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PepsiCo case study. Consumer Strategic Insights (CSI) Director Jorge Rubio

Principles and Practices of Leadership and Management
Order Description
Read the adapted PepsiCo case study. Consumer Strategic Insights (CSI) Director Jorge Rubio is changing his part of PepsiCo into a more flexible style of organization. Using leadership theory to support your arguments, critically evaluate the most important leadership skills and competencies (maximum of two or three) that you think will be required for this organization

Essay (2,200 words) excluding reference list and heading and subtitle

Read the adapted PepsiCo case study. Consumer Strategic Insights (CSI) Director Jorge Rubio is changing his part of PepsiCo into a more flexible style of organization. Using leadership theory to support your arguments, critically evaluate the most important leadership skills and competencies (maximum of two or three) that you think will be required for this organization. (2,000 words).
Case Study – PepsiCo – An adapted extract from

Aguirre-Mar, M. (2013) ‘Global Structural Design and Results: PepsiCo Case’, Journal of Strategic Leadership, 4(2), Spring 2013, pp. 6-13

PepsiCo Foods Mexico (PFM). In order to review PepsiCo’s organizational structure in their Mexico business unit, an interview with Jorge Rubio, national director of CSI (Consumer Strategic Insights) for PFM, was conducted.
CSI. The interview took place in an office named the brain spa, where CSI members carried out customer qualitative studies. For guests and outsiders, there is not a clue that this office belongs to PFM; everything is designed and planned in such a way that it gives visitors the impression that this office belongs to an independent marketing research company. Nothing in the office is uniform; there are different kinds of chairs, pillows, futons and all in different colors and forms. There are no furniture tables in the place. On one side of the room there is bookcase with creativity books and table games to promote creative thinking processes; next to the bookcase, there is a poster which explains the rules of the brain spa:
(1) strictly business—consumer’s creativity and innovation;
(2) keep it cool and keep it clean;
(3) be a stranger, leave your ID at the door;
(4) thank you for not smoking;
(5) spread the word, talk to someone about it;
(6) practice curiosity;
(7) take risks, make mistakes;
(8) be polite, don’t be loud.

Jorge Rubio, a marketing veteran in the company with 25 years of experience in the field, proudly explained that their intention was that the brain spa be similar to Google’s corporate creativity center, a place where flexibility and discontinuity carry out to creative processes to find productive ideas (J. Rubio, personal communication, October 25, 2012). In the interview, Rubio pointed out that they decided to change the name and the strategic structure of the former marketing research department (MRD) in order to make it clear that the department was to be more proactive and flexible, not limited to merely being a distributor of the information obtained from the customers. The aim is that this area becomes a change agent for PFM’s commercial area, leading faster reactions to meet their consumers’ requirements, preferences and likes (J. Rubio, personal communication, October 25, 2012). The steps taken at CSI made it clear that their intention is to increase their value offer to PFM. The structural design of CSI has two main groups:
(1) insights BU’s, insights team inside each business unit (Gamesa, Sabritas and Sonrics) that supports in research and brand strategy, and
(2) the CSI support center, the insights team which designs and executes, with qualitative and quantitative research methodologies, in-house customer studies to support marketing and sales strategies.
Regarding the integration of CSI’s team, Rubio stated: “To integrate the CSI department we followed these steps:
(1) establish the vision;
(2) define core strategies;
(3) build a team;
(4) assign positions and responsibilities (structure);
(5) execution”
(J. Rubio, personal communication, October 25, 2012).
CSI’s organizational structure is flexible, with an approach on matrix-like processes. It is expected that every business unit and individual become:
(1) fast,
(2) flexible,
(3) efficient,
(4) focused on customers,
(5) trustworthy,
(6) motivated
(J. Rubio, personal communication, October 25, 2012). These characteristics can become a strategic advantage for this business to cope with the requirements of today’s organizations to be competitive. Near the end of the interview, Rubio said that he encourages CSI’s employees to demand for the kind of training that will be useful for increasing their effectiveness in their jobs (J. Rubio, personal communication, October 25, 2012). In this paradigm of a flexible organization, in which it is expected that employees be more self-responsible, the task of managers is that they be more like a teacher, counselor and friend, as much as or more than being a commander, inspector, and judge.
Recommended Reading

Caproni, P.J. (2012) Management Skills for Everyday Life. 3rd edn. New Jersey: Pearson Education.

Certo, S.C. and Trevis Certo, S. (2014) Modern Management: Concepts and Skills. 13th edn. International Edition. Harlow: Pearson.

Daft R. L. (2011) Leadership. 5th edn. – International Edition, London: South-Western Cengage Learning

Daft, R.L. and Marcic, D. (2014) Building Management Skills. International Edition. London: South-Western Cengage Learning.

Day, D. V. and Antonakis, J. (Eds.) (2012) The Nature of Leadership. 2nd edn. London: Sage

Northouse, P.G. (2016) Leadership theory and practice. 7th edn. London: Sage
[This book includes free access to an interactive e-book]

Pears, R. and Shields, G. (2013) Cite Them Right. 9th edn. Basingstoke: Palgrave Macmillan

Roe, K. (2014) Leadership: Practice and Perspectives. Gosport: Oxford University Press (Core Text) [NB – This text has a very valuable online website which accompanies the text – please use this at ]
Other Useful texts

Parry, K. and Jackson, B. (2011) A very short, fairly interesting and reasonably cheap book about studying leadership. 2nd edn. London: Sage.

Whetten, D.A. and Cameron, K.S. (2011). Developing Management Skills. 8th edn. New Jersey: Pearson Education.

Journal Articles:
Academy of Management Journal
Administrative Science Quarterly
British Journal of Management
Harvard Business Review
Journal of Management Studies
Journal of Management Academy
Management Review
Leadership Quarterly

Chartered institute of Personnel and Development
Chartered Management Institute
Institute of Leadership and Management

Important Additional Reading

PLEASE NOTE – It is recommended that you read Vol. 62 of American Psychologist – Special Issue. You can find this via the library system online – there are some excellent articles in this issue. One is shown below – Bennis (2007) and is a very good introductory article about Leadership in the Modern World.

Journal Articles:
Avolio, B.J., Walumba, f.O. and Weber, T.J. (2009) ‘Leadership: Current Theories, research, and Future Directions’, Annual review of Psychology, 60, pp. 421-449.

Bass, B. M. (1990) ‘From Transactional to Transformational Leadership: learning to share the vision’, Organizational Dynamics, 18(3), Winter, pp. 19-31.

Bennis, W. (2007) ‘The Challenges of Leadership in the Modern World’, American Psychologist, 62(1), pp. 2-5.

Bjugstad, K., Thach, E. C., Thompson, K. J. and Morris, A. (2006) ‘A Fresh Look at Followership: a model for matching followership and leadership styles’:

Boies, K., Fiset, J. and Gill. (2015) ‘Communication and trust are key: Unlocking the relationship between leadership and team performance and creativity’, The Leadership Quarterly. Dec. 26(6) pp. 1080-1094

Bolden, R. (2011) ‘Distributed Leadership in Organizations: A Review of Theory and Research’, International Journal of Management Reviews, 13(3), pp.251–269.
Caldwell, R. (2003) ‘Change leaders and change managers: different or complementary?’ Leadership and Organisation Development Journal. 24(5), pp 285-293

Carsten, M.K. and Uhl-Bein, M. (2012) ‘Ethical Followership: An Examination of Followership Beliefs and Crimes of Obedience’, Journal of Leadership & Organizational Studies, XX(X) pp. 1 –13

Conger, J. A. (2004) ‘Developing Leadership Capability: what’s inside the black box?’ Academy of Management Executive, 18 (3), pp. 136-139.

Gardner, W.L., Cogliser, C.C., Davis, K.M. and Dickens, M.P. (2011) Authentic leadership: A review of the literature and research agenda. The Leadership Quarterly, 22(6), pp.1120–1145.
Higgs, M. and Rowland, D. (2011) ‘What does it Take to Implement Change Successfully? A Study of the Behaviors of Successful Change Leaders’, Journal of Applied Behavioral Science, 47(3), pp. 309-335
Hirschhorn, L. and Gilmore, T. (1992) ‘The New Boundaries of the “Boundaryless” Company’, Harvard Business Review, May-June, 70 (3), pp. 104 – 115.

House, R.J. and Aditya, R.N. ‘The Social Scientific Study of Leadership: Quo Vadis?’ Journal of Management, 23(3), pp. 409-473.

Ireland, R. D. and Hitt, M. A. (2005) ‘Achieving and Maintaining Strategic Competitiveness in the 21st Century: the role of strategic leadership’, Academy of Management Executive, 19(4), pp. 63-77.

Jacob, B. and Shoemaker, N. (1993) ‘The Myer-Briggs type indicator: an interpersonal tool for system administrators’ In Proceedings of the 7th Systems Administration Conference LISA (supplement),(SAGE/USENIX) (p. 7).

Kellerman, B. (2007) ‘What Every Leader Needs to Know About Followers’, Harvard Business Review, December, pp. 84-91.

Kelley, R. E. (1988) ‘In Praise of Followers’, Harvard Business Review, November, Vol. 66, pp. 142-148.

Kent, T. W. (2005) ‘Leading and Managing: it takes two to tango’, Management Decisions, 43(7/8), pp. 1010-1017.

Kerr, S. and Jermier, J. (1978) ‘Substitutes for Leadership: their meaning and measurement’, Organizational Behavior and Human Performance, 22, pp. 374-403.

Kirkpatrick, S. A. and Locke, E. A. (1991) ‘Leadership: do traits matter?’, Academy of Management Executive, 5(2), pp. 48-60.
Kotter, J. P. (1990) ‘What leaders really do’, Harvard Business Review, May-June, pp. 103-111.

Meindl, J. R. (1995) ‘The romance of Leadership as a Follower-centric Theory: a social constructionist approach’, Leadership Quarterly, 6(3), pp. 329-341.

Mumford, M. D., Zaccaro, S. J., Connelly, M. S., and Marks, M. A. (2000) ‘Leadership skills: Conclusions and future directions’, Leadership Quarterly, 11(1), 155–170.

Parris, D.L. and Peachey, J.W. (2012) ‘A Systematic Literature Review of Servant Leadership Theory in Organizational Contexts’, Journal of Business Ethics, 113(3), pp.377–393.
Raisch, S and Birkinshaw, J. (2008) ‘Organizational Ambidexterity: Antecedents, Outcomes and Moderators’, Journal of Management. 34(3), June, pp. 375-409.

Riggio, R.E., Reichard, R.J. (2008) ‘The emotional and social intelligences of effective leadership: An emotional and social skill approach’, Journal of Managerial Psychology, 23(2), pp. 169–185

Schreyögg, G. and Sydow, J. (2010) ‘Crossroads: Organizing for Fluidity? Dilemmas of New Organizational Forms’, Organization Science, 21(6), November–December, pp. 1251–1262

Shamir, B. (1999) ‘Leadership in Boundaryless Organizations: Disposable or Indispensable?’, European Journal of Work and Organizational Psychology, 8(1), pp. 49-71.

Snow, C.C. (2015) ‘Organizing in the Age of Competition, Co-operation, and Collaboration’, Journal of Leadership & Organizational Studies, 22(4), pp 433-442

Van Knippenberg, D. & Hogg, M. A. (2003) ‘A social identity model of leadership effectiveness in organisations’; in Staw, B. M. & Kramer, R. M. (Ed’s) Research in Organisational Behaviour, 25, New York, Elsevier, pp. 243-295. (Available online at:

Vroom, V.H. and Jago, A. G. (2007) ‘The Role of the Situation in Leadership’, American Psychologist, 62(1), pp. 17-24.

Zaccaro, S. J. (2007) ‘Trait-based Perspectives of Leadership’, American Psychologist, 62(1), pp. 6-16.

Zaleznik, A. (1992) ‘Managers and Leaders: Are they different?’, Harvard Business Review, March-April, pp. 126-135.

Page 1 of 14Organizational Studies Journal of Leadership & The online version of this article can be found at: DOI: 10.1177/1548051812465890 Journal of Leadership & Organizational Studies published online 9 November 2012 Melissa K. Carsten and Mary Uhl-Bien Ethical Followership: An Examination of Followership Beliefs and Crimes of Obedience Published by: On behalf of: Midwest Academy of Management Additional services and information for Journal of Leadership & Organizational Studies can be found at: Email Alerts: Subscriptions: Reprints: Permissions: What is This? >> OnlineFirst Version of Record – Nov 9, 2012 Downloaded from by guest on November 14, 2012 Page 1 of 14
Page 2 of 14Journal of Leadership & Organizational Studies XX(X) 1–13 © Baker College 2012 Reprints and permission: DOI: 10.1177/1548051812465890 Most discussions about organizational ethics emphasize the role that leaders play in modeling, promoting, and reinforc- ing ethical behavior in the workplace (Brown & Treviño, 2006; Kohlberg, 1969; Treviño, 1986; Treviño, Brown, & Hartman, 2003). The basic assumption in the literature and in practice is that leader behaviors (Walumbwa & Schaubroeck, 2009) and their effects on climate (Treviño, Butterfield, & McCabe, 1998; Treviño, Weaver, Gibson, & Toffler, 1999) are the most critical antecedents to ethical behavior in organizations. However, the ethical lapses dur- ing the past decade (e.g., WorldCom) show that it is often the leaders who act unethically and/or demand unethical actions from followers (Whittington & Pany, 2009). Indeed, the 2011 National Business Ethics Survey conducted by the Ethics Resource Center (2012) found that 34% of employ- ees “had a negative view of their supervisor’s ethics.” These findings clearly indicate that relying on leader ethical behavior is not enough. We need to also focus on the role of followers in maintaining ethical behavior in organizations (Hollander, 1995; Perreault, 1997). An area that has been identified as important regarding the role of followers in organizational ethics is followers’ responses to unethical requests by a leader (Uhl-Bien & Carsten, 2007). Followers face ethical dilemmas when leaders approach them with inappropriate requests, such as asking them to engage in behaviors that are clearly unethi- cal. In such situations, followers must make a decision: They can choose to stand up to the unethical request (e.g., by chal- lenging the leader’s directive, refusing to engage in unethi- cal behavior, or proposing alternative courses of action) or they can go along with the leader’s request, in essence becoming complicit with the unethical behavior. This choice will likely be associated with their beliefs about the follower role and how followers should interact with leaders. For fol- lowers to be able to stand up to a leader’s unethical request, they must not view their followership role as passive and obedient. Instead, they must feel a responsibility as an active participant in the leadership process (Baker, 2007; Carsten, Uhl-Bien, West, Patera, & McGregor, 2010; Chaleff, 2009; Hirschhorn, 1990; Kelley, 1992; Uhl-Bien & Carsten, 2007; Uhl-Bien & Pillai, 2007). 465890JLOXXX10.1177/1548051812465890Journ al of Leadership & Organizational StudiesCarsten and Uhl-Bien © Baker College 2012 Reprints and permission: http://www. 1 Winthrop University, Rock Hill, SC, USA 2 University of Nebraska, Lincoln, NE, USA Corresponding Author: Melissa K. Carsten, Winthrop University, College of Business Administration, 518 Thurmond Building, Rock Hill, SC 29733, USA Email: Ethical Followership: An Examination of Followership Beliefs and Crimes of Obedience Melissa K. Carsten1 and Mary Uhl-Bien2 Abstract This study seeks to “reverse the lens” in leadership and ethics research by investigating whether follower (rather than leader) characteristics are associated with intentions to engage in unethical behavior. Specifically, we examine whether followers’ beliefs about the coproduction of leadership and the romance of leadership are related to their willingness to commit a “crime of obedience” by complying with a leader’s unethical request. Using a vignette depicting an unethical demand by a leader, 161 working adults were asked to indicate whether they would obey or challenge the leader’s request. Regression analyses show that individuals with weaker coproduction beliefs demonstrate a stronger intent to obey unethical requests, whereas individuals with stronger coproduction beliefs demonstrate a stronger intent to engage in constructive resistance. This relationship is partially mediated by displacement of responsibility. Findings also identify an interaction between followers’ belief in the coproduction of leadership and romance of leadership, such that individuals with stronger coproduction beliefs who romanticize leaders reported a stronger intent to obey unethical requests. Results are discussed in relation to research on obedience to authority and burgeoning research on followership. Keywords followership, ethical leadership, obedience, coproduction of leadership Downloaded from by guest on November 14, 2012 Page 2 of 14
Page 3 of 142 Journal of Leadership & Organizational Studies XX(X) Burgeoning research on followership suggests that indi- viduals hold a variety of beliefs about the role followers should play in the leadership process (Carsten et al., 2010; Sy, 2010). For example, Carsten et al. (2010) found that some followers construct their roles along traditional defi- nitions of followers being deferent and blindly obedient, whereas others construct their roles around partnership and contribution and focus on engaging in more leader-like (e.g., influencing, voicing, decision making) than follower- like behaviors (Carsten et al., 2010). According to Shamir (2007), this more active and engaging dimension comprises the “coproduction” of leadership, which involves leaders and followers working together to effect important organi- zational outcomes. Building from these initial findings, Carsten and Uhl- Bien (2009) developed and validated a measure of follower beliefs in the coproduction of leadership—the extent to which people believe their role as a follower is to partner with leaders in an effort to coproduce positive leadership outcomes. Their findings show that follower belief in the coproduction of leadership is significantly and positively related to behaviors such as voice and upward influence behavior and negatively related to beliefs in power distance and legitimacy of authority. These results suggest that indi- viduals with a stronger belief in the coproduction of leader- ship are more likely to voice ideas and concerns, influence leaders to gain support and resources, and are less likely to see their role as ineffectual or insignificant. Taken together, these results suggest that followers’ beliefs about coproduc- tion are related to how individuals enact the follower role in organizations. Coproduction beliefs may increase understanding of the choices followers make when faced with an unethical request by a leader. For example, followers with weaker coproduction beliefs likely act more traditionally as follow- ers, seeing that it is their responsibility to defer to a leader by obeying and following the leader’s unethical request. Followers with stronger coproduction beliefs are likely to believe it is their duty to object to a leader’s unethical request for the good of the organization (Carsten et al., 2010). Such followers are likely to work to find an ethical solution in the face of an unethical request by a leader and less likely to see themselves as powerless to a leader’s directive. Thus, it is likely that followers with stronger coproduction beliefs demonstrate “ethical followership” by responding to a leader’s unethical request in ways that help maintain ethical behavior in the workplace, whereas follow- ers with weaker coproduction beliefs may demonstrate “unethical followership” by being complicit in the unethical behavior. The purpose of this study was to conduct an initial inves- tigation into the concept of ethical/unethical followership. Specifically, we examined whether follower beliefs in the coproduction of leadership predict their intentions to stand up to, or comply with, unethical requests by a leader. Followers who comply with unethical requests, meaning they engage in unethical behavior under leaders’ directives, can be described as engaging in “crimes of obedience” (Kelman & Hamilton, 1989). They likely are able to act in this way because they displace responsibility for the unethi- cal act from themselves to their leader (Bandura, 1991; Milgram, 1965, 1974; Rost, 1979). We begin by reviewing research on obedience to author- ity and discuss displacement of responsibility as a neces- sary precursor to obedient responses. In addition, we also address disobedient responses that followers may have to an unethical request by a leader. Given that fewer studies have looked at the relationship between personal character- istics and disobedience (Perreault, 1997), we examined both the obedient and disobedient (e.g., constructive resis- tance) responses that followers may have to unethical demands of superiors. Following this, we discuss research on coproduction beliefs (Carsten & Uhl-Bien, 2009) and romance of leadership (Meindl, Ehrlich, & Dukerich, 1985) to understand whether these beliefs play a role in predicting both displacement of responsibility and a follower’s ulti- mate decision to obey or disobey a leader’s unethical request. The theoretical model that was tested in this study, and explained more thoroughly in the sections below, is shown in Figure 1. Followers Reactions to Unethical Requests by a Leader Crimes of Obedience Kelman and Hamilton (1989, p. 46) define crimes of obedi- ence as “acts performed in response to orders from author- ity that are considered illegal or immoral by the larger community.” Throughout history, crimes of obedience have occurred in the My Lai massacre, Nazi concentration camps, and more recently in the destructive corporate busi- ness practices of companies such as Enron, WorldCom, and Arthur Anderson (Zahra, Priem, & Rasheed, 2007). In the business setting, crimes of obedience occur when subordi- nates willingly follow an unethical or illegal directive of a superior. For example, evidence suggests that the ethical violations that occurred at Enron were, in some cases, ordered by top management to inflate corporate revenue (Carsten & Uhl-Bien, 2007). According to Hollander (1995), ethical lapses such as this occur because leaders are perceived to have “power over” followers, and followers believe they are too weak to counter the unethical demands of their leaders (Biggart & Hamilton, 1984). For crimes of obedience to occur, Kelman and Hamilton (1989) suggested that followers must see the leader’s power and authority as legitimate. The perception of legitimacy leaves followers feeling powerless, as if they Downloaded from by guest on November 14, 2012 Page 3 of 14
Page 4 of 14Carsten and Uhl-Bien 3 have no choice but to obey their leader’s commands (Tyler, 1997). In essence, followers feel they must take a “one- down” position in the presence of their leaders, obeying a leader’s directive because their lower status role requires them to do so (Baker, 2007; Ravlin & Thomas, 2005). Research on obedience confirms these status effects. In addition, it shows that individuals who obey unethical directives also displace responsibility onto the authority fig- ure, perceiving they were not at fault because they were in a subordinate position (Milgram, 1974). This displacement of responsibility is a key element of moral disengagement— a social–cognitive mechanism that allows individuals to engage in unethical acts by disconnecting the moral ramifi- cations of an action from their own involvement in that action (Bandura, 1991). According to Bandura, Underwood, and Fromson (1975), individuals may displace responsibil- ity for unethical or immoral actions onto a leader because they perceive the leader to have greater agency than they do. This helps them escape the negativity of their immoral behavior by attributing responsibility for that behavior onto someone other than themselves (Bandura, 1999). Bandura (1991) stated that one’s propensity to displace responsibility is a trait-like characteristic. Similarly, Blass (2009) suggested that those who participate in it are more likely to engage in obedience than those who feel responsi- bility for the unethical dilemma. Rost (1979) argued that actors who displace responsibility are likely to believe they can avoid punishment because it is the authority figure who is responsible for the unethical act. Milgram’s studies (1965) found that actors who continued to inflict harm on participants who were clearly demonstrating pain and dis- comfort stated they were simply “following orders.” These participants further stated that it was the experimenter who was responsible for the pain that was inflicted on the learner because the experimenter was the “expert.” Hence, a large body of research supports the strong link between an individual’s propensity to displace responsibil- ity and their subsequent obedience to authority figures (see Blass, 2009, for a review; see also Burger 2009; Milgram, 1965, 1974; Wood & Bandura, 1989). Therefore, we believe displacement of responsibility will be a key mechanism in the relationship between followership beliefs and crimes of obedience. Specifically, we hypothesize that followers who demonstrate intent to engage in crimes of obedience by complying with a leader’s unethical request are likely to do so because they have displaced responsibility on to the leader. Hypothesis 1: Displacement of responsibility is posi- tively associated with intent to obey a leader’s unethical request. Constructive Resistance Whereas displacement of responsibility has been linked to obedience in unethical situations, few studies have investi- gated the reactions of individuals who fail to displace responsibility (i.e., those who assume personal responsibil- ity) or the various ways in which individuals may choose to disobey (Modigliani & Rochat, 1995). Thus, we examine antecedents to resistance, given that so few studies have explored resistance to unethical requests by a leader. Obedience studies conducted by Milgram (1965, 1974) and others (see Blass, 2009, for a review) suggest that approximately 35% of individuals resist the unethical demands of a leader. In a replication of Milgram’s experi- ment, Modigliani and Rochat (1995) found that participants who protested the leader’s instructions early in the experi- ment showed greater felt responsibility and a greater likeli- hood of disobeying the experimenter at the end of the experiment when the electric shock became unbearable for the participant. Milgram (1974) concluded that the differ- ence between those who obeyed and those who protested was likely due to complex differences in personal character- istics. However, his early experiments did not reveal such differences. As a result, subsequent research has largely focused on the situational characteristics that predict whether someone obeys or disobeys (Milgram, 1965; also H1 H2 H3a H4 H3b Obedience Constructive Resistance Followers’ Belief in Co-production of Leadership Displacement of Responsibility Romance of Leadership Figure 1. Theoretical model with hypotheses Downloaded from by guest on November 14, 2012 Page 4 of 14

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