Indra Nooyi Leadership - MBA Paper
Indra Nooyi Leadership - MBA Paper
Jonathan Noury-Elliard
SNHU MBA-550
Forward-looking leadership 2
Contents
Indra Nooyi..........................................................................................................................2
Nooyi’s Influence........................................................................................................4
Changes............................................................................................................................4
References............................................................................................................................6
Forward-looking leadership 3
When Indra Nooyi came on as the CEO of PepsiCo, she made rapid changes in the
company’s structure and product development. Her ability to identify the changing desires of the
powerhouse. Her warm yet firm leadership style is a large contributor to her success.
Indra Nooyi
Coming to PepsiCo in "2006, Nooyi foresaw the coming shift among consumers, especially
the millennial generation, to healthier foods and beverages. She immediately introduced
company’s core soft drink and snack business with healthy foods and beverages," (Harvard
Business Review, 2017) which was "an initiative to drive long-term growth while leaving a
positive imprint on society and the environment... results under her tenure as CEO of PepsiCo
speak for themselves. PepsiCo's revenue grew from $35 billion in 2006 to $63.5 billion in
2017 and by the end of last year, total shareholder return was 162 percent" (CNBC, 2018).
While Nooyi possesses the technical knowledge, the strength of convictions, and the
drive to accomplish them, her most transformative trait is her emotional intelligence. "It's
been shown that the most successful companies have a culture where every single person feels
valued. No matter what the position, they all know they have a chance to contribute and make
a difference" (CNBC, 2018). To accomplish this, Nooyi goes out of her way to ensure her
employees feel valued. In the CNBC article that has been sourced a few times now, Nooyi
says the following about recognizing her talent, "I tell the parents what a great job their son or
daughter is doing. That recognition is worth more than money, stock runs, hugs, tickets –
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anything – because at the end of the day, when your parents say to you, 'I'm so proud of you;
your boss just wrote to me saying you're awesome,' the look on their face is worth more than
Due to the natural structure of the corporate world, the Leader-Member Exchange (LMX)
Competition and drive of individuals within the company structure almost forces the creation of
competent “inner circles” for executives, generating the “in-group” and “out-group” described in
the LMX Model. The creation of these groups is exacerbated by the hierarchical design inherent
to corporate structure, so the LMX model is sustained and becomes beneficial for business. "A
complex way in which LMX enhances teamwork is that teams tend to attain better results
when multiple members of the team emerge as leaders. Leadership emergence often depends
on which expertise is required for the task at hand, such as an expert in graphic design acting
in a leadership role when the group task requires graphic design" (Durbin, 2016).
let organizations units work independently when that approach produces the best results. This
practice maintains the benefits of decentralization – giving people the freedom to ‘own’ a
customers, and to be rewarded for the results. This approach, however, needs to be
occur when people throughout the organization appropriately select collaboration projects.
They don’t need orders from the top on where and how to collaborate. Rather, they
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themselves see opportunities, know when to (and when not to) collaborate, and are willing
and able to execute the selected projects. They act as disciplined collaborators” (Hansen,
Nooyi’s Influence
Indra Nooyi worked at PepsiCo as the Chief Financial Officer (CFO) for seven years
prior to being promoted as the Chief Executive Officer (CEO). “‘Indra Nooyi is truly a star and
has been working side by side with Mr. Reinemund over the past several years,’ Citigroup
analyst Bonnie Herzog wrote. ‘She has been very involved with every major decision
PepsiCo has made over the past five-plus years and therefore we expect this transition to be
very smooth’” (Associated Press, 2006). Her history as a decision maker at PepsiCo allowed
her to walk into the CEO role with substantial positional power, alluding to the expected
ease of transition. Beyond her experience at PepsiCo, Nooyi already possessed influential
power through her personal journey and education, her ability to manage hectic situations,
and her emotional intelligence, which doubles as a motivational tactic but allowed her to
avoid dysfunctional politics and improve productivity. Indra Nooyi was the perfect person to
lead PepsiCo to the future and that’s exactly what she did.
Changes
In the face of Indra Nooyi’s success, it is difficult to identify something to alter. By her
hand, PepsiCo saw massive gains in revenue and outpaced the previous industry leader to
become one themselves. Her ability to see changes in the market, use her personal and political
power and to maintain a high level of productivity, and emotionally connect to motivate her
employees, is second to none. By relying on hindsight, I would suggest pushing the health food
alternatives and corporate responsibility harder. In the light of Global Warming, the market is
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continuing to demand healthy and eco friendly options. By pushing this paradigm harder, Indra
Nooyi would have been setting the pace for the Millennial generation through CSR.
We can already see the beginning of this in the growing importance of Corporate Social
Responsibility (CSR) and how businesses have already begun implementing these practices to
attract the younger workforce. Institutions like Ted, Harvard Business Review, and Boston
College have generated aggregates and bodies of work to better stay informed on this emerging
“Millennials have internalized the need to make the world a better place… hearing the speakers
affected the students’ opinions and willingness to work for the companies,” (McGlone & Spain,
2011, p.200). This finding is reinforced by the study by Ewha Womans University focusing on
internal legitimacy versus external legitimacy regarding CSR, finding that, “…internal
legitimacy enhances employees’ attachment to and identification with their firm’s CSR…” (Lee
& Yoon, 2018, p.628). The concept of CSR in manufacturing and its effects on the service
pollution and social cost. Hence, corporate social responsibility (CSR) functions as a way to
reduce the effects of corporate activities, to increase long-term performance and stakeholder
trust” (Handayani, Wahyudi, & Suharnomo, 2017, p1). Should Indra Nooyi have dug her heels
in with health and social contributions, she would have performed even better.
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References
Associated Pres. (2006, August 14). PepsiCo names new chief executive. Retrieved from
http://www.nbcnews.com/id/14343254/ns/business-us_business/t/pepsico-names-new-
chief-executive/#.XLH1p-hKiPo
CNBC, D. (2018, July 25). Follow Indra Nooyi's example: Become a leader people are excited
leader-people-want-to-follow.html
DuBrin, A. (2016). Leadership: Research Findings, Practice, and Skills (8th ed.). Boston, MA:
CENGAGE LEARNING
Handayani, R., Wahyudi, S., & Suharnomo, S. (2017, August 8). The effects of corporate social
https://btp.press.vgtu.lt/article/14803/
In Collaboration: How Leaders Avoid the Traps, Create Unity, and Reap Big
Harvard Business Review. (2017, April 24). Op-Ed: Courage: The Defining Characteristic of
characteristic-of-great-leaders
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Lee, S., & Yoon, J. (2018). Does the authenticity of corporate social responsibility affect
from https://doi.org/10.2224/sbp.6475