Source:https://2012books.lardbucket.

org/books/an-introduction-to-organizational-behavior-
v1.1/s07-understanding-people-at-work-i.html#

This is “Understanding People at Work: Individual Differences and Perception”, chapter 3 from the
book An Introduction to Organizational Behavior (v. 1.1). For details on it (including licensing), click
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This book is licensed under a Creative Commons by-nc-sa 3.0 license. See the license for more
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Individual differences

Advice for Hiring Successful Employees: The Case of Guy Kawasaki

When people think about entrepreneurship, they often think of Guy Kawasaki
(http://www.guykawasaki.com), who is a Silicon Valley venture capitalist and the author of nine

books as of 2010, including The Art of the Start and The Macintosh Way. Beyond being a best-selling
author, he has been successful in a variety of areas, including earning degrees from Stanford

University and UCLA; being an integral part of Apple’s first computer; writing columns
for Forbes and Entrepreneur Magazine; and taking on entrepreneurial ventures such as cofounding

Alltop, an aggregate news site, and becoming managing director of Garage Technology Ventures.
Kawasaki is a believer in the power of individual differences. He believes that successful companies

include people from many walks of life, with different backgrounds and with different strengths and
different weaknesses. Establishing an effective team requires a certain amount of self-monitoring on

the part of the manager. Kawasaki maintains that most individuals have personalities that can easily
get in the way of this objective. He explains, “The most important thing is to hire people who

complement you and are better than you in specific areas. Good people hire people that are better
than themselves.” He also believes that mediocre employees hire less-talented employees in order

to feel better about themselves. Finally, he believes that the role of a leader is to produce more
leaders, not to produce followers, and to be able to achieve this, a leader should compensate for

their weaknesses by hiring individuals who compensate for their shortcomings.

Source:  http://commons.wikimedia.org/wiki/File:Guy_Kawasaki,_2006.jpg  by Dave Sifry.

In today’s competitive business environment, individuals want to think of themselves as

indispensable to the success of an organization. Because an individual’s perception that he or she is

the most important person on a team can get in the way, Kawasaki maintains that many people
would rather see a company fail than thrive without them. He advises that we must begin to move

past this and to see the value that different perceptions and values can bring to a company, and the
goal of any individual should be to make the organization that one works for stronger and more

dynamic. Under this type of thinking, leaving a company in better shape than one found it becomes
a source of pride. Kawasaki has had many different roles in his professional career and as a result

realized that while different perceptions and attitudes might make the implementation of new
protocol difficult, this same diversity is what makes an organization more valuable. Some managers

fear diversity and the possible complexities that it brings, and they make the mistake of hiring similar
individuals without any sort of differences. When it comes to hiring, Kawasaki believes that the initial

round of interviews for new hires should be held over the phone. Because first impressions are so
important, this ensures that external influences, negative or positive, are not part of the decision-

making process.

Many people come out of business school believing that if they have a solid financial understanding,

then they will be a successful and appropriate leader and manager. Kawasaki has learned that
mathematics and finance are the “easy” part of any job. He observes that the true challenge comes

in trying to effectively manage people. With the benefit of hindsight, Kawasaki regrets the choices he
made in college, saying, “I should have taken organizational behavior and social psychology” to be

better prepared for the individual nuances of people. He also believes that working hard is a key to
success and that individuals who learn how to learn are the most effective over time.
If nothing else, Guy Kawasaki provides simple words of wisdom to remember when starting off on a

new career path: do not become blindsided by your mistakes, but rather take them as a lesson of
what not to do. And most important, pursue joy and challenge your personal assumptions.

Case written by Carlene Reynolds, Talya Bauer, and Berrin Erdogan to accompany Bauer, T., &
Erdogan, B. (2009). Organizational behavior (1st ed.). New York: Flat World Knowledge. Based on

information from Bryant, A. (2010, March 19). Just give him 5 sentences, not “War and Peace.”  New
York Times. Retrieved March 26, 2010,

from http://www.nytimes.com/2010/03/21/business/21corner.html?emc=eta1; Kawasaki, G.
(2004). The art of the start: The time-tested, battle-hardened guide for anyone starting anything.

New York: Penguin Group; Iwata, E. (2008, November 10). Kawasaki doesn’t accept failure; promotes
learning through mistakes. USA Today, p. 3B. Retrieved April 2, 2010,

from http://academic.lexisnexis.com/.

DISCUSSION QUESTIONS

1. Describe how self-perception can positively or negatively affect a work environment?

2. What advice would you give a recent college graduate after reading about Guy
Kawasaki’s advice?

3. What do you think about Kawasaki’s hiring strategy?

4. How would Kawasaki describe a “perfect” boss?
5. How would you describe a “perfect” boss
 2. Attitude and Behaviour

Source: https://2012books.lardbucket.org/books/an-introduction-to-organizational-behavior-
v1.1/s08-individual-attitudes-and-behav.html

 People Come First: The Case of SAS

Figure 4.1

© 2008 SAS Institute Inc. All rights reserved. Reproduced by permission from SAS Institute Inc., Cary,

North Carolina.

Who are your best customers? Which customers are bringing you the most profits and which are the

least profitable? Companies are increasingly relying on complicated data mining software to answer
these and other questions. More than 92% of the top 100 companies on the Fortune Global 500 list

are using software developed by SAS Institute Inc., the world’s largest privately held software
company, for their business intelligence and analytical needs. The Cary, North Carolina, company is

doing extremely well by any measure. They have over 10,000 employees worldwide, operate in over
100 countries, and reported $2.31 billion in revenue in 2009 (their 33rd consecutive year of growth

and profitability). The company is quick to attribute their success to the performance and loyalty of
their workforce. This is directly correlated with how they treat their employees.

SAS has perfected the art of employee management. It has been ranked on Fortune magazine’s best
places to work list every year since the list was first published. Employees seem to genuinely enjoy

working at SAS and are unusually attached to the company, resulting in a turnover rate that is less
than 4% in an industry where 20% is the norm. In fact, when Google designed their own legendary

campus in California, they visited the SAS campus to get ideas.

One thing SAS does well is giving its employees opportunities to work on interesting and challenging

projects. The software developers have the opportunity to develop cutting-edge software to be used
around the world. The company makes an effort to concentrate its business in the areas of analytics,

which add the most value and help organizations best analyze disparate data for decision making,
creating opportunities for SAS workers to be challenged. Plus, the company removes obstacles for

employees. Equipment, policies, rules, and meetings that could impede productivity are eliminated.

The company has a reputation as a pioneer when it comes to the perks it offers employees, but

these perks are not given with a mentality of “offer everything but the kitchen sink.” There is careful
thinking and planning behind the choice of perks the company offers. SAS conducts regular

employee satisfaction surveys, and any future benefits and perks offered are planned in response to
the results. The company wants to eliminate stressors and anything that dissatisfies from people’s

lives. To keep employees healthy and fit, there are athletic fields; a full gym; a swimming pool; and
tennis, basketball, and racquetball courts on campus. Plus, the company offers free on-site health

care for employees, covers dependents at their fully staffed primary medical care center, and offers
unlimited sick leave. The company understands that employees have a life and encourages

employees to work reasonable hours and then go home to their families. In fact, a famous motto in
the company is, “If you are working for more than 8 hours, you are just adding bugs.” SAS is truly

one of the industry leaders in leveraging its treatment of people for continued business success.

Case written by Berrin Erdogan and Talya Bauer to accompany Bauer, T., & Erdogan, B.

(2009). Organizational behavior (1st ed.). New York: Flat World Knowledge. Based on information
from Doing well by being rather nice. (2007, December 1). Economist. Retrieved April 30, 2010,

from http://www.financialexpress.com/news/doing-well-by-being-rather-nice/247090; Cakebread,
C. (2005, July). SAS…not SOS. Benefits Canada, 29(7), 18; Florida, R., & Goodnight, J. (2005, July–

August). Managing for creativity. Harvard Business Review, 83(7/8), 124–131; Karlgaard, R. (2006,
October 16). Who wants to be public? Forbes Asia, 2(17), 22.
 3. A Motivating Place to Work: The Case of Zappos

Source :https://2012books.lardbucket.org/books/an-introduction-to-organizational-behavior-
v1.1/s09-theories-of-motivation.html

It is unique to hear about a CEO who studies happiness and motivation and builds those principles
into the company’s core values or about a company with a 5-week training course and an offer of

$2,000 to quit anytime during that 5 weeks if you feel the company is not a good fit. Top that off
with an on-site life coach who also happens to be a chiropractor, and you are really talking about

something you don’t hear about every day. Zappos is known as much for its 365-day return policy
and free shipping as it is for its innovative corporate culture. Although acquired in 2009 by Amazon

(NASDAQ: AMZN), Zappos managed to move from number 23 in 2009 on Fortune magazine’s “100
Best Companies to Work For” list to 15 in 2010.

Performance is a function of motivation, ability, and the environment in which you work. Zappos
seems to be creating an environment that encourages motivation and builds inclusiveness. The

company delivers above and beyond basic workplace needs and addresses the self-actualization
needs that most individuals desire from their work experience. CEO Tony Hsieh believes that the

secret to customer loyalty is to make a corporate culture of caring a priority. This is reflected in the
company’s 10 core values and its emphasis on building a team and a family. During the interview
process, applicants are asked questions relating to the company’s values, such as gauging their own
weirdness, open-mindedness, and sense of family. Although the offer to be paid to quit during the

training process has increased from its original number of $400, only 1% of trainees take the offer.
Work is structured differently at Zappos as well. For example, there is no limit to the time customer

service representatives spend on a phone call, and they are encouraged to make personal
connections with the individuals on the other end rather than try to get rid of them.

Although Zappos has over 1,300 employees, the company has been able to maintain a relatively flat
organizational structure and prides itself on its extreme transparency. In an exceptionally detailed

and lengthy letter to employees, Hsieh spelled out what the new partnership with Amazon would
mean for the company, what would change, and more important, what would remain the same. As a
result of this type of company structure, individuals have more freedom, which can lead to greater

satisfaction.

Although Zappos pays its employees well and offers attractive benefits such as employees receiving

full health-care coverage and a compressed workweek, the desire to work at Zappos seems to go
beyond that. As Hsieh would say, happiness is the driving force behind almost any action an

individual takes. Whether your goals are for achievement, affiliation, or simply to find an enjoyable
environment in which to work, Zappos strives to address these needs.

Case written by Carlene Reynolds, Talya Bauer, and Berrin Erdogan to accompany Bauer, T., &
Erdogan, B. (2009). Organizational behavior (1st ed.). New York: Flat World Knowledge. Based on

information from Robischon, N. (2009, July 22). Amazon buys Zappos for $847 million. Fast
Company. Retrieved February 28, 2010, from http://www.fastcompany.com/blog/noah-

robischon/editors-desk/amazon-buys-zappos-807-million; Walker, A. (2009, March 14). Zappos’

Tony Hsieh on Twitter, phone calls and the pursuit of happiness. Fast Company. Retrieved February

27, 2010, from http://www.fastcompany.com/blog/alissa-walker/member-blog/tony-hsiehs-

zapposcom; Happy feet—Inside the online shoe utopia. (2009, September 14). New Yorker.

Retrieved February 28, 2010, from http://about.zappos.com/press-center/media-coverage/happy-

feet-inside-online-shoe-utopia; 100 best companies to work for. (2010, February 8). Fortune.

Retrieved February 26, 2010,

from http://money.cnn.com/magazines/fortune/bestcompanies/2010/snapshots/15.html.

DISCUSSION QUESTIONS

1. What potential organizational changes might result from the acquisition by Amazon?
2. Why do you think Zappos’ approach is not utilized more often? In other words, what are

the challenges to these techniques?

3. Why do you think Zappos offers a $2,000 incentive to quit?

4. Would you be motivated to work at Zappos? Why or why not?

 4.Managing Stress and Emotions and Emotional Intelligence

Facing Foreclosure: The Case of Camden Property Trust

Figure 7.1
https://2012books.lardbucket.org/books/an-introduction-to-organizational-behavior-v1.1/s09-
theories-of-motivation.html

© Thinkstock

For the third year in a row, Camden Property Trust (NYSE: CPT) has been named one

of Fortune magazine’s “100 Best Companies to Work For.” In 2010, the company went from 41 on
the list to number 10. Established in 1982 and headquartered in Houston, Texas, Camden Property

owns and develops multifamily residential apartment buildings. With 183 properties and 63,286
apartment homes, the real estate giant focuses its development on the fastest-growing markets in

the United States. But like so many organizations in the real estate industry during the 2007 and
2008 subprime mortgage crises, business took a turn for the worst, and the company was faced with

a substantial slowdown.

Camden realized that cuts would be inevitable and in 2009 announced that it would be reducing the

number of planned development projects, which meant a 3% reduction of overall employees and a
50% cut of development staff. Camden’s organizational culture and motto is to “have fun.” Because

the company understood the importance of honesty and open communication with its staff, a strong
sense of mutual respect had been developed and cultivated well before the crisis, and as a result the

company was able to maintain the trust of its employees during the difficult time.

Downsizing and layoffs are two of the most prevalent forms of stress at the workplace and if not

handled properly can create severe psychological strain. Part of Camden’s success during the
transition was the company’s ability to give staff the necessary information about the situation.

Reinforcing the culture of fun at a past annual conference, the then CEO of Camden dressed as
Captain Kirk from Star Trek and referred to the tough economic times as “attacks” on the company,

and then he laid out a plan of action to bring about victory. Camden has found a way to successfully
relate its organizational culture through various modes of communication.
The value and respect that Camden Property shows to its employees has carried over to the way it

treats its customers. The company has discovered that doing the right thing makes good business
sense. With the increase in foreclosures and unemployment, Camden is marketing to individuals in

tough financial situations, a segment of the population once thought of as undesirable tenets. “We’ll
forgive a foreclosure, as long as they didn’t totally blow up their credit,” says Camden CEO Richard

Campo. The company has also created layoff-proof leases, which grant extensions to people and
allow them extra time to come up with the rent. If a resident loses his or her job, the company will

let them out of their lease without penalty or try to get them into a less expensive unit. Camden’s
ability to build trust with both its employees and its customers during a period of extreme emotional

stress ensures that the company will have a committed organization moving forward.

Case written by Carlene Reynolds, Talya Bauer, and Berrin Erdogan to accompany Bauer, T., &

Erdogan, B. (2009). Organizational behavior (1st ed.). New York: Flat World Knowledge. Based on
information from 100 best companies to work for. (2010, February 8). Fortune. Retrieved February

21, 2010, from http://money.cnn.com/magazines/fortune/bestcompanies/2010/full_list; Marino, V.

(2008, March 23). A bright spot for housing investors? New York Times. Retrieved April 22, 2010,

from http://www.nytimes.com/2008/03/23/realestate/23sqft.html?fta=y; Palmeri, C. (2009, March

16). Courting the foreclosed. BusinessWeek, p. 12; Thrash, R. (2009, December 11). Leasing agents

use idea from car sales for renters. St. Petersburg Times, p. 3; Jones, B. (2009, December 28). REITs
look to get back on track. Real Estate Finance and Investment; Caccamese, L. (2008). Managing

under stress: How the Best Companies to Work For address staff reductions. Great Place to Work
Institute. Retrieved February 21, 2009, from http://resources.greatplacetowork.com/

DISCUSSION QUESTIONS

1. What do you think the long-term benefits will be for Camden Property Trust and its
employees as a result of the way it handled this economic downturn?

2. What other suggestions do you have for Camden in creating business opportunities
during a period of economic volatility?

3. How does a company as large as Camden effectively and authentically communicate to

its employees?

4. Does Camden increase or decrease its credibility to staff when the CEO dresses up as
Captain Kirk?
5. What steps has Camden taken to help employees manage their stress levels?
 5.Teamwork Takes to the Sky: The Case of General Electric

https://2012books.lardbucket.org/books/an-introduction-to-organizational-behavior-v1.1/s13-
managing-groups-and-teams.html

igure 9.1

© 2010 Jupiterimages Corporation

In Durham, North Carolina, Robert Henderson was opening a factory for General Electric Company
(NYSE: GE). The goal of the factory was to manufacture the largest commercial jet engine in the

world. Henderson’s opportunity was great and so were his challenges. GE hadn’t designed a jet
engine from the ground up for over 2 decades. Developing the jet engine project had already cost GE

$1.5 billion. That was a huge sum of money to invest—and an unacceptable sum to lose should
things go wrong in the manufacturing stage.
How could one person fulfill such a vital corporate mission? The answer, Henderson decided, was

that one person couldn’t fulfill the mission. Even Jack Welch, GE’s CEO at the time, said, “We now
know where productivity comes from. It comes from challenged, empowered, excited, rewarded

teams of people.”

Empowering factory workers to contribute to GE’s success sounded great in theory. But how to

accomplish these goals in real life was a more challenging question. Factory floors, traditionally, are
unempowered workplaces where workers are more like cogs in a vast machine than self-

determining team members.

In the name of teamwork and profitability, Henderson traveled to other factories looking for places

where worker autonomy was high. He implemented his favorite ideas at the factory at Durham.
Instead of hiring generic “mechanics,” for example, Henderson hired staffers with FAA (Federal

Aviation Administration) mechanic’s licenses. This superior training created a team capable of
making vital decisions with minimal oversight, a fact that upped the factory’s output and his

workers’ feelings of worth.

Henderson’s “self-managing” factory functioned beautifully. And it looked different, too. Plant

manager Jack Fish described Henderson’s radical factory, saying Henderson “didn’t want to see
supervisors, he didn’t want to see forklifts running all over the place, he didn’t even want it to look

traditional. There’s clutter in most plants, racks of parts and so on. He didn’t want that.”

Henderson also contracted out non-job-related chores, such as bathroom cleaning, that might have

been assigned to workers in traditional factories. His insistence that his workers should contribute
their highest talents to the team showed how much he valued them. And his team valued their jobs

in turn.

Six years later, a Fast Company reporter visiting the plant noted, “GE/Durham team members take

such pride in the engines they make that they routinely take brooms in hand to sweep out the beds
of the 18-wheelers that transport those engines—just to make sure that no damage occurs in

transit.” For his part, Henderson, who remained at GE beyond the project, noted, “I was just
constantly amazed by what was accomplished there.”
GE’s bottom line showed the benefits of teamwork, too. From the early 1980s, when Welch became

CEO, until 2000, when he retired, GE generated more wealth than any organization in the history of
the world.

Case written by Talya Bauer and Berrin Erdogan to accompany Bauer, T., & Erdogan, B.
(2009). Organizational behavior (1st ed.). New York: Flat World Knowledge. Based on information

from Fishman, C. (1999, September). How teamwork took flight. Fast Company. Retrieved August 1,
2008, from http://www.fastcompany.com/node/38322/print; Lear, R. (1998, July–August). Jack

Welch speaks: Wisdom from the world’s greatest business leader. Chief Executive; Guttman, H.
(2008, January–February). Leading high-performance teams: Horizontal, high-performance teams

with real decision-making clout and accountability for results can transform a company. Chief
Executive, pp. 231–233.

DISCUSSION QUESTIONS

1. Would Robert Henderson’s strategy have worked if GE were manufacturing an entire

plane rather than just an engine? What about if they were manufacturing medical

equipment?
2. Jack Welch stated that productivity “comes from challenged, empowered, excited,

rewarded teams of people.” Do you agree with this statement? What are some other factors
of productivity that Welch may have left out?
3. One of the factors that contributed to the success of Henderson’s new factory was the
use of FAA-certified mechanics. How could Henderson have accomplished his goal if the

industry was suffering a shortage of FAA-certified individuals?

4. As stated at the opening of the GE story, GE had already invested $1.5 billion in the jet

engine project. This implies that GE has a large amount of money at its disposal. Could
Henderson have pulled off his revolutionary production facility without the amount of

financial capital GE provided? How might his initial planning and development of the factory
have differed if he were working for a new, small, start-up organization?
 6. Negotiation Failure: The Case of the PointCast

https://2012books.lardbucket.org/books/an-introduction-to-organizational-behavior-v1.1/s14-

conflict-and-negotiations.html

In 1997, a company called PointCast Network Inc. was the hottest start-up in Silicon Valley. Its
founder and CEO, Christopher Hassett, was “the most famous guy on the Internet,” said Hassett’s

former attorney, Allen Morgan. Hassett was named CNET’s newsmaker of the year—an honor
previously bestowed on giants such as Bill Gates of Microsoft and Larry Ellison of Oracle. The “push

technology” that PointCast pioneered was making headlines as well as being featured on the cover
of Wired as “The Radical Future of the Media beyond the Web.”

All the attention around PointCast motivated one of the world’s largest communications companies
—Rupert Murdoch’s News Corporation—to make them an offer of $450 million. Negotiations were

intense and lasted weeks. With media speculation that PointCast—a company with almost no
revenue—deserved to be valued at $750 million, some people say Hassett started believing the hype

and, with the support of his board, asked for more money. “People involved in the company thought
they’d be the next Netscape. They hung out for more,” Murdoch said. News Corporation instead

lowered its initial offer to $400 million but added incentive clauses that brought the offer close to
the original $450 million if PointCast met its financial projections.

PointCast also rejected that offer, and News Corporation walked away from the bargaining table.
The timing couldn’t have been worse for PointCast, as “push” technology became old news thanks to

the maturing of alternatives such as Yahoo! By the time PointCast decided to go public in 1998, the
company was valued at half of News Corporation’s last offer. Worse, the process of filing an initial

public offering (IPO) requires the company to disclose all potential dangers to investors. PointCast’s
disclosures—such as news that customers had left because of poor performance—scared off so

many investors that PointCast ultimately withdrew its IPO. By that time Hassett had been forced out
by the board, but the company never fully recovered. In the end, PointCast was acquired in 1999 by

Idealab for $7 million. In this case, stalled negotiations cost the firm a steep price of $443 million.

Referring to the missed opportunity, an industry expert said, “It may go down as one of the biggest

mistakes in Internet history.” According to Steve Lippin, writing in the Wall Street Journal, “Merger
professionals point to these euphemistically called ‘social issues’—ego and corporate pride, that is—

as among the most difficult aspects of negotiating multibillion-dollar mergers these days. Although
financial issues can be vexing too, these social issues can be deal-breakers.”

In a similar and more recent situation in 2008, Yahoo! CEO Jerry Yang was ousted by the board of
directors following failed deals with Microsoft and Google. Yang’s behavior during negotiations

indicated that he wasn’t interested in bargaining as much as playing “hard to get.” He “kept saying
we should get more money, we should get more money, and [he was] not realizing how precarious

their position was,” says high-tech analyst Rob Enderle. In other words, even deals that look great
financially can fall apart if participants fail to pay attention to organizational behavior issues such as

perception, groupthink, and power and influence.

Case written by Brett Guidry, Talya Bauer, and Berrin Erdogan to accompany Bauer, T., & Erdogan, B.

(2009). Organizational behavior (1st ed.). New York: Flat World Knowledge. Based on information
from Arnoldy. B. (2008, November 19). Why Yahoo’s Jerry Yang stepped down. Christian Science

Monitor. Retrieved January 20, 2009, from http://www.csmonitor.com/2008/1119/p02s01-

usec.html; Auletta, K. (1998, November 19). The last sure thing. New Yorker; Lipin, S. (1996, August

22). In many merger deals, ego and pride play big roles in which way talks go.  Wall Street Journal,
Eastern edition, p. C1; PointCast fire sale. (1999, May 11). Wired. Retrieved November 14, 2008,

from http://www.wired.com/techbiz/media/news/1999/05/19618.

DISCUSSION QUESTIONS

1. Considering the amount of buzz surrounding Hassett’s new technology and the impact

previous, similar advancements have made, was Hassett necessarily foolish for not taking a
quick offer?

2. Is the PointCast situation a case of pride clouding someone’s judgment or more

accurately a representation of the rapidly changing nature of computer-related business? In
 other words, if Hassett’s advancement had been in an industry that is not known for such

rapid changes, would he have been considered foolish if he hadn’t held out for more money?
3. This case focuses on how foolish Hassett was for not accepting Rupert Murdoch’s first or

second offer. However, think of the buyout offer from the perspective of Rupert Murdoch. If
the buyout had gone through, News Corporation would likely have lost hundreds of millions

of dollars on the deal, and the company was effectively spared massive losses by the merger
falling through. What could Murdoch have done differently to protect against such risky

mergers in the future?

 7. Taking on the Pepsi Challenge: The Case of Indra Nooyi

  12.1
https://2012books.lardbucket.org/books/an-introduction-to-organizational-behavior-v1.1/s16-
leading-people-within-organiza.html

Source: Used by permission of PepsiCo Incorporated.

She is among the top 100 most influential people according to Time magazine’s 2008 list. She is also
number 5 in Forbes’s “Most Influential Women in the World” (2007), number 1 in Fortune’s “50

Most Powerful Women” (2006), and number 22 in Fortune’s “25 Most Powerful People in Business”
(2007). The lists go on and on. To those familiar with her work and style, this should come as no

surprise: Even before she became the CEO of PepsiCo Inc. (NYSE: PEP) in 2006, she was one of the
most powerful executives at PepsiCo and one of the two candidates being groomed for the coveted

CEO position. Born in Chennai, India, Nooyi graduated from Yale’s School of Management and
worked in companies such as the Boston Consulting Group Inc., Motorola Inc., and ABB Inc. She also

led an all-girls rock band in high school, but that is a different story.

What makes her one of the top leaders in the business world today? To start with, she has a clear

vision for PepsiCo, which seems to be the right vision for the company at this point in time. Her
vision is framed under the term “performance with purpose,” which is based on two key ideas:

tackling the obesity epidemic by improving the nutritional status of PepsiCo products and making
PepsiCo an environmentally sustainable company. She is an inspirational speaker and rallies people

around her vision for the company. She has the track record to show that she means what she says.
She was instrumental in PepsiCo’s acquisition of the food conglomerate Quaker Oats Company and

the juice maker Tropicana Products Inc., both of which have healthy product lines. She is bent on
reducing PepsiCo’s reliance on high-sugar, high-calorie beverages, and she made sure that PepsiCo

removed trans fats from all its products before its competitors. On the environmental side, she is
striving for a net zero impact on the environment. Among her priorities are plans to reduce the
plastic used in beverage bottles and find biodegradable packaging solutions for PepsiCo products.

Her vision is long term and could be risky for short-term earnings, but it is also timely and important.

Those who work with her feel challenged by her high-performance standards and expectation of

excellence. She is not afraid to give people negative feedback—and with humor, too. She pushes
people until they come up with a solution to a problem and does not take “I don’t know” for an

answer. For example, she insisted that her team find an alternative to the expensive palm oil and did
not stop urging them forward until the alternative arrived: rice bran oil.

Nooyi is well liked and respected because she listens to those around her, even when they disagree
with her. Her background cuts across national boundaries, which gives her a true appreciation for

diversity, and she expects those around her to bring their values to work. In fact, when she
graduated from college, she wore a sari to a job interview at Boston Consulting, where she got the

job. She is an unusually collaborative person in the top suite of a Fortune 500 company, and she
seeks help and information when she needs it. She has friendships with three ex-CEOs of PepsiCo

who serve as her informal advisors, and when she was selected to the top position at PepsiCo, she
made sure that her rival for the position got a pay raise and was given influence in the company so

she did not lose him. She says that the best advice she received was from her father, who taught her
to assume that people have good intentions. Nooyi notes that expecting people to have good

intentions helps her prevent misunderstandings and show empathy for them. It seems that she is a
role model to other business leaders around the world, and PepsiCo is well positioned to tackle the

challenges the future may bring.

Case written by Berrin Erdogan and Talya Bauer to accompany Bauer, T., & Erdogan, B.

(2009). Organizational behavior (1st ed.). New York: Flat World Knowledge. Based on information
from Birger, J., Chandler, C., Frott, J., Gimbel, B., Gumbel, P., et al. (2008, May 12). The best advice I

ever got. Fortune, 157(10), 70–80; Brady, D. (2007, June 11). Keeping cool in hot
water. BusinessWeek. Retrieved April 30, 2010,

from http://www.businessweek.com/magazine/content/07_24/b4038067.htm; Compton, J. (2007,

October 15). Performance with purpose. Beverage World, 126(10), 32; McKay, B. (2008, May 6).

Pepsi to cut plastic used in bottles. Wall Street Journal, Eastern edition, p. B2; Morris, B., & Neering,
P. A. (2008, May 3). The Pepsi challenge: Can this snack and soda giant go healthy? CEO Indra Nooyi
says yes but cola wars and corn prices will test her leadership. Fortune, 157(4), 54–66; Schultz, H.

(2008, May 12). Indra Nooyi. Time, 171(19), 116–117; Seldman, M. (2008, June). Elevating
aspirations at PepsiCo. T+D, 62(6), 36–38; The Pepsi challenge (2006, August 19). Economist.

Retrieved April 30, 2010, from http://www.economist.com/business-finance/displaystory.cfm?

story_id =7803615.

DISCUSSION QUESTIONS

1. Indra Nooyi is not a typical CEO. How does she differ from your idea of what a typical
CEO is like? How do you think your current image of CEOs was created?

2. Indra Nooyi is touted as being “unusually collaborative” for someone in charge of

a Fortune 500 company. Why do you think her level of collaboration is so unusual for top

executives?
3. Do you think Nooyi’s story represents a transition of American companies to a different

type of leader or simply a unique case?

4. Pepsi-Cola dates back to 1898 and officially became PepsiCo after merging with Frito-Lay

in 1965. What are some challenges the CEO faces today that were not an issue at that time?
What are some aspects that make the position easier in modern times?

5. If you were in Indra Nooyi’s shoes, what direction would you take the company, given
the success you have had thus far? What are some challenges that could arise in the near

future for PepsiCo?