhance with the customer
support. Further, the leader is organizing with the training sessions for the employees so as to
develop with there skills and knowledge for increasing there efficiency.
It can be argued from the above mentioned trait theory of leadership that it relies on
behavior of people at the workplace. It is not necessary that within the working environment of
an organisation all the people or employees have same nature and behaviour. The people or
organisational members changes as time passes if they get different and better leadership.
Criticism of trait theory
Apart from arguments there are various criticism of the theory which are sometimes
hampered to the firm and working environment. It can be criticised that trait theory is too much

subjective in nature by which the organisation and unable to lead employees in appropriate
manner. As per the theory the workers are divided in the group as per their specialization and
generalizations. By such nature the company cannot able to meet with goals and objectives on or
before deadline because group of members generally do not work on the basis of that. In addition
to this, it can be critically evaluated that trait theory measures performance of individuals on the
basis of group performance. By this team members thinks that leader is comparing all the
members because of using such method of evaluation. Further, it creates negative impact and
reduce efficiency of the individuals. Hence, it can be said that the trait theory of leadership is not
provided effective results to the firm for achieve objectives and goals of business.
Apart from this there are various impacts of trait theory at the workplace of an enterprise
for achieve goals and objectives. The impacts of trait theory with helps of example are as below:
1. Recruitment: It is crucial and important part of every organisation where the trait leaders
help up to higher level. For example: these leaders have such style by born which lead to
recruit highly skilled and talented candidates within the workplace.
2. Training and development: as per this for instance: the trait leader always take initiative
and creative by which he able to provide effective and appropriate training which lead to
make them more skilled and efficient.
3. Radical change: In the firm when company makes new policies and conditions then it
known as a radical changes which needs to adopt by employees. For example: if
individuals of team unable to adopt such changes then trait leader lead and guide them
towards adoption of new polices and changes.
CONCLUSION
From the above report, it can be articulated that Pepsi Co. is taking several efforts to
come up with the environment which gives greater flexibility to the employees in different
contexts. Company is making the place more creative so that people can make there bets time
while working in the organization. Along with this, it is necessary for the company to evaluate
with the traits of the leader so as to evaluate with the best of the one appointed in the
organization. It can be analysed from the above report that leader member exchange theory
(LMX) is the best and highly effective for the entity such as Pepsi company in order to make
better relations between leader and individuals. There are mainly two leadership styles such as
authentic and servant both are having different characteristics but beneficial for the respective

business firm. It can be suggested to the Pepsi company that it needs to use and implement
communication skills effectively rather than interpersonal, inspirational and motivational skills.
Furthermore, it can be concluded that there are mainly three skills such as problem solving,
interpersonal as well as communication skills are helpful for the Pepsi company in order to
change consumer strategic insights.

REFERENCES
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