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Leadership Management -Indra Nooyi as a Role Model

Article · August 2021

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Leadership Management – Indra Nooyi as a Role Model

PepsiCo Inc. is an American company that specialised in foods, snacks and beverages

in New York. It was founded in 1965, with the combination of Pepsi-Cola company. Since

1998, PepsiCo has widened their product range which includes an acquisition of Tropicana

Products and Quaker Oats. According to McKelvey (2006), it has created an amount of more

than $1 billion through retail stores across 200 countries worldwide, with an end annual

revenue result of $43.3 billion. Hence, this has made PepsiCo the second-largest F&B

business throughout the world. Moreover, PepsiCo is made up of various divisions across

countries and each of them has its unique part and method of doing business. Their vision is

‘to be the global leader in convenient foods and beverages by winning with purpose’. This has

successfully mirrored their intention to succeed in the global marketplace and expanded their

product line growth while holding their promise to provide a better place for societies as well

as the planet (PepsiCo, 2020).

Indra Nooyi is the chairman and the chief executive officer of PepsiCo, a famously

known company around the globe. She has led PepsiCo’s onto its global strategy which

includes restructuring as well as divestment of restaurants. Moreover, she is managing a

company with over 300,000 employees and being ranked as ‘Fortune’s 50 most powerful

women in business list’. As a successful leader, she has the characteristics of courageous,

industrious as well as intelligent. A successful leader will be respected by the employees if

they can speak out about what is on their mind and what do they believe in. This is one of

Indra Nooyi’s characteristics that has assisted her in leading the company to a higher degree

(George, 2017). For instance, she has the courage in decision making and ensures that all of

the employees are aware of it. Moreover, a leader who possesses high intelligence is more

preferred by employees as the leader can manage emotions as well as influencing others by

their behaviours. In this case, Indra Nooyi is having a high awareness of her actions as she is

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the one who set the emotions of the entire company besides herself. She has been utilizing her

intelligence to collude the emotions of employees onto their jobs via the company business

model (Blazek, 2010). This has created an essential element in creating a safe working

environment in which her employees are comfortable in proceeding with their opinions. Her

third characteristic has aided her employees to stay loyal to the company, which has helped

her in completing most of the major projects. She always works hard to bring the best out of

herself and spends most of her time predicting the upcoming challenges of the company for

her to make a decision and benefiting PepsiCo (Umoh, 2018).

Leadership is the ability of someone to influence a group of people to achieve the

same goals. The type of leadership theory that is being applied has a high degree of

influencing the employees’ confidence level, cultures, working environment as well as new

laws and regulations (Osborne and Hammoud, 2017). One of the differences between a

successful leader and a manager is a leader will utilize their power to build respect and trust in

one another, whereas managers will only maintain the rules and regulations. In this case,

Indra Nooyi is possessing 3 types of leadership styles: charismatic, transformational and

contingency theory.

Firstly, Indra Nooyi is adopting contingency theory, it is a combination of various

elements and determines that the success of an individual is due to the differences in

individuals (Dudovskiy, 2012). It suggests that the leadership style relies on the qualities and

situations of employees, meaning that they do not have the right way to guide because of the

internal and external environment that requires leaders to fit into the situation provided. Based

on Fiedler’s theory, Indra Nooyi has a good leader-member relation, which is the level of

trust and confidence possessed by the leader (Expert Program Management, 2018). In this

case, Indra Nooyi has possessed 5 C’s in her leadership skills – competence, courage,

confidence, communication skills and compass. For instance, she has gone for communication

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training to enhance her potential in public speaking, meeting with her chief as well as dealing

with her clients (Hedayati, 2014). She is also proficient in her ability to influence her

employees. For instance, she created a supportive working environment and built a trust

culture, it allows each individual to maximize their talent and ability to benefit the company.

During one of her podcast interviews, she has mentioned that a successful leader must have a

level of openness as well as honesty. If a leader is not providing the truth to his/her

employees, he should be explaining the reason for him not exposing the truth. Moreover,

during uncertain times, Indra Nooyi has the trust towards her employees and strived to let go

and let them have the power of decision making (Steinbrecher, 2019).

Secondly, she also possesses democratic leadership in which is based on mutual

respect. It is a combination of participative leadership as it serves as a collaboration between

leaders and subordinates. It involves participation in decision making and requires their

employees to have a strong responsibility in managing the company. This type of leadership

involves team members, engagement and participation (Singhal, 2020). Every employee is

welcomed and has the opportunity to participate in decision making, where ideas are

exchanged freely. The higher the level of trust from the leader to the employees, the more the

employees will support when taking a risk. In addition, this helps to build a long-term

relationship and a good company culture as each employee possess different skills (Maamari,

2018). Hence, the leader can get the best decision from them. For instance, Indra Nooyi is

practising this leadership style which allows the growth of her employees and does not limit

them with rules and regulations. She is more open-minded in which she allows open

discussion between members and tries to satisfy their needs (Steinbrecher, 2019). However,

even though she practices democratic leadership, when it comes to the decision-making

process, she possesses autocratic leadership, meaning that she is the one who makes the

important and final decision.

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Thirdly, Indra Nooyi possesses charismatic leadership. A charismatic leader

encourages her employees in some actions by the way of communication, persuasion as

well as motivating employees to complete their tasks or way of improvements (Welch,

2014). They can communicate effectively with their subordinates at an emotional level and

have the capability of asserting strong emotions in their employees as well. Leaders inspire

and motivate their followers via their capabilities and traits (Tony, 2020). In this case, Indra

Nooyi is famously known as a charismatic leader who inspires and motivates her employees

to obtain a difficult task for them to step out of their comfort zones. According to Awamleh

and Gardner (1999), an individual who sees a charismatic element in a leader will consider it

as a positive light and are willing to follow her behaviour and vision in resulting an improved

performance for the company. Indra Nooyi is utilizing her ‘inspirational motivation’ to push

her employees to be better: ethically, productively as well as personally. Moreover, she has

implemented a clear vision statement for the company and her followers to follow, which is

‘performance with purpose’, making PepsiCo an environmentally sustainable company. In

addition, she takes good care of her employees and was respected as she actively listens to

them, even when they failed to agree with her. She valued communication as an important

element between employers and subordinates, she has maintained a blog in her company in

which she engages her employees online via posts weekly (Ignatius, 2015).

Equally, she also practices authentic leadership, which means she has self-

actualization upon her strengths, limitations and emotions. This is also falling into one of

her 5Cs -compass (Kruse, 2013). As stated by Paine (1994), a leader who does not possess

integrity will lead to a negative image of the company. She can assert mission and goals

ahead of her interests. Direct communication is critical to a good result, however, it is done

with empathy. For instance, employees who worked under her will always feel challenged by

her high quality and performance work. She is not afraid to provide negative feedbacks to her

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employees, with humour and pushes them until they found a solution for the problem. For

example, Indra Nooyi wants her employees to find another option for palm oil and did not

stop urging them forward until they found the solution (Morris, 2008).

On the contrary, there are still some weaknesses in these theories. Firstly, lack of

flexibility in Fiedler’s theory, meaning that the leader will be replaced by another person if

her leadership style does not match the situation. As he believed that leadership style is fixed,

and the most valuable method is to replace the leader. It has neglected the potential of a leader

for adaptability via personal style or training. For instance, Indra Nooyi might have a neutral

LPC as her leadership style might not be suitable to be applied except in a situational case that

requires creativity and innovations (Sample and Wilson, 1965). Secondly, she might face a

delayed process of decision making as she is having a close relationship with employees. If

the company is facing an urgent project, leaders are unable to accomplish the task on time as

she needs to take time to collect opinions from individuals and resources to process the

decision and make the correct choice (Brinn, 2014). Since Indra Nooyi is receiving opinions

from others, she might not feel confident in making a last-minute decision that does not

involve a process (Ignatius, 2015). Thirdly, Indra Nooyi who practices leadership convince

her employees to follow her vision, meaning that employees need to forgo their dreams and

pursue what is best for her. Hence, instead of having an opportunity for growth, employees

have pushed Indra Nooyi to become a more influential leader in the F&B sector. Another

challenge that she may face is the lack of leadership development of an individual. In this

case, Indra Nooyi has always focused on her self-development rather than her employees. She

always requires high-standard and good quality piece of work, while neglected not all of her

employees can keep up and performed the way she wanted. Hence, she must continue to

develop individuals in being a better leader with training or sharing her personal experiences

(MitSloan, 2012).

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Indra Nooyi may improve her leadership management by proactively getting

feedbacks from her employees. By getting feedback from them, she can improve herself

from time to time (Nichols, 2018). Moreover, she has attended training and gain personal

experiences to upgrade herself, getting feedback from employees will be able to view her

from another angle. Feedbacks fosters management changes, leaders should utilize it

effectively to track the improvement of oneself. As a leader, seeking feedback requires

vulnerability. If her employees notice that she is having improvement, they are more likely to

perform the same way. Secondly, she must offer rewards and recognition to her employees.

As a leader, establishing a reward and incentives system will highly encourage employees to

participate more. Setting targets and challenges for employees as an objective and goals to be

achieved would be a great option (Fisher, 2018). Lastly, Indra Nooyi should collaborate her

ideas with her employees. A successful project may be achieved by the collaboration of

minds. Moreover, it promotes self-analysis to her as well as each of the members in which by

challenging how people think and providing them with a glimpse of their strengths and

weaknesses, as collaboration helps to plug each other's gap and increases the effectiveness

and efficiency of the company (Karim, 2019).

In conclusion, leadership styles and management are essential for a company to have a

high performance. A proper management and leadership style possessed by a leader will

minimize the losses as well as maximizing the value of the company.

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