PepsiCo India's Problem with Attrition at Top Level



Case Code : CLHR039
Period : 2014-2015
Publication date : 2015
Subject : Human Resource Management
Organization : PepsiCo.
Industry :FMCG
Countries : India
Length : 11 Pages


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Abstract: ICMR India ICMR India ICMR India ICMR India RSS Feed

PepsiCo India was facing a major attrition problem with senior executives. It was believed that the executives were exiting the company as they were unable to reconcile with its ‘Power of One’ (PO1) strategy. The strategy was about merging the beverages wing with the foods division. It was aimed at leveraging the synergetic benefits of selling food and beverages together since consumers tended to buy beverages and snacks together. Five senior executives of PepsiCo India resigned from the company in 2015, joining a stream of colleagues who had left the company following a change in corporate strategy. Even though PepsiCo India had leadership development initiatives in place and had created a talent pool, industry observers felt that the company would have to resolve the attrition issue at the top level with effective people strategies as well as change management initiatives


1) Understand the issues and challenges involved in dealing with the employee attrition at PepsiCo
2) Analyze how PepsiCo can deal with the resistance of employees toward change in its corporate strategy
3) Explore ways in which PepsiCo can retain its senior executives and make a change in corporate strategy acceptable for them


TSR Murali (Murali), executive director, R&D, in charge of innovations at PepsiCo India, quit the company in July 2015. Murali was considered to be the brain behind popular brands like Kurkure and Aliva and one of the most important people in the company’s efforts to create innovations in its foods business. He was not the only senior executive to quit the company. Five others resigned from the company in 2015, joining a stream of colleagues who had left PepsiCo following a change in its corporate strategy...


PepsiCo, Inc., an American Fortune 500 company, was headquartered in Purchase, New York, US. Founded in Chicago in 1965, the company had a presence in over 200 countries with interests in the manufacturing, marketing, and distribution of grain-based snack foods, beverages, and other products...


In the beverage business, analysts felt that Pepsi had lost momentum to Coke and to bottled waters and fruit juices in 2005. In the snacks section, consumers were putting a lot of pressure on pricing. Frito-Lay’s sales growth fell from 11 percent in 2000 to 7 percent in 2001 to only 5 percent in 2002...


However, the PO1 strategy did not go down well with the senior management in PepsiCo India. Senior executives were of the opinion that different technology setups in different divisions could prove costly...


Analysts felt that PepsiCo had a big responsibility to find out why the employees were dissatisfied, before that reason made them take the drastic step of quitting the organization. ...


Key words:
Attrition, management exodus, ‘Power of One’ strategy, Corporate strategy, Leadership development, ‘Shadow program’, People strategies, Change management

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