Team Leadership and Self-Managed Teams CASE STUDY - Compatibility Mode - Saved to this PC- View Layout References Mailings Review May o== T . Paragraph Help 1 Normal 5 No Space Heading 1 Heading 2 Title v Styles Team Leadership and Self-Managed Teams John Chambers is the CEO of Cisco Systems. His legacy at Cisco will not soon be forgotten. As one writer puts it, "Perhaps ng CEO in history has risen so high, fallen so hard and come back so quickly." After Chambers became CEO in January 1995. Cisco's dominance and competitiveness in the industry was so strong that it led to the early exit of quite a few competitors. Business Week named Cisco one of the Top 50 market performers, Fortune magazine designated Cisco one of America's "Most Admired Companies," and Forbes magazine called Cisco one of the "Leading Companies in the World. Business Ethics Magazine listed Cisco as one of its Business Ethics 100 Best Corporate Citizens." However, it has not been a smooth ride the whole way. Beginning in early 2001, things started to change. A number of telecom companies and Internet service providers- -some of them Cisco's biggest customers -were experiencing major declines in sales and profitability. As a result, they stopped buying Cisco equipment. The negative effect on Cisco's performance caused some industry experts to question Chambers' leadership abilities. Chambers remained unmoved. His strategy for resurrecting Cisco was twofold: first to downsize the company by making deep staffing cuts immediately, and second to implement a new organizational structure focused on cross-divisional teamwork and collaboration at all levels of the company. Underperforming characters (an approximate value) Lontingency Leadership theories Case Study PepsiCo was ranked 63rd in the 2007 Fortune 500 list of the largest companies (ranked by revenues) and is number 1 in the Food and Consumer Products category (ahead of Kraft Foods, Sara Lee, Conagra Foods, and General Mills). Its two primary lines of business are snack foods (Frito-Lay its largest unit) and beverages (Pepsi, Tropicana, Gatorade), with some cereal products (Quaker Oats). Although Coca-Cola sells more carbonated soft drinks than Pepsi, PepsiCo moved into the noncarbonated beverages (bottled water, sports drinks, and teas) market before Coke and it now commands half the U.S. market share about twice as much as Coke. Coca-Cola was ranked lower (94th) than PepsiCo in the 2007 Fortune 500 list. Indra K. Nooyi is Chairman and Chief Executive Officer of PepsiCo, and according to Fortune, Nooyi is ranked as the most powerful woman. Beginning in the mid-1990s, Novyi was the chief strategist that dramatically reshaped PepsiCo. The company got out of the restaurant business by selling Pizza Hut, Taco Bell, and KFC in 1997. It got into the juice business by buying the world's largest brand juice produeer Tropicana in 1998. PepsiCo entered the sports drink business in 2001 by acquiring the bestseller Gatorade, through the purchase of its maker Quaker Oats, which also gave PepsiCo a line of cercal products, including breakfast and other types of granola bars that complement its snacks. PepsiCo also acquired Izze sparkling juice drinks in 2006 and Naked Juice smoothies and other fruit drinks in 2007. PepsiCo also has joint ventures with partners, including Lipton (ice teas) and Starbucks (frappuccino). Nooyi expects to continue to expand PepsiCo through acquisitions. Nooyi is a different kind of CEO. She says her approach boils down to balancing the profit motive with making healthier snacks (in a speech to the food industry, she pushed the group to tackle obesity), striving for a net-zero impact on the environment, and taking care of your workforce. She has others look into possible acquisition targets and gets recommendations from them, but Nooyi has the final say on which companies will be acquired. Nooyi also has strong relationships with her colleagues. She insists that everybody's birthday is celebrated with a cake, Nooyi is a karaoke fan, and her karaoke machine is the ubiquitous party game at every PepsiCo gathering. She was one of the first executives to realize that the health and green movements were not just fads, and she demanded true innovation. As stated earlier, PepsiCo is now the leading seller of noncarbonated beverages. It is gradually shifting its percentage of "better for you" and "good for you" snacks and widening its product portfolio with grains, nuts, and fruits. The company was one of the first to invest in green capital expenditures for water and heat-related conservation projects. Executives originally questioned Nooyi's spending, but nou today with $55 million in annual savings. Her new motto. "Performance with Purpose," is both a means of herding the organization and of presenting PepsiCo globally. So far Nooyi has been a great success at PepsiCo, but cola wars, higher energy costs, and rising ingredient costs will test her leadership After being CEO of PepsiCo, Nooyi wants to give back by going to Washington to work for the government