Organizational Culture and Its Effectiveness in Kentucky Fried Chicken - Case Study Example

Critically discuss how culture is expressed in your organization and how this expression helps or hinders your organization’s effectiveness; Student’s Name: Course/ Name: Date: Instructor’s Name: Introduction The impact of globalization has had a tremendous influence on the way businesses are run today. As competition comes not just from domestic manufacturers and service industries, but also from other countries, the need to be highly competitive and qualitative, mandates better management practices and work environment. Markets have become global and so too have standards and practices. With the opening up of markets just about in every part of the world, many manufacturers and service providers have used the more-than-attractive benefits available abroad to decrease production and operation costs to increase their profits and pass of a major part of this to their customers. It is because of this that one sees the emergence of mergers and acquisitions. By merging or acquiring companies abroad, the amalgamation of the combined units can cut costs, reduce competition and consequentially increase market share. Thus, business leaders meticulously design the strategic intent, resources, systems and structures to propel a successful union. Barrows (2007) states that “dynamic market forces such as global competition, changing customer expectations, and new communication technology, combined with career challenges due to ongoing industry consolidation and corporate restructuring, mandate continuous learning and the sharing of ideas.” This requires constant updating of HR and industry policies. It’s a senior manager’s prerogative to create an atmosphere within the hotel that keeps abreast with changing attitudes and forms. During a merger, or an association, as in the case of KFC, executives from both the merging groups diligently absorb the various technological and strategically strengths of the other and put them into practice to enhance their combined competitiveness in the market, however, the biggest problem they face is their ignorance of the complexity of variant cultures. Most conglomerates barge into the acquired company and obliterate the long-standing traditions, practices and policies to mold it into a faceless subsidiary. Even in case of an equal partnership, the merger of two like-minded organizations can lose their identity and individualistic charm as they overlook the interests of their workforce. Corroborating this theory, ‘Making Mergers Work,’ a study conducted by the Society for Human Resource Management, listed incompatible cultures as the biggest obstacle to success in mergers and acquisitions. The study reiterated that while many companies who merge may look at all the financial matters; they rarely cared for or looked at the cultural and workforce-centric issues which ultimately led to the demise of a merger. Therefore, despite staggering market opportunities and synergies, the amalgamation of these organizations often led to lost grounds due to the avoidance of cultural differences. Every organization has its own principles and ways of doing things, be it in its management, employment structure, or compensation. When two firms merge, customary differences are more than likely to crop up. Structured-entrepreneurial, proactive-reactive, centralized-decentralized, formal-informal or extravagant-economical, each firm has its own firm belief in what is right and what’s wrong. This is where cultural differences emerge and if not addressed properly, lead to huge financial risks. Culture change management is a tough volley and can be successful only when employees ascribe to it. However, predisposed workers lose motivation and experience job insecurity in the face of a merger. Persuasion and not coercion, is required to mobilize an apprehensive workforce. Organizational culture is made up of three important components; “values, rituals and leadership,” says Debenham (2004). An organization’s culture is made up of the certain elements that combine to define organizational purpose and deliver organizational goal. These elements are intricately related to enhance: Organizational values and beliefs Workers attitude and behavior patterns An organizations hierarchical or functional structures (MGS Debenham, 2004) When an organization makes adjustments to its existing work ethics (cultural), workers tend to interpret this as being provocative. No organization would like to be looked at as the inferior one to the other, and this could cause friction among the working group in domestic mergers. Efforts may be on to acquire new ideas and machinery to enhance production and quality. The import of such technology or idea may not find favor with the working class of one of the mergers, and this cause considerable damage to production and alliance. Such cultural invasion may be seen as a provocation into their privacy or existing practices which they may seem more productive and operational. In such situations, workers take a rigid stance to block entry of technology or idea that make them insecure and go on the defensive. So, what makes a partnership tick successfully? It’s the people and the organizational culture. The recipe for getting a successful merger off the ground is shifting the spotlight from deal-making to merging-of-cultures. In fact, culture has been attributed to being one of the most important factors in building relationships. Historians, believe it or not, have attributed the success of the Roman Empire in part to the successful merging of conquered cultures into itself. Therefore, the punch line is, pay more attention to people; not profits, as with people, profits will come in automatically. How do cultural variations integrate? Every organization has its own unique way of doing things, be it management, employment, or compensation to investment. When two firms seek to merge, customary differences are more than likely to crop up. Structured-entrepreneurial, proactive-reactive, centralised-decentralised, formal-informal or extravagant-economical, each firm has its own firm belief in what is right and what’s wrong. This is where cultural differences emerge. Management has always devised a set of ethics on which the company and its employees perform. This is the organizational culture. The practice continues till the company becomes non-existent. Culture cannot be changed within a company, unless there is the influence of an external factor. This so-called external factor is either a merger or an acquisition. Partnerships are the association of two companies working within a set of rules and regulations, for the benefit of each (The Hindu, 2007). Overview Culture and resources of an organization have an important role in the corporate world. Organizational culture is the environment of the work place which originates from the communication among the employees in the office. Good Organizational culture is essential for the performance of every organization. Organizational culture could really decide the performance and goals achieved by the company. In this paper, we are discussing about the organizational culture and structure of Kentucky Fried Chicken (KFC). KFC Corporation is the world’s most popular chicken restaurant chain, specializing in variedly flavored chicken varieties. KFC operates in 109 countries around the world and its products have a good brand image. “KFC operates more than 5,200 restaurants in the United States and have more than 15,000 units around the world. KFC is world famous for its Original Recipe® fried chicken -- made with the same secret blend of 11 herbs and spices Colonel Harland Sanders perfected more than half a century ago” (KFC History, 2011, para. 2). The further sections of this paper discuss more about the organizational culture, key elements of organizational culture, organizational values of KFC and the impact of this structure and environment may have on the role of a manager. Organizational Culture of KFC: The organizational culture of KFC gives more importance to diversity when it comes to the work place culture. KFC operates in different countries and, therefore, the customers and employees from these different cultures also become a part of KFC. They encourage diversity in work culture, values and ethics. They have a strategy to build a ream oriented ambience by concentrating on training everyone and encouraging them to be innovative. The main thing that KFC does is; they encourage and promote harmony in the workplace. KFC really works on building relations and inculcating variety and dedication among the company workforce and customers. The main thing we should look into is that KFC works to keep its customers pleased and happy with its service. And this is the main reason for their higher profits. While discussing about the organizational culture, another thing that we should mention about is the strengths of KFC; KFC has a competitive marketing and distribution strategy and recently they have refocused on improvising their international strategies. These strategies are the strengths of KFC. Secret recipes of KFC play a major role in attracting customers. It was the primary home replacement strategy implemented by KFC. “In KFC (U.S) about 35 percent of their associates are Caucasians and the remaining 65 percentage are Hispanic, African American and Asian” (Yum! Global Diversity and Inclusion, n.d., para. 2). KFC believes that varied teams make for improved crisis solvers, service all KFC customers more efficiently and builds a wealthier culture. KFC is really promoting mixed culture in their organization; they are increasing the representation of African Americans and women as their key decision makers. KFC thinks that by mixing different cultures, it would help their business in many other ways as well. Besides USA, KFC is operating in many other countries and the culture of these countries would be different, so in order to communicate with the customers in these countries, KFC has to employee local people as their staff and they could easily adapt the culture of that particular country. KFC is building strong customer relationships plus their chicken products are quality assured and very hygienic. All these factors attract and satisfy the customers. The organizational culture and behavior plays a major role in the case of KFC. It’s KFC’s culture to give priority to their customer’s choice and needs. KFC takes actions necessary to fulfill and respond to the customer needs. Organizational Structure and Resources of KFC: Kentucky Fried Chicken (KFC) is a chain of fast food restaurants found in Louisville Kentucky, in the U.S. PepsiCo founded an independent company named Tricon global Restaurants Inc (Yum! Brands) in 1997. Since then KFC has been operating as a brand section under Yum! Brands . The main products of KFC include wraps, chicken pieces, sandwiches and salads. And its main focus is fried chicken. It also offers roasted and grilled chicken products, desserts and side dishes. In countries outside North America, KFC provides beef based foods such as kebabs or hamburgers as well as pork based food for instance ribs and other regional fare. “The company was founded as Kentucky Fried Chicken by Colonel Harland Sanders in 1952; though the idea of KFC's fried chicken actually goes back to 1930. Although Sanders died in 1980, he remains an important part of the company's branding and advertisements, and "Colonel Sanders" or "The Colonel" is a metonym for the company itself” (Arcilla-Agtay, 2011.). Following are the chart of organizational structure of KFC: A number of various issues determine the business structure of the company. These elements include social customs, goals, beliefs and principles of the current managers, ecological constrains and obtainable technology. The notion of business structure contains the statement that organizations have comparatively impervious and easy to find restrictions. That is one can quite easily distinguish the business from its surroundings. This principle is true for the majority of organizations today. The company is presently structured with two groups under PepsiCo. KFC is a branch of the two PepsiCo divisions, which are PepsiCo Restaurants International and PepsiCo Worldwide Restaurants. Together these divisions of PepsiCo have been founded in Dallas. The company structure is such that whether its USA franchise or outside, the policy has always been to recruit experienced professionals from a variety of backgrounds. Coupled with good communication skills, outgoing and friendly personality, common sense, the ability to work in a team, commercial awareness, energetic, resilient and adaptable, trained to offer the best of eating experience to their esteemed customers. Having said this, what motivates these personnel is the healthy work ethics in place for them. It is but natural that a healthy environment can go a long way in instigating quality work. Thus, the management at KFC has gone overboard to comply with such standards. As a rule, most managers in companies strive to bring about an increased and effective mode of cooperation between their workforce and themselves. One way of doing this is by creating a broader manager-worker relationship of mutual trust and support and introducing flexible work/career patterns. Having said this, there are a number of business tactics that can be employed to bring about operational changes to manage talent most effectively. “Some noticeable tactics include: Identifying role models and establishing mentoring programs Eliminating all bias-based company policies and procedures Providing equal opportunities, training and development for all Conducting workshops for employees to impress upon them the importance of diversity and inclusiveness to increase performance and production” (Pappie, 2006). Though the above initiatives may sound simple enough to implement, it takes a lot of perseverance and cooperation for it to take shape. Position and Status: A person’s position in a group defines his location in the social system. It recognizes his comparative standing in regard of certain aspects like power, leadership and knowledge. Position is the evaluation of his place by others. It is the prestige or rank which describes this place. Achieved position is considered as an individual achievement and is affected by factors like work experience, education and abilities. Status contributes to a quality of group behavior and other related activities. For instance, high-status people initiate and receive more statements than those with comparatively lower-status and thus these so called high-status people are able to pass on more task-relevant and positive messages. The high-status human being is in an ethnically valued place in the group. Once an individual gains such a position in the group, she makes up a bank account of credits that permits her to diverge without reprisal later on. These credits may be utilized to guide the group in a refined direction. Position often, but not always keeps an individual away from resolving to or directing his followers from indulging in unacceptable behavior. For instance, a study of negative compliance in the military found that a higher officer who provides the instructions was held more responsible for the result than his subordinate. Conclusion With the emergence of transnational economy, there was an increasing realization that organizations needed to operate in a global market. This led to local organizations to change their attitude and perception to analogize with the globally competitive environment. Strong HRM practices are characterized by an equally strong internal labour market, consultative decision making and enterprise unionism. Such practices, either individually or collectively, encourages the incorporation of employees into the mainstream. This results in a strong employee-management relationship, leading to employee identification with the firm, and a high commitment to innovative production practices that enhance the firm’s performance. In return the firm or organization provides job security and rewards (Benson & Debroux, 2007). For an organization to run, it needs the effective co-ordination of its stakeholders, suppliers, customers, and shareholders. How many times have one come across problems in industries due to unhealthy work environment that could be either due to poor man management, or weak working conditions. Either way, it is the organization that suffers. The link to success is the well-coordinated response and functioning of the above entities, not necessarily in that order. However, as with any manufacturing company, man and machinery remain the two most important elements in production line. It is noticeable that the most important asset of an organization remains to be humans. Without these two, no organization can grow or for that matter, survive. It thus becomes mandatory for any company to devise policies that are pro-human in nature. “Functions such as managing cash flow, business transactions, communication, public relations, and production are part of human activities in sustainability and growth of an organization. Unless the organization managers look after human resources diligently, the firm is likely to face unnecessary drawbacks, which could have serious repercussions on the organization as a whole. It is no secret that humans are the driving force of any establishment, and it is they who possess the drive to make or break an organization. In lieu of the current market and multi-polar world situation, the work ethics of most organizations are continuously changing. This change not only affects the business but its employees as well. In order to maximize organizational effectiveness, managers must be able to manage employee capabilities, their time, and talent. This is precisely what KFC has attempted to achieve through its structural and cultural changes, to good effect. References Arcilla-Agtay, G. (2011). A ‘Bucket-Attitude’ at KFC Abreeza. Sun.Star Davao Newspaper. Retrieved Nov. 12, 2011, from http://www.sunstar.com.ph/davao/lifestyle/2011/06/03/bucket-attitude-kfc-abreeza-159235 Azzolini, J. (2009). Principles and Practice of Operations Management. New York: Routledge, 2009. Print. Barrows C. W (2007), International Journal of Hospitality & Tourism Administration, The Haworth Press Inc. Journal, retrieved on Aug 10, 2014, from Benson, J. & Debroux, P. (2007). HRM in Japanese Enterprises: Trends and Challenges Brown, D. (2001). Reward Strategies from intent to impact- Reward strategies–essential or ineffectual? Cipd 2001 Study Material, 118 Debenham, MGS, (2004). The Value of Organisational Culture and the Role of Competencies, Hellriegel, D. & Slocum, J. (2007). Organizational behavior. Florence: Cengage Learning. KFC History, (2014). KFC. Retrieved Aug. 10, 2014, from http://www.kfc.com/about/ Martin, J. & Fellenz, M. (2010). Organizational Behaviour & Management. Andover: Cengage Learning EMEA. Pappie, D. (2006). Women in Business, The Long Haul to Parity, Management Today, Journal, 103 Pettinger, R. (2004). Contemporary Strategic Management, Palgrave Macmillan, ISBN 10: 1-4039-1327-7 Redman T. & Adrian, W. (2001). Contemporary Human Resource Management. Essex: Prentice Hall, Pearson Education Limited Scot, A.(2010). Operations Management. London: McGraw-Hill. Yum! Global Diversity and Inclusion, (n.d.). Yum.com. Retrieved Aug. 10, 2014, from http://www.yum.com/responsibility/diversity.asp Read More