MGT 526 Wk 3 – Practice: Managerial Leadership

By expressing concern for subordinates and representing their best interests in day-to-day activities, a manager demonstrates a(n) _______ behavior in the context of path–goal theory.

Multiple Choice

• directive
• supportive
• task-oriented
• achievement-oriented
• structural

According to Fiedler, _______ is the extent to which subordinates trust and are loyal to their superior.

Multiple Choice

• empowerment
• task-orientation
• leader–member relations
• consideration
• position power

A manager has increased his effectiveness by clearly defining employee goals and ensuring each employee understands how to achieve them. The manager has high

Multiple Choice

• consideration.
• task structure.
• empowerment.
• referent power.
• position power.

The _______ model of leadership is based on the premise that effective leaders possess personal qualities or skills that set them apart from ineffective leaders.

Multiple Choice

• task-oriented
• path-goal
• contingency
• trait
• transformational

When Gillian shows that she cares for her employees and takes action to help them enjoy their work, she is engaging in _______ behavior.

Multiple Choice

• empowering
• consideration
• task-oriented
• referent
• autonomous

Required information

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Diversification at Pepsi

Corporate-level strategies involve choosing the industries and countries in which a company will invest its resources to achieve its mission and goals. Managers ask questions such as, “How should the growth and development of our company be achieved?” In order to improve productivity and profit, managers seek opportunities to use a company’s resources to create new and improved goods and services for its customers.

In this exercise, you will read about and analyze the corporate-level strategy at Pepsi.

Read the case below and answer the questions that follow.

The story of PepsiCo is a bit fizzy. The company’s history tells a tale of related and unrelated diversification. Best known for the soda from which it gets its name, it was founded as the Pepsi-Cola Company in 1902. It merged with Frito-Lay, Inc., in 1965 to become PepsiCo. Along the way, it has diversified into many products related and unrelated to its beverage and packaged snack food businesses. For example, in unrelated diversification, the company once owned several restaurant chains like Pizza Hut, Taco Bell, and KFC. The company divested itself of its fast food division in 1997. Two examples of related diversification include the 1998 purchase of Tropicana and the 2001 purchase of Quaker Oats. The purchase of Tropicana diversified PepsiCo’s beverage portfolio to include juices. The purchase of the Quaker Oats company was mainly to obtain the sports drink Gatorade, which Quaker owned. This purchase further diversified PepsiCo’s beverage portfolio to include sports drinks. Also, the acquisition of Quaker’s breakfast cereal, pasta, and rice business was not completely unrelated to the Frito-Lay snack food division.

However, not everyone feels the products in PepsiCo’s current portfolio are closely related. Activist investor Nelson Peltz would like to see PepsiCo split its beverage and food units apart. His argument is that the two units would be stronger apart than they are together. “A stand-alone snacks business would offer investors strong growth in sales, margins, and free cash flow generation,” he said. “And a stand-alone beverage business would provide strong, stable, free cash flow that may be optimized through an effective balance sheet and capital return program.” A Wall Street Journal survey released in 2014 indicated that the majority of institutional investors support splitting the company.

However, at least two powerful voices do not want to see the company split. First, Warren Buffet, who is the chairman and chief executive officer of Berkshire Hathaway and someone to whom many investors will listen, said, “I think that Frito-Lay is an extremely good business. It’s a better business than the soft drink business, but I think the soft drink business is a good business too, and I don’t see any reason to split them up.” The second powerful voice is that of PepsiCo CEO Indra Nooyi. Nooyi has been leading the company since 2006. In her previous roles with the company, she directed the divestment of the restaurant businesses as well as the acquisitions of Tropicana and Quaker Oats. Nooyi has insisted that beverages and snacks go together, both for consumers and for business logistics. “Decoupling our beverage and snack businesses in North America would significantly reduce our relevance to our customers,” Nooyi said. “Within most of our largest grocery channel customers, we would fall from being the top supplier to a top 4-or-below supplier, and in the mass merchandise and drug channels, we would drop below the top 10.”

The company is keeping its beverage and food units together for now. But the arguments about whether these units are related or unrelated will likely continue for a long time.

In general, _______ refers to the corporate-level strategy of expanding a company’s business operations into a new industry in order to produce new kinds of valuable goods or services.