Management Project: Analyzing Change at PepsiCo - MNGT17

This project analyzes PepsiCo's change management initiatives, focusing on its adaptation to market demands through product innovation and organizational restructuring. The project examines PepsiCo's organizational structure, leadership styles, and the implementation of Kotter's 8-Step Change Model to assess change readiness, address resistance, and develop strategies for successful transformation. It evaluates the company's strategic vision, communication methods, and the importance of employee support and training in facilitating change. The assessment considers situational factors, resource availability, and task demands to determine the effectiveness of change management strategies, including providing support, preparing a case for change, and fostering open communication. Ultimately, the project highlights the challenges and opportunities PepsiCo faces in maintaining its market position and adapting to consumer preferences for healthier products, providing insights into leadership and change management within a global food and beverage company.

Running head: MANAGEMENT
Management
Name of the Student:
Name of the University:
Author’s Note:

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Table of Contents
Overview..........................................................................................................................................3
Assumptions....................................................................................................................................4
Assessment......................................................................................................................................5
Evaluation........................................................................................................................................9
Strategies........................................................................................................................................10
Summary........................................................................................................................................14
References......................................................................................................................................17

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Overview
Pepsi Co. is one of the most famous names in the food and beverage sectors. They have
made pioneering works in the field of supplying good quality and fresh tasty soft drinks that
would help people in staying healthy and also enjoy the taste of a refreshing drink. In the year
1965, the CEO of Pepsi Co Donald Kendall partnered with the CEO of Frito Lay, Herman Lay
thinking that this would be highly profitable for their business. Since then the two companies
have been working together and also they have been able to ensure that their customers are
getting the best quality salted sacks with the best refreshing drink. The company mission is -
CREATE MORE SMILES WITH EVERY SIP AND EVERY BITE
The major aim of the company is to follow the process of continuous improvement strategy so
that they can prepare new and tasty food items for the customers and also
The vision of the company is -
BE THE GLOBAL LEADER IN CONVENIENT FOODS AND BEVERAGES BY WINNING
WITH PURPOSE
The major focus is to continue their growth by improving the work and the performance of the
top line managers along with the desire to give back to society and help to make the planet a
better place to live in.
The company has 22 brands and operates in over 200 countries and Territories. The Company
has many different branches and Pepsi co Canada is one such well-known branch of the

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organization. They are the market leaders in Canadian beverages and have different kinds of
products like Diet Pepsi, Aquafina, SoBe, Lipton, and Brisk and many other such products. They
have about 6 manufacturing units across the whole country and this sums to about 88 percent of
the total volume of the soft drinks that are sold in Canada. To ensure that
Assumptions
The organizational structure of the company for several years has followed the top-down
approach. The company had a hierarchical organizational structure that has CEO at the top
and also the rest of the employees have to abide by the decision that is being taken by the
seniors. However, the leadership style has undergone several changes with the need of the
company. It is for this reason that they are divided as per the two important aspects that are
business and geography (Yasir et al., 2016). This is one of the most prominent aspects of this
organization as they give equal importance to the geographical setting and also the need for their
business. This helps in making the organization cater to all the needs and demands of their
customers. This is well suited for the different debarments that are existing because they mainly
focus on the market division (Kim, 2018). Market division is one feature that helps in getting the
business stable and also in reaching the targeted customers in a very easy and simple manner. On
the geography-based market division, they have the Americas, Europe, and other regions. The
following are the market division in PepsiCo's organizational structure:
1. PepsiCo Americas Beverages
2. Frito-Lay
3. Quaker Foods

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4. Latin America Foods
5. PepsiCo Europe
6. PepsiCo Asia, Middle East & Africa
On the other hand, the business division is mainly for Quaker foods and also the Frito –Lay.
However as there is a very large demand for healthy products all over the world, the organization
now has to focus on the manufacturing of the healthy items that would be able to meet with the
needs and the requirements of the customers. It calls for an organizational change because to
make new and fat-free products all the employees in the organization have to be given proper
training. As there is a product variation coming into the market, all the employees will indeed be
suffering from this fear of loss of job or job replacement. To ensure that employees can be given
moral support. The change agents or the change management experts will have to focus on the
different phases of the change that is the Readiness (the climate for a change), Resistance to
change transition, Commitment to implementation and sustaining momentum,
Institutionalization of change (Teixeira, Gregory & Austin, 2017). It is important to note that
Pepsi Co. decided to focus on product differentiation so that they can get the response from the
young customers who are drifting away from the oversweet, sugary soda and also oily snacks
and the other food items. However, to bring this change, the change management experts will
have to assess the readiness of this change as well.
Assessment
The tool for the assessment is the Change management is Kotter’s 8 Step Change Model. This
tool has been used to study and analyze the Readiness (the climate for a change). This is one
of the most important aspects of the change management prices because the success of the

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change or the momentum to keep pace with this change can only be brought about if the
employees can cope up with the phase of readiness for the change.
Initially, employees might not be able to use the resources. For instance, if employees
are asked to take up the new training session after the completion of their official hours, they
might refuse to do so. However, initially, they might not want to devote any extra time (Sroufe,
2017). However, if I act as the change management official, I will always develop some
additional monetary benefits or reward schemes so that they are motivated and understand the
importance of taking part in the change management activity. As there is also a cost or expense
expenditure, I will try to develop some internal training and management sessions so that the
charge that would have otherwise been used for hiring external trainers would be saved. This
instead would be allocated over the R&D sectors and others.
Creating an urgency for the change
Business cases or the result of previous business data must be used to develop the urgency for
change. This will help employees to know the actual need for the change.
Build a strong team
A strong team must be built so that the change strategy is being carried on in a proper and also
error-free manner. Pepsi Co. has been successful in making this move as it has hired the best of
the officials who can guide the employees. Indra Nooyi is one such significant employee who
has always been able to develop newer and innovative ideas for the change. It was her idea to
emphasize on product innovation (pepsico.com.2020). Nooyi was the major person who wanted
to bring about this change as she realized that there is a need for making healthy and

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preservative-free drinks and move away from the too many sweet drinks that the customers are
not having the demand any further.
Form strategic vision and initiatives
The readiness for change has to be created so that employees can form a proper connection with
the change urgency and contribute properly.
Communicating the vision clearly
Verbal and nonverbal, communication modes must be used to be the managers so that there can
communicate the business decisions among all the employees in a very effective manner. Open
horizontal communication is an issue in this organization because of the hierarchical approach.
Removing the obstacles
Obstacles or the resistance towards change must be removed by arranging for some employee
counseling or employee motivation system. As the sale of beverages in North American belt has
fallen drastically and they are also facing a cost pressure there must be the proper way for
removing these obstacles
Creating short term wins
This is one of the most essential moves that the company must focus upon. This is because, to
motivate the employees, they have to be appreciated and rewarded in the short term gains (Haas
et al., 2020).

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Build on change
One of the important aspects is to encourage employees on their past achievements so that they
can contribute similarly in the future. This can be done by focussing on the responsiveness
available for the employees and also how they can be kept motivated.
Making the change a part of the culture
This can be made by encouraging employees throughout. Some monetary rewards or other
beneficial rewards must be arranged so that employees can contribute properly and also be able
to work properly.
Therefore it can be said that readiness for change is present among the employees but there is a
lack of proper flexibility in the organizational structure. The existing organizational structure has
to enable more employees friendly so that they can communicate freely and in a horizontal
manner.
Evaluation
Readiness for change is one of the most essential phases in the growth process. This is because
some important factors must be considered while bringing about a successful change. The
employees will mainly lookout for three different factors in this aspect. They are the situational
factors, the availability of the needed resources and also the task demands (Caulfield & Brenner,
2019).
As far as task demand is concerned, it is the duty or the responsibility of the managers and the
change professions to explain that customers are demanding innovation and also health benefits
within the products. It is, for this reason, the employees will have to undergo new and innovative

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training that will train them on how to prepare the diet products and also fresh, zero sugar added
soft drinks. In such cases, the employees will be able to get the actual knowledge for the need for
change. The readiness or the climate of the changes set properly only when the employees are
ready to cooperate and they are also able to learn the new skills that will be needed to make the
upcoming change successful.
Strategies
Change
management
strategies
rationale
Providing proper
support for
Change
This will ensure
that the
employees are
getting timely
support both the
work-related and
also the moral
support to
withstand the
change
Employees will
be encouraged to
make a
significant
contribution to
bringing about
the changes
Preparing a case
for the change
This is because
change is usually
undesirable and
employees do
A case for
change is the
result of some
previous data or

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not like to see
any changes or
bring about any
changes unless
they find any
case for it
some market
research results
which will be
helping in
making
employees
understand about
the exact need
for bringing
about the change
A free-flowing
horizontal
communication
system
This makes
employees get
an employee-
friendly
atmosphere and
they can reach
out to their
managers and
their seniors
without
suffering from
any hesitations
This would
make the change
more successful
Employee
attrition rate will
also be checked
as there will be a
clear and
transparent
relationship
existing between
the managers,
the departmental
heads and also
all the other
employees.

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o Managers must provide continuous support to all their employees. As there is a
need for bringing about a change in the product, more employees have to undergo
training sessions. Trainers will be appointed to ensure that all the employees are
given the proper training that is needed to produce sugar-free and healthy diet
cokes. This needs new expertise or knowledge. Therefore the managers have to
develop a proper schedule of interaction with their employees to know if they are
suffering from any issues. However, it is seen from the assessment of the
readiness of change in the organization that the employees are not able to cope up
with the stress of the rapidly advancing changes. ON one hand, they are learning
the new technologies and expertise to prepare the naturally healthy and the zero
preservative added products and on the other hand, they also have to focus and
maintain the production and sale of the beverages. For the first quarter of 2018,
the company reported sales of $12.6 billion with organic revenue growth of 2.3%.
The volume was driven primarily by its snack food business with the overall
growth of 3%, compared to beverages, which reported a 1% decline. This shows
that leaders have to increase their support systems so that they can take proper
feedback from employees and know about the issues they are facing.
o The other important strategy is to develop a horizontal communication system in
the organization. It is evident from the change assessment with the company that
Pepsi Co. follows the hierarchical structure. However though have focussed over
market divisions but at the same time, they have not been able to make some
significant changes in the hierarchical structure. They follow the top-down
approach and this often creates a huge disparity and also confusion among the

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employees. As the change needs some product innovation it is a known fact that
the employees will surely have many doubts and questions. It is for this reason
that they must be able to get the flexibility that allows them to reach out to their
management without any problems. However the existing structure of the
company does not give that flexibility as they follow the hierarchical structure,
this is a disadvantage for the organization also for the employees. Employees
must be given the complete freedom to take part in the decision making process.
o A leader in the modern-day scenario must always be able to develop a people-
oriented or a people-centric approach that will be helping them to attain the
change in a successful manner. As per the opinion of Indra Nooyi, one of the
chief officers, former CEO of Pepsi Co-leaders must develop a proper emotional
intelligence that will be enabling them to take a view the changes or the situation
from the perception of employees and also be able to act as a source of constant
support.
o To focus on product innovation and produce naturally healthy, zero preservatives
fewer products the company has to hire the best trainers and also take proper
feedback from the employees to know what are the issues being faced by them.
On the other hand, readiness for change is a multipurpose and multi-phased
situation where the employees have to focus on many different works at the same
time. It is for this reason that they must be able to pay attention to the same of the
soft drinks or the other beverages as well, particularly in the North American
market.