IBU5COV - PepsiCo's Entrepreneurial Health Audit: La Trobe Report

This report assesses PepsiCo's corporate entrepreneurial health, focusing on entrepreneurial intensity and the climate for corporate entrepreneurship within the Pepsi brand. It examines PepsiCo's pro-activeness and risk-taking abilities, along with integrated innovative techniques in supply chain and sales. The research employs secondary data from financial, annual, and CSR reports to evaluate the company's operations and market growth. Key dimensions analyzed include management support, resource availability, risk-taking, and organizational structure. The report concludes that these dimensions are crucial for improving business operations, highlighting the importance of fostering an entrepreneurial climate within the organization to drive innovation and performance. Desklib provides access to similar solved assignments and past papers for students.

PEPSI
Assessment 2 Assessing Corporate Entrepreneurial Health
PepsiCo
SUBMITTED BY- ASHISH ASHISH
STUDENT ID 19157767
SUBMISSION DATE-23/09/2018
WORD COUNT-2243

Executive summary
The main purpose of the report is to analyze the corporate entrepreneurial health of the
PepsiCo Company with respect to their different operations. PepsiCo is one of the American
multinational beverage, snack, and food corporation. The headquarters of PepsiCo are located
in New York. This report analyzes the theoretical aspects regarding the corporate
entrepreneurial health in order to get a better view of the company. The primary aim of the
report is to highlight the entrepreneurial intensity and the climate for the corporate
entrepreneurship initiative within the brand, Pepsi. The entrepreneurial intensity of Pepsi has
been examined in the report with respect to the pro-activeness and risk taking abilities.
Moreover, integrated innovative techniques has been applied in the supply chain as well as
sales operations.
In order to collect the data for the research, number of secondary resources are used such as
the financial year report, annual year report and the Corporate Social Responsibility (CSR)
reports of the company. The secondary data resources are helpful in gathering the real time of
the company with respect to their relative operations that are responsible for enhancing the
overall performance and the market growth of the company. The main area which is
evaluated in the research include the five main dimensions of the climate of the
entrepreneurial orientation of the company. The main sections that are cover in the overall
report include the introduction to the report as well as the overview of the company named as
PepsiCo. Along with this, the research approach is provided that further includes the research
question, research method, and data collection. Lastly, a conclusion which wraps the solution
has also been provided and it suggests that the Reward system, Management support,
Resource availability, Risk-taking, and Supportive organizational structure are the primary
dimensions which improve the operations of the business.
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Contents
Executive summary....................................................................................................................1
Introduction and company overview..........................................................................................3
Introduction..........................................................................................................................3
Overview................................................................................................................................3
Theoretical concepts...................................................................................................................3
Research approach.....................................................................................................................5
Research objective................................................................................................................5
Research method..................................................................................................................5
Method of data collection.....................................................................................................5
Data analysis and discussion......................................................................................................7
Conclusion................................................................................................................................10
References................................................................................................................................12
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Introduction and company overview
Introduction
The project is undertaken for the company PepsiCo. The complete analysis of PepsiCo is
done on the basis of their operations as well as performance. The report is helpful in
providing the overview of the company along with their different operations. The theoretical
concepts are defined and provided in the report in number of sub-sections. The report helps in
depicting the entrepreneurial intensity as well as climate corporate entrepreneurship.
Entrepreneurial intensity can be described as the degree as well as the amount of
entrepreneurship evidenced which is present in a given firm. On the other hand, the climate
corporate entrepreneurship can be stated to be related to the environment of the firm which is
conducive for entrepreneurial activities (Bayarçelik & Özşahin, 2014). The report will
present a brief overview of the Pepsi Company and its operations which will then be followed
by the discussion on the related theoretical concepts. The latter half of the report discusses the
research approach along with the analysis of the data.
Overview
PepsiCo is one of the American multinational beverage, snack, and food corporation. The
headquarters of PepsiCo are located in New York. The company has the interests in
manufacturing, marketing of grain-based beverage, foods, snacks as well as other products,
and distribution of products. In the year of 1965, the company’s named was formed as
PepsiCo with the emergence of Pepsi-Cola company as well as Frito-Lay. However, in the
year of 2012, on the date of 26 January, the total of 22 brands of PepsiCo generated the retail
sales of more than the price of $1 billion apiece. The products of the company are distributed
in more than two hundred countries in the world which is beneficial in increasing the revenue
of annual net $43.3 billion. Hence, PepsiCo is one of the second largest food and beverage
business firm in the world (Scheepers, Hough and Bloom, 2013).
Theoretical concepts
The report introduces to the concepts of the Corporate Entrepreneurial Health along with the
overview of the company. This report is based on the PepsiCo which is an American
multinational food, beverage, and snake corporation headquartered in Purchase, New York.
The research approach of the paper is the qualitative research method in which secondary
data is collected from various sources and then analyzed against a set parameter. In the
paper, Entrepreneurial orientation is explored as an organizational level variable.
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Entrepreneurial Intensity is used for capturing both the amount as well as the degree of
entrepreneurship evidenced within an organization. The levels of the Entrepreneurship are
associated with the measures of the performance of the company significantly.
The Degree of entrepreneurship is represented below:
The Entrepreneurship Intensity is the function is the degree as well as frequency of the
entrepreneurship innovations where the frequency of entrepreneurship refers to the number of
times a company acts as entrepreneurially. The entrepreneurship intensity of a company
tends to have a direct impact on the performance of the company. According to, the EI can be
regarded as a technical field between the conservative attitude of the government and the
concept of entrepreneurial spirit on the other. The degree which can be used to define the
degree of opportunity identification which exists at a workplace and the exploitation. This
aspect allows the company to evaluate the different prospective business opportunities which
then goes a long way in achieving the sustainable growth.
(Heilbrunn, 2008) argues that the entrepreneurial climate is requisite for an
entrepreneurial orientation and various factors that influences the entrepreneurial intensity are
also explored. Along with this, some methods are also used for measuring the entrepreneurial
intensity within the community context for determining the entrepreneurial intensity over a
period of ten years. The factors influencing the Entrepreneurial intensity are also detected.
There are certain organizational factors which are established by the communities for
establishing the unit of analysis and the theoretical framework is located within the field of
the corporate entrepreneurship (Dess, Lumpkin & Covin, 1997). The factors which are
responsible for influencing the entrepreneurial intensity are organizational features,
organizational resources. It needs to be noted that the primary factor of corporate
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entrepreneurship is to encourage the entrepreneurial activities in an organization whereby
innovation prospers. The Climate for Corporate Entrepreneurship can be considered to a
critical aspect of the organizational context. The CCE acts as an amalgamation of various
policies which are developed by the top management and motivates the spirit of the different
individuals.to perform well.
Research approach
Research objective
The main objective of the research is to highlight the entrepreneurial intensity and the climate
for the corporate entrepreneurship initiative within the brand, Pepsi.
Research method
In order to gather relevant data as well as information for the purpose, an extensive research
based on the different theories of the concept of corporate entrepreneurship will be discussed
so that the entrepreneurial health of the Pepsi can be effectively understood. These aspects
related to EI as well as CEC have been examined and applied in relation to the organization.
The given methods or approaches have been used:
1) Self-Reported
This means that the website of Pepsi as well as the CSR reports and other annual
reports have been utilized to understand the environment of the firm, Pepsi. These
help in gaining a comprehensive insight into the strategies of the firm at large.
2) External Sources
Other external sources like newspapers as well as scholarly articles will be reviewed
along with the various concepts related go corporate entrepreneurship. In addition to
this, various websites like Glassdoor and other related review websites will be used so
that the entrepreneurial climate within the firm can be assessed.
Method of data collection
In order to collect the data for the research, number of secondary resources are used such as
the financial year report, annual year report and the CSR reports of the company. the
secondary data resources are helpful in gathering the real time of the company with respect to
their relative operations that are responsible for enhancing the overall performance and the
market growth of the company. from the annual report of the company, the data is collected
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in the form of external environment on which the company operates. The increasing trends,
as well as technological innovations that are particularly developed in the nations, is one of
the main challenges to the company. The nations like Australia and US are highly active in
order to conduct the digital disruption (Pepsico, 2018).
The technology has rapidly growing, and the company also deploy the automated
technological solutions for making the effective supply chain operations. The production
machines in the company are highly efficient that can fill 1200 bottles per minutes.
Therefore, the technological environment is one of the main factors in which performance of
the company relies. The data is also collected in the form of labor environment that defines
that the laws related to labor can also affects the overall growth of PepsiCo (Cengage,
Kuratko & O'Connor, 2015). PepsiCo is the company that deploy its manufacturing industries
across the world. The different nations can also pose the natural resources that may affect the
business of PepsiCo.
From the CSR report of the organization, it is collected that the customers distributed across
the world have the different perceptions that change the consumption demands. The
increasing health consciousness of the different drinking products can also affect the business
growth of the company. the entrepreneurial orientation has main five dimensions that are
followed in the PepsiCo. entrepreneurial firm of PepsiCo is engaged with the product market
innovation that also undertakes some risky ventures in which the first comes the proactive
innovation. The data is collected from the number of secondary resources and can be
analyzed with the use of subjective analysis (PepsiCo, 2018). The main area which is
evaluated in the research include the five main dimensions of entrepreneurial orientation of
the company. The main five dimensions of entrepreneurial orientation on the basis of which
the overall performance and the operation of the company can be analyzed are of
management support, autonomy, reinforcement, availability of time and organizational
boundaries.
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Figure 1: The five dimensions of entrepreneurship
(As created by the author)
Data analysis and discussion
The factors which influences the entrepreneurial intensity of the PepsiCo. includes the
organizational features. It is analyzed that there are two dimensions which might be used for
determining to form an Entrepreneurial Grid which helps in describing the population of
business. The results reveal that the internal organizational factor encourages as well as
flourishes the corporate entrepreneurship and provide the opportunity to the organizations for
initiating the entrepreneurial behavior (Heilbrunn, 2008). The entrepreneurial orientation can
be constituted only after entrepreneurial culture that helps in supporting the entrepreneurial
climate. It is analyzed that all the dimensions of the entrepreneurial behavior are crucial
although the climate which is perceived by the employees is much more important. The
organizational factors which are analyzed that affects the entrepreneurial climate includes the
Reward systems, management support, resource availability, risk-taking, and supportive
organizational structure.
It is analyzed that the first dimension is the management support for idea development
which refers to the willingness of the managers of the PepsiCo to facilitate as well as promote
the entrepreneurial projects in the firm. The second dimension is the Management support
for risky projects which represents the willingness of the managers of PepsiCo to take risks
as well as show tolerance for failures in the firm (Covin & Miles, 1999). The third dimension
which is analyzed is the Autonomy which means that willingness and the ability of the
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Autonomy
M anagem ent support
Re-inforcem ent
Availability
Organizational boundaries

employees of the PepsiCo to be self-directed in the pursuit of opportunities. The results
reveal that high level of entrepreneurial activity takes place from the autonomous leaders
(CSR - PepsiCo ,2018). On the other hand, the higher employee involvement in decision-
making process maximizes their performance. The fourth dimension which is analyzed is the
Reward which enhances the motivation of the entrepreneurs for engaging in innovative
behavior.
Figure 2: The Perpetual cycle which is followed by Pepsi with respect to its reward based
system
( Source: Pepsico , 2018).
PepsiCo has designed the reward systems based on the clear feedback, goals, reward based on
results and individual influence. Each individual has different goals, therefore, due to this, the
employees of the PepsiCo are motivated by different things (Scheepers, Hough and Bloom,
2013). The entrepreneurs are motivated by the controllable rewards like bonus, share, profit,
pay or equity in the PepsiCo, job security, expenses, promotions, autonomy, job
responsibilities, private or public recognition, money for research trips to conferences.
Time availability is the last dimension which is analyzed in context of PepsiCo where the
individuals requires time for creating the innovative as well as new ideas, therefore PepsiCo
seeks to moderate the workload of the employees and avoid the time constraints on job tasks.
The time constraints are required to be avoided in order to allow the employees to work with
others on long-term problem-solving. Moreover, it is analyzed that the time availability is
crucial as other organizational factors for implementing the entrepreneurial climate.
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The relationship between the momentary perceived progress is examined along with the
intensity of the entrepreneurial efforts among the early stage entrepreneurs based in the
business incubators. The perceived progress variability is also examined over time predicted
entrepreneurial effort intensity (A, 2012). Moreover, the it is also analyzed that whether this
link is moderated by the venture goal commitment. Experience sampling data is gathered
from approximately one hundred entrepreneurs at early stage which indicated that the
perceived progress predicted offers more effort intensity. Along with this, the perceived
progress predicts the entrepreneurial effort intensity negatively over time where this negative
relationship is attenuated by the venture goal commitment. It is analyzed that the methods are
being investigated by exporters to gain more profit where some studies on the entrepreneurial
orientations provides the manager’s attitude to take make risky strategies like strategies
towards the exports. It is analyzed that the entrepreneurial orientation is a managerial attitude
which helps in enhancing the exports when the managers also make some efforts in the
organizational learning as well as innovation (Atkinson & Ezell, 2012). The results reveal
that being entrepreneurially oriented might be considered as important but it might not be
sufficient to increase the export performance if the company not able to innovate and learn.
Bayarçelik and Özşahin (2014), describes that the entrepreneurship is the main feature of
economic growth of any country and it can also be fostered by inculcating the skills of
entrepreneurship right at the educational stage. The results reveal that students who are
exposed to the activities of the Entrepreneurship Development Cell are higher significantly
on innovation as compared to the other students.
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Figure 3: Climate for Corporate Entrepreneurship of Pepsi
(Source: Scielo.br , 2018).
Conclusion
From the above report and data collection and analysis, it is concluded that there are five
dimensions of entrepreneurial orientation on the basis of which the overall performance and
the operation of the company can be analyzed. These factors are management support,
autonomy, reinforcement, availability of time and organizational boundaries. Along with this,
it is concluded that the main operations and components included in the company which are
responsible for their better performance mainly include technological environment, economic
environment, competitive environment, resource environment, and labor and customer
environment. With respect to the corporate entrepreneurial health of Pepsi, it can be stated
that Pepsi can be described as a moderately innovative brand in the industry and that it takes
various strategic moves to ensure the long term success of the organization. The firm acts to
customer demands and for this reason, the sales have been rising. Moreover, as it has enabled
transparency in the value chain, latest innovations have been at a rise. Moreover, Pepsi has
created a suitable environment for its employees whereby they are allowed to work
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independently and the organizational structure has also been aligned accordingly. Hence, it
can be stated that Pepsi has created an appropriate environment for the entrepreneurial
activities to make it a market leader.
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