would you really think of working in company where employees are treated as slaves, where managers have whips in hand to make employees work, where in if you talk during work hour you would be made do sit-ups in front of everyone? Well this no instance from a real work culture, but think would you work in such a organisation, where an employee has no value? No wonder as you are reading this the first thing popping in your mind is , really? No way i am going to work here?
Based on conclusion by D. Knight et al(1999:p.446) that uses upper echelons theory (Hambrick and Mason, 1984)as the main basis of their research that TMT's in a organisation based upon their strategic decisions tend to mirror the organisation characteristics. Considering these postulations and (Y.Berson et.al. 2008) (refer to appendix 1.2), we can conclude that in a organisation the role of CEO and top management team is similar.
Consider Pepsi co example (refer to appendix 2.4(a) &2.5 for detailed understanding), based on the 3 hypothesis suggested by (Y.Berson et.al.,2008)(refer to appendix 1.2), we can explain the culture formulated by Indra Nooyie and the top management team at PepsiCo. We can say that PepsiCo will fall under the Hypothesis 1: The self direction Value of CEO's will be more associated with the innovative work culture dimension,(refer to appendix 1.2, pg.no. for details) the work culture is creative and risk and challenging decisions are supported here. (when Indra Nooyie decided to lay off the Fast Food business of Pepsi, which contributed to 35% of the revenue of the overall revenue of the organisation, that was very risk decision to make to attain a better entrepreneurial opportunity that was re invent Pepsi Co. the creativity, and innovation by diversifying the organisation into healthy food segments in the industry. thus the work culture here as more attuned to creativity, innovation and self direction value of the leader.
Best example of type to hypothesis 2 suggested by Y.Berson et al.(2008) would be General Electric work culture (refer to appendix 1.3 for details).Such an organisational culture comes under Hypothesis 2:The Security values of CEO's will be more positively associated with the Bureaucratic work culture,(Y.Berson et.al.,2008),in such a work culture as indicated by (bhargava Kelkar,2000;Sherman & Smith,1984;Clark,2001)(refer to appendix 1.1) we can conclude that perception of a organisation as Bureaucratic has negative effect on the job satisfaction of employees.
work culture at Google represent a more employee welfare oriented, supportive and attending the needs of the employees. the founders of Google were Larry page and Sergy Brin, currently Larry Page is the CEO and their values in formulating a open and dynamic work culture, also which is very Supportive and attends the needs of its employees (for details on Google work culture refer to appendix 1.6, pg.no ()).Google would fall under Hypothesis 3: CEO benevolence values will be associated with a supportive work culture. Such a work culture shows the values of its founders, are more focused towards its employees welfare.
Consider the work culture at Enron a classic example of what could go wrong if things are not well managed. (Refer to Appendix 1.5, pg no.(), for details) was Enron concerned about their employee welfare too much? , and employee welfare Enron was doing without proper limitations and management principles' in practice to regulate these activities. At that time Kenneth Lay was the CEO of Enron, and his values played major role to evolving a lavish work culture at Enron. Based upon this example we can conclude that, in formulation of organisational work culture, other factors than personal values of CEO''s must be considered so that, we can effectively measure the performance of a organisation based on its work culture. Some stringent guidelines and rules are must no wonder in organisations such as Google, where non bureaucratic work culture is prevailed and employee job satisfaction sis very high, but again corporate disasters such as Enron remind us that power and money can really blind the leaders at times, a level of Bureaucracy in organisations is must this statement is in contrary to bhargava &kelkar, 2000; Sherman & Smith, 1984; Clark, 2001) (refer to appendix 1.1).
based on these discussions we can conclude that whatever be the case in future mitigating circumstances and mitigating factors will come into play while formulation of organisational culture but, it's all in hands of the leaders, to device efficiency in organisations, there is no specific conclusion to this, thus while formulation of Organisational culture, a CEO and top management teams must consider past experiences of other organisations irrespective of the industry.
2.Role of CEO and TMT in formulation of organizational strategy:
" Strategy is the direction and scope of an organization over the long-term: which achieves advantage for the organization through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfill stakeholder expectations"(tutuor2u,2010).For any organization to be successful in today's corporate race it needs strong objective or effective strategy , strategy in a organization exists at all levels be it production, sales, finance etc.
If, Michael dell had not devised an effective strategy, he would have been not CEO of a global Brand listed in fortune 500 companies. (For further details on importance of strategy in organization refer to appendix 2.1)
Like CEO of D&B Sarah Mathews, says in a exclusive interview to Rube field, "Analyze what's happening in the market and position the company targets accordingly". thus as a first step to formulate a effective strategy he/she mush have clear understanding of what's going on around in the market, when its monopoly the concern is only limited to current performance and set new objectives to future development based on current analysis, but in case of a Duopoly or perfectly competitive market the work becomes even more complex, one has to analyze the strategies of the competitors and current market performance and then place the objectives for the company accordingly.
In any organization, if a CEO fails to communicate his commitments and does not firmly support the plans and strategies, the plans and the strategies cannot be effective, Steiner (1969),Role of top management team and CEO in strategy formulation in any organization is very prominent and this is supported by evidences (e.g.,(Sarrazin,1981)). Sarrazin based on his findings has proposed 5 models of enterprises with varying role of top management and CEO in its strategy formulation. His suggestions are partly based on the Rumelts(1974) diversification scale(refer to appendix 2.2 for details).
5 models of strategy formulation requirements associated with 5 different business firm settings.
source: (Sarrazin,1981:p.13)
figure:2.1 this diagram outlines 5 different business firm settings in relation to strategy formulation
source:(Sarrazin,1981:p.21),
figure 2.2:This diagram oultines the model prescribed by the Sarrazin and the importance of top management in strategy formulation in them.
Sarrazin (1981) suggests 5 different kind of firms as follows:
Type 1:The mono activity enterprise.
Type 2: The enterprise with homogeneous diversification of its activities and a simple stable environment.' top management's role in strategy formulation is expected to be mainly As leader and integrator of decentralized strategic thinking'(Sarrazin, pg22).
Type 3: The enterprise with heterogeneous diversification of its activity and a simple stable environment:' whose top management might better act as an entrepreneur who builds a strategy at the corporate level on the basis of synergistic effects among activities'(Sarrazin,pg22).
Type 4: The enterprise with homogeneous diversification of its activity and a complex unstable environment: Top management's role in strategy formulation in this case being that of a "pilot" who evaluates long-term uncertain corporate goals and constraints and establishes what we called short-term "windows" '(Sarrazin, pg22).
Type 5: The enterprise with heterogeneous diversification of its activity and a complex unstable environment:' top management negotiates viable links with various groups of actors' (Sarrazin, pg22).
The type of firm and the respective strategy formulation requirements are discussed in detail in appendix (2.3).
Based on findings of (Y.Berson et.al. 2008) (refer to topic 1 page no.2 for details) and (Sarrazin, 1981) the type of organization culture formulated is associated to the personal values (details, on personal values refer to appendix 1.2) of CEOs and top management. (For other evidences refer to topic 1) and a clear relationship of these organization culture and strategy formulated and personal values of CEOs is established (also Refer to Appendix 2.6 & appendix 2.5, last paragraph for details on and leadership style).
These drivers(refer to appendix act as the sole characteristics of ones decision making capability. All these combined findings we will analyze in the following example of Indra Nooyie, CEO of Pepsi.co. (Refer to appendix 2.6 for detailed case study).
Based on Sarrazins findings we can explain this diversification strategy as follows. Pepsi. Co. comes into Type 4, homogeneous diversification of its activity and a complex unstable environment (Sarrazin, 1981). (Referring to appendix 2.5 Pepsi Co. case study) In the food industry Customer taste keeps changing, as in here the customers were shifting towards healthier foods (which makes the environment very unstable and the constant completion from Coca-Cola made it even complex). Indra nooyie being a Vice president had a long term objective/Vision, this long term vision laid track for a the short term objectives , which involved laying off the fast food chain of Pepsi and M&A with Tropicana in 1998 and Quaker Oats(2001).
Indra Nooyies personal characteristics and values are revealed in her strategic decisions, (refer to Appendix for detials on Indra Nooyies personal characteristics and decision making skills).the key to using oorganisation culture to improve performance is lies in matching culture or attributes to organisational goals'(Bruce M.Tharp, n.d:p. 3 ).
On the contrary there are examples of various organizations where in even though there was clear long-term objective, tough it ended up in bankruptcy, or it was a failure. For example Jonanthan Schwartz,the Ex CEO of Sun Micro Systems , ( for detailed case study refer to Appendix 2.5(b)) or be it wal marts failure in other countries (refer to appendix 2.5(b)) . Ram Charan and Geoffrey Colvin in a Fortune magazine article argue that lack of Vision is not the only factor contributing to the failure to strategies, but there are other factors contributing to it, like the economic factor, market situations, environment factors, cultural differences, constant pressure on CEOs.
most of the times the leaders , know the problem but ignore to accept it, also the CEOs loyalty towards, their subordinates with who they have been working for a long time they are blinded in their decision making(Charan, Colvin,1999) just as it happened in the case of Walt Disney. Though Pepsi Co is ranked 40 the Forbes 500 and has established good strategic plans for the long term yet the investors are reluctant to invest in PepsiCo(Geoff Calvin ,2012), should this mean that PepsiCo does not have a effective strategy? Pepsi has good profit margins, and revenues, and then what's wrong?
When strategy is formulated In a organization by top management, but in the long run whether it is successful or not is a big question. Because what looks great today will not be the same tomorrow, with time everything changes given today's global crisis and economic environment, things can be assumed but exact predictions, are only a matter of question even for top executives and CEOs.
Given these examples one can have a clear picture that for strategy formulation there are other factors contributing such as the personal characteristics and the organizational culture which in turn is related to the performance of the organization (Y.Berson et al., 2008).
3. Role of CEO and TMT in formulation of Organisational Operations:
Formulation of effective operations is key to a organisations effective performance. anf effective strategies have to be formulated for this. Thus formulation for strategies and its importance and role of top management in its formulation has been well discussed in topic 2 pg. No 3. Apart from strategies also organisational structure plays an important role in formulation of operations in an organisation.
Operations is all about transforming inputs to outputs (end goods and services)
'The operations in a organisation are central to the organisation because it produces goods and services which are the reason for existing' (N.Slack et.al, 1995; p.8). In organisation there are other functions (refer to appendix 3.2) coordinated by operations management. Thus operations prove to be a vital tool to attain competitive advantage. As stated by N.Slack et. al,1995 , that these operations have boundaries in which it functions and definition of these boundaries , means formulation of operations in a organisation. Organisation culture a measure of organisation performance (refer to appendix 3.3 for details).
already the role of CEO and TMT in formulation of organisational strategies and culture has been well discussed(refer to pg,...), according to the research work done by Y.Berson et. al,2008) there exists a link between the CEO and top management values and formulation of org culture this in turn is linked to the organisational performance(refer to appendix 3.3).
Based on the evidences (Y.Berson et al,2008;(refer to appendix 1.2 &3.3);Sarrazin,1981),we can conclude that in formulation of operations in a organisation TMT's and CEO's have a central role and their characteristics are core to all these.
Considering the example of Pepsi Co. Which has a innovative work culture where in failures are tolerated and the CEO is looking for new entrepreneurial opportunities, and risk taking is encouraged (Y.Berson et.al,2008) the performance is more related to sales growth. In such a organisations the operations formulated will be in accordance to their performance which is sales growth.(refer to appendix 3.1),thus by establishing an effective organisational structure(refer appendix 3.1) Pepsi co is able to maintain its operations(refer appendix 3.1) and meet its customer needs. Thus CEO and TMT have to formulate a decisive strategy and efficient structure for formulation of effective organisational operations.
Thus strategy, structure and organisational culture can be used as efficient tools by Top Management teams in formulation of effective organisational operations.
Appendix:
Appendix 1:
1.1: Importance of organisation culture:
according to evidence the (eg.bhargava &kelkar,2000;Sherman & Smith,1984;Clark,2001) based on their findings we can say that work flexibility and the perception of a organization culture does have positive or negative effect on the employees work satisfaction factor.
1.2:Organisation culture and CEO values (Y.Berson et.al,2008)
Among these characteristics are personal values, which have been argued to be among the most influential leader characteristics. Top managers aim to pass on their values to employees as a means of shaping behaviour and directing the firm (Enz, 1988; Schein, 1992).
In a organisation the role of a top manager is more focused to passing on the their values and characters on to the employees in a organisation. According to Agle, Mitchell and Sonnenfeld (1999) Strategic decisions made by CEO's are mere tools to imprint their organisation culture. These values can be pictured as ones actions or means influenced by the desirable(Kluckhohn,1951).values are defined as having influential effect on the interpretation of events and how individuals actuate to apprehend events such that they are in line with their personal values(Hitlin & Piliavin,2004). These research works tend to give a good overview about the values of individuals .Based on these examples and findings Y.Berson et al.(2008) conclude that personal values does have considerable effect on their behaviour and characteristics and this in turn effects moulding of organisation culture and performance.
3 dimensions of work culture:
>Innovation: in this dimension the weigtage is on entrepreneurial orientation and creativity and risk taking work environment.
>Bureaucratic: in this dimension the focus is more towards formalized and centralized work environment. Distinctive set of rules and regulations are embedded and strictly meant to be followed.
>Supportive: in this dimension the emphasis is more towards employee well-being, and encourages a more open and dynamic work environment.
also
Based on these cultural dimensions, Y.Berson et.al. (2008) have postulated 3 hypothesis relating various individual values of CEO's associated with these dimensions.
These are as follows:
Hypothesis 1: The self direction Value of CEO's will be more associated with the innovative work culture dimension. This means that, CEO's who identify values such as individuality, innovation and opportunity oriented, formulate a work culture that prefers taking risky decisions and looking for more entrepreneurial opportunities and good rewards are given to employees who follow this. They do not stress that only particular sets of rules and guide lines have to be followed etc.
Hypothesis 2: The Security values of CEO's will be more positively associated with the Bureaucratic work culture. The CEO's who areWhich means that the CEOS who are concerned with security and smooth running of the organisation will formulate a set of strict guide lines and rules to be followed by employees.
Hypothesis 3: CEO benevolence values will be associated with a supportive work culture.
This means that the ceos who prefer employee's welfare and well being will formulate a work culture that is supportive, encouraging &cooperative. Such leaders basically pays close attention to their employees needs.
1.3: GE work culture:
the work culture at General Electric is they follow a completely Bureaucratic work culture and re focused to following rules and regulations and smooth operations of the organisation. Their work culture is more committed to meeting results and performance.
Employees are expected to meet their responsibilities and performance by balancing their personal life, no wonder they perform well in the, market but again are the employee's needs met? Are working hours really flexible? According to Y.Berson et.al (2008), organisation associated with such a cultural dimension, work flexibility is not negotiable by workforce as their primary goal is performance and for this they follow a set of guidelines and rules very strictly.
1.4: work culture at D&B and frame work to measure the performance or organisation:
This can be resolved with help of The 7 'S's diagnostic framework, developed by management consultants McKinsey, these 7 s's are:
D&b culture is passionate about winning and all we care is about being energetic team to winning with our customers, she actually indentifies 3 constituents for gaining a remarkable performance and these are wining shareholders, wining customers and winning as a team , to measure their performance they have various performance metrics availed.
in an exclusive interview to Robert reiss host of the ceo tv show, Sarah Mathew Ceo of Dun & Brad Street says that "I am the architect of the D&B culture and what i do the organisation is actually mirror of how I behave" she also lays stress on Communication as a tool resolve various cultural issues(Robert Reiss, 2007).D&B culture is oriented towards success and market driven that is their main goal is to attain customer satisfaction and the performance has been good given that the customer satisfaction is going up for the past 3 years.(Robert Reiss, 2007), this is another added evidence to the fact that culture is related to the organisational performance((y.berson ET Al,2008) this interview is a evidence that ceo has major role to play in framing of organisational structure
1.5 work culture at Enron,and Enron Scandal:
Enron was America based energy company based in Houston Texas, it was world's 7th largest corporation with a long Enron, which had gone Bankrupt in late 2002 and today stands as a classic study material for scholars and researches , for bad management practices .
The answer points to three persistent tasks of corporate governance: the avoidance of perverse incentives for executives, the strengthening of board oversight, and the reinforcement of ethical discipline in the conduct of business affairs.
'Enron's approach to compensation and incentives included many perverse features: It encouraged growth over profitability. It rewarded employees for closing commodity deals and power-generation projects without concrete evidence of their future profitability. It deepened a deadly addiction to pumping up the price of the stock through a variety of obfuscating manoeuvres. It helped encourage a corporate culture that tolerated and sometimes encouraged deception. It created many opportunities for executives to reap enormous personal gains from gaming accounting and SEC rules.'(S.Salter, 2006; p.1)
at Enron anything done was always bigger and flashier, for example they had allocated 1.5 million dollars for a New Year party. Everything at Enron was lavish, be it the expensive gifts to the top executives, etc. the easy going attitude of the top executives and lack of information on the financial details all this contributed to the down fall of the organisation. (banerjee et al, 2002).
The company had a lavish culture, where in at on instance they had spent thousands of dollars to build a Potemkin village trading floor just to impress the equity analysts as that unit had no trading function. (banerjee et al, 2002).
the work environment was luxurious , be it the free laptops to workers, best ergonomic chairs , office lunches at the Houston's best restaurants, at one instance for Enron family picnic they had booked a 85 acre theme park, all these depict the work culture practices at Enron. The top managements and directors' lack of knowledge on financials and easy go, and lavish spending attitude all contributed together for its down fall. When Enron energy, share prices reached 50$, there was a 100$ bill left on every employees table. The employees flew first class on their travels and also the parking was filled with porches and Ferraris etc. (Banerjee Et Al, 2002).
Appendix 2
2.1.importance of strategy:
strategy ofr any firm can be defined as its vision and it can be there fore mean a lot . as compared to last few decades
importance of strategy in the organisations has seen a shift.strategy has seens a shift in early 1950-605 corporate decision making was more about planning but witht he strating of 1970-80s the compnies became aware of economic instabilitya and international competition, because of which here was a shift from corporate planning to strategy, with the primary goal of acheieving competitve advantage , also with the burst of technology and contineous changes stragey becomes more about flexibility and temporary competitve advantage.(Rober M Grant,2010).
the imprtance of strategy ina organisaiton is wel oulined by this very recent example of smasung over apple i phone.
Importance of strategy in a organisation:
strategy exists at levels of an orgainsation be it individual working, marketing, production, etc. these can be split as follows:
>>Corporate strategy:is more associated to meett he stake holder expectation.
>>Business Startegy:is more associated to how a organisation competes in a competetive
market.
>>Operational Strategy:is more associated with how each part of business is organised .
Strategy opted by Samsung Mobiles recently fo the lauch of their new smart phone samsung galaxy S3 , heleped it to outrun apple i phone in sales numbers and revenue. so far Apple has been a pioneerr leader in the field of smart phone but recent Samsung seems to be storn competitor to Apple. the strategy was very simple, Samsund decides to launch it s product 5 months after the lauch of Apples Iphone4 s which gave it a ground breaking opportunity in the market as , I phone was old by now and custiomers always want something new. the mains success strategy od Samsung was its strategy to lauch its product after Iphone, also the marketing campaigns contributed to the slaes of new products. 'Together, over 50 million units of the S series have been sold by Samsung till June 2012'(Ashwin Shree Kumar, 2012)>> appendix...
Micheal Dell, ceo of dell computers strarted in 1995 his strategy was very simple all orders were made via telephone and cutom built as per their requiredment in factories , with the advent of internet era , all purchases were done online , where in customers can customise thoer desktops and laptops etc according to their needs, ans palce order, this strategy really worked and today Dell is one of the strongest competitiors to Sony and IBM in their field. in an exclsive interview to Geofferey James , Micheal says ''My responsibility is more along the lines of determining what businesses we're going to be in, and where we're going to make our investments, prioritizing investment decisions, and establishing the criteria for success in the different businesses that we're in, and, obviously, prioritizing opportunity. '' (citation)
2.2.Rumelts Diversification scale:
Rumelts (1974) scale is based on 2 variables:
Specialization Ratio: proportion of firms revenue attributable to the lagest business.(Sarrazin,1981)
Related ratio: revenue of firm , attribytable to its largest market activity.(Sarrazin,1981)
based on these two sclaes Rumelt states 3 main levels of diversification:
monoactivity enterprise:
homogeneously diversified company:
Heterogeneously diversified company:
2.3 Strategy formulation in relation to type of enterprise:
Also based on the assumption made by De Woots concept of an Enterpreneural Company ,Sarrazin(1981) defines top management as also an important entrepreneur and not just an coordinator of various activities in a organization.
Another important element of these models is the environment, based on Dunvan's,1972 findings , Sarrazin states that, more complex the environment is , more difficult it becomes to make decicions.
Based on his findings Sarrazin has outlined 5 different models of firms in a organization. These are as follows:
type 1:the mono activity enterprise.( top manager plays an important role in strategy formulation)
type 2:the enterprise with homogeneous diversification of its activities and a simple stable
environment.(top manager has key role to play , also a part concerned with the CEO in strategy formulation.
type 3: the enterprise with heterogeneous diversification of its activity and a simple stable
environment:
type 4: the enterprise with homogeneous diversification of its activity and a complex unstable
environment:
type 5:the enterprise with heterogeneous diversification of its activity and a complex unstable
environment:
According to the firms position in these dimension it will influence the strategy formulation as follows:
- more complex the environment is , greater the firm will be required to concentrate on adapting it, and thus the concern shifts to development rather than planning.(Sarrazin,1981)
- greater the firm is heterogeneously diversified greater will be the difficulty for firms divisions to manage their interrelations.(Sarrazin,1981).
Type 1: in such a kind of firm then, the firms are more associated with the functionality. The top level manager is the only person concerned with formulation of strategies , there are no written plans or any other kind of formal papers involved .
In these firms as 'we can expect to find highly centralized, no formalized, strategy formulation'(Sarrazin,pg22)
type 2: In such firms the top managers acts as integrator, coordinator and a entrepreneur(Sarrazin,1981). A leader of top management mainly focuses on setting objectives and measures to achieve them. And also as integrator to make sure that a proper planning system is installed. The CEO is assisted in coordination, implementation of strategic planning. (Sarrazin, 1981).In such firms we find a' top management's role in strategy formulation is expected to be mainly As leader and integrator of decentralized strategic thinking'(Sarrazin, pg22).
Type 3: Strategy is formulated at corporate level mainly. Top level managers due to their inability to have a clear understanding of the situations and make decisions based on choices. Basically here the CEO plays a key role in formulation of strategy. The weight in such forms for strategy formulation is to the strategy thinking at corporate level and less at the levels of divisional managers. In such firms 'whose top management might better act as an entrepreneur who builds a strategy at the corporate level on the basis of synergistic effects among activities'(Sarrazin,pg22).
Type 4: In such firms, the environment in which they come into action are very complex and unstable, their decisions are made not once and for all but rather in steps, for short term period. These short term objectives will define the track towards a long term. These short term objectives can be modified as the long term objectives emerge. (Sarrazin, 1981). In such firms dynamic short term objectives are viewed as a window which evolves with time and to which the organization has to adjust itself. Coming to the long term objectives the flexibility measure has to be kept in mind as it's a unstable environment. 'He can be understood as a "pilot "who determines uncertain long-term goals and constraints and the short-term dynamic objectives for the various activities of the corporation and its the managers at the divisional level who have to effectively implement them', (Sarrazin,1981; p.19) .decisions are made , analyzed, assessed at corporate level, in evolving the top level management team and the CEO, and implemented by the divisional level. In such firms 'top management's role in strategy formulation in this case being that of a "pilot" who evaluates long-term uncertain corporate goals and constraints and establishes what we called short-term "windows" '(Sarrazin,pg22).
Type 5:
in such firms they have less focus on strategic control. In such forms the various actors such as suppliers, competitors etc comes into action, the development of organization as a whole depends on the activities of these actors, (Sarrazin, 1981). Thus in such firms the top management team has to focus on maintaining such networks and relationships and assessing these networks. Thus strategy formulation is done at corporate level, either more stress on the relationships or networking. In such firms basically 'top management negotiates viable links with various groups of actors' (Sarrazin, pg22).Leader ship style is in turn related to the characteristic and values of a CEO or top management. According to (Hambrick& Mason, 1984) upper echelons theory Top level executives characteristics reflects the actions of a firm, based on evidences such as(e.g.(Sosik,2005), (Miller et al.,1988,Miller &Toulouse,1986)),
2.4(a) Pepsi Co Case Study:
Indra Nooyie Joined PepsiCo in 1994 as the Vice president of Corporate Strategy, and for a long time PepsiCo was losing sales to its rival Coco cola. After joining in she to execute her vision reinvent PepsiCo, she opted the diversification of PepsiCo, into a healthy food company's a first step of these she laid off the Fast food part of PepsiCo, which included KFC and Pizza hut. Decision were not easily accepted by the board but rather faced many challenges and rejections, but indra nooyie with her communication skills was able to convince other top management teams her commitment towards her vision. In 1996 Pepsi laid off their fast food chain and in 1998 through M&A diversified into Tropicana, again in 2001 through M&A PepsiCo added Quaker Oats to their product line. Reinvent PepsiCo was her long term vision/objective and healthy foods was just the initial short term objective to achieve her was a long term vision , which was broken down into short term steps and according to changing environment (i.e. customer demands for healthy foods) . in 1997 -98 the revenue was at the same level but profit s increased to 13.8% and 12.6%(Addel Et All,2012) .
2.4(b) case study: sun micro systems:
which was acquired by Oracle in 2008 after its series of failures . After john Schwartz was appointed as CEO of sun Microsystems in 2006.
2.4(c) Case study: Wall mart:
Wal Mart one of the super market giants in US. Their long term vision is global expansion, keeping this strategy in mind the
2.5: personal characteristics of Indra Nooyie:
Indra Nooyie was born and brought up in Chennai, southern India.. He was born and brought up in an educated Bhramin Family. Indra Nooyie has sister, and since her child hood, she has been a enthusiastic and energetic kid. Her strong judgment and contribution skills have been brought up since her child hood. After completing her masters in finance and marketing from Indian Institute of Management, Calcutta. She came to US in 1974 at the age of 23 to study her MBA at Yale University New York. She was working as a dorm receptionist and struggled to gather $50 to buy a formal suit for her first job interview."I always had this urge, this desire, this passion,"(Micheal useem, 2008).
She joined PepsiCo In1994 as VP, and had contributed to other top management staff in making tough decisions. This characteristic of her to make tough strategic decision is very well revealed in her objective to Re invent Pepsi Co. As a leader today she is not only CEO of PepsiCo but also chairs many posts in various organization boards and Business clubs and Social organisations.This shoes her strong leadership skills and her passion towards her work.
She also is known for her cultural and traditional values; she wears Sarees to her Board Meetings and enjoys listening to Soft Carnatic Music in her free time. She equally respects her subordinate's views when it comes to making strategic decisions.As CEO of PepsiCo she continues her vision of Re inventing Pepsi Co and is well known for her corporate mantra "Performance with purpose", this again shows her personal characteristics of passion and commitment towards her work. In a Speech Indra Nooyie Says but rather "that we bring together what is good for business with what is good for the world."( Micheal useem,2008:p.1).
Her personal traits are very well expressed in her work style and her vision and judgment style and communication skills have taken Nooyie to make tough Strategic Decision and a Successful Entrepreneur.
2.6: Characteristics of CEOs:
according to Richard Lynch, there are some effective traits of CEO or in other words to say roles of an effective CEO/top management.
these are as follows:
1.>>Recognize peoples efforts:
2.>>Develop a power base:
3.>>use authority Effectively:
4.>>Use the power of Position:
5.>>Build a reputation:
6.>>Develop Skills and abilities:
7.>>Clarify Personal Objectives:
8.>>Communicate with stake holders:
9.>>Develop a positive self image:
10.>>Combine vision with attention to detail:
