A STUDY ON

LEADERSHIP STYLE OF
INDRA NOOYI

SUBMITTED BY:

ORGANIZATIONAL BEHAVIOR PROJECT

REPORT
THEME: LEADERSHIP

(SESSION-2014-16)

SUBMITTED TO:
PROF. RAJESH KUMAR
SUBMITTE BY:
GROUP-3
ALOK KUMAR
MANISH KUMAR
MEGHA SHRIVASTAVA
NIKITA AMAL
PRITI MISHRA

Acknowledgements

On the very outset of this project, we would like to extend our sincere & heartfelt obligation
towards all the personages who have helped us in this endeavor. Without their active
guidance, help, cooperation & encouragement, we would not have made headway in the
project.
We are extremely thankful and pay our gratitude to our faculty Prof. Rajesh Kumar for his
valuable guidance and support on completion of this project.
At last but not least gratitude goes to all of our batch mates who directly or indirectly helped
us to complete this project report.

CONTENTS

S.NO.

TOPICS

Abstract

Introduction

Purpose

Theory

Literature

Case

Findings

References

PAGE NO.

Abstract
Our study is based on understanding Leadership theories and establishing a connect with
leadership qualities possessed by our chosen leader, Indra Nooyi. The project aims at defining
various leadership theories, finding the latest research work on leadership and analysing Indra
Nooyi as a leader. Finally, as an outcome, a confluence has been identified between few of
the leadership theories and the leadership traits of Indra Nooyi.

Introduction
Concept:
We have taken leadership as our theme because it is an important quality of any individual
which maximises productivity, shapes a positive culture and promotes harmony in an
organization. Leadership is an important factor for making an organisation successful. The
work of the leader is to guide the path of his team. The leader does not solve every problem
alone, but motivates his team members to find the solution and reach the goal together.
Leadership may be defined as the act of influencing others to work toward a goal. Leaders
exist at all levels of an organization.
What makes leaders effective? What distinguishes people who are perceived as leaders from
those who are not perceived as leaders? More importantly, how do we train future leaders and
improve our own leadership ability?
We came across so many leaders of India and abroad.After reading abundant information we
couldnt make out that what leadership qualities a person should have to become successfull
in corporate world.Finally,we found Indra Nyooi having required leadership qualities to be
successfull in an organization.To achieve high position in an organization, key people must
lead individuals and a team using an appropriate leadership style and Indra Nooyi is one of
the best example.
As our project is related to understanding the role of leadership within the organization and
Indra Nooyi is a valued and influential leader managing the corporate family of over 300,000
employees. She is the Chairman and CEO of Pepsico and has been ranked 2 on Fortunes 50
Most Powerful Women in Business list. We have chosen Indra Nooyi as a leader because under
her strategic vision and leadership style Pepsico witnessed a remarkable
transformation.

Purpose
To correlate the pre defined leadership theories with leadership style of Indra Nooyi and
study the current research on leadership. The objective is to find confluence between
leadership theories with the leadership of Indra Nooyi.

Theory

LEADERSHIP THEORIES (CHRONOLOGICAL ORDER)

Great Man Theory (1840s)
The Great Man theory evolved around the mid 19th century. The theory assumes that the
traits of leadership are intrinsic. That simply means that great leaders are born and not made.
The belief was that great leaders will rise when confronted with the appropriate situation. The
theory was popularized by Thomas Carlyle, a writer and teacher.
In 1860, Herbert Spencer, an English philosopher disputed the great man theory by affirming
that these heroes are simply the product of their times and their actions the results of social
conditions.
Behavioural Theories (1940's - 1950's)
The earliest research on leadership style, conducted by kurt Lewin and his students ,identified
three basic styles: autocratic, democratic, laissez-faire. Autocratic style is directive ,strong,
and controlling in relationships. Democratic style is collaborative, responsive, and interactive
in relationship.
In reaction to the trait leadership theory, the behavioural theories are offering a new
perspective, one that focuses on the behaviours of the leaders as opposed to their mental,
physical or social characteristics.
The behavioural theories first divided leaders in two categories. Those that were concerned
with the tasks and those concerned with the people.

Contingency Theories (1960's)

The Contingency Leadership theory argues that there is no single way of leading and that
every leadership style should be based on certain situations, which signifies that there are
certain people who perform at the maximum level in certain places; but at minimal
performance when taken out of their element.

To a certain extent contingency leadership theories are an extension of the trait theory, in the
sense that human traits are related to the situation in which the leaders exercise their
leadership. It is generally accepted within the contingency theories that leader are more likely
to express their leadership when they feel that their followers will be responsive.

Path -Goal Theory(1970's)

Path goal theory emphasizes the relationship between the leader's style and the characteristics
of the subordinate and the work setting.

Fig. The basic idea behind path-goal theory

Situation Leadership Model

Transactional leadership Theories (1970's)

Transactional theories, also known as exchange theories of leadership, are characterized by a
transaction made between the leader and the followers. In fact, the theory values a positive
and mutually beneficial relationship.
The leader must find a means to align to adequately reward (or punish) his follower, for
performing leader-assigned task.
The transactional theorists state that humans in general are seeking to maximize pleasurable
experiences and to diminish un-pleasurable experiences. Thus, we are more likely to
associate ourselves with individuals that add to our strengths.
Transformational Leadership Theories (1970s)
The Transformational Leadership theory states that this process is by which a person interacts
with others and is able to create a solid relationship that results in a high percentage of trust,
that will later result in an increase of motivation, both intrinsic and extrinsic, in both leaders
and followers.The essence of transformational theories is that leaders transform their
followers through their inspirational nature and charismatic personalities.

Literature
(Current research on Leadership)
Organizational and leadership researchers hold a number of theories and hypotheses about
trends in leadership. This section of the survey asked respondents to consider their
organizations leadership approach and answer the following theory-based items.
The definition of leadership
More than 84 percent of respondents believe that the definition of effective leadership has
changed in the last five years. In hopes of uncovering these changes, the research team asked
two additional questions examining the challenges faced by leaders and the extent to which
interdependent work is a central foundation of leadership. Though respondents believe that
interdependence is important and that challenges go beyond their own capability, the percent
agreement shows there may be other shifts in leadership signaling this definitional change.
The definition of effective leadership has changed in the last five years. 84%
Leaders face challenges that go beyond their individual capabilities. 60%
Interdependence work is the foundation of effective leadership. 58%
The Outcomes of Leadership
DEFINITION OF EFFECTIVE LEADERSHIP % AGREE
Central to the CCL definition of effective leadership are these three tasks: setting direction,
building commitment and creating alignment. It is believed that if these outcomes are
achieved, leadership must be present. The question is: How well are organizations
accomplishing the outcomes at the present time? As seen in Figure 12, the results indicated
that there is substantial room for improvement, with organizations and their leaders receiving
less than 50 percent agreement in all three categories.
Leadership sets direction effectively.- 50%
Leadership gains commitment effectively.- 46%
Leadership creates alignment effectively.- 40%

The need for change leadership

CCL is currently exploring the area of change leadership, or using culture and leadership as
the key drivers for sustainable change. Only 58 percent of respondents felt that change efforts
are sustainable and those efforts focus more on systems/structures (76%) than culture and
values (59%). The results point to the importance of this approach.
Change efforts are sustainable (i.e., long lasting).
58%
Change efforts focus on values and norms (i.e., 59%
culture).
Change efforts focus on systems, structures and 76%
processes.
The second major research method used two forms of interactive data collection as part of the
in-class experience of participants. Both of these data collection methods examined if
leadership has changed over the last 10 years. A worksheet was used to uncover the
individual leadership skills thought to be most important two years in the future while the
wall chart method was used to better understand organizational philosophies of leadership.
The individual leadership skill
Eighty-five respondents were asked to choose up to five of 16 skill categories (from CCLs
Benchmarks 360-degree assessment tool) that would be most important in becoming a
successful leader in two to five years. The skills chosen were compared to the Benchmarks
database as of 2002. This comparison provided a gap of about five to six years to see if there
were any notable differences. So, the skills that are ranked higher (nearer to one) are those
that were selected most often. There are some notable differences between the skills
respondents thought were important in 2002 and the skills they believe would be most
important in the future. The most striking difference is the rise of what we might call soft
skills, such as building relationships and participative management. Building relationships
moved from the fifth most important skill to the second most important. Additionally, change
management moved from seventh to third, indicating leaders expect the unpredictability of
late to continue. These results point to a belief that future leadership skills should place
increased emphasis on building relationships, collaboration and change management.

OVERVIEW OF AUTHENTIC LEADERSHIP

One of the emerging pillars of interest in the field of leadership has been called authentic
leadership development. As discussed in a special issue [edited by Avolio & Gardner (2005)]
of the Leadership Quarterly on this topic and in an earlier theoretical piece by
Luthans&Avolio (2003), the advent of work on authentic leadership development came as a
result of writings on transformational leadership, in which authors such as Bass &
Steidlmeier (1999) suggest that there are pseudo versus authentic transformational leaders.
Luthans & Avolio (2003) also introduced the concept of authentic leadership development
into the literature with the goal of integrating work on (Luthans 2002) positive organizational
behavior with the life-span leadership development work of Avolio (1999). Their main
purpose was to examine what constituted genuine leadership development including what
worked and didnt work to develop leaders and leadership, as well as to bring to the
foreground some of the recent work in positive psychology as a foundation for examining
how one might accelerate the development. Luthans and Avolio reasoned that using some of
the theoretical work in positive psychology such as Fredricksons (2001) broaden-and-build
theory, they could offer a more positive way for conceptualizing leadership development.
According to Fredrickson, those individuals who have more positive psychological resources
are expected to grow more effectively or to broaden themselves and build out additional
personal resources to perform. Luthans and Avolio report that to a large extent, the prior
leadership development work was based on a deficit-reduction model strategy, where one
discovered what was wrong with a leader and then worked to correct deficits in terms of
focusing on the leaders development (also see Avolio & Luthans 2006).
Authentic Leadership Defined
First and foremost, the concept of authenticity has been around for a long time, as reflected in
many philosophical discussions of what constitutes authenticity (Harter et al. 2002). George
(2003) popularized authentic leadership in the general practice community when he published
his book on the topic, as did Luthans & Avolio (2003) for the academic community. Luthans
& Avolio (2003, p. 243) defined authentic
leadership as a process that draws from both positive psychological capacities and a highly
developed organizational context, which results in both greater self-awareness and
selfregulated positive behaviors on the part of leaders and associates, fostering positive
selfdevelopment. This definition and subsequent work on authentic leadership was defined
at the outset as multilevel in that it included the leader, follower, and context very specifically
in the way it was conceptualized and measured.
Future Focus Required
Work on defining and measuring authentic leadership is in the very early stages of
development. Future research will need to offer additional evidence for the construct validity
of this measure or other measures, and it will also need to demonstrate how authentic
leadership relates to other constructs within its nomological network. This would include

constructs such as moral perspective, self-concept clarity, well-being, spirituality, and

judgment. Moreover, there is a need to examine how authentic leadership is viewed across
situations and cultures and whether it is a universally prescribed positive root construct
meaning it represents the base of good leadership regardless of form, e.g., participative,
directive, or inspiring. In the next section, we turn our attention to the second major focus on
authentic leadership, which incorporates the term development.
Heritability and Leadership
One avenue of research that has explored whether leaders are born versus made has involved
studying identical and fraternal twins. Preliminary evidence using a behavioural genetics
approach has shown that approximately 30% of the variation in leadership style and
emergence was accounted for by heritability; the remaining variation was attributed to
differences in environmental factors such as individuals having different role models and
early opportunities for leadership development (Arvey et al. 2007). Because identical twins
have 100% of the same genetic makeup and fraternal twins share about 50%, this behavioural
genetics research was able to control for heritability to examine how many leadership roles
the twins emerged into over their respective careers. In this and subsequent research for both
men and women across cultures, similar results were obtained. The authors conducting this
research conclude that the life context one grows up in and later works in is much more
important than heritability in predicting leadership emergence across ones career.
Examining Evidence for Positive Leadership Interventions
Lord & Hall (1992, p. 153) noted, too much research in the past has attempted to probe the
complex issues of leadership using simple bivariate correlations. It seems fair to say that
although most models of leadership have causal predictions, a relatively small percentage of
the accumulated literature has actually tested these predictions using controlled leadership
interventions, especially in field research settings (Yukl 2006).
Future Focus Required
Relatively little work has been done over the past 100 years to substantiate whether
leadership can actually be developed. Indeed, based on the meta-analysis findings reviewed
above, only 201 studies were identified that fit the intervention definition. Of those 201
studies, only about one third focused on developing leadership as opposed to manipulating it
for impact through role plays or scripts to test a particular proposition in one of the various
models. One of the emerging areas of interest in leadership research, which we have
dedicated more attention to in its own section, concerns the linkages between cognitive

science and how leaders perceive, decide, behave, and take action (Lord & Brown 2004). For
example, to develop leadership, it is imperative that we examine how a leaders self-concept
and/or identity is formed, changed, and influences behaviour (Swann et al. 2007).
COGNITIVE PSYCHOLOGY AND LEADERSHIP
One of the more recent developments in the literature has been an attempt to develop models
of leadership cognition. Lord & Hall (2005) developed a model of leadership development
that emphasized the leaders cognitive attributes or abilities. A second model was developed
by Mumford et al. (2003) and examined the way shared thinking contributed to leader
creativity. These two approaches illustrate a fundamental way in which views of leadership
cognitions vary, with the former focusing on activities with the individual leader and the
latter focusing on interactions that occur between individuals (Mumford et al. 2007). We
examine several of the key emerging constructs within this literature, beginning with the selfconcept.
Prototypical Abstractions of Leadership
The leadership research on social identity formation has also focused heavily on what
constitutes prototypicality, which has shown that followers may be more drawn to leaders
who are exemplars of groups they belong to or want to join. Early research conceptualized
prototypes as being relatively static and applicable in many situations. Recent work has
contested that view, arguing that prototypes are dynamic and can be applied and adapted
based on the existing constraints or challenges being confronted by leaders (Lord et al. 2001).
Future Focus Required
Cognitive approaches to investigating leadership draw heavily on several literatures described
above. This broad stream of research has potential for enhancing existing theories of
leadership in terms of helping to explain how leaders and followers attend to, process, and
make decisions and develop. Additional work linking self-concept and meta-cognitive
theories to research on leadership will no doubt contribute to our understanding of how
leaders and followers actually develop. For example, if a leader has low self-concept clarity,
to what extent can we expect that same leader to be self-aware? What are the implications for
enhancing a leaders self-concept clarity or working self-concept about what constitutes the
roles of effective leadership in developing that leaders self-awareness and performance?
NEW-GENRE LEADERSHIP
Although prior authors have focused on what constitutes charismatic, inspirational, and
visionary leadership as far back as the early 1920s, much of the attention in the literature on

these newer theories of leadership has come about over the past 25 years. Burns (1978) and
Bass (1985) signalled the need to shift the focus of leadership research from predominantly
examining transactional models that were based on how leaders and followers exchanged
with each other to models that might augment transactional leadership and were labelled
charismatic, inspirational, transformational, and visionary. The early work of Bass and Burns
set the stage for distinguishing what Bryman (1992) referred to as more traditional theories of
leadership versus what they termed new-genre leadership.
New-Genre Versus Traditional Leadership
Bryman (1992) commented, There was considerable disillusionment with leadership theory
and research in the early 1980s. Part of the disillusionment was attributed to the fact that
most models of leadership and measures accounted for a relatively small percentage of
variance in performance outcomes such as productivity and effectiveness. Out of this
pessimism emerged a number of alternative approaches, which shared some common features
. . . , collectively referred to as the new leadership (Bryman 1992, p. 21). Unlike the
traditional leadership models, which described leader behaviour in terms of leader-follower
exchange relationships, setting goals, providing direction and support, and reinforcement
behaviors, or

what Bass (1985) referred to as being based on economic cost-benefit

assumptions (p. 5), the new leadership models emphasized symbolic leader behaviour;
visionary, inspirational messages; emotional feelings; ideological and moral values;
individualized attention; and intellectual stimulation. Emerging from these early works,
charismatic and transformational leadership theories have turned out to be the most
frequently researched theories over the past 20 years (Avolio 2005, Lowe & Gardner 2000).
COMPLEXITY LEADERSHIP
Earlier theories were based on the style that were followed in the organisation i.e hierarchical,
Yet, there has been a growing sense of tension in the leadership literature that models of
leadership that were designed for the past century may not fully capture the leadership
dynamic of organizations operating in todays knowledge-driven economy (Lichtenstein et al.
2007). Applying the concepts of complexity theory to the study of leadership has resulted in
what has been referred to as complexity leadership (Uhl-Bien & Marion 2008).

According to complex systems leadership theory, leadership can be enacted through any
interaction in an organization . . . leadership is an emergent phenomenon within complex
systems (Hazy et al. 2007, p. 2).
In line with leadership fitting the needs of the situation or challenges in which it operates,
complexity leadership posits that to achieve optimal performance, organizations cannot be
designed with simple, rationalized structures that underestimate the complexity of the context
in which the organization must function and adapt (Uhl-Bien et al. 2007).
Complexity leadership theory (CLT; Uhl-Bien et al. 2007) has been developed as an
overarching explanation of how CAS operates within a bureaucratic organization, and it
identifies three leadership roles to explore: adaptive (e.g., engaging others in brainstorming to
overcome a challenge), administrative (e.g., formal planning according to doctrine), and
enabling (e.g., minimizing the constraints of an organizational bureaucracy to enhance
follower potential).

Shared Leadership Defined

According to Day et al. (2004), team and shared leadership capacity is an emergent state
something dynamic that develops throughout a teams lifespan and that varies based on the
inputs, processes, and outcomes of the team. It produces patterns of reciprocal influence,
which reinforce and develop further relationships between team members (Carson et al.
2007). The most widely cited definition of shared leadership is that of Pearce & Conger
(2003): a dynamic, interactive influence process among individuals in groups for which the
objective is to lead one another to the achievement of group or organizational goals or both.
LEADER-MEMBER EXCHANGE
Unlike shared leadership, which has focused on groups, leader-member exchange (LMX)
theory has focused on the relationship between the leader and follower (Cogliser &
Schriesheim 2000). The central principle in LMX theory is that leaders develop different
exchange relationships with their followers, whereby the quality of the relationship alters the
impact on important leader and member outcomes (Gerstner & Day 1997).

Tekleab & Taylor (2003) assessed leader and follower levels of agreement on their mutual
obligations and their psychological contract with each other. In a recent meta-analysis
reported by Ilies et al. (2007), the authors reported that a higher-quality LMX relationship not
only predicted higher levels of performance, but also organizational citizenship behaviors.
Some additional areas of focus in terms of high- versus low-quality LMX relationships have
been the context in which those relationships have developed.
Recent research has moved beyond examining LMX in terms of antecedents and
consequences and has examined the quality of the leader and follower relationship as a
moderator and/or mediator of performance. For example, Sparrowe et al. (2006) reported that
the quality of the relationship moderated the relationship between downward-influence tactics
and helping behaviors.
SERVANT LEADERSHIP
Building on the work of Greenleaf (1991), Spears (2004) listed ten characteristics
representing a servant leader: (a) listening, (b) empathy, (c) healing, (d ) awareness, (e)
persuasion, ( f ) conceptualization, ( g) foresight, (h) stewardship, (i ) commitment, and ( j )
building community. Russell & Stone (2002) reviewed the literature on servant leadership,
distinguishing such leadership into two broad categories: functional and accompany
attributes.
In terms of accompany attributes, servant leaders are described as good communicators and
listeners, credible, competent, encouraging of others, teachers, and delegators. In general, the
limited empirical research on servant leadership has shown that it is positively related to
follower satisfaction, their job satisfaction, intrinsic work satisfaction, caring for the safety of
others, and organizational commitment. Joseph & Winston (2005) examined the relationship
between employee perceptions of servant leadership and organizational trust, and reported a
positive relationship with both trust in the leader as well as trust in ones organization.

Case
Indra Nooyi is Chairman and Chief Executive Officer of PepsiCo. Mrs. Nooyi is the chief
architect of Performance with Purpose, PepsiCos promise to do whats right for the business
by doing whats right for people and the planet. Mrs. Nooyi was named President and CEO
on October 1, 2006 and assumed the role of Chairman on May 2, 2007. Prior to becoming
CEO, Mrs. Nooyi served as President and Chief Financial Officer beginning in 2001, when
she was also named to PepsiCo's Board of Directors.
Indra Nooyi was born in Chennai, India. Nooyi graduated from Yales School of Management
and worked in companies such as the Boston Consulting Group Inc., Motorola Inc., and ABB
Inc. She also led an all-girls rock band in high school, but that is a different story.
She is among the Top 100 most influential people in Time magazines 2008 list. She is also
number 5 in Forbess (2007) most influential women in the world, number 1 in Fortunes 50
most powerful women (2006), and number 22 in Fortunes 25 most powerful people in
business (2007). The lists go on and on. To those familiar with her work and style, this should
come as no surprise: Even before she became the CEO of PepsiCo Inc. in 2006, she was one
of the most powerful executives at Pepsi and one of the two candidates being groomed for the
coveted CEO position.
Indra Nooyi said I do not want to sound like a male chauvinist pig but the reality is that
women are just not given enough space to move about in the corporate world, in fact not even
elbow room.
So, in this male dominated world, for a woman to find her own space and leave behind all
men and to reach the very top requires a very high degree of tenacity. Which our Indra has in
ample measures. And, an Indian to boot!

Indra as a leader

Participation
The posts she holds besides being the Chairperson and the CEO of Pepsico, a very American
institution read like something out a story book. She holds a membership in the Foundation
board of the World Economic forum. International Rescue Committee also her name in its
roll. The Board of Trustees of Eisenhower fellowships is an organization where she is a
member. What is noteworthy is that she is on the board of Lincoln Center for the Performing

arts. That in deed shows her caliber in being not just a person steeped in corporate culture but
as someone who is equally good at life's good things like arts.

Handling Power
She handled power well.Wall street journal and the Forbes magazine have both named her as
one of the most powerful women in business in the world. Time magazine went one step
ahead and put her in the top place as number one influential woman in the world. Hard
figures reveal that her leadership has caused Pepsico to achieve double the sales after she
took over in 2000.

Strength of Conviction
Indra believes in competence. Unless you are an expert in your chosen field, you will get
nowhere. You will be known only if you become an expert. In anything, take a decision
weighing everything for and against it. Once you have decided, never waver from it. You
should send out the message that you are courageous and confident enough to say what is
believed to be right by you.

Outstanding Communication Skills

The way you communicate carries a lot of weight. In fact, your communication skills will be
in the forefront of your leadership qualities. Indra is all for surrounding herself with mentors.
She believes in listening to the mentors' advice and suggestions and incorporate the goods
points in what she does. She is not the one to veer away even a little from her moral compass.
You must have strength to hold to what you know to be morally right, no matter what.

Emotional Intelligence
She believes in the idea of employees as people first. She created fun and heartfelt
environment in the office.She walked barefoot and sang in office to create humorous
environment.She communicates to everyone throygh blog and social media (more than
300000) people.

Take Care of your Employees

She takes proper care of her employees. She treats her employee as family and gave benefits
like leave, tution reimbursement, adoption assistance etc.

Inspirational Speaker
She is an inspirational speaker and rallies people around her vision for the company. She has
the track record to show that she means what she says. She was instrumental in Pepsis

acquisition of the food conglomerate Quaker Oats Company and the juice maker Tropicana
Products Inc., both of which have healthy product lines. She is bent on reducing Pepsis
reliance on high-sugar, high-calorie beverages, and she made sure that Pepsi removed trans
fats from all its products before its competitors. On the environmental side, she is striving for
a net zero impact on the environment. Among her priorities are plans to reduce the plastic
used in beverage bottles and find biodegradable packaging solutions for PepsiCo products.
Her vision is long-term and could be risky for short-term earnings, but it is also timely and
important.

Cutting National Boundries

Her background cuts across national boundries which gives her a true appreciation for
diversity, and she expects those around her to bring their values to work. In fact, when she
graduated from college, she wore a sari to a job interview at Boston Consulting, where she
got the job.

Famous Leadership qualities of Indra Nooyi

During her career, Indra explains that she has held to her 5 Cs Model of Leadership. Her
five Cs of leadership are competency, courage, confidence, communication skills and
compass

Communication
Indra Nooyi lists communication skills as one of the Five Cs of Leadership. She has
explained that competence, courage, confidence and a strong moral compass go to waste
without strong communication skills. What does it matter if someone is innovative on a
subject if they cant clearly discuss it? In Indras words You cannot over-invest in
communication skills.

Relationship Building
Indra goes beyond writing blog posts every other week to maintain a relationship with
employees. She writes letters to their parents to thank them for their children. If thats not a
CEO building strong relationships, what is? In regards to relationships, Indra has said If you
only want people to help you when you need them and not have an ongoing relationship with
them, they dont know you, they dont know where you come from, and they are doubtful
whether you really are interested in the issue, or are you just trying to skate over a current
problem? In maintaining a company relationship with the public, Indra has been in-tune
with consumers needs for healthier snack and drink options, which has led to transformation
in Pepsis product line. Relationship-building may not be part of Indras Five Cs of
Leadership, but it is certainly one of her strengths.

A Moral Compass:
When discussing the choice to face the challenges at Pepsi during the economic collapse,
rather than slash prices and bolt quickly, Indra explained Look, this is my company, this is
my living, my livelihood. And 300,000 people in PepsiCo depend on PepsiCo for their life
and their livelihoods. There are pensioners and investors out there who are hoping
PepsiCo will remain a successful entity forever . This is just one of many examples where
Indra has turned to her moral compass and exercised strong emotional intelligence in making
leadership decisions.
Indra herself had confessed that leadership is not easy Leadership is hard to define and good
leadership even harder. But if you can get people to follow you to the ends of the earth, you
are a great leader

Case: Meeting the diversity challenge at PepsiCo

PepsiCo was one of the first companies to recognize the importance of people of color within
the workplace and target market. PepsiCo hired and appointed their first African-American,
Hispanic, Asian, and woman executives all before 1970. Today PepsiCo operates in over 200
countries, and continues to focus on diversity and inclusion at all levels of the corporation.
These successes have largely been credited to top executives, particularly the CEO of
PepsiCo.
Steve Reinemund was the first senior leader at PepsiCo to focus on diversity and inclusion
from a perspective of changing the entire culture of PepsiCo. Reinemund recognized that the
workforce that PepsiCo had did not successfully represent that demographics that they were
marketing their products to. To combat this growing gap, Steve Reinemund appointed a new
vice president of human resources to help promote diversity within PepsiCo. In the year
2000, Steve Reinemund and his vice presidents developed the first Hispanic Advisory Board,
and creating new metrics to ensure that diversity goals in terms of hiring were met.
These new metrics were met with great resistance, as diversity of the workforce became part
of the forefront of hiring and promotion decisions. Many people were angered because they
viewed the new policies as potentially promoting someone based on the fact that they were
diverse, when they could be less qualified. Resistance was further met when, in 2002,
PepsiCo did not meet its diversity goals. Steve Reinemund had previously attached diversity
initiatives to bonus compensation, and due to the goals not being met, limited the bonuses,
sending a message to his staff that everyone.
Announcing his retirement and naming Indra Nooyi as his successor raised many questions
for the future of diversity in PepsiCo. Though Indra Nooyi was exceptionally qualified for

the position of CEO, holding several other senior positions over her career at PepsiCo, she
had yet to find her own voice within the company.
One difference that Indra Nooyi brings to the table is her experience with rising to the top as
a minority. This knowledge allows her to have a first-hand experience of how her minority
status as both a woman, and a person of color plays out in the corporate climate of inclusion.
Furthermore, as a person that is Indian-born; she possesses potential knowledge about
different cultures that can be integrated into PepsiCos global strategies.
The advisory boards will not be successful in accomplishing their goals if they do not have
the access to the higher executives who can make changes in the company and make diversity
more integrated in the culture of PepsiCo.
Nooyi took this a step further and got it into a high percentage where inclusiveness became
part of the cultural norms at PepsiCo. This has many benefits for the company, as it will make
PepsiCo a better place to work, and helps keep PepsiCo in a desirable position with the
surrounding community and stakeholders.

Leadership Strategies of Indra Nooyi :

1. Balance the Short Term and Long Term
Indra Nooyi believes in focusing on the short term quarterly results while yielding decisions
that effect the long term health of the organization. Finding a balance is essential.
2. Develop an Understanding of Public/Private Partnerships
Work together within both sectors rather than demonize one sector from the other and vice
versa. This is an ideology that is found to be common place among private and public sectors.
3. Think Global, Act Local
Yield innovative and out of the box solutions. When advertising think about marketplace and
their society and culture. Reconnect with your international audience.
4. Keep an Open Mind, Adapt to Changes
Ask questions to facilitate dialog and exploration. Do not close your minds to dissent and
lead on to a constructive debate if needed.
5. Lead With Your Head and Your Heart
Leaders must show a form of emotional intelligence and bring 100% of themselves to work
each day. Remind yourself that having a human connection and bond with those in your
company is essential to your overall success.

How Indra Nooyi learned to be a CEO :

Indra Nooyi had been chairman and CEO of PepsiCo for nearly four years, but she took none
of it for granted: not the beautiful setting, not the large corporate campus filled with art, and
certainly not the position she occupies. "I have an immigrant mentality, which is that the job
can be taken away at any time, so make sure you earn it every day," Nooyi, who was born in
India, explained.
Nooyi credited experiences early in her career as a strategy consultant with Boston
Consulting Group (BCG) for teaching her inductive thinking that helped shape her leadership
style. "I don't think I could have gotten here without a strategy consultant background
because it taught me inductive thinking. It taught me how to think of the problem in micro
terms but also to zoom out and put the problem in the context of its broader environment and
then zoom back in to solve the problem."

In 2001, she became president and chief financial officer, which deepened her leadership
skills and experiences as well as her knowledge of the company. When she became CEO five
years later, however, nothing could quite prepare her for the demands of the job. "The one
thing I have learned as a CEO is that leadership at various levels is vastly different. When I
was leading a function or a business, there were certain demands and requirements to be a
leader. As you move up the organization, the requirements for leading that organization don't
grow vertically; they
grow exponentially," Nooyi explained. "When I was president of the company, I said, 'Okay, I
can do this--piece of cake.' Then when you are the CEO, the responsibilities multiply
enormously because you worry about everything."
. In order to succeed, CEOs must not only draw on previous experiences and abilities they
have developed, but also commit to lifelong learning as a process of continual
selfimprovement. The more the leader is willing to expand and grow, the more vibrant the
organization will be.
Nooyi related this lesson by quoting what she considers one of the best pieces of advice she
ever received: "The distance between number one and number two is always a constant. If
you want to improve the organization, you have to improve yourself and the organization gets
pulled up with you. That is a big lesson. I cannot just expect the organization to improve if I
don't improve myself and lift the organization, because that distance is a constant."
Nooyi said that "Just because you are CEO, don't think you have landed," she said. "You must
continually increase your learning, the way you think, and the way you approach the
organization.

Learning and growing as a leader means Nooyi focuses not only on the big picture, but also
on the details. She related her experience of doing store checks to see how the company's
Pepsi-Cola, Frito- Lay, Quaker, Tropicana, and Gatorade products were displayed in a
neighborhood store. "I notice everything. The printing quality--if the printing is bad or if the
color is off. If it's a Hispanic store and we don't have enough Hispanic offerings there. Why
isn't this merchandised so that the shopper mom can pick things up easily?" With a slightly
mischievous smile she added, "I pick up the details that drive the organization insane.

Findings
Indra Nooyi leadership style is already in the syllabus of many colleges and universities,
especially in courses on business administration and business management. Indra Nooyi
leadership style is about courage, competence, confidence, compass and communication
skills. She is one of the best communicators in the world of business. Indra Nooyi is also
known to be a leader with a heart. She has a very high moral standard set for herself and that
has trickled down through her company over the years that she has held the reins. PepsiCo is
regarded as one of the most ethical companies when it comes to employer-employee
relations, client relations and public relations. Managing such a huge global brand is not a
cakewalk and Indra Nooyi has managed that daunting challenge with notable flair.
Leadership style of Indra Nyooi can be related with the following leadership theories:-

(1) Contingency theory

Indra Nooyi contingency style of leadership is both task oriented and relationship oriented.
She is a strategic thinker and a leader for all seasons. Indra is fluent in the global arena and
this is part of what made her the right leadership fit for PepsiCo. She says we can inherit old
problems, but we dont have to use old solutions i.e. she has always acted in different
situations differently. Indra became the chief strategist and began to reshape PepsiCos brand
identity.
Indra Nooyi took care of her employees as well as she was very ambitious to achieve the
target.In the ledership Grid given by Robert blake and Jane Moutons,she can be kept at
point( 9,9).This style of leadership is named as Team Manager leadership style.This is
considered ideal.Here,the person has great concern for both people and production.

(2) Behavioural Theory

In this theory,she can be related with Initiating Structure. This leadership is aimed defining
and organizing work relationship and roles,as well as establishing clear pattern of
organization, communication, and ways of getting things done.
Nooyi is fully aware of the companys bottom line but she is also focused on operating a
business that has a positive impact on society. Nooyi is fully aware of the companys bottom line
but she is also focused on operating a business that has a positive impact on society.She had a
clear vision for Pepsi. Not long after she was named CEO of PepsiCo, she established the
corporate mission, Performance with Purpose.
This approach includes three components: human sustainability (an increase in the nutrition of
products), environmental sustainability (operating responsibly), workforce development (creating
a place where employees feel they can maintain both a job and a life).
Indra Nyooi practiced Consideration behaviour.This leader behaviour is aimed at nurturing
friendly,warm working relationships,as well as encouraging mutual trust and interpersonal
respect within the work unit.

(3) Behavioural

theory - Democratic style

She followed Democratic style of leadership.Here, the leader takes the

collaborative,responsive,interactive actions with followers concerning the work and work
environment.She interacts with employees and keeps motivating them to find solution of a
problem.Those who work with her feel challenged by her high performance standards and
expectation of excellence. She is not afraid to give people negative feedback, and with humor
too. She pushes people until they come up with a solution to a problem and does not take I
dont know for an answer. For example, she insisted that her team find an alternative to the
expensive palm oil and did not stop urging them forward until the alternative arrived: rice
bran oil.

(4) Participative Style of Leadership

Indra Nooyi practiced participative style of leadership.In this style of leadership,decision are
taken with the most feasible amount of participation from those who are affected by the
decision.She always considered the ideas and viewpoints of employees before taking
decision.
To her, employees are like an extended family, and she ensures that their needs and concerns
are addressed so as to ensure the overall running efficiency of the company.She stated that
You need to look at the employee and say, I value you as a person. I know that you have a life
beyond PepsiCo, and Im going to respect you for your entire life, not just treat you as employee
number 4,567,

(5)Charismatic Leadership
In this type of leadership,a leader uses his personal abilities and talents in order to
have profound and extraordinary effects on followers.Indra Nyooi has charisma and
ability to create vision and convience others to become a part of it.

She comes across as a balanced and credible personality who practices what she preaches and
considers all those around her as equals. This is her overall success mantra, tried, tested, and
completely successful.

References

www.pepsico.com
hbsp.harvard.edu/list/hbr-case-study