Kentucky Fried Chicken (KFC) is a world-famous company. Kentucky Fried Chicken (KFC) one of leading fast food Franchise concepts of today. Kentucky Fried Chicken (KFC) was founded by Colonel Harland Sanders in 1952. The Colonel Harland Sanders has gone through many challenges about blending the food business industry. He has struggled to create a variety of taste for his food. The Colonel Harland Sanders has finally created 11 spices and unique cooking technologies secret recipe successfully. My group has taken the title of studying the Kentucky Fried Chicken (KFC) company for my group's work assignment. The purpose for this project paper is to know history of company, planning, organization of firm, leadership, control process and conclusion. We choose KFC Utama Jaya which is one of Labuan Branch for our project paper.
2.0 COMPANY BACKGROUND
2.1 HISTORY OF COMPANY
Kentucky Fried Chicken (KFC) was founded by Colonel Harland Sanders. Harland Sanders was born on September 1890. Harland Sanders was born in Henryville, Indiana. When Harland Sanders was six-year-old his father passed away. After his father passed away, Colonel Harland Sanders drop out of school since he was young and left to go work as a farm. In June, Colonel Harland Sanders has transformed the storeroom into a dining area and used a small dining table, serving food like a steak, country ham to travelers.
In 1936, Colonel Harland Sanders took over the lease of the Pure oil filling station and he taken began to sell fried chicken. After that, Colonel Harland Sanders has taken food-processing course at the University School of Hotel Administration. At 1937, Colonel Harland Sanders have expanded the restaurant area by making 140 seats and buying motel and making name the Sanders Court & Café. After that Colonel Harland Sanders not satisfied with the preparation of the chicken for so long with the preparation of fried chicken takes 35 minutes. So, the Colonel Harland Sanders has changed the way of frying chicken by using a pressure pots to save time to fry chicken. At the year 1939, Colonel Harland Sanders perfected his Perfected his Original Recipe chicken with his secret blend of 11 herbs and spices, pressure-cooked to seal in the finger licking' goodness.
In year 1950, he is 65-year-old after retirement. Colonel Harland Sanders focus its franchise business. He has traveling some countries by car and Colonel Harland Sanders travelling from restaurant to restaurant across the United States and Canada. Approximately 10 years, he has more than 600 restaurant restaurants in the U.S. and Canada only. In year 1965, he is 75-year-old it was the beginning for the Colonel. Colonel Harland Sanders sold the company at a price $2 million. At the same time Kentucky Fried Chicken (KFC) has grown all over the world and the Colonel Harland Sanders will not forget it and at the same time his face remained on KFC's face. In year 1976, Colonel Harland Sanders a figurehead in his own right, was ranked as the world's second most recognizable celebrity. Lastly, in the year 1980, Colonel Harland Sanders died when he was 90 years' old. The cause of his death is caused by pneumonia in Louisville, Kentucky, on December 16 and many have sympathy with their death and Kentucky Fried Chicken (KFC) name remains until now.
2.2 NATURE OF BUSINESS
KFC is a stand for Kentucky Fried Chicken. KFC is the world's most popular chicken restaurant chain in the world specializing in Original Recipe, Extra Crispy, Twister and Colonel Crispy Strips chicken with homestyle sides. Almost eight million customers everyday are served around the world. KFC continues to grow in Asia. In Malaysia, the first KFC restaurant opened in 1973 on Jalan Tunku Abdul Rahman. Now, KFC has been opened all over Malaysia. As we can see now, in Labuan Island there are also 4 restaurants that are open in the city as the fast food gets a warm welcome in Malaysia. KFC has become the favorite choice of Malaysians regardless of age either old or young.
2.3 LOCATION AND EMPLOYEES
The first Kentucky Fried Chicken restaurant located is North Corbin, Kentucky, United States but now KFC has been built all over the country. This fast food that is obligatory in every country. Meanwhile in Labuan Island, there are only four KFC restaurant opened in Labuan Island and one of them is located at Lot C19 (Corner Lot), Jalan Kemajuan / Ujong Pasir, 87000 Labuan, Labuan Federal Territory which is known as KFC Utama Jaya.
It says almost 1001+ workers working in KFC all around the world. This has a direct, positive effect on staff retention, she says. KFC also puts a significant focus on making employees feel valued. This is manifested in the way employees treat each another and is also achieved through the company's reward package. For example, the employees that working in the KFC Labuan Federal Territory which is KFC Utama Jaya, there only have 29 people. There are 3 managers, 3 permanent workers and 23 part-time workers.
3.1 VISION AND MISSION
KFC Utama Jaya branch Labuan vision is want to be the leading integrated food services group in the Asia region based on consistent quality products and exceptional customer-focused service. They firmly control the product processing system that starts with suppliers of all raw materials. The audit was conducted by the KFC Quality Assurance Department to ensure food safety, quality, packaging, and distribution. KFC Malaysia chicken vendors are closely monitored by the Department of Veterinary Services to ensure that Halal procedures are complied with. In addition, they will also provide the best service to customers as the customer's smile is their satisfaction.
KFC Utama Jaya branch Labuan mission is want to maximize profits and increase shareholder value. To maximize profits, they use a franchise system that allows the company to maintain the overall control of the product and deliver the promised rate of return. Now, over 600 KFC franchises in Malaysia and reflects that the opening of the KFC franchise brings huge revenue and maximizes profits to local owners and KFC Malaysia. As such, shareholder value can also be improved because the profit gained is no limit.
3.2 SWOT ANALYSIS
KFC is the best known fast food industry among others fast food industry such as McDonalds, Starbucks and so on. KFC always be number one choice because of the delicious fried chicken served with a complete meal with eleven original herbs and spices recipes. In addition, KFC is also known for providing clean, well-kept food and fast service.
The weaknesses available through KFC is having an unhealthy food menu. The KFC food menu comprising high fat and high calories which is not good for our healthy. In addition, KFC's other weaknesses is having many competitors such as McDonalds, Pizza Hut, Starbucks and Donut Dunkin's. KFC need to compete with another fast-food industry. For example, McDonalds produces a new menu of spicy chicken. It makes customers from KFC prefer a fried chicken from McDonalds. This makes KFC often competitive with any fast-food industry. It makes KFC need to work harder to make sure their customers always choose KFC.
KFC also provides home delivery services wherever they are. KFC has provided KFC applications and short message numbers to enable customers to place their desired food orders. For example, housewives who refuse to go out from their house because they do not want to face traffic congestion in the city can order their foods through KFC application and will be sent immediately to their homes. Besides, KFC also constantly updates their menu that will attract the attention of their customers. Recipes from other countries such as Thailand, Korea, India and other countries have been referred by KFC to update their menu to make it different from their other menus. With the result of this new menu, the customers can find menu-based foods from abroad.
The threats often faced by KFC are from negative publicity. This negative publicity often produces negative views from community. For example, this negative publicity says fast food in KFC is not halal for Muslims. It's make KFC has been boycotted by people who are Muslims because Islam takes the food that is halal to eat. However, this negative threat can be resolved by KFC as the fast food available at KFC is halal. Additionally, KFC also lacked strong business ventures. For example, KFC was ever faced very low profit during a business period.
4.0 ORGANIZATION OF FIRM
4.1 FORMAL STRUCTURE OF ORGANIZATION
Formal structure is primarily concerned with the relationship between authority and subordinate. A typical organization chart illustrates the formal structure at work in a company or part of a company. The hierarchical organization begins at the top with the most senior leader and then cascades down to the subordinate managers and then subordinate employees below those managers. There are job titles, financial obligations and clear lines of authority for each box on the organization chart. There are three types of organizational chart such as functional structure, divisional structure and matrix structure.
Figure 1: Formal Structure of KFC Utama Jaya Labuan
Based on Figure 1, KFC Utama Jaya Labuan use divisional structure. KFC Organization structure is basically decentralized, leaving a great deal of responsibility and competencies to the mangers of its operating companies. The group encourages as decentralized an organization as possible, within the limits of the basic policies and strategies defined but its international Headquarters. The operating companies implement them according to their own situation and the local conditions. This is a good application of the principle of “Global Thinking And Strategy, but local action and commitment” KFC favour people and product over the system. The group also encourages flat organization, with few levels of hierarchy and broad scope of responsibilities, following the concept of “as much hierarchy as necessary, as little as possible”.
4.2 DECISION-MAKING PROCESS
Decision making is the process of making choices by identifying a decision, assessing alternative and gathering information resolutions to choose the best decision for their company.
Figure 2: Decision Making Process
Based on figure 2, first step is identifying a decision problem. That is, a discrepancy between an existing and the desired. The manager should consider critical and strategic factors in defining the problems. These factors are, in fact, obstacles in the way of finding proper solution. These also known as limiting factors. For example, the problem that faced by the KFC Company which is KFC and MacDonald's are considered direct competitors in the Western fast-food category. KFC and MacDonald's are more likely to increase several outlets in a city where their rival has a larger scale of presence, controlling for city characteristics and own-chain effect.
Second step is identifying decision criteria. Once a manager has identified a problem that needs attention, he or she must identify the decision criteria that will be important in solving the problem. For example, KFC issue we focusing on two potential relevant factors that is market learning which is demand expansion which the existence of rival chain may help to cultivate consumers taste for Western-style fast food and expand the potential demand and the behavior of rival may reveal valuable information about the market size and growth rate that a firm can utilize in it is subsequent decisions.
Third step is allocation of weights to criteria. The criteria are not equally important, so it's necessary to allocate weights to the items listed in Step 2 to factor their relative priority into the decision. For example, the factors of demand expansion are more likely to explain MacDonald's positive spillover on KFC. While the relevant factor of learning is more likely to expand the positive effect that KFC exerts on MacDonald's
Fourth step is development of alternatives. The decision maker lists the alternatives that could resolve the problem. The decision maker only lists the alternatives and does not attempt to appraise them in this step. For example, from the relevant factor of the previous process that is market learning, there are many ways in marketing can be included as an alternative. In the promotion strategy, a direct marketing can be very useful as it updates the consumers with news constantly. For instance, in conjunction with the launch of KFC cards, new members would register and filled up their contact details. The other promotion strategy is sales promotion. KFC should launch its sales promotion conjunction with the new product launching. As new product launching would certainly attract customers to come, hence the sales promotion like lucky draw, sweepstakes, drawing competition etc. would certainly grab the customers mind to revisit KFC again.
Fifth step is analysis of alternatives. That is critically analyzing each alternative by appraising it against the criteria. The strengths and weaknesses of each alternative become evident when compared with the criteria and weights established in Steps 2 and 3. For example, regarding the promotion strategy in direct marketing, the implementation period is ongoing as it is priority to update customers with news every day. From this, the manager can conclude that the information of the KFC is spreading widely and constantly to the customers throughout the direct marketing.
Sixth step is selection of an alternative. The critical act of choosing the best alternative from among those assessed. Since we determined all the pertinent factors in the decision, weighted them appropriately, and identified the viable alternatives, we choose the alternative that generates the highest score in Step 5. For example, the manager has decided to take an action to select the sales promotion of the promotion strategy as the best alternative in solving the problem that faced by KFC.
Seventh step is implementation of the alternative. It involves conveying the decision to those affected and to obtaining their commitment. The people who must carry out a decision are more likely to enthusiastically endorse the outcome if they participate in the decision-making process. For example, as the manager has decide to take an action to select the sales promotion of the promotion strategy as the best alternative in solving the problem that faced by KFC, an action that must be taken as new product launching would certainly attract customers to come, hence the sales promotion like lucky draw, sweepstakes, drawing competition etc. would certainly grab the customers mind to revisit KFC again.
Last step is evaluation of decision making. Managers appraise the result of the decision to see whether the problem was resolved. Indeed, KFC Company remained the world's largest chicken restaurant chain and third largest fast food chain it held over 50 percent of the U.S market in terms of sales and ended 1995 with over 9000 restaurants worldwide. One of the first fast food chains to international during late 1960's. KFC has developed one of the most recognizable brands outstrips its most competitive rival. MacDonald's.
5.1 LEADERSHIP STYLE USED BY THE LEADER/MANAGERS OF THE ORGANIZATION
Leader is someone who can influence others and who has managerial authority. Leadership is what leader do or in other word it's a process of leading a group and influencing that group to achieve its goal. A leadership style is a pioneer's style of giving guidance, executing designs, and inspiring individuals. It is the consequence of the rationality, identity, and experience of the pioneer.
5.1.1 COLONEL HARLAND SANDER
DEMOCRATIC LEADERSHIP STYLE
Colonel Harland David Sanders (September 9, 1890 – December 16, 1980) was an American Businessman, have a leadership style of democratic style. Democratic leadership, which is also known as participative leadership or co-leadership, is a type of leadership style in which members of the group took over the party's role in the decision-making process. in this leadership, Colonel Harland also sometimes act as a leader who heard the voice of most of its employees. He is also a leader who will be responsible for the opinions given by his employees.
5.1.2 PETE HARMAN
PACESETTING LEADERSHIP STYLE
Leon Weston "Pete" Harman (January 16, 1919 – November 19, 2014) was an American businessman best known for having struck a deal with Colonel Harland Sanders to open the first KFC Franchise. Pete Harman has used the leadership style of Pacesetting. In this style, the leader sets high standards for performance. He is "obsessive about doing better and faster things and asking everyone to do the same." But Mr. Goleman warned this style should be used with caution, as it can diminish morale and make people feel as if they fail. Pete Harman is a strong leader in implementing any operation. He will be putting pressure on workers to ensure they achieve their objectives.
5.1.3 ROGER EATON
AFFILIATIVE LEADERSHIP STYLE
Roger Eaton is the current Chief Operation in KFC. Leadership style of Affiliative, an affiliated leader promotes harmony among his followers and helps resolve conflicts. This type of leader will also build a team that ensures his followers feel connected. Often the followers will get much praise from this leader's style, but bad achievements tend to be unchecked. Roger Eaton is an affiliated leader, he does not like fights or misunderstandings among his employees. therefore, he will act as a problem solver for the harmony of the company.
5.2 MOTIVATIONAL ENVIRONMENT
5.2.1 CREATE TASKS THAT ARE BENEFICIAL TO THE COMPANY
Each worker needs to feel that their activity has any kind of effect. If a representative feel like his/her work doesn't mean anything or isn't really contributing, probably he/she won't be propelled to try and achieve the undertaking. As a business, guarantee that a dominant part, if not all, of your workers' assignments have an immediate advantage or commitment to the general achievement of your organization. Deliberately made assignments that straightforwardly influence the organization will invigorate and propel the worker to perform to their best capacity. For example, one representative may feel that they essentially pick up the telephones and exchange calls. They may feel that their activity doesn't really influence the organization's prosperity. Rather, let the worker realize that exchanging a call to the right office can prompt enhanced consumer loyalty. They now know that it is so critical to accurately exchange calls. This will, thus, persuade them to adequately and proficiently play out the activity.
5.2.2 SHOW APPRECIATION
Thankfulness can be a basic "great job" or "pleasant work." It will just remove a couple of minutes from your day to demonstrate your representatives that you see their remarkable work. For Example, a worker worked a long time on an undertaking that thus expanded benefits for your organization. Nonetheless, you've of late seen that worker taking longer breaks and disregarding their work. Odds are, your absence of acclaim influenced the worker to feel overlooked. Rather, offering basic expressions of acclaim and thankfulness will spur the representative to keep up and even increment their skill.
5.2.3 SET GOALS
An objective is an outcome that somebody is hoping to accomplish effectively in an assigned measure of time. Make a rundown of objectives that a worker or the general organization could sensibly accomplish. Pick some place to show the objectives. For instance, although you've executed a rundown of objectives, you see that the representatives are not precisely handling them. While you may surmise that making and hanging the rundown up is sufficient, you may have missed one urgent component: a course of events. At the point when the representative knows when precisely you anticipate that the objective will be refined, they will wind up persuaded to meet a due date.
5.2.4 DISPLAY CONFIDENCE
Demonstrate that you believe your workers to settle on the correct choices for the general prosperity of the organization. To a degree, enable the worker to be inventive in their activity assignments. For instance, you make a rundown of occupation assignments for a worker to embrace. Notwithstanding, you see the worker isn't performing to the best of their capacities. Ingrain trust in the worker by offering them some adaptability and imagination in the errands. Or maybe then essentially finishing the undertaking, they will endeavor to go well beyond. While there are numerous approaches to rouse your representatives, these five basic hints can make a persuading work environment without requiring much time or cash from you.
6.0 CONTROL PROCESS
6.1 FEEDBACK CONTROL
First control process that apply by KFC management is feedback control. Feedback control is done by supervisor of the branch KFC. Feedback control also can be done assistant manager. Feedback control can be collect in many ways such as through comment cards, generals' interviews of employees about KFC management behavior and other related issue. This feedback control that have been collected can be their motivation for the KFC to continue to provide the best service to all their customers in line with their purpose of establishing KFC.
6.2 CONCURRENT CONTROL
Second control process that apply by KFC management is concurrent control. Concurrent
control is done by the Unit Business Manager. The purpose of concurrent control is for the assurance food quality by monitoring kitchen workers with number of visits during a day. The purpose of concurrent control is also to reduce wastages, and to make sure superior quality KFC products.
6.3 EXTERNAL CONTROL
Third control process that apply by KFC management is external control. Yum Brands send representatives to come and visit all the branch of KFC. The purpose of Yum Brands send their representatives to come and visit branch of KFC is to make sure all branch of KFC still follows their standard set and for quality checkup.
6.4 FINANCIAL CONTROL
Fourth control process that apply by KFC management is financial control. This financial control is control by their finance department. Finance department sees all the financial activities that use by their employees. Unit Business Manager need to report all the financial activities required to be done or already done to the finance department directly.
6.5 INVENTORY CONTROL
Fifth control process that apply by KFC management is inventory control. Inventory control is done several times a week, one final time a month and at the end of the year. The purpose inventory control is to efficiently manage the availability of stock for production, sales and delivery and services of a business to maximize the volume of business and profits. Inventory controls are look after by Unit Business Manager.
6.6 STATISTICAL CONTROL
And last control process that apply by KFC management is statistical control. Statistical control of the branch is taken care by the Unit Business Manager. All these statistical data will be given to financial management at the end of day, week or month.
In conclusion, KFC restaurant is a familiar restaurant amongst Malaysians community. The diversity of strategies that have been applied by KFC makes KFC always be the number one choice among Malaysians community wherever they are. This situation makes KFC even more confident with their position even though lot of other fast food restaurants like MCD, Pizza hut and Starbucks. Although there are many issues arising that link KFC's good name, it still not disturbs the KFC business. The issue arose as KFC's business grew with other businesses. The issue arose can be a motivation for the KFC to continue to provide the best service to all their customers in line with their purpose of establishing KFC. This not only increases the number of customers visiting KFC, but it's also helps KFC to achieve KFC vision and missions.
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