Comparaison of Two Ceos

Topics: Leadership, Starbucks, Charismatic authority Pages: 9 (1976 words) Published: February 19, 2011

Leaders can be considered as people who inspire the others in their attitudes and their behavior towards the achievement of a goal. Nowadays, leaders play big roles in our organizations. Indeed, a good leadership guaranties efficiency and effectiveness in the organization. In this report, we are going to talk about two Chief Executive Officers (CEO). The CEOs of Starbucks Coffee Co and PepsiCo, who are respectively, Howard Schultz and Indra Nooyi.

Starbucks Coffee Co. has been created in 1996 in Seattle, and then many years later opened a store in Tokyo and now, count more than 16,000 stores in 50 countries. It is one of the leading companies of coffee area in the world[1] while PepsiCo, a company that employs 198,000 employees with annual revenue of 43 billion dollars is one of the biggest worldwide company in the food, beverage and snack sector. Its portfolio of products is available in more than 200 countries with brands like Tropicana (juices), quarter food, and more…[2] According to the Fortune 500 magazine, contributed to increase the global revenue of this company of 12% from 2006 to 2007.

Now, let’s compare the leadership style of Nooyi and Schultz and link them to the leadership theories learned in Leadership and Organizational behavior.


Both Chief Executive Officers’ leadership styles are different. Indeed, Ms Nooyi, the CEO of PepsiCo has a style which can be linked to the transformational and charismatic leadership theories, while I associate the transactional leadership and the theory of Path-goal to the leadership style of the Starbucks Coffee Co’s CEO, Mr. Howard Schultz.

I am going to describe those leadership theories in order explain why I have associated them to our respective CEOs’ leadership styles in this report, and put in opposition the transactional leadership and transformational leadership.


How can we define the term leadership?

Leadership has been defined in many manners per m any authors. For example:

According to Mullins (2008), the leadership is a capability to inspire and influence others.

And for Robbins & Judge (2009), leadership can be defined as the capacity to affect a group of people with an objective to carry out goal s.

"Leadership is the ability of a superior to influence the behavior of a subordinate or group and persuade them to follow a particular course of action." — Chester Bernard

Importance of leadership:

“A manager may develop a perfect strategy to make an organization successful, but to carry forward that strategy towards realization; he or she needs leadership qualities. Leadership then takes a bigger, broader and more important role.” – Dr. Adalat Khan.

Without a good leadership, it will not be easy for the organization to achieve its goals.

Theories of leadership:

Contemporary Theories: Charis matic leadership

The Cha rismatic Leader ga thers follo wers throu gh dint of per sonality and ch arm, ra ther than any form of ex ternal power or au thority.[3]

Vision and articulation: Perfect ability to clarify the advantages for the organization.

Personal Risk taking: Ready to take high risks and very sure that it is necessary to achieve his goal.

Sensitivity to the environment: Ability to evaluate the constraints of the environment.

Sensitivity to member needs: He has to understand the needs of the subordinates find solution to their preoccupations.

Performing unconventional Behavior: The leader should be engaged in behaviors perceived as different.

Contingency theory: Path-Goal Theory[4]

Through the Path-Goal Theory, we assume that the manner by which the leader satisfies the needs of the employees has a serious impact on their performances. The theory of motivation is strongly related to what the employees of the organization expect.

According to...
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