Functions of management that applied Essay

Introduction

– Purpose of the report

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More Essay Examples on Management Rubric

– Current issue and potential impact

– Background of the organisation

– Functions of management that applied

1

1

2

2
Discussion

PLANNING

– Why is planning needed?

– To set goals and plans

– Establishing goals and developing plans

LEADING

– The importance of leadership

– Transformational-transactional leadership

– Leading through empowerment

3

3

4

5

5

6
Conclusion
7
Recommendations
8
Appendices
9 – 12
List of references
13

EXECUTIVE SUMMARY

Purpose of the report

           The main aim of this report is to highlight the response to be shown to the issue and how management functions can be applied to address the issue.

Background of the report

            PepsiCo, Incorporated consists of Frito-Lay North America, PepsiCo Beverages North America, PepsiCo International and Quaker Foods North America - Functions of management that applied Essay introduction. PepsiCo brands are available in nearly 200 countries and territories. PepsiCo offers various products to meet the customers’ needs and preferences. The products are focused on convenient food and beverages. Pepsi-Cola is one of the brands of PepsiCo that includes different types of carbonated and noncarbonated beverages.

Sources of information

PepsiCo official website
Internet articles
Article journals
Management textbooks
Main findings

             Two functions of management, planning and leading are discussed to address the main issue that is the Coca-Cola Company to acquire Energy Brands, Incorporated, known as Glacéau. In response to the issue, goals of PepsiCo have to be set and they are to retain the product sales of noncarbonated beverages in the United States and remain as the biggest shareholders of the noncarbonated beverage industry in the United States. This is part of the planning. Both transactional and transformational leadership are applicable as managers of PepsiCo need to concern employees’ self interest as well as looking for results that are reaching goals.

Conclusion and Recommendations

            Both management functions are applicable to respond to the event. It is significant to plan before taking any immediate action once a competitor has launched new strategy. On the other hand, first line leading is important to achieve organisational goals.

Five recommendations are given:

Launch a new series of noncarbonated beverages
Promotion
Additional advertising
Limited edition bottled water
Hold noncarbonated beverages drinking competition

INTRODUCTION

Purpose of the report

            The main aim of this report is to highlight the response to be shown to the issue and how management functions can be applied to address the issue.

Current issue and potential impact

            The current event is the Coca-Cola Company to acquire Energy Brands, Incorporated, known as Glacéau, for $4.1 billion in cash (Sorkin & Martin, 2007). The acquisition has been done in order to grow the Coca-Cola Company’s active lifestyle beverages as well as to fasten and enhance the growth of Glacéau’s products and brands in North America market. Through the acquisition of Glacéau, its brands that are in leading position in enhanced water and attractive brands in water and energy drinks, the Coca-Cola Company’s ability to meet consumers’ needs will be strengthened and expanded. (The Coca-Cola Company, 2007).

            This current issue has potential impact on PepsiCo, Incorporated. One of the impact of the Coca-Cola Company to acquire Glacéau could be it affects the product sales of PepsiCo. The final purpose of the acquisition is to compete with the biggest rival that is PepsiCo especially in terms of noncarbonated drinks in North America and following by worldwide market. Referring to the trade publication Beverage Digest, PepsiCo’s share of the noncarbonated beverage industry in the United States which consists of bottled water, sports drinks and juice is more than the Coca-Cola Company’s share (Sorkin & Martin, 2007). It contributes to this acquisition, hence by expanding and diversifying the products, the Coca-Cola Company is able to close the gap and take inch closer to PepsiCo.

             Apart from product sales could be affected, the noncarbonated beverage market monopoly of PepsiCo in United States is threatened as well. Customers’ preferences change from time to time. There might be an opportunity that some customers choose to try new noncarbonated drinks after consuming the same brand for a period of time. The quality and prices of different brands will be compared. Thus, consistency of containing a large number of noncarbonated beverage customers may vary and market monopoly is influenced.

Background of the organisation

            PepsiCo, Incorporated consists of Frito-Lay North America, PepsiCo Beverages North America, PepsiCo International and Quaker Foods North America. PepsiCo brands are available in nearly 200 countries and territories. PepsiCo offers various products to meet the customers’ needs and preferences. The products are focused on convenient food and beverages. Pepsi-Cola is one of the brands of PepsiCo that includes different types of carbonated and noncarbonated beverages (PepsiCo, 2007).

Functions of management that applied

            In order to address this issue, two of the management functions can be applied. They are planning and leading. It is significant to plan before taking any immediate action once a competitor has introduced new strategy. On the other hand, first line leading is important as well. Any good plan is wasted if it is completely a plain plan but no action taken, thus, if this is the case, issue may heavily affect the corporation and utterly no results produced.

DISCUSSION

PLANNING

             Planning is defined as “management function that involves defining goals, establishing strategies for achieving those goals and developing plans to integrate and coordinate activities” (Robbins, Bergman, Stagg & Coulter, 2006, p. 11).

Why is planning needed?

            Planning has often been unplanned and often relegated to the “seat-of-the-pants approach” as being too theoretical (Anjard, 1995). However, there are numberous reasons of planning. One of them is to have a clear direction where the organisation, employers, employees should have moved towards. Without planning, the work unit which consists of departments and individuals might move towards different pathways, as a result, efficiency is not obtained and organisational goals are not achieved (Robbins et al., 2006). In this case, in order to start a new strategy for minimising the impact of the acquisition on PepsiCo, planning is required.

            Planning is to reduce uncertainty and risk. While planning, many factors and different aspects have to be considered, potential impact and vulnerability of planning have to be foreseen. This leads to a reduction of uncertainty. Moreover, waste of resources can be minimised as a result of planning. Through planning, goals and plans can be developed. Subsequently, changes or amendment of plan are in control (Robbins et al., 2006). Before having a new strategy, employees and managers must become familiar with the competitor’s event by having a clear, summarised explanation of the nature, function and competitive advantages obtained from the detailed survey on the Coca-Cola Company’s new products launched (Bergeron & Raymond, 1992). It has to be prepared effectively by co-operation of departments to avoid waste of resources and it reduces uncertainty through knowing the competitor’s tactics well.

To set goals and plans

           Goals are “desired outcomes for individuals, groups and entire organizations” (Robbins et al., 2006, p. 240). In order to have a clear direction, objectives are needed. Goals of PepsiCo at the moment are to retain the product sales of noncarbonated beverages in the United States and remain as the biggest shareholders of the noncarbonated beverage industry in the United States.

         Plans that can be applied are strategic plans which are long term, directional and single use. The acquisition has already occurred and followed by immediate impact. Nevertheless, the plan cannot be short term as it is related to the future noncarbonated beverage market. The plan has to be directional which is flexible with general guidelines are set. If it is too specific, sudden vulnerability may not be fully addressed in time. Single use plan which means a one-time plan set to address this particular, acquisition of Glacéau event.

Establishing goals and developing plans

            “It is important to note that the planning process is similar to almost any other project management effort. The first step is the justification and the goal setting. The plan is then estimated and cost issues are decided. There are many alternatives to be reviewed before the plan is written, and each of those alternatives needs to be evaluated and the proper one selected for the plan to be effective” (Wylder, 2004, p. 6).

             Traditional goal setting is a way which goals set by high level managers and broken down into sub goals for each organisational level. The disadvantage is it loses clarity and unity as the way down from top to low level and in each of these level, biases might be applied to it. On the other hand, management by objectives (MBO) is a system that goals are jointly decided by employees and managers and the progress is constantly reviewed and rewards are given in order to motivate the employees. The weakness is MBO is not efficient once there is environmental change. Both methods are not fully applicable to this case. PepsiCo is a large company and it is not realistic that employees to get involved in setting the organisational goals. On the contrary, disadvantage of traditional goal setting might affect the outcome of the goals. Nonetheless, traditional goal setting is applied to this case eventually and the disadvantage will be minimised, so that goals are attained in an efficient way (Robbins et al., 2006).

           One of the contingency factors in planning is environmental uncertainty. Specific but flexible plans are required to overcome environmental uncertainty. Planning is actually an ongoing process where may be changing all the time in such a dynamic and competitive market. For this case, the Coca-Cola Company and Glacéau might introduce a series of new-formulated noncarbonated drinks in the United States market in order to attract new customers. This is an example of the dynamic environmental uncertainty where it cannot be controlled by PepsiCo but can be overcome through planning.

LEADING

            Leading is defined as “management function that involves motivating subordinates, influencing individuals or teams as they work, selecting the most effective communication channels or dealing in any way with employee behavior issues” (Robbins et al., 2006, p. 11).

The importance of leadership

           The co-operation between employees and managers is built up by managers’ appropriate leading. This leads to the bond between them is strengthened as employees are confident, trust and respect managers as it is mentioned in Fred Fiedler’s one of the contingency dimensions – leader-member relations (Robbins et al., 2006). Leaders get things done through others, who have a vision for the organization and manifest this vision through interpersonal strengths, change imperatives, and strategic initiatives (Sarros, Cooper & Hartican, 2006). Through this, a culture of corporation is formed. It is also critical to be willing cooperation is a win-win philosophy. A win-win philosophy ensures that as the organization performs well, individuals benefit from organizational success. Win-win goals and outcomes have been shown to reduce conflict (Mastrangelo, Eddy & Lorenzet, 2004). Subsequently, it brings advantages such as organisational goals can be attained in an efficient way.

Transformational-transactional leadership

            Transformational leadership is to provide individualized consideration and inspire to excel the employees’ own self-interest. This is closely related to transactional leadership which is to guide or motivate the employees in the direction of realistic objectives (Robbins et al., 2006).  A transactional leader is exclusively concerned with the results of the relationship. This leader focuses on negotiating extrinsic exchanges and on controlling the actions of his or her collaborators so that they follow the leader’s will. The transformational leader, as well as looking at the results, is also concerned with aligning the collaborator’s interests with those of the organisation. This leader focuses on creating an attractive vision and good work conditions for the collaborator and is able to persuade the collaborators to want what is needed (Cardona, 2000).

            Before motivating the employees to attain the organisational goals, it is significant that the employees know the reasons to do so and what benefits can be gained from doing so in aspects of organisation and individuals. For instance, employees of PepsiCo have to be known the consequences that brought by the Coca-Cola Company to acquire Glacéau that is to reduce PepsiCo’s noncarbonated beverage sales. This directly affects the corporation’s revenue and wages of employees are concerned as well. By foreseeing this impact, as far as employees’ self-interest is concerned, they tend to be more committed to solve the issues.

 Leading through empowerment

            “Empowerment involves increasing the decision-making discretion of workers” (Robbins et al., 2006, p. 591). The reason of empowering company’s workers is the need for immediate decision to be made by workers who are most knowledgeable about the issues or events. Another reason is due to large spans of control, to cope with increased work demands is required. Bergeron & Raymond (1992) stated an employee cannot identify system opportunities that are adapted to the company’s strategy without first having a clear understanding of the company’s activities and environment.

            Participation in decision making or employee empowerment can be used in several areas, methods and forms which are all subject to psychological, organizational and environmental factors for success. Participation is not appropriate for every decision-making situation, but if it is the chosen method for dealing with a task or problem, it must be managed skillfully to avoid potential dilemmas. If certain guidelines are followed and its limitations are understood, participation can be an effective tool (Nykodym, Simonetti, Nielsen & Welling, 1994).

            In this dynamic global economy, employees have to react and implement changes immediately in order to compete with others. Hence, leading through empowerment is actually applicable to this issue. Employees of PepsiCo analyse the potential sales figure after this event has occurred. They are the first line workers who understand the corporation well.

CONCLUSION

            The most direct response to the issue is to start planning. Through the process of planning, clear objectives have to be set. Goals of PepsiCo are to retain the product sales of noncarbonated beverages in the United States and remain as the biggest shareholders of the noncarbonated beverage industry in the United States. After that, contingency factors in planning need to be considered. One of the examples of it is environmental uncertainty. In order to address it, planning can minimise the threat of the Coca-Cola Company and Glacéau might introduce a series of new-formulated noncarbonated drinks in the United States market.

            Another management function to be applied is leading. Co-operation can be built through a good leadership by the managers. Both transactional and transformational leadership are applicable as managers of PepsiCo need to concern employees’ self interest as well as looking for results that are reaching goals. Empowerment helps in leading as employees cooperate with managers to react and implement changes quickly in order stay in the competition.

RECOMMENDATIONS

Launch a new series of noncarbonated beverages

            PepsiCo’s management team should analyse the noncarbonated beverages market and innovate the new drinks that have potential to be a great hit in the city among young and old generation. Subsequently, launching and introducing of new series of noncarbonated beverages have to be made in order to keep the old customers as well as attract the new comers.

Promotion

            Promotion is the best way to increase product sales. Every 500 milliliters of noncarbonated bottled drinks such as green tea, iced lemon tea, 100% pure fruit juices and others are increased to 600 milliliters and be sold at a slightly higher price. There are counters set at the obvious spot of supermarket and hypermarket to promote these additional bottled beverages and hold some lucky draws to keep customers’ attraction.

Additional advertising

            A renowned singer or top model is invited to be the spokesperson of PepsiCo’s newly launched noncarbonated beverages. Shooting of commercial break with a suitable and creative storyline has to be done. Big posters of the singer or model have to be hung up along the busy streets. Fans of the singer or model will definitely support PepsiCo’s products.

Limited edition bottled water

           Customers especially youngsters tend to prefer collecting limited edition merchandise. Thus, noncarbonated bottled drinks have to be designed in special and innovative characteristics. Moreover, the pictures of characters from a currently showing hot movie or animation are used to be printed on the bottles. This leads to a huge attraction from the movie fans or children.

Hold noncarbonated beverages drinking competition

           On a sunny day, noncarbonated beverage drinking competition is held at a main attraction place. The main purpose is to promote PepsiCo’s products. Once there is a winner, a hamper of PepsiCo’s different types of products to be sponsored and given out. It is a kind of propaganda of PepsiCo’s beverage products.

List of references

Anjard, R.P. (1995), “Management and planning tools”, Training for Quality, Vol. 3, No. 2, pp. 34-37.

Bergeron, F. & Raymond, L. (1992), “Planning of information systems to gain a competitive edge”, Journal of Small Business Management, Vol. 30, No. 1, pp. 21-26.

Cardona, P. (2000), “Transcendental leadership”, Leadership & Organization Development Journal, Vol. 21, No. 4, pp. 201-206.

Mastrangelo, A., Eddy, E.R. & Lorenzet, S.J. (2004), “The importance of personal and professional leadership”, Leadership & Organization Development Journal, Vol. 25, No. 5, pp. 435-451.

Nykodym, N., Simonetti, J.L., Nielsen, W.R. & Welling, B. (1994), “Employee empowerment”, Empowerment in Organizations, Vol. 2, No. 3, pp. 45-55.

PepsiCo revised 2007, viewed 15 Sept. 2007, <http:www.pepsico.com>.

Robbins, S., Bergman, R., Stagg, I. & Coulter, M. (2006), Management, 4th edn, Prentice Education Australia, New South Wales.

Sarros, J.C., Cooper, B.K. & Hartican, A.M. (2006), “Leadership and character”, Leadership & Organization Development Journal, Vol. 27, No. 8, pp. 682-699.

Sorkin, A.R. & Martin, A. (2007), “Coca-Cola ready to expand noncarbonated holdings”, International Herald Tribune, 25 May, viewed 15 Sept. 2007, <http://www.iht.com/articles/2007/05/25/business/coke.php>.

The Coca-Cola Company revised 2007, viewed 15 Sept. 2007, <http:www.coca-cola.com>.

Wylder, J. (2004), Strategic information security, Auerbach Publications, United States of America.

 

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