Impact of Change on Pepsi and Coca-Cola: A Leadership Analysis

This report examines change management within Pepsi and Coca-Cola, focusing on the impact of internal and external drivers on their operations, strategies, and organizational behavior. The report analyzes how these companies adapt to market changes, addressing the effects on leadership, teams, and individual behavior. It explores the steps taken by these organizations to mitigate the negative impacts of change, including the application of system theory, Bohner and Arnold's change impact analysis, and the Burke-Litwin model. The report also investigates various obstacles to change and their influence on leadership and decision-making, and highlights specific leadership approaches used to manage organizational changes. The analysis covers pricing and marketing strategies, technological capacity, organizational culture, financial management, and the influence of political, economic, social, and technological factors. Overall, the report provides a comprehensive understanding of change management in the context of these two major beverage companies.

UNDERSTANDING
AND LEADING
CHANGE

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Impact of changes on operations and strategies of Pepsi and Coca Cola..............................1
P2 Effects of internal and external drivers of change on leadership, team and individual
behaviour.....................................................................................................................................4
P3 Steps taken for reducing the negative impact of change on organisational behaviour..........5
TASK 2............................................................................................................................................7
P4 Various obstacles of change and their influence on leadership and decision making...........7
TASK 3............................................................................................................................................8
P5 Certain leadership approaches which is used for changes in organisation............................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Change is a constant thing in the world. For a smooth conduct of business, it is important
to have some alteration according to the present scenario. Thus, it is an essential element for an
organisation. Company should implement certain methods which will improve their work and
move them in a forward direction. In this recent market place change happens whether in context
with external or internal environment, enterprise should accept these in a positive manner. Pepsi
and Coke; both are drinking beverages and have a positive image in front of their customers
(Peters, 2012). In this report, importance of leader is explained which will assist them in dealing
with uncertain alterations in an organisation. This will help them to take proper decisions so that
they can identify the problem related to their company. Change management and its importance
is also explained here.
TASK 1
P1 Impact of changes on operations and strategies of Pepsi and Coca Cola.
Change is essential as per the new trends because this helps them to know about mind set
of customers regarding their products. This can vary from company to company. So, it is
essential to implement organisational structure and strategies in a proper manner. Some of the
factors which can act as a main drivers in this process of change includes competitors, culture,
market, technology, choice of customers (Wellman, Jeffries and Hagan, 2016). Hence, this has a
huge impact on respective company. Organisation should have the courage of accepting changes
through which a high market share and relations with consumers can be fruitful for longer period
of time. Therefore, it is necessary for both; Coca cola and Pepsi to determine alteration and make
strategies according to them. Some points are given as below:
 To attain competitive advantages and to remain in superior position they have to
understand changes and accept all the drivers.
 Creativity and innovation will help them in improving their performance in various
departments.
 To fulfil different requirement of customers.
 To adopt best possible tools and techniques for increasing the performance of staff
members this assist them in maintaining their quality products.
 Introducing new commodities will enhance their business.
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Pepsi and Coca cola both are organising their business through out the world and some of
the activities are given below:
Pepsi: Pepsi is a multinational company which give their customers drinking beverages.
It was after the 1961, that company changed its name as Pepsi. They manufacture carbonated
soft drinks. Their main production is Crystal Pepsi, Pepsi Zero Sugar, diet Pepsi etc., There are
many company which are in competition and they sell the similar products but what make them
different is, strategies and plan which they have introduced for the benefit of their enterprise.
Through this they are capturing a large amount customers towards them (Feldman, Hart and
Milosevic, 2017).
Coca Cola: It is company which deals in soft drinks and provide variety of products like
diet coke, caffeine free Coca cola and many more to their consumers. Organisation is selling
their commodities in around 200 countries and it is consumed by around 1.8 billion people on
daily basis across the globe. Management makes certain changes and which help them in doing
their operations (Miller and et. al., 2013).
Hence, it is essential to acquire some of the changes for improvement which will assist
them in gaining a superior position, this will accelerate their business, both organisation have
made some polices and plan of action and they are given below:
Strategies Pepsi Coca - Cola
Pricing Strategies Pepsi is a huge company
which provides their consumer
with quality of products.
Coca–Cola is the biggest
competitor of this as they
manufacture similar
commodities as Pepsi. They
have to make some changes in
their pricing strategy so that
they can attract more and more
people towards their company
which will enhance their
business. Organisation have
Same as Pepsi it is operating
on a large scale. Their main
aim is to provide good quality
of soft drinks with variety of
new products. Pricing is
essential because it have a
direct impact on sales of their
company. They have to work
according to their customer
need and satisfaction and rates
should be decided on that
basis. Various pricing helps
them to understand the nature
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planned to keep their price
same or below from their
competitors so that maximum
number of costumers can buy
from there which will give
them profit. They have
adopted different pricing
policy as per their demands
which gives them competitive
advantage.
and demand of the market.
Marketing Strategies Sales and profitability can be
increased with this method
because it help them with
making strategies according to
present situation. Social media
and newspapers are the best
mediums through which they
can promote and tell their
customers about their different
offers. Young generations are
attracted in large number as
they are the biggest users of
social networking sites.
They are also using best
possible tools and techniques
which are available in the
market. Electronic media,
magazines, etc. are used by
them. This help them to
expand their business
worldwide.
Process To improve their business they
are taking help of online
technologies fro promoting
their products in best possible
ways. Large number of stores
are operated by this online
process which is improving
Coca cola follow the same
process in their various stores.
They also use face to face
interactions which assist them
to know about the behaviour of
their customer's towards their
products.
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their business which save time
of their customers and
employee as well.
P2 Effects of internal and external drivers of change on leadership, team and individual
behaviour
There is an impact on leadership behaviour, team and employees of both company which
may be positive and negative in nature. Its a prime duty of management and managers to ensure
and analyse internal and external factors which is required for an organisation. This may have
some effects on the ability on both company and employee so that they can perform their
activities in an effective manner (Krahmann, 2013). Internal drivers are those factors under
which both organisation and management have some amount of control over them. This may
includes organisational culture, moral values of their workers, technological capacity and lot
more. External drivers are the factors which affect the capacity of delivering their functions to
their consumers. Hence, it also has a great influence on business environment. This involves
political, economical, social, technological etc., Pepsi and Coca Cola both cannot control this
factors.
Internal factors which put an impact on leadership behaviour, teams and employees
of Pepsi and Coca Cola are given below: Technological Capacity: It is very important to go hand in hand with new techniques so
as to give best performance and show their capabilities. This provides their company with
long term benefits but if they are not ready to accept the changes than it can affect their
work. Organisational Culture: This help a firm to evaluate the process of employee and team
of any enterprise. This assist them in determining different culture and policies according
to which they can adopt one of them. This aid them in maintaining a good relation
between employee and their team members (Jones and Harris, 2014).
 Financial management: Management of money is very crucial factor because it
motivates their workers to work hard and complete their task in appropriate manner. If
they don't get rewards according to their work than it can demotivate them which will act
as a barrier of their company.
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External factors which put an impact on leadership, team and individual behaviour
in Pepsi and Coca Cola are as follows: Political Factor: In this factor some of the factors are included which are government
policies, political stability, tax implementation etc., company's working can have a huge
impact because of these factors. Leadership and quality of motivation is the major
element which is harmed and this can be seen in the growth of team or an individual. Economic Factor: Economic conditions is the basic factor which can be inter related
with nation and business of any firm. If situations which are related to economy are not
worth than it can have a negative affect on firms. Thus, they have to plan accordingly so
that there is a possibility of eliminating bad factors (Whitney and Cooperrider, 2011). Social Factors: Corporate Social Responsibility activities are included in this which help
them to recruit more and more eligible people towards their organisation. They boost
moral of their employees so that they can work effectively I the society.
 Technological Factors: New innovations and techniques are involved in this which
enhance their organisation for introducing better products. This aid them in developing
their skills and knowledge, which is required for the betterment of their business.
P3 Steps taken for reducing the negative impact of change on organisational behaviour
Certain steps and measures are taken for reducing the risk factor and negative impacts of
any organisation. This includes theories and various new concepts which are essential, many
organisation opt this for enhancing their firm. This help them in reducing consequences of
enterprise which influence employees and their team directly or indirectly. Some of the theories
are given below: System Theory: This is a common kind of approach which are used by many organisation
for developing their performance. During uncertainties and complicated situation they
can utilize this process. Pepsi has adopted many models and Supra system is one of them,
in this leaders of an organisation guide their employees and workers follow them and this
subsystem is also known as component system (Harris, 2012). Bohner and Arnold change impact analysis theory: Both company apply this theory to
reduce the negative impact of change in their business. They assist them in identifying
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certain circumstances and alteration which give them strength to carry out measures
which is required for achieving their aims and objectives. Strategies guide them to
minimize or reduce their negative impacts which may have a adverse effect on their
performance. This assist them in evaluating risks which have a great impact on resources,
effort and schedule. This can be further classified into three types which are
Experimental, Dependency and Trace (Maccoby, 2015). Bruke – Litwin model: This kind of a model is used to organising their task in a proper
way. The most important factor is given at the top of the image i.e. External environment
and the lower levels are gradually less essential. This model includes some of the points
which are necessary for any organisation which are given below:
◦ External Environment: This involves elements like market, legislation, and
economy. Company are influenced by all these factors and their consequences are to
be managed by the managers. They control and have a direct impact on changes
regarding health, local government which are regulated by external environment
which are required to be carry out by the firm.
◦ Mission and Strategy: Strategies are executed so as to set a broad vision of attaining
any target. So, change manager has to implement their plan in such a way that it can
be understood by all their employees (Gonzales and Pacheco, 2012).
◦ Leadership: Leaders are the one who take their workers along with them which help
them in achieving their goals and task in a given period of time. For this workers
should have faith in their seniors who are leading them.
◦ Organisational Culture: This involves behaviours of an individual, values and their
culture which are utilized by any enterprise. Culture is what which does not happen
overnight but it develop over a time which can leads to changes in an organisation.
◦ Structure: Sometimes alteration can effect the structure of any company.
Relationships, responsibilities ans their ways of work can have a serious impact on
any firm. Thus, it is them main aim of mangers to make sure that team understands
the task and work appropriately (Hrebiniak, 2013).
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(Source: Bruke – Litwin model, 2017)
TASK 2
P4 Various obstacles of change and their influence on leadership and decision making
Leaders faces many problems during decision making. Which have a bad impact on their
work. Person having a good leadership quality can easily influence their employees to work
effectively which leads their business in forward direction (Yoder-Wise, 2014). Most common
barrier in any company is communication, if proper interaction is not there among their workers
than this will hamper their business. Some of the models are given below: Schein 's Organisational Culture Model: Organisational culture is a term which refers to
values and beliefs of a company. It includes principles and ideologies which are required
for policy making. Under this it includes three different level of organisational culture
and they are as follows:
◦ Assumptions: It can be said that culture is based on certain foundations. There are
some values which cannot be assumed but they make a difference in culture of an
organisation. Assumption is very common in human nature. For example: in an
organisation female workers dominate their male counterparts and former are are not
comfortable with this kind of culture (Salmela, Eriksson and Fagerström, 2012).
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Illustration 1: Bruke – Litwin model

◦ Artifacts: In this characters can be easily viewed and felt by and individual. This
includes attitudes, behaviour of workers which is necessary for making future
decisions. This give a broader perspective or vision which is important for enhancing
their organisation.
◦ Values: This simply tells a company about what kind of values is constituted by an
employee. Thought process creates a huge impact on particular organisation.
Thinking of people about their organisation matters a lot (Alkahtani and et. al., 2011). Self – efficacy: This can be defined as personal judgement, in which a company can
determine how an individual can complete the task with available resources. Person with
high level of efficacy can cop up with the problems. This can change according to
capabilities of a person. This is use to determine about somebody's thinking, feelings
regarding their work, best way to motivate themselves and behaviour according to their
task. They love challenges rather than just avoid them. They themselves set a goal which
they have to attain in specific time period. This help them in reducing their stress level
which rescue them from depression.
 Situational Resistance: in this various possible outcomes are included which required to
maintaining a healthy relationships across the boundaries. Pepsi is very good in keeping
proper relations with countries they provides with different offers which any country can
adopt (Situational Resistance. 2012). This will assist them in increasing their revenues as
company will pay them taxes. This concept is easier to understand as compared to other
theories (Peters, 2012).
Some of the barriers are mentioned below:
Not allowing its team members to do their job: It can act as the biggest barrier this can
create a discomfort between their team members. Leaders should be very cooperative in nature
and should take an individual along with them. This can generate a negative impact on business
environment. Thus, it is important to let the team do their work as per their capabilities.
Lack of functional credibility: leader should able to encourage and motivate sits team
members so that they can perform their task in a specific time period. Team will suffer if they
leaders cannot manage the task in an appropriate manner.
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Therefore, from the above mentioned point it can be evaluated that Pepsi is very much
influence and affected by change which help them in leadership and decision making. Thus, all
these theories are essential so that company can overcome with such problems. Barriers may act
accordingly on employee, Government and Environment. This improves the behaviour of an
individual what he/she was having earlier.
TASK 3
P5 Certain leadership approaches which is used for changes in organisation
There are different approaches of leadership which is utilised by Pepsi and Coca – Cola
which help them in growing their business. This also increase the performance and knowledge of
their employees and leaders as well. This encourage them to do their work in an effective manner
(Wellman, Jeffries and Hagan, 2016). New tools and techniques are well utilised for effective
management. These conceptualization of help managers to introduce new policies which are
given below: Situational leadership and its approach: This is a major concept of leadership which
change according to different situations. This includes styles and strategies which are
very essential for any company. Managers needs to manage changes which are as per
their costumer's needs. Both Pepsi and Coca Cola emerged as a trusted company in front
of their customers. Approaches of Transactional Leadership: This approach is opted by many organisation
for stimulating their employees performance. This can work as a aid as it build up their
courage and dedication in completing their task. Performance appraisal and giving them
proper reward enhances commitment towards their company (Feldman, Hart and
Milosevic, 2017). Transformational Leadership Approach: Under this theory various styles which are
used by a leader to perform and guide their subordinates are included. This is simply used
to motivate their employees so that they can complete their work effectively. They accept
changes at different level to influence their workers.
Applications which are applied in Pepsi
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