Chapter 16 Case Application 1 (pages 580-581) 

16-15: How do you think leadership is changing in contemporary society ? What behaviors
exhibited by Indra Nooyi indicate such change ? (Nhi)
The leadership is changing in contemporary society as the leadership helps to influence a group
that stimulates and motivates people to willingly attain the objectives giving them the experience of
helping and satisfaction with the leadership skills. The control, hierarchical hie rơ ki cồ and command
organizational structures are no longer relevant.  So I will take a deep insight in contemporary approaches
to leadership include:
Based on Leader–Member Exchange (LMX) Theory: A recent LMX study found that leaders
who establish a supportive relationship with key subordinates leads to increases in employee
performance.
To be an effective leader: in PoM, effective leaders must possess other characteristics such as honesty,
humility, listening skills, and respect for others.
Transformational leadership that develops from transactional leadership. According to PM Some
people suggest that the universal appeal of these transformational leader characteristics is due to the
pressures toward common technologies and management practices and Nooyi was able to apply a
transformational leadership structure.
Charismatic-Visionary leadership: In 2012, she decided to create a design team, to redesign the shape
of the bottles as well as the vending machines. Even people inside PepsiCo were unsure about this
decision at the beginning. However it has been a great success 
Authentic Leadership and Supportive, Inspiring: manager now more focuses on the moral aspects of
being a leader. In contemporary societies, leaders have to be collaborative, they need to lead through
influence and not exert the power of their positions. 
=>Nooyi created a leadership development program for women to help women boost their self-
confidence. For example, with the help of the “Strategies for Success” program, women’s representation
in senior positions in the operation team rise from 0 to 33 percent.
Ethical Leadership: Today's leaders are concerned about the ethical, environmental and political
implications of their actions because they are expected to be transparent, open, accountable and extremely
conscious about their actions
Team leadership: The role of team leader is different from the traditional leadership role in that the role
of the leader in guiding team members has become increasingly important.

Developing Trust: In today’s uncertain environment, an important consideration

for leaders is building trust and credibility

• Integrity: =>Nooyi has a deep sense of gratitude to all of the employees for
their efforts and energy. Thus, beside standard incentives of companies for hard-
working employees, she sometimes writes some gratitude letters to the
employees’ parents to express her respect and give them credit for their well
performance in the PepsiCo

• Competence:=>Nooyi, before becoming a CEO of PepsiCo, she had studied in

the Yale School of Management, and had 7 years working in the PepsiCo.

• Consistency: =>She helped make one of the biggest food deals in corporate
history when Pepsi acquired Quaker Oats for $13.4 billion. (According to the
Entrepreneur.com).
 She also represents loyalty and openness, Contemporary leaders are open and
receptive to new thoughts and ideas, to criticism, and to different perspectives. In
the twenty-first century, hard leadership was replaced by soft leadership. 

Empowering employees: Managers are increasingly leading by empowering their employees in order to
cope with the increased work demand. If organizations want to successfully compete in a dynamic global
economy, employees have to be able to make decisions and implement changes quickly

=>Indra Nooyi also allowed employees to make creative decisions so that employees in each culture
would make better judgments to fit their own beliefs.

Leading Across Culture, proactive and attentive to the customers needs: It is extremely crucial for
contemporary leaders to understand and appreciate the nuances of other cultures. 

=> Nooyi uses every occasion to better understand and improve the rapidly changing beverage
patterns. In a recent business trip to China, she toured different cities in the region for ten days,
closely studying the strategic market for PepsiCo.

In conclusion, society (employees)  always has expectations of their managers, they hope their managers
treat them honestly and devotedly, with deep insight, not just appearance.

 The leadership is changing in contemporary society as the leadership helps to influence a group
that stimulates and motivates people to willingly attain the objectives giving them the experience of
helping and satisfaction with the leadership skills. In contemporary societies, leaders have to be
collaborative, they need to lead through influence and not exert the power of their positions. The control,
hierarchical and command organizational structures are no longer relevant. Not only do they need to
influence internal stakeholders but should also have the ability to influence people outside the
organization and focus on the moral aspects. Contemporary leaders are open and receptive to new
thoughts and ideas, to criticism, and to different perspectives. In the twenty-first century, hard leadership
was replaced by soft leadership. 
 Based on Leader–Member Exchange (LMX) Theory: A recent LMX study found that
leaders who establish a supportive relationship with key subordinates by providing
emotional and other kinds of support generate organizational commitment on the part of
these employees, which leads to increases in employee performance.
To be an effective leader: in PoM, effective leaders must possess other characteristics such as honesty,
humility, listening skills, and respect for others

 Next slide: Transformational leadership that develops from transactional

leadership. Nooyi was able to apply a transformational leadership structure, in which a
leader guides or motivates followers to work toward established goals by simply
exchanging rewards for their productivity. Evidence indicates that transformational
leadership is strongly correlated with lower turnover rates and higher levels of
productivity, employee satisfaction, creativity, goal attainment, follower well-being, and
corporate entrepreneurship, especially in start-up firms. 
Nooyi created a leadership development program for women to help women boost their
self-confidence. For example, with the help of the “Strategies for Success” program,
women’s representation in senior positions in the operation team rose from 0 to 33
percent.
 Charismatic-Visionary leadership: The most comprehensive analysis identified five
such characteristics: they have a vision, the ability to articulate that vision, a willingness
 to take risks to achieve that vision, a sensitivity to both environmental constraints and
follower needs, and behaviors that are out of the ordinary. With the trustworthy and
confident personalities as well as the power to overcome the “glass ceiling” to be the first
foreign female CEO for such a large company, Indra Nooyi is one of the leaders who are
close to the standard of a charismatic leader

=> In 2012, she decided to create a design team, to redesign the shape of the bottles as well as the vending
machines. Even people inside PepsiCo were unsure about this decision at the beginning. However, the
new fountain machine which enables customers to select their flavor coke from more than 1,000
combinations, has been a great success and one of the reasons for which the restaurant chain Buffalo Wild
Wings decided to switch from Coke to Pepsi in 2013.

 Authentic Leadership: Authentic leadership focuses on the moral aspects of being a

leader. Authentic leaders know who they are, know what they believe in, and act on those
values and beliefs openly and candidly.
 Ethical Leadership:That is holding culpable employees accountable, and stands behind
employees by creating a culture in which they feel that they could and should do a better
job.
 Team leadership: The role of team leader is different from the traditional leadership role
in that the role of the leader in guiding team members has become increasingly important.

Now, more than ever, managerial and leadership effectiveness depends on the ability to gain the trust of
followers. Today’s leaders are faced with the challenge of rebuilding and restoring trust with employees
and with other important organizational stakeholders.

Developing Trust: In today’s uncertain environment, an important consideration

for leaders is building trust and credibility, both of which can be extremely
fragile.

• Integrity: honesty and truthfulness

=> For example, according to the case, she has a deep sense of gratitude to all of the employees for their
efforts and energy. Thus, beside standard incentives of companies for hard-working employees, she
sometimes writes some gratitude letters to the employees’ parents to express her respect and give them
credit for their well performance in the PepsiCo

• Competence: technical and interpersonal knowledge and skills

=>According to Britannica, before becoming a CEO of PepsiCo, she had studied in the Yale School of
Management, and had 7 years working in the PepsiCo.

• Consistency: reliability, predictability, and good judgment in handling

situations 

=>She helped make one of the biggest food deals in corporate history when Pepsi acquired Quaker Oats
for $13.4 billion. Since she has been at the helm of the company, PepsiCo’s shares have gained 78 per
cent (According to the Entrepreneur.com).

• Loyalty: willingness to protect a person, physically and emotionally

• Openness: willingness to share ideas and information freely

  Empowering employee: Managers are increasingly leading by empowering their employees. If
organizations want to successfully compete in a dynamic global economy, employees have to be
able to make decisions and implement changes quickly. In order to cope with the increased work
demands, managers had to empower their people

=>Indra Nooyi also allowed employees to make creative decisions so that employees in each
culture would make better judgments to fit their own beliefs.

 Leading Across Culture:  It is extremely crucial for contemporary leaders to understand and
appreciate the nuances of other cultures. 

=> Nooyi uses every occasion to better understand and improve the rapidly changing beverage
patterns. In a recent business trip to China, she toured different cities in the region for ten days,
closely studying the strategic market for PepsiCo.

In conclusion, society (employees)  always has expectations of their managers, they hope their managers
treat them honestly and devotedly, with deep insight, not just appearance.

In 2012, she decided to create a design team to refresh the company's brand. In 2010, the
company launched a survey with women managers, who were well represented in middle-level
management positions but very low represented in top-level positions to understand the reasons for such
under-representation and Pepsico.  She stimulated and inspired her followers. She took steps to develop
the skills of her employees. She took a visionary decision to refresh the company's brand, redesign of
machines. In contemporary society a leader works in groups.

Some people suggest that the universal appeal of these transformational leader characteristics is due to the
pressures toward common technologies and management practices as a result of global competitiveness
and multinational influences

The behaviors of INDR NYI that indicate these changes are that she is employee and customer oriented,
who is particularly attentive to the needs and preferences of the customers, she is visionary in the
decisions she has taken, she is also a supportive leader and is completely committed to promoting
diversity and inclusion at all levels of the organization.