The tool that will be used in the first phase is the SOOT (Strengths, Weaknesses, Opportunities, Threats) analysis which is used to point out the strengths and weaknesses of the company and also to identifying the leadership and management issues that exist within the organization. The second part of the report consists of the evaluation and rationalization of the management and leaderships issues identified in part 1 by using the McKinney AS Model to help to identify what types of changes that should be made and implemented in order to help the company to improve.
In the last phase of the report, an overview of the company situation will be presented followed by suggested sets f recommendation and actions for KEF in order to overcome the key issues identified. Company Background Kentucky Corporation (KEF), also known as Kentucky Fried Chicken, is a chain of fast food restaurants based in Louisville, Kentucky, in the United States which was started in the 1930 by Colonel Harlan Sanders as a small franchise operation. Kentucky Fried Chicken is a very well-known restaurant in the world.
It is rated at number 60 as the world most well-known brand by the Businesslike, while McDonald at number 9 and Nestle at number 23 (Baddish, 2007). KEF remained the largest chicken restaurant chain and third arrest fast-food chain. It held over 50 percent of U. S market in terms of the sales number and ended the year 1995 with over 9,000 restaurants worldwide. By end of the 1995, KEF have opened 234 new restaurants and is operated in 68 countries. In the year of 1997, the company has become a brand of YUM!
Brands Inc. Which is the world largest fast food chain who also operates Taco Bell, Long John Silver and Pizza Hut. Currently, the company owns and franchises more than 1 6,200 outlets in about countries and have employees of more than 24,000. KEF was the first fast-food chains to enter international market and has owe developed one of the world’s most recognizable brands. Cuff’s early entry into the fast food industry allowed the company to gain a strong brand name in the industry and dominate the chicken industry.
Cuff’s nearest competitor – Boston Market (formerly Boston Chicken) and Poesy’s held market share of 12. 3 and 10. 2 percent respectively while KEF held a market share of 58 percent in the chicken segment (KEF. Com, 2007). Cuff’s global success is credited to its quality management which is the: Quality, Service and Cleanliness (SC) program to review the quality of the service offered o the customers and to evaluate the company performance. Other than that, the understanding of the customers and satisfying their needs also contributed to Cuff’s global success (Reynolds, 2001).
Not only so, KEF also has also uses a special marketing tools to promote its product by means of combining PepsiCo product which is the beverage and the products of KEF itself, with these marketing idea, both company KEF and PepsiCo are both generating profits and it is an advantage for KEF since they no longer purchase beverages from outside company. KEF primarily sells chicken pieces, wraps, salads and sandwiches. While its primary focus is fried chicken, KEF also offers a line of grilled and roasted chicken products, side dishes such as mashed potato, sweet corn, coleslaw and desserts.
KEF also uses the localization strategy while designing the menu in KEF as a way to adapt to the local taste and culture by also offering beef based products such as hamburgers or kebabs, pork based products such as ribs and other regional fare. On the other hand, judging by the current market growth in China, KEF have absorbed the Chinese cultural elements into its western management style, hence forming an inter-cultural management ode.
China’s rapid economic development has opened its door for the fast- food industry and enable KEF to use localization strategy to let Chinese to have the chance to experience western lifestyle with traditional Chinese cultural embedded in it (China Daily, 2004). At present, there are more than 1,000 restaurants in China and they are now increasing at the rate of average 200 stores per year. In 2010, Yum! Brand, the parent company of KEF Corporation expects 36% of their global $2 billion operating profits from 3700 restaurants in China.
The success of KEF in China has lead Yum! Brand Inc to be the most successful foreign company in China with 40% market share outstripping competitors like McDonald’s (Turner, 2011). Such management mode by KEF has proved that the company has the flexibility to adapt to different cultural and environmental changes. SWOOP Analysis SOOT is a tool for auditing the strategies and the environment of an organization for decision making. And it can be classified as Strengths, Weakness, Opportunities and Threats. Pall & Richter, 2007) Strengths * KEF is recognize as the second largest fast food chains in the world, the first which being took by its main competitor, McDonald’s * Holding over half f the market shares in the fast food industry. * Occupied the china market, KEF defeat McDonald and become the largest fast food chain in China market which contain 1. 3 billion population. * It have been globally recognized and experienced and having strong market in Mexico, Middle East and Asia such as China, Japan, Korea, Thailand and Malaysia. * Earn huge revenue from the franchises and licensing fees. The most major strength of the company is their Brand Equity. * Its secret recipe allowed KEF to set itself apart in the industry and maintained supremacy in the fast food market. * Every year, the refits of the company increases. * KEF have a quality management which called “Quality, Service and Cleanliness (SC) program” use to judge the quality of its service offered to the customers and to measure the company performance. Weaknesses * Least focus about their product research and development, they more concerned about their branches expending. Inconsistent quality of services in many outlets by few of its franchises had damaging the brand name and * Inflexibility of prices makes it unaffordable to middle company reputation. Class people. * Imbalanced entrance of the franchises to different markets at nee time especially too concern the Chinese market has extremely decreased its global growth rate. * Besides expanded its target market focus to family and friends of all age brackets, KEF also targeting and tempting the young customer which age between 18 to arrears old. Dependability of the chicken meat used as the people are scared of infections from eating beef globally. * Focus in Chinese market which known as the world’s faster growing market. * Increased and effective services specially home delivery and drive though services * Induction of new products other than chicken including fish and vegetable in most of its menu in reality the whole menu is balanced and healthy which aim to attract the customers considerably. * Position itself strongly in the global markets, with a vision of increasing market value and market share. Customer began to demand more healthy and fresh food but KEF was faced with a limited menu and majority consist of fried foods * Faced by slowed sales growth in the fast-food industry, other segments of the industry have turned to new menu offerings, as they have very few products other than their selection” Fried chicken”. * Customer shift to other brand that offering the same products which in lower rates on the prices. Less economical deals are being offered compare to its biggest competitor McDonald’s who offer more cost-effective products.
Cuff’s Key Challenges KEF Corporation, being one of the largest fast-food chains in the world usually will have challenges that the company will have to overcome in order to retain their market share and reputations. But however, KEF restaurants around the world have various complaints regarding its services provided. It has been reported in United States that a customer was offended by the manner in which she was served. Customers complained that the employees were rude, lazy ND negligent to her family and other customers.
In the eye of management, a good services will help for t he long term customer relationships. But however, KEF in USA failed to realize the importance of it as employees were not given a proper training regarding good customer services (Essential et. Al, 2008). According to some of the staff in KEF, there is a lack of communication between the marketing department and the operation of KEF. Marketing department may not give accurate details on the new promotions and new products to the KEF operation nor clearly explain to them about the campaign.
This lead to many robbers for the operation team as they may be confused about the promotion or coupon and hence might not be able to explain the details to customers with enquiries. In addition, it COUld affect the efficiency and effectiveness of operation as creamers may not be familiar with the new marketing strategies and may not be able to sell the products as the corporate wanted them to be (Lana & Manhood, 1995). Additionally, KEF in China has also been reported that some KEF restaurants have failed to change their frying oil for four days and also failed to provide fresh soybean milk for customers.
The restaurants has been caught for changing the dates for replacing the oil for the purpose of passing examination by district inspectors from the company, and what’s more, the employees also ignore and changed the time on unsold items to make customers believe that they were eating freshly prepared products. The condition of kitchen is also reported to be very unclean and the employees did not follow the food safety regulation such as wearing caps when preparing foods. (China Times, 2009). Despite of the corporate rules on standard operation and regulations, employees at KEF often ignore them.
Such incident in KEF would destroy the company’s brand reputation although KEF Corporation claimed that they did provide training booklets which include questions on cross-contamination of food, but because of the lack of supervision, the employees would act whatever they want and ignoring the rules set by the management. The mission of KEF is “people be the first, customers be the focus” (Yum! Restaurant International, 2003) but however, it is found that KEF did not take proactive approach on listening to customers and employees. There is no systematic customer survey for its products and services.
It relies on the branch managers and public relation officers to get the customers’ opinion. Although the website of KEF has a customer service comment box for customers to send suggestion, but KEF ignore those customers who are not computer savvy. Many customers were complaining that customer did not have access to a customer service number and those who were able to reach customer service often received no response. The failure of KEF to deliver efficient service proved that the management does not show concern to their customers and did not make any improvement to take care of the customer’s complaints and thought.
Customers are viewed as an important asset of a company and therefore any complaints or opinions from them should be valued by the company (Essential et. Al, 2008) Other than that, even though KEF has adequate human resources but they are lacking the capabilities. Its mother company, PepsiCo, makes wrong decision in its corporate level strategy. They centralize and tightens the control over existing KEF managers and such actions causes the drop of the employee morale. In addition, PepsiCo also limits the rights and powers of the franchisees’ right and power and intents to compete and acquire the franchisees’ units.
Such incident has caused a dispute which last for 7 years until 1966. This also make the company performance to drop and drive down Cuff’s market shares (Chug, 2003). Evaluation key challenge with Muckiness’s as Model The McKinney g’s Model The McKinney g’s is a model of organizational effectiveness that proposes that there are seven internal factors of an organization that need to be associated and reinforced in order for it to be more success. It involves seven interdependent factors which are characterized as “hard” or “soft” elements: Hard Element I Soft Element Strategy I Shared Values I Structure I Skills I Systems I Style I
I Staff I “Hard” elements are easier to recognize and management can directly influence them: These are strategy statements; organization structure and reporting lines; and formal processes and IT systems. Oppositely, “Soft” elements are intangible and influenced by culture. However, those elements are as important as the hard elements for the organization going to be more successful. Strategy Strategy is a plan or progress of action in assigning resources to achieve identified goals over time.
It transforms the organization from the present position to the new position designated in the objectives, subject to constraints f the capabilities. Structure Business needs to be organized in a specific form that is generally referred to as organizational structure. Organizations are structured in a variety of ways, dependent on their objectives and culture. Usually, businesses are structured with divisions, departments and layers, in which the lower layers report to upper layers. Systems Systems are processes and procedures followed within an organization to implement the strategy and to run day-to-day activities.
These processes are designed to achieve company success. Style Management style and way of doing work are influenced by the culture which notations the dominant values, beliefs and norms which develop over time and become relatively permanent features of the organizational life.. The businesses usually been influenced by the style of management and culture where strict loyalty to the upper management and procedures was expected from the lower- rank employees. Staff Staff is workforces groups within the organization, such as engineers, sales persons, auditors, marketers and etc.
Nowadays, the top organizations not only put a lot emphasis on hiring the quality staff, they also provide their staff with quality training and monitoring support, and give incentive for their staff to achieve the best performance. Shared Values All members of the organization share some ultimate ideas, guidelines or concepts around which the business is built which to achieve excellence in a particular field. These values and goals keep the employees working towards a destination as a intelligible team and are important to keep the team spirit success.
Skills Skills are the capabilities of the staffing the organization as a whole. Alternative Approaches The root cause of KEF management problem comes mainly from PepsiCo centralization strategy, which also leads to the company’s high turnover rate and also lowers down the employees’ morale. In order to tackle the situation above, PepsiCo needs to gradually decentralized KEF to semi-autonomy. First thing first, they need to delegate some operational decisions to CIFS existing managers, whereas PepsiCo can spend more time on corporate strategic decisions.
By decentralization, it would increases the flexibility of Cuff’s managers so that they can become easier to cope with the diversity of the local situations and will be able to response to the market change. With a decentralized delegation system, managers of all levels will be able to perform their duty knowing clearly what is he objective and able to perform decision making in a faster and more efficient ways. The reason why PepsiCo should have a decentralized strategy is that by doing so, the company will now have a flat organizational structure that will help to engage a full involvement of all the subordinates in the company.
Such diversification of activities can create a greater motivation and morale of the employees since they get more independence to act and make important decision while minimizing the consumption of time waiting for top management for approval or decisions. And since PepsiCo would to delegates some of it main decision asking power to Cuff’s manager, hence forming a flat organizational structure in the company, thereafter PepsiCo WOUld only interfere with the major decision making while delegating most of its authorities to its middle level and lower level of management.
System The top management of KEF should have a set of clear and transparent policy and HRS system to serve as guidelines for the managers to provide these employees with basics right and benefits. Management should design a more appropriate HRS system such as proper reward and benefits as well as training and development in order to increase employees’ motivation. In addition to that, KEF should also implement a set of system that is to improve interaction between departments so as to ensure that every employees of KEF are well- informed of the company’s internal progress and performances.
According to Hypotheses Cultural Dimensions, China is considered as a high power distance country whereby they accept and perpetuate inequalities between management and employees. In this high power distance society, employees will only perform their duty if clear guidelines were given by the top management as a form of respecting the status. Furthermore, China is also country low in uncertainty avoidance whereas a the society is less aware of careful planning and step by step procedures since they are more open to risk and does not fully relies on rules and laws.
The issue with KEF China in which the employees have been caught for changing the date for replacing the oil for the purpose of passing examination by district inspectors reflects that the employees dare to take up such risks and violate the laws by sacrificing customers’ health and emphasizes on the company’s profits. Hence, KEF management set up a regulation body and rules so as to check on the KEF outlets and ensuring that the employees would perform the job and follow the rules or at least the procedure of preparing food in a more appropriate way.
According to Handy and Chine organizational culture model, employees of KEF should be injected with beliefs and ideas about what kinds of goals members of an organization should pursue and ideas about the appropriate kinds or standards of behavior the employees should use to achieve the company’s goal and objectives. KEF should provide a brief training to all the employees when they first join the company to ensure that the employees are aware of the company’s objective, mission and vision.
A shared belief and value will help the managers and employees to have better understanding and hence able to work together as a team and hence will be able to increases their work efficiencies, effectiveness and overall job performances. Each organization has their own management style and culture. Different management style and organization culture will reflects how managers interact with the employees and their way of spending time.
According to Hershey- Blanchard Model of Leadership, in order to determine the appropriate leadership style to use, the leader will need to determine the maturity level of the followers n relation to the specific task that the leader is attempting to accomplish through the effort of the followers. As the level of maturity increases, the leader should only begin to reduce his task behavior and increase relationship behavior until the followers reach a moderate level of maturity (Hamlin, 2002).
KEF would have to engage multi-way communication with the employees in order to provide support and encouragement and facilitate interaction that involve the employees in decision making. Thereafter, employees of KEF will feel that they are being treasured by the company and hence increase the level of engagement with the many which might in turn beneficial to both the company and customers of KEF. According to the engagement model, those “engaged employees will work with passion and feel a strong connection to the company and will directly linked to the productivity and performance of the employees.
In order to build such engagement with the employees, KEF should improve by having an appropriate communication channel, employees performance feedback, rewards and recognition, and improve the quality of working relationship with peers, superiors and subordinates. KEF management should provide training and placement courses for their employees once every year to further improve their knowledge of the organization’s goals and their sense of responsibilities to improve their career development opportunities.
Lastly, management’s effort in providing training and development for the employees will not only benefits the company, but also will help to motivate the employees in the sense of employees will be that they are part of the company and is an asset to the company and hence it will motivates them better and will encourage them to perform better. Skill KEF in USA received various complaints regarding the services provided and customers were offended by the improper manner of the managers. KEF management should improve their service management in which a policy of responding to customer’s complaint within 48 hours should be implemented.
By doing so, any unsatisfactory complaints from the customers will be solved and such information can be used by the company to evaluate which and what sector they should improve better. In addition, such implementation will help the company in holding managers accountable for their behavior towards the customers. Moreover, KEF management should re-design their screening and raining program in order to hire a more appropriate and quality managers. Managers are seen as an important role in the company whereby they need to have the capabilities and abilities to handle and make important decision regarding the employees and also the company.
A new implementation of screening and training program should focus on customer and employees relations, in addition to safety and hygiene. This will result in managers and employees who are more able and willing to meet customers’ expectations and on par with the company’s objective and standard. Recommendation With the issue faced by KEF, it is recommended that the company should introduce some innovative and advanced training program which aims to up skill their current and future management population.
Using a root model, KEF can plan their existing internal training programs and combined additional elements of the framework to ensure that the program fully meets the needs of their organization and also increase the sense of belongings of the employees. It is believe the initial results are very positive and show significant improvement in the decision making abilities of the employees, higher levels of confidence and improved business knowledge. Longer term, KEF is keen to raise goals further and embed qualifications at the next level of management.
KEF is a quick service restaurant business with across 68 countries. As the business has expanded there is an increasing focus on people development, career progression, succession planning and a need to become known as an employer of choice. A review of the business needs showed that team leader capability was a key issue and as a result there was clear gaps in their management associate with many team leaders which not able to progress into assistant manager positions. In his case, KEF should spent time to investigate several options to address this gap.
While KEF has had internal development program for many years, KEF need to make sure their training program qualification were recognized by the global recognition, not only recognize as a key reason for job seekers and staff. Their internal systems and structure need to be strong and meet the technical needs of the business. Moreover they need to address some of the knowledge and skill issues such as understanding and analyzing business level data and trends and having an awareness of the wider hospitality sector and competitive environment.
Defining the solutions have to suit the needs of their business. KEF need to decide an advanced hospitality training, somewhat embed within their business, was the best resolution. Their internal training programs should be amended where necessary and the additional requirements should also need to be added into the process. This additional learning about the hospitality industry has been valuable for the employees, giving them a good understanding of the business environment and where KEF and its competitors fit within it.
An external training provider should appoint as well which can provide the employees some functional skills element of the structure. As have confidence in, the programs will have a significant impact to the organization. The result can be showed when a manager report a marked improvement in the decision making abilities of the employees, higher levels of confidence and improved business knowledge. Moreover, the upper management can communicate with each store daily for an update on the previous shift, report that employees are far better informed and aware of what is happening in their division.
Efficient skills will principally well received by the employees and the direct contact they have received from the provider has helped their confidence and improved their knowledge and skills. The programs will give the management and staffs a better confidence and skills to run the business successfully. Longer term, The aim is to embed nationally recognized qualifications within KEF career pathways at the next level of management and review what they offer at the team member level. Conclusion The main purpose of this paper is to identify the role of each theory to business and how these theories can be helpful to modern operations.
All in all, it can e said that a business organization who having good management system are business which can easily gain respect and good reputation from its employees. Contrary to the belief that leadership and the organizations plans undermines businesses’ profitability goal, this actually help in generating profit through employee’s loyalty and give motivation to their staff to achieve the best performance.