Leading Change: Strategies and Impacts on PepsiCo and Coca-Cola

This report provides a comprehensive analysis of change management, focusing on the strategies and impacts within PepsiCo and Coca-Cola. It begins with an introduction to the importance of change management in today's business environment, emphasizing the need for organizations to adapt an...Read More

UNDERSTANDING
AND LEADING
CHANGE

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 ...........................................................................................................................................1
P1 Evaluating impact of changes on strategies and operations by comparison of two
companies...............................................................................................................................1
P2 Impact of internal and external drivers on organisational behaviour................................3
P3 Evaluation of measures to reduce impacts of changes on behaviour of a firm.................5
TASK 2............................................................................................................................................7
P4 Analyse barriers for change and its influence on decision-making of a leadership..........7
TASK 3............................................................................................................................................8
P5 Leadership approaches in dealing with changes...............................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
......................................................................................................................................................11

INTRODUCTION
Understanding and leading change helps to set up an organisation to meet all problems
which has come when a change is initiate within workplace. Today, changes are essential in
every part of an organisation to avail sustainable development. To meet all these challenges of
the market, organisations has to implement and initiate changes at their workplace. In regard to
change management, this present report has been prepared on how should a change can
implement in a company as well as the way it affects working of others (Nahavandi, 2016). For
efficient completion of change, an organisation need to develop all skills and knowledge in a
leader and workers too. In order to describe all these, two companies i.e. PepsiCo and Coca-Cola
have been taken to understand how they respond to change and their strategies to deal with the
same as well as their contribution in change management.
TASK 1
P1 Evaluating impact of changes on strategies and operations by comparison of two companies
Change in an organisation is a systematic approach to deal with its goals, objectives,
techniques or processes. Main purpose of a company behind introducing a change at its
workplace is to implement strategies for controlling as well as helping employees to adapt the
same. For a business organisation like PepsiCo, a change management is used as an effective
tool for its development. If it is not doing so, then its competitor like Coca-Cola will get a one
step forward in marketplace as well as this firm will face many issues in its business and will
soon become invisible also from mind of customers (Parsons and Cornett, 2011 ). Thus, it need
to do make alternations and modifications at its workplace so, that its production will become
more efficient.
Due to the following reasons, organisations like PepsiCo and its competitor Coca-Cola
need to implement these change- respond to changes and consumers in an effective manner,
improve performance of work as well as their skills and knowledge for that, building an effective
organisational culture and development of entire workplace and organisation too as well as for
increasing the revenues and market share.
PepsiCo is a multinational food, snack and beverage corporation of the UK. Pepsi
Company was formed in 1965 and named PepsiCo after merger of Pepsi-Cola Company. It has
offered a wide range of products in marketplace. Today, many companies like Coca-Cola present
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at marketplace having same products expanding its business at higher rate, has given PepsiCo a
tough competition. Thus, it need for product enhancement that makes it able to revive the stake
of market. Its higher authority began to evolve better and effective quality in order to compete
with Coca-Cola and other international trade companies (Suchman, Sluyter and Williamson,
2011). To meet all these, changes required in its operations and strategies as shown below:
Strategy: PepsiCo need to develop its strategies first to implement the changes
successfully in organisation. It has to made all developing programs for improving skills of
employees so that, they become able to adopt changes and help this firm in achieving success.
Impact of change on its operation and strategies: Any changes whether small or large,
affects working of all employees, operations and production of a company. In order to meet
changes successfully, a firm need to modify its structure, operations and strategies. To be more
concern on impact of change in a company like PepsiCo, let it be compared with Coca-Cola as
shown in below table:
Comparison of PepsiCo and Coca-Cola in respond to changes:
Basis PepsiCo Coca-Cola
Objectives Main objective of PepsiCo is
to become the largest
producing company in
beverage sector.
Main objective of Coca-Cola is
to share international market as
much as possible by producing
carbonated soft drinks
including food and snacks.
Pricing It is offering its product on
basis of location and changes
in competitive market.
It is also offering its products
to sustain in competitive
market.
Porter's Competitive
Strategies
Corporate strategy Business strategy
Change drivers Being innovative Being Competitive
Operations This firm has operated mainly
on online services. Now, it is
pushing all business operations
in online supermarket retailing
It is famous for its wide range
of food products like snacks
and drinks so, it mainly
operates business in retaining
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store. the customers.
P2 Impact of internal and external drivers on organisational behaviour
Organisational culture of an enterprise effects the employees who are working in it. So,
any changes at workplace affects them a lot. Implement a change successful, management need
to prepare cover review of that as well as investigate all alternation they need to do for emerging
the same. Management should make effective strategies also for sustainability of its firm. Cover
page includes designing and executing the plans in a structured way (Thomas and et. al., 2013).
Further process includes collection of data related to feedback of others on adapting changes at
their workplace. It also required to understand gap and recognise resistance level in internal and
external environment of an organisation. In order to examine all these factors, managers and
leaders should possess all skills, qualities and capabilities which depend on objectives and field
of activities of an organisation (Malenfant, 2010).
PepsiCo has expanded its business in many countries, therefore, internal and external
environment affect its activities, decision-making, behaviour of employees, etc. To understand
effects of these on PepsiCo, an analyse has been taken by its management as:-
Changes internal drivers that influence team, individual and behaviour of
leadership are: Generally these changes are under manageable and controllable by a company.
These factors are associated with mission statement of a company, organisational culture and on
leadership's style. Therefore, PepsiCo and Coca-Cola need to change to have some changes in:
Change in mission statements: PepsiCo and Coca-Cola are becoming famous for their
products. According to market demand, they should create or modify mission statement which
specifies in investing and helps to move a step further.
Change in organisational structure: Both firms, need to restructure their organisations
for developing growth and expansion in international market.
Change in style of leadership: Characteristics of a leader or manager needs to be
modified and effective in order to implement changes in employees' working conditions and to
reduce resistance in them (Hrebiniak, 2013).
To analyse further internal factors it is easy to examine on SWOT:
Strengths: PepsiCo and Coca-Cola, both are one of the most famous brand at
international level today in food and beverage sector. PepsiCo is retaining its customers and their
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loyalty due to its alcoholic free products but Coca-Cola has failed in this category as its product
contain carbonated drink which contains so much ill effects.
Weaknesses: Main weakness of any company is its competitors available in same
marketplace. Coca-Cola is giving so much tough competition this time to PepsiCo. Its “Crystal
Pepsi” has failed in market that impacts negatively on brand image of PepsiCo and gave an
opportunity to other companies to come over it.
Opportunities: Today, all people are becoming conscious for their health. They overview
on ingredients and side effects of all products before consuming it. So PepsiCo need to improve
qualities of its product. It has also taken this opportunity by introducing its new product Diet
Pepsi which is liked by many customers. Coca-Cola also needs the same by modifying its
product (Fullan, 2014).
Threats: Unhealthy factor associated with beverages and snacks type food products
becoming threats for companies in this field. It has become threat for retaining the customers.
Changes external drivers: Following are five external drivers that affects it are: Consumer-led drivers: It includes changes on basis of customer's interest, preferences,
taste and level of income. Modification of people's income, demographic and demand of
marketplace that change definition of convenience and value. After understanding these,
PepsiCo can gain and sustain their buyer of products. Technology-led drivers: Changes in technologies that a company has to be adopt to
increase and improve its production Capital-led drivers: It includes changes according to investors who funds in a company
that is often formed by institution which result in alternating the performance standards. Competitors-led drivers: Competitors also impact on an existing company's strategies
and operations.
 Government-led drivers: Legislative changes also demands modification in a company's
policy.
Along with these drivers some more external factors that influence PepsiCo and beyond its
control are:
 Political & legal factor: These factors affects business of all organisation that lay
within boundary of a country. PepsiCo and Coca-Cola both firms has expanded
their business in many countries so, they have to follow rules & legislation
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including trade laws for trading products. In UK, Government has made Food
and Drug regulations which impact businesses of such companies. Therefore,
Coca Cola has made its beverages alcoholic free.
 Socio-Economic factor:Economic and social conditions of a country affect
whole business of companies in market (Fagerström and Salmela, 2010). It
effects both in positive and negative ways. The present companies need to avoid
alcoholic and carbonated type of drinks as customers become more conscious for
their health as its product can cause obesity. Coca Cola needs water much in its
production but due to its scarcity, production of this firm affects a lot. Another
impact of socio-economic factors include rise of cost raw materials and labour
which also effects businesses in a negative way.
 Environmental factor: These companies need to focus on reducing wastages also
and try to renewed if its possible. As agricultural products constitutes the major
portion of raw materials, therefore, Coco Cola makes investment in such sectors
that help farmers in their part of work. It has initiated many programs in order to
improve yield of farmers against restraints.
 Technological factor: It concerns on techniques used for production, distribution
and other operations. Both companies need to adopt latest technology to make
efficiency at workplace and in production too. Since, scarcity of water is a major
trouble for production of Coca Cola so, with help of technologies, it try to
overcome from the same.
P3 Evaluation of measures to reduce impacts of changes on behaviour of a firm
Changes in workplace or operational activities in an enterprise affects employees and
their behaviour much. Other causes that affects behaviour of them as well as enterprises are:
 Culture of organisation are influenced much by changes that would impact on
leadership, performance of employees, objectives of business etc.
 Changes can causes on motivational behaviour and morale of employees.
 Apart from these, changes mostly impacts on decision-making of a company.
Therefore, for implement proper change management in an enterprise, PepsiCo and Coca-Cola
need from its management to hold a reinforcement system, perfect leadership skills. It also
required to take feedback from every person associated with these changes (Doppelt, 2017). It
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would led them to know whether changes effects their performance in accomplishing company's
goals. Management of companies can examine needs of employees also that they want while
completing a task. This will result to manage changes as well as reducing its negativity for
PepsiCo and Coca-Cola after introducing changes at workplace. Management of these provide
effective training programs for employees in order to develop their skills and knowledge and
make them able to adapt changes (Understanding and Leading Change. 2017). For more
concerning on need of employees and to reduce resistance, management of both companies have
to taken following steps:
 Creation of pathway: It is necessary to create a proper direction and instruction for
employees which describes duties, responsibilities of their that help them to carry out
activities in a better way (Carrington, Deppeler and Moss, 2010).
 Explain about plans: They should explain superiors, subordinates and all business
associates including workers about what plan an organisation makes to make work
more effective.
 Participation in meetings and seminars groups: They can explain about plan of
change by organising meetings or seminars in order to inform them about modification
in companies policies, operations and other activities.
 Manage planning and its implementation: To plan and manage implementation of
changes, it is required to give responsibility to leader of each group who will carry or
discuss further information in his team members and can handle all problems easily.
There are several theories, model and approaches of leadership which can be used to
measure impact of changes in competitive industry for both companies in order to reduce
influence, some of them are discussing in below:
System theory: This includes an effective leadership in its approach for a company to
achieve success in implementing the changes through enhancing performance level of
employees. This would help PepsiCo and Coca-Cola to organise leadership for influencing
workers (Booth, Wade and Walker, 2014).
Continuous improvement model: It refers to a cycle development that includes Check,
Act, Do and Plan which is used in development of businesses of both firms by improving
qualities of their product and services.
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TASK 2
P4 Analyse barriers for change and its influence on decision-making of a leadership
An organisation needs to modify its operational strategies for availing competition in
marketplace. To initiate and implement changes it needs to investigate on all parts that would be
effected after this. These changes impacts on company's process, people and on its culture. but,
these changes impact much on human resources so, its natural in arising resistance between
them. As a human being, every changes brings positivity and negativity both in their behaviour
which could affect entire operations of an organisation (Anderson and Anderson, 2010). But this
resistance is not resembles as a barrier in change management. Barriers include factors which
causes decreasing in sales of products and services and on decision-making of leadership, that
mainly consist of two types:
Imposed Changes: This one include the changes that are imposed directly on employees
before consulting them. They have just given an order to adapt changes and work on that. So, it
could create resistivity and impacted negatively on employees.
Initiated Changes: In this, leaders or managers have discussed on plan changes,
concerning them with their opinions about to adapt and what they need to do that etc. This would
impact positively on employees by getting them to feel equally at workforce.
Management of PepsiCo are generally initiate changes on employees rather than to
impose which would help them to avoid resistance at workplace. To measure further barrier that
actually effects changes are:
Schein’s Organisational Culture Model: To adopt changes in a big firm like PepsiCo is
not easy to handle to do in a short-interval of time. It takes many procedures and time to
implement successfully at its enterprise (Fagerström and Salmela, 2010). These changes takes
place in three levels, according to this model that are:
1. Artefacts and behaviours: It refers to basic characteristics of a company like its office
interior, furniture, structure, behaviour and culture etc.
2. Values: This phase includes values and opinion of workers that effects the working
conditions of an enterprise as well as its development.
3. Assumptions: It refers to management of internal workplace which is managed by HRM.
Force-field Analysis:
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Phase I : Change proposal: To gain revenue and market share, both companies need to
make changes in technologies and techniques.
Phase II : Change force Identification: High market competition, development of
products or services qualities and a need to increase probability are to be identified in making
changes.
Phase III: Force against alternation identification: It includes legislation of
government, existing structure of organisation etc. are some forces that against changes for
identification.
Phase IV: Score Assign:To meet every elements of influence, score each force from 1 to
5, where 1 for weak and 5 is for strong.
Force-field PepsiCo Coca-Cola
High competition 5 5
Product quality 4 3
gain in profitability 4 4
Skill Dearth 5 3
Legislation of state 5 4
Phase V: Analyse and Apply:
These companies also need to carry appropriate steps in order to keep their staff happy
and directed them towards work which can support enterprise in attaining desirable outcomes.
In order to remove such type of barriers Coca Cola takes some strategic actions like- focusing on
driving revenue and profit growth, makes huge investment in building effective brand image at
marketplace, rebuild growth momentum by investing more in marketing and by creating
refreshing beverages etc. It helps this firm to retain customers as well as increase market share.
TASK 3
P5 Leadership approaches in dealing with changes
There are several leadership theories and approaches to be used for developing
performance of a leader, his abilities, capabilities and skills to influence employees (Anderson,
2016). These type of leadership are utilised by PepsiCo at its administration to control and
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manage situations regarding competitive pressure, alteration in technologies and changes in
behaviour of workers. Some of these leadership approaches are explained as:- Situational Leadership Style: This type of leadership included changes according to
situation of an enterprise that can a leader adopt to handle the same. A leader can alter
his style which need not to adopt by members working around him. It proves beneficial
to meet expectation of employees and various market situation for a company at the time
of alteration in system and its strategies (Brown, 2012). Transactional approach of Leadership: It is also known as Ship Float due to its purpose
that is to manage flow of all activities in order to meet outcomes of a firm in an effective
manner. Transformational Approach of Leadership:This leadership approach is mainly concerns
on motivation, team building, coordination of workers, relationship with them in
initiating the changes successful. Thus, leaders having this approach influence greatly on
organisation.
Usage in PepsiCo of these leadership approach: This time PepsiCo is facing so many
problems while implementing the changes or modification in its existing system (Doppelt, 2017).
So, it needs to introduce various approaches in leadership of its management to make effective
changes. Including above leadership theories, it has used mainly two approaches that are
situational and transformational ones.
Situational leadership approach helps PepsiCo in bringing flexibility regarding to these
changes. Its management has provide all necessary training programs to employees in order to
develop their skills and knowledges and make them able to adapt changes. Including this,
PepsiCo has used transformational theory also to develop employee relationship, support
stimulation etc. by organising meeting to discuss about all changes with them.
CONCLUSION
According to above mentioned report, it has been concluded that understanding and
leading change justifies the fact that a respond to external as well as internal factor have a critical
impact on organization's behaviour. Sometimes barriers in change are caused by resisting force
of employees which should be regulated and handled with effective leadership startegy. Different
leadership approaches should be used to deliver change effectively. Change must always have a
positive impact on employees otherwise it can cause hindrance and interruptions in management
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functioning. Various change models (discussed above) can be practiced so as to have well
ordered and manageable workforce.
REFERENCES
Books and Journals
Doppelt, B., 2017. Leading change toward sustainability: A change-management guide for
business, government and civil society. Routledge.
Brown, B.C., 2012. Leading complex change with post-conventional consciousness. Journal of
Organizational Change Management. 25(4). pp.560-575.
Anderson, D. L., 2016. Organization development: The process of leading organizational
change. Sage Publications.
Fagerström, L. and Salmela, S., 2010. Leading change: a challenge for leaders in Nordic health
care. Journal of nursing management. 18(5). pp.613-617.
Anderson, D. and Anderson, L. A., 2010. Beyond change management: How to achieve
breakthrough results through conscious change leadership. John Wiley & Sons.
Booth, J. A., Wade, C. J. and Walker, T., 2014. Understanding Central America: Global forces,
rebellion, and change. Westview Press.
Carrington, S., Deppeler, J. and Moss, J., 2010. Cultivating teachers' knowledge and skills for
leading change in schools. Australian journal of teacher education. 35(1). pp.1-13.
Doppelt, B., 2017. Leading change toward sustainability: A change-management guide for
business, government and civil society. Routledge.
Fagerström, L. and Salmela, S., 2010. Leading change: a challenge for leaders in Nordic health
care. Journal of Nursing Management. 18(5). pp.613-617.
Fullan, M., 2014. Leading in a culture of change personal action guide and workbook. John
Wiley & Sons.
Hrebiniak, L.G., 2013. Making strategy work: Leading effective execution and change. FT Press.
Malenfant, K. J., 2010. Leading change in the system of scholarly communication: A case study
of engaging liaison librarians for outreach to faculty. College & Research Libraries. 71(1).
pp.63-76.
Nahavandi, A., 2016. The Art and Science of Leadership -Global Edition. Pearson.
Parsons, M. L. and Cornett, P. A., 2011. Leading change for sustainability. Nurse leader. 9(4).
pp.36-40.
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Suchman, A. L., Sluyter, D. J. and Williamson, P. R. Eds., 2011. Leading change in healthcare:
Transforming organizations using complexity, positive psychology and relationship-centered
care. Radcliffe Publishing.
Thomas, T. and et. al., 2013. Leading change and innovation in teacher preparation: A blueprint
for developing TPACK ready teacher candidates. TechTrends. 57(5). pp.55-63.
Online
Understanding and Leading Change. 2017. [Online]. Available through:
<https://execed.economist.com/understanding-and-leading-change-2018-09-12>.
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