Leadership Skills and Core Competencies for PepsiCo's Structure Change

This report examines the essential leadership skills and core competencies required for PepsiCo to successfully navigate organizational structure changes. The study delves into various leadership theories, including trait theory, behavioral theory, and Leader-Member Exchange (LMX) theory, to assess their applicability and effectiveness in the context of PepsiCo's restructuring efforts. It explores the skills needed by leaders, such as managing change, risk-taking, communication, mindset skills, setting vision and plans, problem-solving, social judgment, and technical skills. The report analyzes how these skills and competencies can facilitate the transition to a more flexible organizational structure, enhance employee motivation, and promote innovation within the company. The report also discusses the limitations of each theory and suggests competencies to overcome those limitations. Ultimately, the report provides insights into how PepsiCo can leverage effective leadership to achieve its strategic objectives and gain a competitive edge in the market.

Principles and Practices of Leadership and
Management

Table of Contents
COURSEWORK 2...............................................................................................................................3
REFERENCES.....................................................................................................................................8

COURSEWORK 2
Introduction
There are different factors which affect the success of the organization in which
organizational structure is one of them. It is very important for every growing company because it
provides the guidance and clarity to the management about the various issues within the workplace
(Chand, 2016). It delivers the various advantages to the companies such as promote growth and
diversification, increase the coordination between the different functions of the enterprise, increase
the optimum use of resources, raise employees productivity level and many other things. But to
attain all these things, it is important for the organization to find and select that person who is
having good leadership skills and able to lead the group of people (Importance of Leadership,
2016). The same thing happens with PepsiCo Company which wants to bring the changes in the
existing organizational structure and make it more flexible. The intention behind making
modifications in the structure is to develop a firm in such as way so that it can be easy to take
competitive advantages in highly competitive market. In future, the flexible organizational structure
deliver various benefits to PepsiCo and make him market leader. The present study will cover
several leadership skills and core competencies that will be needed the company at the time of
leading the organizational structure change (Rothwell, 2011).
Most essential leadership skills and competencies for PepsiCo
Jorge Rubio is a director of CSI (Consumer Strategic Insights) is changing his part of
PepsiCo Foods Mexico (PFM) in a more flexible style of organization. Company has developed a
centre which is just like to Google corporate centre (Wong, Mahmud and Omar, 2015). The aim
behind establishing this centre is to motivate the employees to bring the new innovation in the
existing products and make it more effective and according to the customer expectations . But after
some time, Jorge Rubio decided to bring the changes in the organizational structure and make it
more flexible and proactive (AlMazrouei and Zacca, 2015). In this direction, he has decided to
made the modifications in the leaderships styles so that the initiation of the changes can be carried
out in effective manner. Jorge Rubio think that the flexible organizational structure will raise the
productivity level of the staff and influence them to bring the new ideas and innovation for the
current products and services (Krogh, Nonaka and Rechsteiner, 2012). For this, it has necessary to
changed the leadership styles as per the situation and adopt different core competencies. With the
help of this, it can be easy to manage the modifications within the organizational structure of
PepsiCo. It will make the organization an independent market research firm in the market place and
help in achieve long and short term objectives (Hakanen and van Dierendonck, 2013).

SKILL 1
In a leader life, his leadership style and core competencies help him to lead the group of
people and influence the followers to accomplish the aim. The given case study explore that
PepsiCo wants to change in existing organizational structure and make it more flexible to achieve
the objectives and aims of the business (Collinson and Cook, 2013). According to the director of the
company. The structure of company should be in such a form that make the employees self
responsible and increase their motivational level. All the management level should be able to take
some decisions by themselves (Hakanen and van Dierendonck, 2013). Therefore, to set the
organizational structure as per the imagination, some leadership skills and competencies required in
the leaders of PepsiCo which is as follow:
Traits theory
It defines the characteristics that should be posses in the leaders and it may cover
personality, skills, abilities, interest, self-confidence, intelligence etc. These are make them unique
and differentiate from other ordinary people (Cherry, 2016.). The following hypothesis may be
effective for PepsiCo because it can be used by all management level manager easily. The
information gain from trait leadership style, the managers can determine their own position within
the firm and assess own strengths and weaknesses in more effective manner (Trait Theory of
Leadership, 2016). It helps them to improve the position level within the company and effectively
lead the teams in the right direction to achieve the aim and objectives of the business.
In the case of make the organizational structure of PepsiCo more flexible in order to
promote innovation within the firm, the leaders of organization can use trait theory. It will assist
them to determine the themselves identity and impacts of their actions on the enterprise as well as
the employees (Trait theory of leadership, 2016). Along with this, the leaders of PepsiCo can able
those qualities which should be needed in a good leader and the organizational structure changes
work in the right direction.
But there are some limitations or weaknesses of trait theory of leadership if PepsiCo leaders
adopt it. It is not necessary that all the traits always inherited by birth, some of them can be acquired
from training, learning or experience (AlMazrouei and Zacca, 2015). Beside this, it may be possible
that some of the traits can influence the performance, productivity and abilities of company leader
which may be affect modifications in organizational structure.
So, to over above stated limitations of trait theory and lead the organizational structure work,
the leaders of PepsiCo should have some competencies and these are as follows:
 Managing change skills: A leader should having the skills of managing the changes because

without this ability, he would not lead the followers and achieve the objectives. The same
thing applies on leaders of PepsiCo because during making the organizational structure more
flexible, it will bring many modifications that cannot be accept by the team members. So, it
is important that the leaders of the company should have the ability to manage the changes
(Barrick and et.al., 2013).
 Risk taking and innovation skills: Generally, it is assume that the leader should take the risks
to ensure the success of the work. In the case of PepsiCo, the leaders should have the nature
of risk taking to deal with different issues during the organisational structure change
(Daicoff, 2012). In addition to this, they should always looking for new ideas by which they
can make the organization structure more flexible.
 Communication skills: A communication skill is an important factor for a leader because
without having proper communication skills, it cannot be easy to share information with the
followers. The leaders of PepsiCo should follow appropriate communication skills so the
miscommunication situation can be avoided during bring the changes within the
organizational structure (Collinson and Cook, 2013).
SKILL 2
Behavioural theory
According to behavioural theory, the behaviour of a leader can be assess from his reaction in
the particular situation. It defines the success level of him in the near future. It assists in analyse or
compare the expected and actual qualities and abilities of the leaders (Carpenter, Bauer and
Erdogan, 2016). PepsiCo managers can use behavioural theory at the time making modifications in
organizational structure and make it more flexible. It promotes the values of leadership styles of the
leaders of the company and increase the focus on collaboration of the workforce during change
phase. It also encourage the participation of the team members and the leaders of PepsiCo in
decision making and align the objectives of team with the objectives of the firm. It also help in
assessing the own behaviour of the managers and their impacts on the staff (Frick and et.al., 2014).
So, by following behavioural leadership style, the leaders of PepsiCo can take right decision
regarding brining the changes in organisational structure and make it more flexible.
But due to certain limitations of behavioural theory of leadership, it may be risky for
PepsiCo to adopt it in entire phase of organizational structure change process (Daft, 2014). So to
overcome this risk, the leaders of the company should adopt some competencies which are as
follows:
 Mindset skills: The leaders of PepsiCo should have the ability and intelligence to know how

to increase the engagement of the employees within the different process and improve their
performance to achieve the organisational structure change work.
 Setting vision and plans: PepsiCo leaders should clearly set the vision and mission regarding
the work so that set objectives can be achieve. With the help of this, it can be easy to
formulate good plans to bring the changes in organizational structure (Avolio and Mhatre,
2012).
SKILL 3
Leader Member exchange theory (LMX)
The focus of following theory is on the relationship that exists between the leaders as well as
the followers. As per the given hypothesis, leaders have focused on forming varied kinds of
relationship with the subordinate groups (Leadership-Member Exchange (LMX) Theory, 2016). The
relationships can be segregated in terms of in-group and out-group . In case of in-group, the
subordinates share the information with the leader and influence them by giving there useful
suggestions, ideas as well as opinions (Fullan, 2011). But in case of out groups, there is a less
compatibility with the leader as they focus on just performing there duties. They do not provide any
kind of opportunities related to growth as well as challenging tasks (Kaur, 2015). Hence, by making
used of LMX theory it gets easier for management to separate highly skilled as well as talented
leader from others. In this regard, if PepsiCo makes use of LMX leadership theory in their
workplace then the management can identify as well as apprise those leasers that belong to in group
(Iqbal, 2013).
But it is further true that the theory has got certain limitations as well. This can make the
employees feel that there has been discrimination as well as unfair practices within workplace.
Hence there can be a creation of negative environment in the entire firm (Krogh, Nonaka and
Rechsteiner, 2012).
In this regard, PepsiCo if starts to follow LMX theory at work place then they should
develop certain competencies as well as skill set that can aid in bringing changes within the work
structure. The few competencies in this regard are as follows;
 Problem solving skills: Varied kinds of issues are faced by organization when PepsiCo
management brings a change in organizational structure (Termeer and Nooteboom, 2012).
Hence, in order to deal with the problem the need is to focus on developing problem solving
skills so that the issues can be resolved in best possible manner.
 Social judgement skills: the leadership team at PepsiCo should develop the overall capacity
of judging the employees as well as the behaviour that is exhibited by them in varied

situations. If the leaders have the capacity of social judgement then they can easily evaluate
the follower’s behaviour (Lee, and Lawrence, 2013).
 Technical skills: The leaders of PepsiCo are further required to have a proper understanding
as well as knowledge related to technical skills. This is as when the expected changes in
organizational structure takes place then there will be a need of analytical skills for assessing
the impacts of new structure n the firm as well as employees.
Conclusion
From the following study, it can be concluded that leadership has an most important
component of the organization because the the level of appropriate leadership style has ensured the
success of the firm. Along with this, the major core competencies differentiate the company from its
competitors. These both have helped the organizations to take competitive advantages. But in the
case of leader, both have most essential because it has made them unique from the other ordinary
group of people. In the case of PepsiCo, director has planned to made the modifications in
organisational structure and make it more flexible for gain various benefits. In this context, it has
important that leaders of the company have to follow right leadership styles as per the situations.
For overcome the issues during following different leadership skills, some core competencies have
needed. The proposed leadership methods have both negative and positive impacts on modifications
in organizational structure and its flexibility.

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