ORGANIZATIONAL

STRUCTURE OF
PEPSICO
 In 1965, Donald Kendall, the CEO of Pepsi-Cola, and Herman Lay, the CEO of Frito-Lay,
recognized what they called “a marriage made in heaven,” a single company delivering
perfectly-salty snacks served alongside the best cola on earth. Their vision led to what quickly
became one of the world's leading food and beverage companies: PepsiCo. For more than 50
years, as tastes, trends and lifestyles have changed, PepsiCo has evolved with them. Our
willingness to adapt and grow has transformed our snack and soda company into a collection of
global brands including Pepsi and Quaker, Gatorade and Tropicana, Frito-Lay and beyond.
Today, PepsiCo is one of the world’s most-respected companies with products sold in more than
200 countries and territories and 22 brands that generate more than $1 billion each in estimated
annual retail sales. PepsiCo is also celebrated for its commitment to doing business the right
way, integrating Purpose into our business strategy. In 2019, we adopted a new vision: to Be the
Global Leader in Convenient Foods and Beverages by Winning with Purpose. Winning with
Purpose is the next chapter in our purpose agenda and conveys our belief that sustainability can
be an even greater contributor to our success in the marketplace. Our company is made up of six
divisions: PepsiCo Beverages North America; Frito-Lay North America; Quaker Foods North
America; Latin America; Europe Sub-Saharan Africa; and Asia, Middle East and North Africa.
Each of these divisions has its own unique history and way of doing business. PepsiCo’s
organizational structure has been reformed several times to address changing global market
conditions. The company’s current corporate structure reflects the business aims of global
expansion and leadership. These aims highlight PepsiCo’s mission and vision statements.
PepsiCo’s strategies are also manifested in how its organizational structure supports international
growth. A firm’s organizational structure defines the system and design of business components,
and how these components interact to fulfill the firm’s mission and vision. In PepsiCo’s case, the
organizational structure enables control over the expansive reach of the company around the
world, considering significant differences among market conditions. PepsiCo’s organizational
structure’s characteristics are based on the company’s approach to maximize its control of the
business while continuing to grow internationally.

Features of PepsiCo’s Organizational Structure

PepsiCo originally had a hierarchical organizational structure in its early years. However, after a
number of key mergers and acquisitions, along with global expansion, the company has changed
its organizational structure accordingly. The following are the main characteristics of PepsiCo’s
organizational structure

1. Market divisions
2. Functional corporate groups/offices
3. Global hierarchy
 The organizational structure of PepsiCo. Inc. Pepsi adopted a divisional organization. Operations
were departmentalized by product, by location and by location. It is organized into three business
units, as follows: PepsiCo Americas Foods (PAF), which includes Frito-Lay North America
(FLNA), Quaker Foods North America (QFNA) and all of our Latin American food and snack
businesses (LAF), including our Sarita’s and Gamesa businesses in Mexico; PepsiCo Americas
Beverages (PAB), which includes PepsiCo Beverages North America and all of our Latin
American beverage businesses; and PepsiCo International (PI), which includes all PepsiCo
businesses in the United Kingdom, Europe, Asia, Middle East and Africa. CEO PepsiCo
Americas Foods President Frito-Lay North America Marketing Dept. Production Dept. Finance
Dept. President Quaker Foods and Snacks North America Marketing Dept. Production Dept.
Finance Dept. President South America Foods Marketing Dept. Production Dept. Finance Dept.
CEO PepsiCo Americas Beverages President Pepsi- Cola North America Marketing Dept.
Production Dept. Finance Dept. President Latin America Beverages Marketing Dept. Production
Dept. Finance Dept. DEO PepsiCo International President PepsiCo Asia Pacific Marketing Dept.
Production Dept. Finance Dept. President PepsiCo SAMEA Region Marketing Dept. Production
Dept. Finance Dept. President PepsiCo Europe Marketing Dept. Production Dept. Finance Dept.

Market Divisions.

The most prominent feature of PepsiCo’s organizational structure is its market divisions. These
divisions are based on two variables: business and geography. In terms of business, PepsiCo’s
maintains one global division for Frito-Lay and another global division for Quaker Foods. In
terms of geography, the company has divisions for the Americas, Europe, and other regions. The
following are the market division in PepsiCo’s organizational structure:

1. PepsiCo Americas Beverages

2. Frito-Lay
3. Quaker Foods
4. Latin America Foods
5. PepsiCo Europe
6. PepsiCo Asia, Middle East & Africa

Functional Corporate Groups/Offices.

This characteristic of PepsiCo’s organizational structure refers to basic business functions. The
company has global or corporate offices for these functions. PepsiCo’s objective in having
functional groups is to ensure corporate control and rapid implementation of policies and
strategies. An Executive Vice President or Senior Vice President heads each of these groups. The
following are the main functional corporate groups/offices at PepsiCo:
1. Global Categories and Operations
2. Global Research and Development
3. Human Resources
4. Finance
5. Government Affairs and Legal
6. Talent Management, Training and Development
7. Communications

Global Hierarchy.

PepsiCo’s organizational structure also features a hierarchy that spans the global organization. A
hierarchy typically supports monitoring, control and governance at the global/corporate level.
PepsiCo has maintained considerable hierarchy for top-down communications, monitoring and
control. This characteristic of the organizational structure also provides a means through which
PepsiCo minimizes deviations from its policies and strategies.

PepsiCo organizational structure can be described as divisional and it

integrates the following divisions:

1. Frito-Lay North America (FLNA).

2. Quaker Foods North America (QFNA).
3. Latin America
4. Asia, Middle East & North America (AMENA).
5. Europe & Sub-Saharian Africa (ESSA).
6. North America Beverages (NAB).
Each division is led by a divisional CEO, who report to PepsiCo CEO and Chairman Indra K.
Nooyi. Besides divisional CEOs, PepsiCo leadership team comprises the following positions:
1. Executive Vice President, Communications
2. President, North America Nutrition
3. Senior Vice President, Chief HR officer for Human Capital Management Services and Operations
4. Senior Vice President and Chief Information Officer
5. President, ESSA Category Teams, Franchise and Po1 Sub-Saharan Africa
6. Senior Vice President, Talent Management Training and Development
7. President, Global Foodservice
8. Senior Vice President and Controller
9. President, Global Beverage Group
10. Vice Chairman and Chief Financial Officer
11. Vice Chairman and Chief Scientific Officer, Global Research and Development
12. Chairman, Greater China Region
13. President, Global Snacks Group and Global Insights
14. President, Latin America Beverages
15. Executive Vice President, Global Operations
16. President, Mexico
17. President and Chief Operating Officer, Frito-Lay North America
18. Senior Vice President, Chief Global Diversity and Engagement Officer
19. President and Chief Executive Officer, Greater China Region
20. President and Chief Operating Officer, North America Beverages
21. Executive Vice President, Human Resources and Chief Human Resources Officer
22. Executive Vice President, Government Affairs, General Counsel and Corporate Secretary
23. Senior Vice President and Chief Supply Officer
24. Executive Vice President, Global Categories & Franchise Management

PepsiCo’s Organizational Structure Advantages & Disadvantages

The primary advantage of PepsiCo’s organizational structure is the ability to focus on regional
market needs. This is possible through market divisions. The organizational structure also has the
advantage of supporting PepsiCo’s global corporate control. However, PepsiCo experiences the
disadvantage of the limits of its organizational structure in terms of flexibility. For example, the
company has a single global division for Frito-Lay. This characteristic reduces PepsiCo’s ability
to respond to market variations and changes in its Frito-Lay business. Thus, a possible
improvement is to divide such single global divisions into regional market divisions, so that
PepsiCo could enhance its responses to market variations around the world.