Case 4 Strategy Implementation and Strategic Controls
Executive Summary
This report presents a detailed analysis of PepsiCo’s strategic implementation and controls with regard to their fitness with the company’s generic approach. The report mainly starts with providing an in-depth assessment of the complementary mechanisms by evaluating the company’s organization design as well as the structural components and control systems such as budgeting and variance inquiry. This is then followed by a significant explanation of the cultural forces as well as human resources distresses. Further the implication of the company’s strategy of the discussed components and how the components are aligned with the existing vision and mission statements followed by ethical principles and how they are encompassed by its strategy.
Introduction
The implementation of the most effective strategies is essential for the success of every organization. Strategies are mainly implemented via the utilization of the existing organizational structure, human resources, control networks, and culture. In that, a successful strategy is one that incorporates all these elements for better performance. Regardless of how well a particular strategy is created if the people within the respective organization fail to be involved and the culture is unsupportive, and their systems are unable to conduct the several measures then the system will ultimately fail. It is widely known that human resource is one of the most expensive assets that any organization can own. People are the ones that determine the performance of the organization, and thus the culture must be one that encourages individuals to focus on the strategic growth of the company. The ability for any company to succeed in the market there must be a good strategy that not only markets the company but also promotes the products among the target consumers.
Complementary Components
With respect to the company’s organizational structure, the culture is based on diversity since it mainly employs thousands of individuals from different nations around the world. The aspect is a potential source of skills and expertise (Schermerhorn, 2010). One of the leading approaches of assessing a business approach is to examine its organizational design while incorporating cultural forces and human resources issues to gain an in-depth comprehension of values that drive the success of the business on a daily basis (Bachmeier, 2013). Each and every structured organization is created through the development of varying units, and thus the organizational design refers to a manner in which departments are arranged. The two leading organizational designs are departmentalization and functional. The functional design entails where departments are arranged based on their functions such as marketing and account while the divisional design is just grounded in classifications.
PepsiCo has a decentralized organizational structure. The company has a mixed design that incorporates the divisional and functional classification given that it has several departments that are focused on specified functions (Bachmeier, 2013). The divisional design exists because numerous subsidiaries across the globe have a reduced level of independence. The decentralized structure such as the one that the company holds is needed to incorporate extensive business operations in a smooth manner since it is just a single division that is entitled to making decisions for the growth of the market. Every division is thus entitled to carrying out specific roles which lead to efficiency and the success of the organization. The roles are therefore not centralized based on the extensiveness of the business to acquire high control of its multinational approach.
With regard to the strategic control, several instruments are necessary for budgeting and evaluation of variance (Hill & Jones, 2010). The instruments are necessary for the bid to ensure that the selected strategies are applied in the right manner, and they are additionally utilized as significant signs for the evaluation of the needed measures for strategic positioning. The budget serves as a tool for forecasting the operational expenses while on the other hand, the variance findings offer details on the needed corrections for the achievements of the set goals by the organization.
With regard to the cultural values on which the organization is involved in as a global company, the firm must at all times face diversity and cultural differences a component that is seen in the way that it presents itself to the public. The culture of the company is one that is inclusive with regard to cultural diversities which has continuously supported the innovative aspect. Some other benefits that usually boosts the functionality of the company include its quality products and focus on continuous growth (Lynch, 2018). The strategy is vital in addressing human resources related issues given that it promotes fairness as well as the necessity to employ individuals with technical skills to guard the performance and positioning of the firm. The company mainly seeks to become the leader in the market by transforming the world and creating a more reliable environment. For the achievement of the goal, the company is mainly dependent on its employees. Thus, it creates a favorable environment for all of them by encouraging them to be committed and offering adequate compensations (Lynch, 2018). The company has been capable since it uses a standardized system that follows a centralized approach that offers skills to the workers while adhering to ethics.
The Implication of Complementary Components on the Company’s Strategy
The direct effect of the company’s design that is divisional and functional following the decentralized structure is that it makes the firm flexible as it enables it to efficiently mitigate through challenges and adopt adequate approaches in the market. The approach is comprehensive and consumer-centered given that different markets hold different needs. In that, in a particular region, the products provided in the United States might not be demanded (Hill & Jones, 2010). The existing structure additionally allows for the ability to hold a rapid strategy in the case that issues erupt without being forced to await centralized feedback. The approach makes it possible to receive responses conveniently leading to efficiency.
Strategic controls in the competitive surrounding are vital tools that seek to ensure that the form achieves the set objectives and limits. As for PepsiCo, these instruments are needed to sustain adequate control within all the divisions while also offering the potential for the goals to be obtained with the existing resources. In other words, it is evident that variance assessment and budgeting have a direct implication on business strategy because they are the determinant of the performance to be achieved and the much that the firm needs to invest in every operation.
About the cultural forces, they are well incorporated in the company since it offers directions that individuals should adhere to for the success of the company. In that even when the business is extensively grounded across the globe, the people involved clearly understand their role with regard to business. Most of the cultural forces originate from the outside surrounding, and this can, therefore, impact the manner in which business is conducted on the global scale. In that with the rising need for healthier commodities among the public the company has made the decision of producing healthier commodities so as to avoid undesirable attitudes. The worker's issues also affect the company’s approach (Hill & Jones, 2010). The company must at all times use a strategy that favors its employees in order to support good performance. It is thus essential for the company to guard an intelligible adherence to the company’s value in the avoidance of any negative publicity and ensure that the workplace favors every individual.
In this context, it is evident that the structural elements of the company like budgeting are well aligned with the firm’s strategy since they depict the foundation on which the strategy has been developed upon. In the case that the needed resources are not adequate for the achievement of the set objectives, there is a necessity to transform the approach with regard to the resources that the firm possesses (Hoskisson & Hoskisson, 2013). In this context, the budget is needed for the success of the approach for the objectives to be achieved. The cultural setting is well connected with the firm’s mission and vision because this leads to the achievement of the set objectives. The brand approach is centered explicitly on inclusion and diversity which have been the primary stirring tool for the achievement of success.
Business Ethics
PepsiCo can be viewed as an ethical company. The business does not necessarily incorporate unethical operations since the corporation is socially responsible. The company mainly focuses on ensuring that it guards the social, economic and environmental wellness of all the communities that the operations take place (Hoskisson & Hoskisson, 2013). The company has been on the forefront of ensuring that it guards its wastes and the use of resources such as water. The company is particular with regard to its values, and its adherence to safety and quality are evident. The company has set up measures that seek to ensure that it becomes transparent by complying with the legal guidelines in all the markets. The fact that it asserts on fairness when treating its employees is also essential in showing its business ethics obligations.
Proposed Changes
Some of the proposed changes might include sustainability and marketing. In that, the company must not only focus on the cultural aspect of the business. The aspect would result in an adequate change which would lead to the success of the company. Transparency is a necessity in the modern business world that is needed in overcoming competition. Its marketing needs to be more explicit by informing the consumers of all the health-related problems with the consumption of the products. As more and more consumers move to the healthier options, the public needs to be aware of the health effects of beverages consumption.
Conclusion
Based on the analysis above, it is evident that the company follows a decentralized strategy because its business is costly. PepsiCo has been able to achieve success following a mixture of the divisional and functional approach where the functions are divided based on individual’s expertise. In the third context, the company has been able to align the strategy with its general structure and components. Thus for success to be achieved for the long run the company needs to focus on the achievement of transparency in the market to allow the consumers to fully understand the health issues that are related to their beverage consumption.
References
Bachmeier, K. (2013). Analysis of marketing strategies used by pepsico based on ansoff's theory. Place of publication not identified: Grin Verlag.
Hill, C. W. L., & Jones, G. R. (2010). Strategic management theory: An integrated approach. Boston, MA: Houghton Mifflin.
Hoskisson, R. E., & Hoskisson, R. E. (2013). Competing for advantage. Mason, OH: South-Western/Cengage Learning.
Lynch, R. L. (2018). Strategic management. Harlow, England: Pearson.
Schermerhorn, J. R. (2010). Management. Hoboken, N.J: Wiley.
