When appointed CEO of PepsiCo in 2006, Ms. Indra Nooyi was only the 11th woman to run a Fortune 500 company. Since then, Ms. Nooyi has been ranked in the top 10 of Forbes magazine’s list of the world’s 100 most powerful women. In 2016, she ranked #2 on Fortune’s list of the most powerful women in business. Today, leading a $63 billion company that employs more than 260,000 people worldwide, Ms. Nooyi is considered one of the most powerful business leaders globally. A native of Chennai, India, Ms. Nooyi obtained a bachelor’s degree in physics, chemistry, and mathematics from Madras Christian College, an MBA from the Indian Institute of Management, and a master’s degree from Yale University. Prior to joining PepsiCo in 1994, Ms. Nooyi worked for Johnson & Johnson, Boston Consulting Group (BCG), Motorola, and ABB. Ms. Nooyi is not the typical Fortune 500 CEO: She is well known for walking around the office barefoot and singing—a remnant from her lead role in an all-girls rock band in high school. It should come as no surprise, therefore, that Ms. Nooyi—an executive who spends more than 50 percent of her time outside the United States—has shaken things up at PepsiCo. CEO since 2006, Ms. Nooyi declared PepsiCo’s vision as performance with a purpose, defined by three pillars of sustainable growth: 1. Products, helping to improve health and well-being through the products it sells. To do that, here are three of its goals for 2025: At least two-thirds of its global beverage portfolio volume will have 100 calories or fewer from added sugars per 12-oz. serving; at least three-quarters of its global food portfolio volume will not exceed 1.1 grams of saturated fat per 100 calories; and it will provide access to at least 3 billion servings of nutritious foods and beverages to underserved communities and consumers. 2. Planet, to ensure that PepsiCo’s operations don’t harm the natural environment. For example, by 2025 it plans to design 100 percent of its packaging to be recoverable or recyclable; to improve the water-use efficiency of its direct manufacturing operations by 25 percent (in addition to the 25 percent improvement it achieved from 2006 to 2016); and to replenish 100 percent of the water it consumes in its manufacturing operations within high-water-risk areas. The goal is to transform PepsiCo into a company with a net-zero impact on the environment. Ms. Nooyi believes that young people today will not patronize a company that does not have a sustainable strategy. 3. People, which attempts to create a corporate culture in which employees “not just make a living, but also have a life.” This includes a continued focus on achieving gender parity in PepsiCo's management roles and pay equity for women. PepsiCo's ambition is to empower people and social development across its operations, its global supply chain, and communities. PepsiCo’s vision of performance with a purpose acknowledges the importance of corporate social responsibility and stakeholder strategy. Ms. Nooyi is convinced that companies like PepsiCo have a tremendous opportunity—as well as a responsibility—to not only make a profit but to do so in a way that makes a difference in the world. Has the approach of “performance with a purpose” impacted PepsiCo’s financial performance from 2006 through 2016? Exhibit MC 12.1 shows PepsiCo’s stock performance versus that of its arch-rival, Coca-Cola. Since Ms. Nooyi took the helm at PepsiCo, Coca-Cola’s stock has appreciated by roughly 77 percent, whereas PepsiCo’s has appreciated by roughly 70 percent. In comparison, the Dow Jones Industrial average has appreciated roughly 77 percent over the same time period. Required: 1. One measure used to assess competitive advantage is shareholder value creation. How would you assess PepsiCo’s performance? 2. If you were to apply a triple-bottom-line approach to assessing competitive advantage, would you reach the same conclusion? Why, or why not? 3. PepsiCo’s vision is to deliver top-tier financial performance over the long term by integrating sustainability into its business strategy. How might this approach apply to firms in other industries?
> Can you suggest alternative strategies for reducing the trust gap?
> What are some of the predictable consequences of a trust gap?
> To many people, a deep-seated sense of unfairness lies at the heart of the trust gap. How might perceptions of unfairness develop?
> What types of safeguards might you suggest to ensure fairness, transparency, and accountability in performance-management systems?
> Are there features of current performance-management systems that are worth keeping?
> It’s one thing to get rid of numerical ratings, but managers still have to decide whom to promote, perhaps whom to let go, the relative sizes of pay raises, and bonuses. Will the new systems help them do those things more effectively?
> What disadvantages or opportunity costs can you identify with this approach?
> Are some types of material or course work better suited than others to TDI?
> What are some of the key advantages of TDI?
> How does the effective management of people provide a competitive advantage to organizations?
> How might organizational culture affect the ways that employees deal with coworkers and customers?
> What might be the role of organizational culture in staffing decisions?
> What can a company do to communicate its culture to prospective new hires?
> How might a company measure the costs and benefits of social media in the workplace?
> How can organizations manage the risks associated with social media?
> From your own perspective, what is the main appeal of social media in recruitment?
> As board chairperson, how might you overcome the resistance of a CEO to plan for succession?
> What sort of leadership-development process would you recommend?
> If planning for leadership succession is so important, why don’t more organizations do it?
> Based on EEOC’s guidance, what changes in company policies might be necessary?
> It has often been said that people don’t leave bad companies; they leave bad bosses. What can managers do to enhance employee retention?
> Is there additional information beyond the information presented here that you feel is necessary to make the business case for diversity?
> What is the ethical rationale for building and managing a diverse workforce?
> What can an employer do to avoid liability for retaliation?
> What effects do you think the U.S. Supreme Court decisions have had on the number of retaliation charges filed with the EEOC?
> Why is it that work groups that hold these beliefs are 50 percent more likely to achieve customer loyalty? What might be the link?
> What can a manager do in his or her everyday behavior to encourage these beliefs?
> What kinds of organizational policies might help to support these beliefs?
> How has ubiquitous computing changed the way you live and work?
> What advice would you offer a young person about the effects of technology on his or her career?
> How can managers maximize the positive effects of technology at work?
> The pace of developments in new technologies is becoming faster than the abilities of workers to adjust to them. What recommendations would you make to high-level policymakers in organizations and government to address this issue?
> What might governments do to cushion the blow from job losses?
> In the United States, about 6 million manufacturing jobs disappeared in the first decade of the 21st century. What factors other than free trade and foreign competition might explain that?
> What are some of the benefits of increased flows of digital information and knowledge?
> Do simulations like Motorola’s “travel well”? That is, do you think they will work in different cultures?
> How accurate are such workplace simulations? In what form might results show up?
> Can you identify any differences between managing domestically and managing internationally?
> General Motors (GM) manager Courtland Kelley had been the head of a nationwide GM inspection program and then the quality manager for the Chevy Cavalier and its successor, the Chevy Cobalt. He found flaws and reported them, over and over, and repeatedly
> As you have seen in this chapter, many employers are offering company-sponsored savings programs known as 401(k) plans. While expert’s advice that workers need to save about 15 percent of their annual salaries each year to be able to retire comfortably,
> Forging a Winning Workforce Nucor’s egalitarian culture places a premium on teamwork and idea-sharing between frontline workers and management. Result: A highly profitable partnership. Pay-for-Performance On average, two-thirds of a Nucor steelworker’s p
> The gold medal performance of the U.S. ice hockey team in the 1980 Winter Olympics has been described as the “Miracle on Ice” The “miracle” was the product of an effective performance-management system implemented by the U.S. team’s head coach, Herb Broo
> How can effective HRM contribute to sustainability?
> In the 3 months since he began working for Alibaba Group Holdings, Ltd., Matt Shofnos, age 30, has improved his Mandarin, helped an American retailer target Chinese consumers, and donned a Captain America costume to meet the company’s chief executive. Al
> Arguably, the bottom line of recruiting success is the number of successful new hires. Organizations know that it is important to measure the outcomes of recruitment, but, unfortunately, most focus on measures that show how efficient they are: time to fi
> Merrill Lynch, like many other financial companies, was caught in a bad situation during the Great Recession. Sub-prime lending woes and a downwardly spiraling housing market resulted in enormous financial losses. The company benefited from high returns
> Talk, talk, talk. As Ken Hartman, an African American midlevel manager at Blahna Inc. recalls, that’s all he got from the white men above him in top management—despite the fact that Blahna had long enjoyed a reputation as a socially responsible company.
> ONO Inc. is an auto-supply company with 11 employees. In addition, there are two supervisors and Fred Donofrio, the owner and general manager. Last year, ONO did $7 million in business and earned $355,000 in profits ($525,000 before taxes). The auto-supp
> The robots are coming! The robots are coming! Well, not so fast. According to a 2017 study from the McKinsey Global Institute, only 5 percent of all occupations are at risk of being entirely automated by 2025. Even when the technical potential exists, th
> Skyline Machine Shop is a medium-sized firm located in San Jose, California. It employs almost 1,000 workers when business is good. Skyline specializes in doing precision machining on a subcontract basis for several large aerospace companies. Skilled mac
> Your company wants to encourage more employees to participate in work site wellness programs. Would you recommend rewards for participating or punishments for not participating?
> Identify three preventive steps that an employer might take to avoid incidents of workplace violence.
> How can effective HRM contribute to improvements in productivity and quality of work life?
> Should organizations be willing to invest more money in employee wellness? Why or why not?
> You observe a coworker threatening another employee. What should you do?
> If the benefits of EAPs cannot be demonstrated to exceed their costs, should EAPs be discontinued?
> Explain how a disease-management program might be used to address substance-abuse problems.
> Discuss the relative effectiveness of engineering versus management controls to improve job safety and health.
> What can firms do to encourage all employees to behave safely on the job?
> Should OSHA’s enforcement activities be expanded? Why, or why not?
> How does the imposition of employee discipline for poor performance (or conversely, the failure to discipline) serve as a signal to other employees?
> What might explain the finding that across cultures, employee-voice systems are associated with judgments of fairness?
> Discuss the similarities and differences among employee voice, interactional justice, and informational justice. Can you give an example of each one?
> What difficulties do you see in shifting from a hierarchical, departmentalized organization to a leaner, flatter one in which power is shared between workers and managers?
> In the course of your job, you learn that someone is “cooking the books.” Discuss the steps you would take to resolve the issue.
> What are some guidelines to follow in determining a reasonable compromise between a company’s need to run its business and employee rights to privacy?
> How can a firm avoid lawsuits for employment at will?
> Is it ethical to record a conversation with your boss without his or her knowledge? If yes, under what circumstances?
> What advice would you give to an executive who is about to negotiate an employment contract?
> Discuss the similarities and differences in these concepts: procedural justice, workplace due process, and ethical decisions about behavior.
> In performance reviews, why is it more important to focus on the future than to dwell on the past?
> Google’s Project Oxygen found that technical skill is the least important characteristic of a good boss. What kinds of other skills are more important?
> Why is it so difficult to compare industrial relations systems in different countries?
> Your company has just learned that it is the target of a union-organizing campaign. How will you advise managers about what they can and cannot say to employees?
> Considering everything we have discussed in this chapter, describe management styles and practices that will be effective for your country’s businesses in the next decade.
> Why is it in the best interests of management and labor to work together? Or is it?
> Compare and contrast mediation, interest arbitration, and grievance arbitration.
> What are the key features of the U.S. industrial relations system?
> Why is it so difficult to be effective at both distributive and integrative bargaining in the course of the same negotiations?
> Discuss the rights and obligations of unions and management during a union-organizing drive.
> Are the roles of labor and management inherently adversarial?
> What might be some advantages and some disadvantages of cafeteria-style benefits?
> How do voluntary benefits programs allow smaller companies to offer a wider array of benefits than they otherwise would be able to?
> A major problem with benefits is that many employees don’t know much about them—until they need to use them. What can organizations do to deal with that problem?
> Your company has just developed a new, company-sponsored savings plan for employees. Develop a strategy to publicize the program and to encourage employees to participate in it.
> How will demographic changes and increasing diversity in the workplace affect the ways that organizations manage their people?
> What can large firms do to control health-care costs? What about small firms?
> In terms of the “attract-retain-motivate” philosophy, how do benefits affect employee behavior?
> The new world of employee benefits is best described as “sharing costs, sharing risks.” Discuss the impact of that philosophy on the broad areas of health care and pensions.
> What should a company do over the short and long term to maximize the use and value of its benefits choices to employees?
> How do tight versus loose labor market conditions affect wage rates?
> If you were implementing an employee stock-ownership plan, what key factors would you consider?
> Distinguish profit-sharing from gain-sharing.
> In your opinion, why are more firms tying executive incentives to long-term (3 years or more) company performance?
> What cautions would you advise in interpreting data from pay surveys?
> Discuss the advantages and disadvantages of competency- or skill-based pay systems.
> What are some advantages of having a common set of leadership attributes for all managers to strive for? Are there any downsides to this approach?
> What can companies do to ensure internal, external, and individual equity for all employees?
> What steps can a company take to align its compensation system with its general business strategy?
> Should discussions of employee job performance be separated from salary considerations?
