Leadership at Kentucky Fried Chicken Restaurant - Case Study Example

Kentucky Fried Chicken (KFC) restaurant overview and history

Kentucky Fried Chicken (KFC) restaurant a multinational corporation. It has over seventy years of the existence in the operation in the global market. In nineteen fifty-two it was franchised. Now Kentucky Fried Chicken (KFC) restaurant is the subsidiary of Yum. It has managed to maintain significant market share in the market due its sustainability in providing the quality services in the market. Now Kentucky Fried Chicken (KFC) restaurant boast of over eighteen thousand outlets in the global market. China being the leading market. It generates over ten billion of the revenues annually each fiscal year from its operations.

Literature review

In today's era organizations are experiencing dynamics. These changes occur due to it is essential to growing. Also, change teaches reasons for one to be flexible. Furthermore change challenges values and beliefs of the management‚ It also reviews strengths and weaknesses of the organization. It also stimulates the management to break up from regular patterns. Thus, a change well embraced creates an opportunity to the organization. (Ann‚ Heather jerry‚ 2009).Thus embracing change is a very crucial to the organization but it must be implemented systematically to avoid possible resistance and other advance effects on the organization. (Kamugisha‚2013).It is very important to involve employees and other key stakeholders in the whole process of introducing change right from change planning stage to implementation stage to avoid cases of resistance.( Jos, Marjolein. Caniëls& Thijs‚2013)

Taking Kentucky Fried chicken case, the organization have a past reputable success in the US market before 1994. The major challenge facing the organization was that most of their unit were based oversees. Domestically some of the units were being closed down during the 1994-1995 period. This was mainly due to increased competition from other restaurants and also other major obstacles in the United States market. Its expansion was very difficult especially the units because of scarcity in the available sites for construction. In addition to that there was increment in the costs incurred in running the business, consequently cutting down the profit margins greatly. Despite all the challenges faced during this period KFC ended up reporting a growth which was largely attributed to its effective leadership in management as discussed in the paper.

Impacts of the leadership of operation

Leadership has significant impacts on the business. It affects all the stakeholders of the organization from the top to the lower. Level employees. It implies that it affects both subordinates' employees who represent the lower level category in the enterprise to executive officers in the company who includes Chief executive officers (CEO) and company secretaries. Leadership style applied in the organization also shapes the culture in enterprise set-up. Culture means a lot to the team's success and failure. Good governance enhances achieve its goal hence success where else inefficient organizational leadership leads to business failure due to dissatisfaction on the part of the employees. Which in turn possess major setbacks to the stakeholders who are owners of the firm. Usually, business failure leads to what is called urgency problem between management and the stakeholders. It mainly occurs as a result of the conflict of interest between the management and the shareholders. For instance, during an individual fiscal year managers can decide to use retained profits for the purpose of making an acquisition. While the shareholders anticipated getting increment in share payout. Hence causing a severe conflict during the annual general meeting (Nanjundeswaraswamy&Swamy‚2014)

Impacts of good leadership on operations of Kentucky Fried Chicken

In a case of the Kentucky Fried Chicken (KFC) participative form of the leadership is mostly used. This kind of the leadership usually values the inputs of others. It is also called Democratic leadership. It gives all the participants of the certain task with a lot of autonomy to perform a particular activity. For instance in the case of Kentucky Fried Chicken (KFC), all the managers from different divisions are allowed to make a decision of the range of foodstuffs which can be offered to diversify the portfolio of dishes offered. For instance for Kentucky Fried Chicken based in the Middle East. The operational manager in charge of that division can make a decision on the amount of food and beverages such as wine and pork that will be stocked in Kentucky Fried Chicken (KFC) headquartered in the Middle East. The managing director gives the approval only after considering all the viable options as wine and pork are not on high demand in the region (Sylvester Marek‚2010).For this reason, senior managers must know the cultural differences between them to formulate business strategic goals and objects. The effective international firms like Kentucky Fried Chicken (KFC) to be very cautious when formulating objectives for the whole business. It clearly is seen that participative form of management the top managing officers have the final say on whatever decision made. Though contributions from the subordinates are allowed. Though this kind of the leadership is not possible in short-term duration. As a result of a lot of consultations with a substantial number of participants. (Kozmenko&Balatsky‚2003)

Proper leadership has enabled Kentucky Fried Chicken to achieve high profits. Now the Kentucky Fried Chicken has expanded to multinational markets. Kentucky Fried Chicken (KFC) initially started in early nineteen fifty-two (1950). It operated as a simple roadside restaurant. After some time, it gained growth potential then Sanders franchised it. This hotel expanded beyond the other well know hotels such as Hamburger. Which further enabled Kentucky acquire more competitive advantages over its rivals. In nineteen sixty-two (1962) Kentucky Fried Chicken (KFC) restaurant opened its branches in Mexico‚ Jamaica and England. In nineteen seventy Kentucky Fried Chicken (KFC) experienced a dramatic change as a result of selling its assets to spirits distributor company. Hence the change of leadership. From above history of Kentucky Fried Chicken, it is evident that Kentucky has experienced high returns from its operations. Furthermore‚ now Kentucky Fried Chicken (KFC) has expanded to African countries and also other parts of the world to a great. It is obvious signal that this restaurant is experiencing a tremendous growth hence growth in profits. Proper leadership ensures efficient flow of the information across the whole organization (Steffen. Konrad & Wieland‚2003)

Wider market coverage hence more sales. As a result of real leadership Kentucky Fried Chicken (KFC), great sales have been realized. For currently Kentucky Fried Chicken (KFC) restaurant has got expanded the market by use of mass media in its advertising. For instance, Kentucky Fried Chicken (KFC) have got Facebook page ‚advertising blogs and website for advertising its services. Hence attracting more customers' attention as compared to local established restaurants which are still holding to old means of advertising. For instance with its arrival in Kenyan market in the twentieth century in East African market Kentucky Fried Chicken (KFC) has become one of the well-known best-serving restaurants in the region. Thus beating local restaurants which have been in existence for years (Jozef‚ Vladimir & Bartłomiej OKWIET‚2012).

With effective leadership in Kentucky Fried Chicken (KFC) has enhanced the effectiveness and flexibility of meeting changing consumer needs. The achievement has been realized by using the modern technology in the management. For instance use of information communication, technology has enabled fast dissemination of information to various divisions across the world.

Also, growth as in Kentucky Fried Chicken (KFC) cannot be achieved without proper functioning of the finance and accounting department and by using modern accounting soft wares. For instance with eighteen thousand outlets in China only which accounts for its largest market. Such market cannot be achieved without proper financial management. The following are benefits of sound financial management. It helps to minimize cases of frauds and theft in the firm. Also, it helps in ensuring cases of embezzlement of enterprises funds is very much mitigated. It also helps in ensuring that enough cash is maintained in reserve to fund acquisitions and expansion of the business. Furthermore‚ effective cash management helps in ensuring that there are sufficient funds to ensure there are no budget deficits during the fiscal year. (Christopher Pollitt‚2001)

Role of effective leadership on customer satisfaction

Proper leadership helps to meet customers' needs efficiently. For instance, an appropriate communication channel in the organization ensures feedback is disseminated feedback promptly. Thus making customers feel respected this will make them be enticed to make repeat orders in future. It is clear that business should be more oriented to customers. For instance, Kentucky Fried Chicken (KFC) has achieved a large market share in the world since it has consumers' friendly services such as warm water bath‚ Forex equipment showing exchange rates this makes it easy for customers to make payment promptly without a need for computing. (Jolene Montgomery ‚2008)

Furthermore, ‚effective leadership helps in building business –customer relationship which is very for the survival of any business in an economy. A customer who is satisfied will tend to feel very much attached to an enterprise which serves him best.

Proper leadership helps in building customers' confidence. This is very essential for industry success. If the client has confidence in the particular brand. He will tend to be convinced that he cannot do without such a product. For instance, if a tourist from say Canada visits the Middle East or China he will tend look for services of Kentucky Fried Chicken (KFC) restaurant. The reason being that since the KFC has won international recognition due to its reputation.

In a performance in general Kentucky Fried Chicken (KFC) restaurant has achieved high gross revenue. This has helped in cutting cost greatly due to efficient automation of systems. The use of reverse logistics provides efficient utilization of resources. For instance recycling of food wastes and making profitable products. Furthermore, the use of Enterprise Resource Management (ERM) has tremendously achieved a lot regarding performance (Chirag‚2009).

To achieve change successfully participatory management is very essential. Employees feel very much involved in the business operations. Also, they feel motivated in undertaking their duties the reason being that they contributed to the decision-making process.

Transitional leadership is whereby managers and subordinates set goals together then subordinates agrees to follow unquestionably. The managers have autonomy to make reviews of the decision. Managers have the power to correct subordinates whenever they fail to meet the goals. Also, they train them to be more useful in future. Employees receive rewards regarding bonuses when they meet targets.

Authoritative leadership styles the team is mobilized towards achieving the common goal and objectives. This technique works best when the organization is going to experience a significant radical change. For instance, for the first time Kentucky Fried Chicken (KFC) restaurant was moving from the roadside to multinational market this leadership strategy was very relevant. It was done by mobilizing all managerial functions. Authoritative leadership is sufficient to inspire enthusiasm spirit in business enterprise (Denver‚ Severino‚..& Christopher‚2012)

The following skills are very essential to ensure effective change is achieved;-

• Inspires and motivates others-Great leaders create the vision that very clear and compelling. Great leaders also motivate the subordinates to achieve the goal it is called goal congruence. Everybody wants to work with the company which makes an impact in and the other world. For when Kentucky Fried Chicken (KFC) restaurant reached in East Africa, most graduates applied for vacancies. It was a desire to everybody to work in such multinational company due to its brand reputation in the world market. It the role of the great leaders to mobilize other team members to achieve the goals. This makes the organization impact on the society and customers as the whole.( Amit & Lalropuii‚2014)
• Good decision making skills-A good manager must also be the good decision maker. When the project team is faced with the dilemma, he should be able to help them to solve the problems. There are various decision-making models which are very relevant in helping in choosing the best cause of action. Such models include -Decision tree model and linear programming models.
• Excellent communication skills are very essential for every organization to achieve high deliverables. Good communications ensure managers disseminates information regarding the planned change. Thus helping them to prepare in advance to welcome the change and make necessary adjustments.
• Proper relationship building skills this enables in ensuring goal congruence. All employees feel satisfied and united when undertaking their respective duties during the change implementation. Change should be done systematically the following phases must be followed to achieve better results: -unfreezing‚ moving and then freezing.
• Displays strategic direction-Great leaders have the long-term vision for future. They typically plan ahead what is to be achieved in the future. For instance in the organization set up everything is subject strategic planning. Then the strategic path is developed to reach the predetermined goal. Goals are well broken down into manageable objectives.
• Innovative-When you look at most successful businesses such as Facebook and Goggle companies which are so far the leading social media platforms. Innovativeness has been a key to achieving significant market share. Thus, great leaders are also the great innovators. Such investors such as Bill Gates and Mark Zuckerberg has been the innovators in the field of the social media arena. In hotel businesses such as Kentucky Fried Chicken (KFC) restaurant can be innovative by using advanced technological equipment to enhance service delivery. For instance, they can buy a cloth washing machine and dryers; this helps to bring change in current mode of the provision of services.
• Great leaders are champions in the business-They can foresee the change to happen in the future. Hence taking necessary adjustments in time. For example, if managers anticipate in future there will be expanded the market for certain commodity due to say immigration which in turn pulls demand for individual product up.
• Ability to listen to suggestions from the subordinates-Great normally listen to subordinates views. He welcomes proposals from the subordinates. Then he evaluates them logically hence coming up with conclusive decisions. Manager by utilizing this management skill can gather relevant resourceful information which can help in solving a particular problems in the organization.
• Good communication skills are very critical for one to mobilize his team. Excellent communication skills assist in passing precisely the issues to be addressed. Without good communication, a firm cannot make any move towards achieving its objectives.
• Collaboration skill is very essential for manager driven to manage a multinational corporation. Collaboration is the skill to recognize and value cultural differences. It is true that multinational corporations such as Kentucky Fried Chicken (KFC) restaurant operate in the market where there are various cultures. For instance, for the manager of Middle East division must give autonomy to make decisions which will meet and suit the local economics. Also, the management should consider and know what motivates the divisional managers from the various regions. For example in developing world divisional managers can be motivated to be given heavy cars. While in the developed world divisional managers can be motivated by achieving organization's goals. Thus it is clear that knowing cultures and values of people will enable management to motivate the workers effectively hence high productivity will be made in the operation. Also since multinational firms such as Kentucky Fried Chicken (KFC) restaurant operates in full market. Divisional managers are frequently moved from one division to another. Knowing relationship existing among various residents of different parts of the world. Will help the managers in deciding where a manager from a particular region can be assigned and equally perform as the home country.( Ruben G
• Management and leadership skills-Great firms which have a high capacity to deliver are led by great managers. An effective manager has the ability to set reasonable, achievable goals. Prioritizes the opportunities then chooses the best cause of action for a particular activity. Furthermore, a good manager can identify the best assistance who can take over his roles when he is not on the premises.
• The financial skills-Effective manager must have financial skills. This enables the manager to make realistic budget hence effective allocation of the funds. Thus, the cases of budget surplus and deficits are reduced. The following are effective of budget deficit: -Budget creep whereby more funds will be borrowed to finance the budget. Also, it will it will lead to possible conflicts among different stakeholders of the project. Which in most cases causes agency problems in the firm. For instance, the funds which were meant and was allocated for paying shareholders will be channeled towards financing the project. On the other hand, budget surplus has the following impacts on the firm: - the funds which were to be in another resourceful use is tied up. (Terry‚2009)

Recommendation

For effective changes in an organization to take place the following have to be taken into consideration and implemented:

• Management support change-Managers must demonstrate the need for change. He must communicate clearly to subordinates the expected results and targets.( Faizan‚ Muhammad‚ Zeeshan & Numan‚2004)
• The case for change-No one wants to change to come for the sake of change. For the change to be achieved data must be first be collected and analyzed systematically. This enables to establish proper change strategy, and also, it helps in gathering all the relevant tools needed to implement the change. Using data helps in identifying the areas of improvements.
• Employee involvement-No matter how small or big the organization it is there is always the need to involve the employees every move. ( Dodi ‚2015)It helps in building the goal congruence within the corporate setup. Changing business processes ‚improving customers satisfaction and finding ways to reduce costs are fundamental areas where the change must be implemented to ensure high-profit margins are achieved in the organizations.( Sofijanova1& Zabijakin‚2015)
• Communicate the change effectively- By being proactive in communicating the change process in time makes the employees feel free to welcome the change. It is clearly known that some changes in enterprises cause the retrenchment in the organization which sometimes is not a good business practice. Workers should be made aware of forthcoming changes.As it helps to find possible areas of improvement in case the change requires new skills.( Manshoor‚ Attiya& Rahat‚2011)
• Implementation- Effective change process should be accompanied by a proper timeline. A reasonable schedule allows the management acquire the necessary resources in time. Such resources include- equipment ‚suppliers or training to take place before the full implementation is done. Implementing without a proper logical order in place can create a lot of confusion and frustrations on the part of those given the mandate to implement the change.
• Making a follow-up is essential to ensure successful implementation of the modification. It assists in identifying the areas of deficiencies and also the areas which need to be improved. Hence avoiding unnecessary debugs after the implementation of the change.
• Removing the barrier-This barriers can be due to lack of necessary tools and equipment. Restrictions imposed by the other departments. Inadequate training. In most cases it leads the workers or else employees to resist the change. It is the management's responsibility to ensure implementation change. Thus, they must develop a model which will counter such resistances.
• Celebrate-It is the clear indicator that the modification has achieved its intended purpose.

It is clear that since Kentucky Fried Chicken (KFC) restaurant is the multinational firm it is being affected by the cultural differences. It is clear that when implementing particular change, the management must consider this fact. For example, when making the decisions on the category of the dishes to be offered in the various divisions across the world. Divisional managers must be given an opportunity to contribute to decision making as failure to this will poses a challenge during the implementation stage. Sam Su is chairperson and CEO of Yum Chinese operations have adapted local foods in their menu. Thus accommodating the locals. These are some of the categories of dishes offered in Chinese outlets: - Rice congee‚ egg custard tarts and tree fungus salad among other dishes. In such a case Kentucky Fried Chicken (KFC) restaurant management has given the divisional managers the autonomy to make an independent decision which will cater for local needs while at the same time maximizing the returns. In East African regions. Many residents there prefer beef and pork. In this case, Kentucky Fried Chicken (KFC) restaurant branch located at this area offered such local dishes in plenty thus meeting local taste for all customers effectively.

Conclusion

Kentucky Fried Chicken (KFC) restaurant is now financially stable with a large chuck of its economic structure being financed by equity capital. In economy, most firms are funded from the use of the debt capital which is not the case with Kentucky Fried Chicken (KFC) restaurant, an evident indicator that KFC has limited liabilities in their balance sheet. Hence proper maintenance of the assets-liabilities balance. (Ian‚2002)

More leveraged firms always plug in the danger of financial distress. Which is the state when the firm is not able to pay for its financial obligation. Extreme cases of financial distress lead to bankruptcy or insolvency in the enterprises. Kentucky Fried Chicken (KFC) restaurant generates more than ten billion dollars in each fiscal year. Which has seen it experience tremendous growth. With this high-profit margins, Kentucky Fried Chicken (KFC) restaurant can finance new diversification of its range of the services offered in the market this is also known as profit plough back or reinvesting. (Annamaria‚2007)

Such high profits are used to finance expansion such as we experienced in recent years after the Kentucky Fried Chicken (KFC) restaurant expanded to East Africa region. Though some parts it is not doing well pooling of small bits of the profits earned it is enabling the Kentucky Fried Chicken (KFC) restaurant have the proper amount of cumulative gross profit.

Leadership in KFC plays a major role in ensuring the organization remains to be one of the biggest restaurant brands in the world. So far by addressing issues such as quality assurance, service delivery, cleanliness in the restaurant and catering for the needs of the customers, the leadership at KFC remains to be an example that leadership can turn an organization into a vast brand. Furthermore the leadership at KFC researches on the market trend and selects appropriate new locations where new units can be set up. Putting all this aspects into consideration makes the annual financial report of KFC to be always recording profits. In addition to that, it makes the company avoid any insignificant financial issues.