Analysis of Leadership and Change Management at Coca-Cola and Pepsi

This report provides a comprehensive analysis of change management strategies within Coca-Cola and Pepsi, exploring how these companies navigate internal and external drivers of change. It examines the impact of change on their operations, strategies, and leadership, including how they adapt to maintain a competitive edge. The report delves into the ways in which both internal and external factors, such as customer demands, market trends, and technological advancements, influence leadership behavior, individual performance, and team dynamics. It also highlights measures these organizations can implement to mitigate the negative impacts of change, such as the continuous improvement model and the PDCA cycle. Furthermore, the report assesses barriers to change and the application of different leadership approaches to effectively manage and overcome these challenges, providing valuable insights into how these global beverage giants lead and adapt in a dynamic business environment.

Understanding and Leading
Change

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Influence of change on operations and strategy of firm........................................................1
P2 Ways in which external & internal drivers of change influence leadership and behaviour...4
P3 Measures that can be taken to reduce negative influence of change on firm behaviour........5
TASK2 ...........................................................................................................................................6
P4 Different barriers to change and its impact on leadership decision making..........................6
TASK3 ............................................................................................................................................8
P5 Application of different leadership approaches to deal with change.....................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Change is necessary for every organisation in order to grow and sustain in the
competitive market. It is essential for the firm to understand and adopt changes in their business
operations and activities. It assists in improving the processes and methods of production so that
tasks can be effectively completed on time (Fagerström and Salmela, 2010). There are many
changes that take place in the business environment that influence decision making process of
company. Changes are unpredictable and it is important for the manager to accept these and
formulate appropriate strategies in order to reduce uncertainty risk. In the present assignment,
chosen company is Coca Cola and Pepsi which deals in carbonated soft drink. Report covers
influence of change on the operations and strategy of organisation as well as on ways in which
external and internal drivers of change impact leadership, individual and team behaviour within
firm. It also includes the measures that can be taken in order to reduce negative impact of change
on organisation’s behaviour. Apart from this, barriers to change and application of different
leadership approaches in order to deal with those changes are also studied.
TASK 1
P1. Impact of change on the operations and strategy of organisation
Business environment is dynamic as there are many changes that take place within
organisation due to internal and external factors. It involves the changes that take place in
strategies and structure of business. Forces that exist in environment are the main drivers that are
responsible for change. These include customers, competitors, technology, suppliers, market,
laws and policies, political, economic, socio cultural and legal factors. All these components
highly influence the operations and activities of business. It is necessary for every organisation to
keep in view these changes and adopt them for smooth and effective functioning of business.
This helps the firm in attaining growth and sustainability in market (Doppelt, 2017). Adoption of
change administers many opportunities to company in terms of increasing the market share,
maintaining healthy relationship with customers, gaining customer attraction, etc. Therefore, it is
crucial for Coca Cola as well as Pepsi to determine these changes and adopt them by
implementing effective strategies.
The reason that encourages both the firms to implement changes in its operations and
strategies are defined as below:
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 To gain competitive advantage in the market by understanding change drivers and adopt
them (Carrington, Deppeler and Moss, 2010).
 To attain a strong position in market by attracting a large number of customers towards
brand and gaining high customer loyalty.
 To promote creativity and innovation among manpower with improving performance of
various departments.
 To satisfy the needs and demands of customers by delivering them high quality products
and services.
 Improving processes and operations of business so that high quality goods can be
produced.
Both the organisations operate their business operations worldwide and accept changes in
its operations and strategies whenever required. Brief overview of both the companies is given as
below:
Coca Cola: Company produces soft drink products and offer them at global level.
Different varieties of products are provided by the firm such as diet coke, coca cola zero,
caffeine free drink, etc. It offers the beverages in more than 200 countries and about 1.8 billion
drinks are consumed by people every day. The brand value of company is high and it is one of
the well-known firms. Pepsi is the main competitor of it which forces or enable the management
to think about implementation of change in operations and strategies of business.
Pepsi: It is a multinational beverage company which offers snacks, food and drinks to its
customers. The firm is headquartered in New York and serves its products in many countries. Its
goods include crystal, diet, vanilla and zero sugar Pepsi (Booth, Wade and Walker, 2014). In
order to compete with the competitor firm and capture a large portion of market share, they adopt
changes and formulate strategies.
So, in order to maintain a strong position in the market and attain business objectives,
both companies adopt change and introduce new strategies as well as policies to grow their
business.
Strategies Coca Cola Pepsi
Pricing
strategies
As the firm operates worldwide and
have a good position in market, they
mainly emphasize on maintaining
Pepsi also deals in the same industry
and provides similar products to their
customers as Coca Cola does. In order
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quality of their products and offer
different variety of drinks to customers
as per their needs in order to satisfy
them. Pricing is the crucial factor
which influences sales and revenues of
company. For this, it is necessary to
understand the customer’s willingness
to pay for their product. They adopt
economic pricing policy and set
minimum prices for their drinks. This
assists company in gaining competitive
advantage and retaining their position
in the market.
to attract a large number of customers
and capture high market share, they
also change their pricing strategies for
products. They adopt competitive
pricing policy and set prices of their
drinks according to the value of their
competitor's products. This enables
company to capture high market share
and attract a large group of customers.
Marketing
strategies
In order to increase sales and profits of
company, it is necessary to formulate
effective strategies. Coca Cola
develops marketing strategies in order
to effectively promote their products in
the market and for this, various
promotional tools are used by them
such as social media, advertisement,
newspapers, etc. Social media assists
in reducing cost of promotion and at
the same time, it also helps in
attracting a large number of
youngsters.
Electronic media, magazines, etc. are
the promotional tools which are used
by the firm in order to promote its
products in market. This assists
company in expanding their brand and
reach at a large group of target
audience from different regions of
country worldwide.
Process The firm performs its operations in
many countries. By adopting new
technology in its production processes,
they are able to produce high quality
Pepsi provides their products through
various stores. This assists in direct
interaction with customers. It also
helps company in influencing the
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products and satisfy customer’s needs.
They also adopt online process of
ordering drinks which saves the time of
customers.
buying behaviour of target audience.
P2 Ways in which external & internal drivers of change influence leadership and behaviour
Both drivers of change, i.e., internal and external put positive as well as negative
influence on leadership, individual and team behaviour. So, in Coca Cola and Pepsi, it is the
responsibility of manager to assess both the factors which affects the performance of
organisation as well as its employees (Fragouli and Ibidapo, 2015). Internal forces are
controllable by firm but external factors are uncontrollable. These components put high impact
on working and performance of company. Influence of internal and external forces are defined
below:
Influence of internal forces:
Customers: Profitability and success of business is depends upon its customers. They
highly contributes in sustainability and continuous growth of firm. So, it is necessary for the
manager of both the company to identify needs and demands of customers and develop product
accordingly in order to satisfy them.
Culture of firm: Culture of organisation influence the behaviour of employees. It is
necessary for manager of Coco Cola and Pepsi to determine culture difference and maintain
healthy culture within the firm so that employees stay happy and work effectively. Some
policies and practices are also needed to be adopt by firm.
Managing funds: Effective management of funds are necessary so that business
operations can be run smoothly. Manager needs to focus on managing appropriate funds in order
to ensure proper functioning of business (Fullan, 2014).
Influence of external factors:
Political factor: It includes government policies, tax rates, political stability etc. All these
factors put high impact on functioning of both business organisations. These factors are taken in
concern by managers as these affect motivation level and leadership quality of administrator and
hamper growth of individuals as well as teams. Various laws and policies also affect the prices of
soft drinks provided by the company.
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Economical factors: Functions of business and economic condition of country are
interlinked with each other. It includes inflation, recession, unemployment, exchange rates,
currency rates etc. Activities of business rely on economic condition. These factors reduce the
capability of business.
Social factors: These factors include culture, age, lifestyle, religion, income etc. These
factors influence the demands of customers for soft drinks. Both the companies distribute its
products in countries related to culture. They made their products according to the taste and
preferences of customers. They are providing sugar free drinks as these are good for health.
Technological factors: Emergence of new technology or technological changes influence
the operations and strategies of business (Hrebiniak, 2013). They also influence the leadership
and behaviour of individuals and teams as it is difficult for them to adopt these changes quickly.
Coca cola and Pepsi use high technology machinery so that high quality soft drinks can be
manufactured. They use social media to interact with customers.
Above mentioned are the external and internal drivers of change and influence the
leadership and behaviour of individual as well as teams.
P3 Measures that can be taken to reduce negative influence of change on firm behaviour
Management of Coca Cola and Pepsi can take many measures in order lower down the
negative impact of change on behaviour of organisation. In this context, many concepts and
theories are adopted by firm. It assists in determining the outcomes of change in future and
administer measures to minimize the adverse impact on behaviour and performance of
organisation as well as individuals. Different theories that are works as remedial measures can be
applied by managers in order to reduce the negative impact of change on organisational
behaviour. Some of these are defined below:
Continuous improvement model: This model assists in constant improvement in
processes and operations of firm by improving its products and services. Both the companies can
implement this model in order to attain set targets and objectives of the firm in effective and
efficient manner. In order to ensure successful implementation of this model, it is necessary to
follow the cycle that is defined below.
PDCA Cycle: This model is used by both the firms in order to improve their
performance and enhance profitability (Malenfant, 2010). The four phases included in this cycle
are:
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Plan: This step involves the process which is related to identification of opportunities
and formulation of plan in order to bring changes within organisation.
Do: At this stage, changes are applied at small level in organisation. Managers of the firm
introduce changes in practices and policies of firm.
Check: In this step, performance is measured, results are identified and match them with
standards. It assists in determining the outcomes off changes that takes place due to adoption of
change (McLoughlin, 2011).
Act: If the executed change is successful and assists in growth of the firm then, managers
take decision to apply change on large level and determine its outcomes. In case, if changes are
fail to minimize negative impact then, it is responsibility of manager to apply different methods
and approaches in order to reduce the impact on organisational behaviour.
System theory: This approach of leadership is effective in motivating employees and
encourage them to perform well. This is one of the approach which is used by the managers of
both companies in order to improve its performance. In Coca Cola, this method assists in
building super system, team working and organised leadership as it is assumed that subsystem
and leader are able to comply components of it in order to reach system.
Bohner and Arnold change impact analysis theory: In order to reduce negative impact
of change on behaviour of organisation, both the companies apply this theory. This theory assists
the manager in determining the outcomes of change. It also administer the measures that helps in
attaining desired results. Change is applied and actual performance is measured with standard
one. This approach helps the managers in formulating appropriate plans and strategies that
provides directions to workforce in order to successfully adopt these changes and lower down the
adverse impact of change on behaviour. This assessment assist in identifying risks related to
change. It is classified into three parts, i.e., dependency, trace and experimental.
TASK2
P4 Different barriers to change and its impact on leadership decision making
Force field analysis: This analysis assists in assessment of pressure that can be confront
by organisation at the time of adopting change. It shows equilibrium among the force which
resist change and the one that drive change (Nahavandi, 2016).
Phase 1: Proposal for change
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It involves the process of setting targets and objectives related to adoption of change
within organisation.
Phase 2: Identification of forces of change
It involves the process of determination of forces that are the reason for bringing change.
It includes internal as well as external drivers:
 Low morale of employees Outdated machinery
Phase 3: Determination of forces against change
It includes all those factors or components that restricts the firm to bring change. It
consists:
 Organisational structures Fear of unknown
Phase 4: Assigning of sources
It includes the procedure of rating in which each factor is rate on the scale of 1 to 5 as per
their strengths and weaknesses (NHS England, 2016). This assists the organisation in identifying
the force which put high impact on change.
Phase 5: Evaluation and execution
This involves the process of assessment of various factors and their influence on firms.
This assist the organisation in effective implementation of change and attainment of desired
outcomes.
Barriers to change and their impact:
In Coca Cola, there are many barriers that are existing within business environment
which restricts adoption of change and affect decision making by leaders. The major barriers
which influence adaptability of change involves government, employees and environment. It
lowers down the ability of firm to enhance its performance & expand its business operations. It
hinders the ability of firm to gain competitive advantage. Below defined are some barriers and its
impact:
Government: There are various laws and regulations that are introduced by government
and should be adhered by organisations in their activities and operations. Sometimes, the
regulations made by government acts as barrier that restricts firm to bring changes within the
company (Parsons and Cornett, 2011). These laws and policies also influence decision making
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by leaders. It affects the working of company as sometimes, regulations restricts organisation to
change processes.
Employees: This is one of the major barrier that is faced by the company at the time of
adopting changes as workforce are not ready to accept changes. They don't want to leave their
routine schedule. This restricts the manager to take decisions regarding various activities and
operations.
Environment: Workplace surroundings also influence the decision making ability of
manager (Pelling, 2010). If the environment of workplace is not healthy then it leads to
demotivation of employees and if they are not happy, its performance can not increase.
TASK3
P5 Application of different leadership approaches to deal with change
There are some leadership approaches that can be used by managers of both the firms in
order to improve performance of organisation and its workforce. It assists in improving skills of
employees so that they can effectively handle and deal with changes. These approaches are used
in managing and controlling different situations related to alteration of technology, competitive
pressures and employee behaviour. Some approaches to leadership are defined below:
Situational leadership: This approach states that, leaders should adopt leadership style
according to the situation. On that basis, workers will not require to make changes in themselves.
As per this theory, leaders adopt leadership style in order to provide guidance to employees so
that work can be performed effectively. It also defines that it is necessary to change strategies on
continuous basis in order to meet the needs and expectations of workforce in different situations
that takes place in organisation.
Transactional leadership: This approach assists in controlling the flow of functions of
firm in order to ensure effective performance. It emphasize on oversight, performance and
organisation. In this style, leaders encourage compliance by workers through punishments and
rewards. Those individuals who use this approach are looking to keep things same. They are not
looking for any change (Suchman, Sluyter and Williamson, 2011). Transactional leadership is
effective in the situation of emergency and crises. It also used in the projects that needs to be
perform in specific way.
Transformational leadership: In this approach, both followers as well as leaders raise
each other to higher levels of motivation and morality. It is the model of fairness and integrity. It
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assists the manager in setting clear goals, encourage others, administer recognition and support,
stirs people's emotions and inspire people to attain goals. In this style, leader works with their
team members in order to determine needed change, develop vision and execute change.
Application of approaches in Coca Cola:
The firm adopt two theories of leadership which are as follows:
Situational: It is a flexible approach and can be adopted in every situation. This assists
the manager of Coca Cola in formulating appropriate strategies. Technological advancement
changes are faced by firm and this approach is suitable in order to introduce new technology.
Leaders provide training session to employees so that they can gain knowledge (Thomas, 2013).
Transformational: Leaders emphasize on employee relation, coordination and team
performance. This theory assists manager of Coca Cola in creating effective teams.
CONCLUSION
As per the above mentioned report, it has been concluded that it is necessary for every
organisation to adopt and implement changes on continuous basis in order to grow and sustain in
competitive market. It is essential for both the companies so that their performance can be
increased. Changes provides various benefits to firm and provides many opportunities which
helps in increasing profitability, gaining competitive advantage and capturing large portion of
market share. It will also influence the leadership, individual and team behaviour. There are
many barriers that are exist in business environment which restricts the firm to adopt changes.
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REFERENCES
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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.
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Pelling, M., 2010. Adaptation to climate change: from resilience to transformation.
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Online
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