The process of leadership is not homogenous in all contexts i.e. industry, country - Essay Example

? The process of leadership is not homogenous in all contexts i.e. industry, country – discuss how the process of leadership may be used in order to maximize potential of the organization and its employees. Name University As the world’s largest beverage market, the size of the U.S carbonated soft drink industry stood at more than $60 billion towards the departure of the twentieth century (Liu 2012, p. 119). The rapid and continuous expansion of the industry is evidenced by the fact that between the period lasting from 1966 to 2000, the market share of PepsiCo and the Coca-Cola Company, the two dominant players in the American beverage industry increased to 76 per cent in 2000 from 54 per cent in 1966 (Liu 2012, p. 119). The key issue with regards to the American beverage industry is that of the unparalleled level of concentration which is enjoyed by PepsiCo and the Coca-Cola Company within the market. Liu (2012, p. 119) understands that the fundamental characteristics of the carbonate soft drink industry necessitate that competitors should have the capital to launch extensive marketing campaigns, maintain cost-efficiency and invest in technological advancement to successfully compete in the industry. However, the presence of these elements can be categorized as a barrier to entry in the industry as smaller companies do not have the means to approve massive investments. This observation can be identified as one of the key reasons behind the dominance of companies such as PepsiCo and the Coca-Cola Company within the U.S beverage industry. The aspect of competition with regards to the beverage industry is closely linked with the dynamics of the external or macro environment in which the firms operates however, several other features of this environment have the capability to influence organizational activities and managerial decision making. For example, the harmful effects of carbonated soft drink consumption have often come into question by researchers for promoting health related issues and obesity. In addition to this observation, the U.S beverage industry has also addressed several scandals that have emerged from the very beginning. From the accusation regarding the presence of aborted fetus cells as an ingredient of Pepsi to the alleged presence of chlorine content in Coca-Cola, the multi-billion dollar beverage industry in the United States is marked by a plethora of issues, accusations and critics of the product that it promotes and sells to consumers belonging to every age-group. However, the focus of these issues is towards addressing the needs of the modern, health-oriented and aware consumers who demand products that can minimize health risks and promote their well-being. Given the dynamics of the U.S beverage industry, it is most appropriate to examine the notion of leadership as an ongoing and comprehensive process. According to Northouse (2010, p. 5); “The process viewpoint suggests that leadership is a phenomenon that resides in the context of the interactions between leaders and followers and makes leadership available to everyone”. In the present scenario, the foremost challenge of the U.S beverage industry is that of innovation, which in a broader sense is not linked with new product development but the formulation of effective strategies and frameworks that can allow leaders to respond to “…the demand of competitive pressure to fast-changing consumer needs and trends…” (Isaken and Tidd 2006, p. 265). As stated previously, the business model on which the beverage industry is based on a concept that does not support the presence of small companies who cannot invest in the development of brands in addition with the launch of marketing campaigns to attract a large customer base. Therefore, the beverage industry in the United States is dominated by two key players who engage in fierce competition to deter the absolute dominance of the other. In order to cope with the scale of the industry’s operations and the issues that it faces, the process of leadership is marked by the adoption of transformational leadership. Schien (2010, p. 293) asserts that in situations where an organization needs to revive its activities after the surfacing of a scandal, transformational leaders can prove to be effective because they are responsible for essentially unfreezing the company’s activities and then proceeding with the initiation of change programs. Kotter (1996, p. 12) establishes that the adoption of this leadership technique can also assist the establishment of transformational visions. For example, addressing the concerns of the health-oriented consumer markets the U.S beverage industry has modified its product portfolio in recent years (Colvin 2012). This transformation has come in the wake of promoting a healthier and aware image of the carbonated soft drink beverage industry as a whole by renovating the product portfolio as well as the company’s brands so that the adverse health impacts of their consumption can be reduced if not completely eliminated (McKay 2007). The evaluation of this example establishes how the transformational style of leadership that is followed in the U.S beverage industry addresses the key issues that are rooted in its operations. From the perspective of examining the leadership process that is present in this case, it can be established that transformational leaders of the industry essentially aim to inspire in their followers what they wish to see the company achieve. Thus, the primary goal with regards to this observation is to initiate a leadership process which allows the internalization of organizational goals and objectives within the workforce. On the other hand, the leadership process that is practiced in the U.S beverage industry is also characterized by the significance of establishing a strong organizational culture that can potentially aid and guide employees. For example, Coca-Cola CEO Muhtar Kent has primarily focused on renewing the culture of the firm. Sellers (2012) understands that Kent’s influence on the organizational culture is spearheaded by the formulation and development of teams and a restructuring of the organization’s management by designating company operators in the position of senior managers. For Fisher and Ury (1991, p. 154) cultural differences are attributable to variations in opinions and even disagreements however, the elimination of these disagreements is possible by the utilization of external standards. The beverage industry in the U.S faces two distinct challenges, the emergence of risks and the adoption of techniques to resolve those risks and promote continuous innovation. The organizational culture of firms that are operating in the U.S beverage industry is characterized by innovation, risk taking and team orientation. As demonstrated by the example of the Coca-Cola Company, the firm has redefined its culture through restructuring and promotion of teamwork to generate greater revenues and establish a strong network that is based on cooperation and support. While, the maintenance of an effective and strong organizational culture within a firm is of monumental significance for the achievement of success another important cultural dimension is associated with the recruitment, training and development of multicultural employees. As identified by Fitzsimmons, Miska and Stahl (2011, p. 3), the multicultural identity of an organization is boosted and enhanced by the presence of employee diversity and bicultural leaders. Being the key players of the U.S carbonated soft drink industry; PepsiCo and the Coca Cola Company manage multinational operations across the globe. It is interesting to note that the Chief Financial Officers of the industry’s largest firms belong to what can be identified as multicultural backgrounds. The presence of this feature implies that multiculturalism in leadership aids the leadership process by allowing leaders to effectively and successfully manage a diverse workforce which is a characteristic of the industry under study. Fitzsimmons, Miska and Stahl (2011, p. 3) argue that because of their participation in more than two cultures, multicultural leaders have the capability and advantage of understanding the traditions, norms, customs and values of consumers based on the culture to which they belong. More significantly, multiculturalism allows the initiation of a process of internalization whereby, the aforementioned elements become a part of the individual and he/she has the ability to apply them in a given a situation in the most effective and best possible manner. Even though, the operations of the beverage industry’s two key players are global this observation is also applicable with regards to the narrower scope of the U.S beverage industry, which is the largest carbonated soft drinks market in the world. As a diverse and multiethnic society, the beverage industry of American serves a clientele that can segmented on the basis of multiple segmentation variables including demographic, psychographic, behavioral and geographic. The customer base of the U.S also faces health-related risks and threats such as obesity which are posed by the consumption of carbonated soft drinks yet consumer awareness in the nation is rising rapidly. This observation presents a contrasting picture of the scenario where both the critics and consumers of the beverage industry are calling for a transformation of the industry’s product portfolio to promote a healthier lifestyle through the elimination of risks. This drastic change does not only demand a renovation of the product but an alteration of the industry itself which should be facilitated through transformational leadership and effective change management frameworks to successfully guide followers and make leadership available for everyone. References Colvin, G. (2012, May 29). Indra nooyi's pepsi challenge.CNN. Retrieved from http://management.fortune.cnn.com/2012/05/29/pepsi-indra-nooyi-2/ Fisher, R., & Ury, W. L. (2011). Getting to yes: Negotiating agreement without giving in. Penguin. Fitzsimmons, S. R., Miska, C., & Stahl, G. (2011). Multicultural employees: Global business' untapped resource. Organizational Dynamics, 40(3), 199-206. Isaksen, S., & Tidd, J. (2006). Meeting the innovation challenge: Leadership for transformation and growth. John Wiley & Sons. Kotter, J. P. (1996). Leading change. Harvard Business Press. Liu, C. (2012). Multinationals, globalisation and indigenous firms in China. Routledge. McKay, B. (2007, November 19). The other women to watch. Wall Street Journal. Retrieved from http://online.wsj.com/news/articles/SB119517314579995043 Northouse, P. G. (2011). Leadership: Concepts and practice. Sage. Schein, E. H. (2006). Organizational culture and leadership (Vol. 356). Wiley. com. Sellers, P. (2012, May 12). Muhtar kent's new coke.CNN. Retrieved from http://postcards.blogs.fortune.cnn.com/2012/05/10/500-coca-cola-muhtar-kent/ Read More