PRINCIPLES AND PRACTICES OF

MANAGEMENT


CASE STUDY ON LEADERSHIP


Prepared By:-
S.KoteswaraRao(1225111143)
Feroz(12251111 )
Mahesh(12251111 )
Sai Prasad(12251110 )

(MBA Sec-A )



ABSTRACT
This case study is related to Indra Krishnamurthy Nooyi on Leadership the importance
of strategy and leadership in the leading of an organization. It states about the strategic
vision and leadership style and she is the first woman CEO of PepsiCo Incorporated in
2006 at the age of 50. Nooyi started her career at PepsiCo in 1994 as senior vice
president (strategic planning). She promoted to the post of CFO in 2001 and later
became the CEO in 2006. During her time at PepsiCo, she undertook a number of
strategic initiatives. Nooyi recommended spinning off Taco Bell, KFC and Pizza Hut,
arguing that PepsiCo couldn't bring enough value to the fast food industry with
restaurant businesses as it required dedicated services industry management.
She was also provided a seat on the Board of Directors and assigned additional role of
President with associated Responsibilities for Pepsico. Nooyi became the CEO of
PepsiCo, the primary goal advocated by her was to achieve "Performance with
Purpose." She implemented a number of measures to improve the sustainability of the
company's operations and image by focusing on improvements in the health
implications of PepsiCo's products. Nooyi also led the acquisition of Tropicana in 1998
and merger with Quaker Oats Company in 2001.She expanded PepsiCo's business into
developing markets worldwide.In Fortune Magazines,She was ranked as one of the 50
Most Powerful Women in Business.
INTRODUCTION
In 2006, Nooyi became the fifth CEO of PepsiCo. As CEO, she continued to steer
PepsiCo based on the vision of "Performance with Purpose." She implemented a
number of measures to improve the sustainability of the company's operations and
image by focusing on improvements in the health implications of PepsiCo products.

Measures such as removing trans-fats from PepsiCo snacks, product innovations in the
Quaker Oats brand to come out with a range of consumer perceived healthy snacks,


categorization of its snacks into three categories named fun for you, good for you, and
better for you were undertaken under her leadership.
Nooyi's strategic measures to tackle the slow-down in the beverages and snack food
industry included a productivity improvement program, the benefits of which were
expected to the tune of US$ 1.2 billion over the next three years beginning 2009. Other
measures under her leadership included aggressive expansion into the emerging
markets of Brazil, Russia, China, and India and product and process simplification
across the organization.
The company's overall sales increased from US$ 20,337 million in 1996 to US$ 26,935
million in 2001 and net profit doubled from US $ 1,149 million to US$ 2,662 million in the
same period. After she became the CFO and President, sales recorded a further growth
from US$ 25,112 million in 2002 to US$ 35,137 million in 2006 when she was promoted
as the CEO.
Nooyi also had her share of critics, who found fault with what they called her lack of
operational skills, her mercenary handling of the PepsiCo pesticide content issue in
India, as also her portraying PepsiCo products as healthy while according to the health
experts, they were not.Marion Nestle,professor of nutrition at the NewYork University.







NOOYI AS A STRATEGIST
Within two months of Nooyi joining PepsiCo as SVP, the company's restaurant
business, which it had acquired a decade earlier and in which it had invested billions of
dollars to build up, entered a sluggish phase with lower sales, volumes, and profits.
Nooyi worked with Roger Enrico (Enrico), Chairman and CEO of Frito-Lay, who had
been asked to take charge of PepsiCo's restaurant business as Chairman and CEO of
PepsiCo Worldwide Restaurants, and turn it around. Together, they investigated the
problem and made efforts to analyze what was wrong with the business . They
concluded that the problem was with PepsiCo trying to adopt a management and
distribution model that was more suitable for a packaged goods industry rather than a
restaurant chain in the services industry.
She conclude that the problem was with Pepsico trying to adopt a management and
distribution model that was more suitable for a packaged goods industry.
Between 1994 and 2001,Nooyi used her experience in strategic planning and
execution,which are included the following:
1.The Tricon-Restaurant Spin-of
2.The Tropicana Acquisition
3.The Spin off of Pepsicos Bottling operations into Pepsi Bottling Group
Nooyi follows her leadership philosophy
Stand out from the pack and be a lifelong learner. Remain ahead and abreast in
your field.
Speak out. Establish your knowledge base and be confident in it as a leader.


Over-invest in written and oral communication. Leaders constantly have to
motivate the troops.
Remaining steady, reliable, and determined allows for credibility and a baseline to
measure your successes and failures.
Integrity is critical in this job.
NOOYI BECOMES CFO
Nooyi was promoted as the Chief Financial Officer at PepsiCo in February 2000. A year
later, she was promoted as the President and also provided a seat on the Board of
Directors. As a CFO, she was responsible for innovation, finance, procurements,
investor relations, strategy, and information technology functions.
The changes in her tenure as CFO:
1.The Quaker oats Merger
2.Challanges of Achieving Double Digit Growth Rates
NOOYI AS CEO
In October 2006, Nooyi was promoted as PepsiCo's CEO. Analysts felt that her diverse
knowledge of global markets and ethnic background were the reasons for her becoming
CEO. On her appointment as CEO, Reinemund said, "She not only co-authored our
vision and drafted.
CHALLENGES
To tackle the competitors with PepsiCo as coke was no longer , Nooyi created
innovations in PepsiCo products and adopted fresh sales strategies to bridge the gap
with its competition.
Nooyi reorganized Frito-Lays operating structure into two more divisions,
FLNA& FLI to three broad units, Africa, America, Australia. Nooyi and Reinemund felt


that individual businesses are emerging for the snacks business could be trapped.
The changes that Nooyi initiated such as the acquisition of Tropicana and Quaker Oats
and the spin-off of the Pepsi Bottling Group helped propel PepsiCo past Coca-Cola in
market value in December 2005.PepsiCo entered the bottled water. In 2006, Pepsicos
Aquafina of the bottled water and cokes Dasani took second place.

ISSUES
Understand the role of strategic and transformational leadership in management.
Compare and contrast different styles of leadership.
Study and comment on the leadership style of Indra Nooyi.
Understand the importance of sustainability in the management of a company.
RESPONSE TO GLOBAL ECONOMIC SLOWDOWN
PepsiCo faced a number of economic challenges in 2008. Spiraling fuel and energy
prices, rising costs of raw materials and other commodities, and increased packaging
costs across economies had become a cause for concern.
Through her effective leadership, INDIRA NOOYI is successful in various aspects in the
sustainability of PEPSICO. If she is successful she posses all the qualities of leader,
creating a path for PEPSICO for establishment of desired goals. If she is unsucessful,
she will be the main victim for the downfall of the company and upliftments of its
competitors.
Some of the factors are
The main affect would be on her company that is PEPSICO.As a successful
leader PEPSICO would benefit her leadership in the expansion of the company globally.


The manpower would be effective in driving the company into profits.
The major affect would be on the society, because customers play a key role for
company sustainability and growth.

Some of the factors that are affected when NOOYI is successful are:
The main affect if she is unsuccessful will ruin the company drowning into losses.
It could not attain the attraction and satisfaction from the potential
customers/customers and wiping out image and efficiency of the company..


THE CRITICISM
Notwithstanding her successful stint in PepsiCo, Nooyi also had to face criticism on
several fronts. She was criticized for her lack of operational experience. Nooyi had
joined PepsiCo after six years in consulting and at PepsiCo too, had worked as a
strategist before becoming CFO and later CEO.


EXIBITS
Exhibit I:
Awards and Recognitions Received by Nooyi


Ranked #1 in the Worlds 50 Most Powerful Business women list
In the year 2006,2007 and 2008 from Fortune Magazine
Women Pioneer Award in the year 2003
India Abroad Person of the 2007 year
Padma Bhushan Award in the year 2007
Chicago United Bridge Award 2008
Exhibit II: PepsiCo's Organizational Structure (2008)
Exhibit III: Financial Highlights of PepsiCo and its Subsidiaries (2000-2005)
Exhibit IV: Financial Highlights of PepsiCo and its Subsidiaries (2006-07)