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FACULTY OF COGNITIVE SCIENCE AND HUMAN DEVELOPMENT

KMS1023: ORGANIZATIONAL MANAGEMENT

SEMESTER 1, SESI 2020/2021

ASSIGNMENT 1 GROUP WORK [30%]

BUSINESS/ENTREPRENEURIAL PROPOSAL PAPERWORK

“KFC (KENTUCKY FRIED CHICKEN)”

No. Name of Group Members Matric No. Phone number


1. Nur Sabrina Afiqah Binti Bakerya 76278 0145804551
2. Joqlin Ling Mee Eng 75211 01125113778
3. Alvin Wong Siu Long 74049 01118728629
4. Valerie Minah Anak Harris 77056 0136231842
5. Vivien Anak Bennet 77109 01115907425

Lecturer: Dr. Nur Fatihah Abdullah Bandar


Date of Submission: 6 December 2020
Group: 04 (Monday, 8 a.m. – 11 p.m.)
TABLE OF CONTENTS

No. Content Page


1. Executive summary 1
2. Planning: KFC’s background 2
3. Planning: KFC’s industry analysis 2-3
4. Organizing: KFC’s organization chart 4
5. Organizing: Individuals job within the organization 4-5
6. Leading: Managers and management 6-8
7. Controlling: KFC’s performance standard 9-10
8. Controlling: KFC’s actual performance against standard 10-12
9. Conclusion 13
10. References 14-15
EXECUTIVE SUMMARY

KFC is one cooperation company that we moreover know as Kentucky Fried Chicken
and it is one of the exceptionally popular chains of fast food restaurant. In Malaysia, Singapore
and Brunei, it surpasses 540 outlets. The founder of Kentucky Fried Chicken was by Colonel
Harland Sanders and as of now KFC is one of the biggest businesses of food service in the
world. KFC is a part of Yum! Brands, Inc., the world’s biggest restaurant company in terms of
system restaurants, with more than 36,000 locations around the world. The company is
positioned #239 on the Fortune 500 List, with incomes in overabundance of $11 billion in
2008. Malaysia could be a major Fast Service Restaurant (QSR) operator in Malaysia and has
been built up for just over 20 years now. The commerce of KFC primary most is the
nourishment made by chicken just like the chicken nuggets, fried chicken, chicken burger and
so on. These days, individuals all surge for their life and work, so quick food restaurant is their
choice to fulfil their request to full the stomach. They are giving the quality goods, serve client
quickly but productive and compelling. The packaging of the nourishment also appealing and
the encompassing of environment also clean and consolation for client to having meal. Other
than that, KFC also give a line of dishes and pastries such as ice-cream, salad and potato
wedges and so on. Recently, more and more Malaysians have been selecting for a more
beneficial eating count calories as a huge number of them have ended up more health
conscious. This has opened the entryway for KFC’s primary competitors, such as McDonald’s,
to come out with a modern range of more advantageous items, permitting them to mount a
more noteworthy challenge on KFC Malaysia’s current position as Malaysia’s leading fast-
food operator.

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PLANNING

Organization/Company Background
1. Vision and mission statement

KFC or known as Kentucky Fried Chicken vision is to be the leading integrated food
services group in the ASEAN region delivering consistent quality products and excellent
customer-focused service while the mission is to maximizing profitability, improve
shareholder value and deliver sustainable growth year after year.

2. Objectives

The most important objectives of KFC’s case are to sell food in a fast, friendly
environment that appeals to pride conscious, health minded consumers. KFC has strategic
planning to extend its market worth value of the market and its market share. They work on a
well-defined key planning for this. They are working productively on operational plans for
example, they only open the branch where they can effectively win up to more than desired.
This is often part of their operational plans once they will think they have made the spot at
that point they would open up its new department. Operational plans include launching of a
new product to change or innovate its product line for the customers.

Industry Analysis/Environmental Scanning


1. Economic condition, competitors and customers

Economic condition
Kentucky Fried Chicken (KFC) was one of the first fast-food chains to go international in the
1950’s and has remained a strong competitor in the industry. By 2000, KFC had become the third
largest chain in the world with 11,000 locations in 85 countries. The strategies utilized by KFC
and its management appear to be quite effective. In 1999, KFC was ranked number six in the top
50 fast food restaurants in the United States with sales exceeding 4.3 million dollars. They were
number one in the chicken chain category with a substantial market share of 55.2%. Their sales
grew at a steady rate of 4%.

Competitors
The competitors of KFC divided into two which are direct competitors and indirect competitors.
The direct competitors are McDonald’s, Subway, Pizza Hut and other fast food restaurants while
the indirect competitors are other restaurants which are not included in fast food restaurants list.

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Customers
The main customers of KFC are family so we can see the menu of KFC usually sale in the set
form. KFC products usually bought by individual which included male, female, single and
families. Therefore, the product range offer should appeal as many people within these
consumer markets is possible to ensure that the maximum amount of product can be sold.

2. Organization’s competitive advantages

I. Unique features
KFC has some features that other restaurants don’t have. First is the KFC Reusable Side
Container. Their objectives of creating this container are to make packaging more eco-friendly
and create something that can be used again and again. This concept had won the 2010 Greener
Package Awards. Besides, KFC also have fast food movie maker which named KFC Movie
Matic. This fast food movie maker lets user become real-life fast food stars.

II. Emotional and practical payoffs to your customers


Corporate social responsibility (CSR) is driving force of how a company is perceived
both local and international in their community. This is one of the key strategy KFC has
leveraged to sustain its competitive advantage. KFC has a rich history of generosity which was
inspired by its founder Colonel Harland Sanders. Evidently, there is a KFC foundation which
aid more than 4500 students and KFC employees by helping them go to college and earning a
GED.

III. Intellectual property rights or any patents that protect differentiation


Colonel Sanders did not include the specific composition of the “moist layer of breading
material” in his patent. The “moist layer of breading material” is obviously Colonel Sander’s
famous ‘original recipe of 11 herbs and spices,’ allegedly written down only on a single piece of
paper by Colonel Sanders himself and known to only a select few people

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ORGANIZING

Organization structure/ Organization chart


A) Organization Chart

B) How do you allocate human resources to ensure the accomplishments of objective?


Human resources can ensure the accomplishments of KFC’s objective by making sure an
organization has a supply of willing, motivated, and skilled employees.

Individual jobs within the organization.


A) Duties and responsibilities
B) How the duties should be carried out.
POSITION JOB DESCRIBTIONS
General Manager a) Overall duty for coordinating the day by day operations of a restaurant.
b) Ensuring compliance with company guidelines in all ranges of operation,
counting item planning and conveyance, client relations, eatery upkeep and
repair, stock administration, group administration, enlisting and maintenance
of group individuals and money related accountability.

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Assistant a) Partner with the General Manager on victory measurements and lead
Manager eatery group to reach goals.
b) Responsible in planning the draft item projections and financial
which have to be be surveyed by the Common Manager.
c) Grow and coach group through preparing and contracting.
Shift Supervisor a) Provides top-notch visitor encounter that incorporates inviting intuitive, a
clean eatery and hot and new meals.
b) Manage day by day operations by observing the working of
the representatives either independently or in a bunch. The standard is set by
the move bosses with respect to the execution of the group individuals.

Team Member: a) Make and prepare guest orders with accuracy and efficiency.
Customer b) Answering the telephones cells and handle order via online and drive thru
Services from customers.
Team Member: a) Make KFC world-famous chicken at the most noteworthy quality standards.
Cook b) Partner with group part to oversee the item required to fulfill visitor orders
c) Practice tall quality nourishment and cleanliness guidelines.

Team Member: a) Responsible for taking orders and demands from clients. She is
Cashier additionally capable for supplanting orders if asked by customers.
b) Responsible for gathering customers arrange in a tray, this incorporates the
most supper, side dishes, drinks, condiments and utensils.
Responsible for treating the clients with the leading client benefit hones such
as engaging a customer’s comments or complaints with respect
to the nourishment and administrations.

Table 1.1: Job content of KFC’s restaurant

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LEADING

A) How managers can most effectively lead subordinates?


Managers must first understand their subordinates’ personalities, values, attitudes and
emotions to become effective at leading. If managers are effective leaders, their subordinates will
be enthusiastic about exerting effort to attain organizational objectives.
Managers have to treat each of their subordinates fairly and respectfully. As a manager, you have
to avoid any kind of favoritism and be fair to everyone. We have to develop abilities or potentials
of every subordinate by provide any necessary resources and training needed by the subordinates
to do their jobs. By doing so, they will perceive that you care for their well-being. You have to
know and like your subordinates too. It will make them feel good working with you because you
learn the individual strengths and weaknesses of them.

You have to show continuing concern in your subordinates by providing feedbacks on


their performance regularly. Be honest whether they are doing well or bad. It means giving praise
when it deserved, not when it doesn’t. You have to be diplomatic whenever you criticize any
aspects of any employee’s performance. Think first the consequences of your critics before you
jump to any judgement or conclusion. They will definitely appreciate you for being a considerate
manager.

Besides, you have to be flexible in dealing employee’s concerns. Use your good common
sense that always give you the flexibility you need to resolve individual performance. You also
have to give simple, but specific job directions at any time you assign a new task to a worker.
Make things not so difficult in the eyes of your subordinates even if it is in actuality a challenging
task. This will make them feel good and confident doing the jobs assigned to them.
Managers have to defend their subordinates against unfair criticisms and be with them. Make
them think and feel that you are a reasonable or supportive manager. You have to be loyal to your
subordinates as well as to the organization. Includes subordinates in the decision-making process
whenever feasible. You can also show your leadership qualities by working to obtain promotions,
pay raises, and awards for deserving employees.

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B) What makes a manager a good leader?
To be a good leader as a manager, you must listen to the team. Sometimes, a leader may
get too busy giving directives and managing the team, so that they forget to listen to other leaders
and even their followers. A good leader should understand that they do not know everything and
that they can learn new thing from the most junior employee. The leader should learn to interact
and listen to all employees because most organizations hire staff based on their expertise and
experience in specific fields.

Besides, you have to respect the chain of command. Organizations implement an


organizational structure so that each person in the company knows who to report to if there are
challenges in particular department. If a leader fails to observe these chains of command, there
will be confusion in the organization and employees will be demoralized. Also, if the leader does
not respect the chain of command, the employees will find it hard to report to their seniors and
this will cause disharmony among the employees.

You have to deliver on promised results. Good leaders must deliver actual results rather
than just giving promises every time. They must work toward getting tangible results and focus
less on the past achievements that they have not been able to equal afterward. Leaders can
accomplish this by learning the art of delegation, where they can break down large tasks into
smaller manageable tasks that can be assigned to one or more employees.

Other than that, you have to resolve conflict quickly. Conflicts often arise in organizations
between employees, leaders versus leaders or leaders versus employees. How quickly the
conflicts are resolved determines how competent a leader is. A good leader should arbitrate when
conflict arises to prevent the disagreements from stalling projects within the company. The
employees should see that their leader has the heart and mind to embrace challenges so as not to
break the organization.

A good leader also has to value people. Appreciating the contribution of other people in an
organization helps strengthen the relationship between the leaders and the followers. The leader
should exhibit good communication and listening skills such that no employees will feel inferior
to other persons within the organization. Also, the leader should be honest, fair and open to
discussions that touch on the welfare of the employee. Valuing the contribution of employees in
the organization enhances the leader’s ability to interact with people in a meaningful way.

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C) In what situations are certain leadership styles most appropriate and effective?
One of the most effective leadership styles is the transformational leadership style. This
style inspires their staff through effective communication and collaboration and thus initiating the
path to success. The second leadership style is democratic leadership. This style usually reports
higher levels of job satisfaction and the company can benefit from individualistic creativity. The
third leadership style is laissez-faire leadership. In this leadership style, the leader allows the
employees to make decisions. The fourth leadership style is transactional leadership. This
leadership style is basically focused on group organization, establishing a clear chain of command
and implementing a carrot-and-stick approach to management activities.

The fifth leadership style is autocratic leadership. Autocratic leaders take control of the
staff and rarely accept or consider employees’ views or suggestions. The sixth leadership style is
strategic leadership. This leadership style involves a leader who is essentially the highest
authority of the organization. The seventh leadership style is bureaucratic leadership. In this
leadership style, the leaders set a strict set of rules, regulations and policies which they follow
precisely, and they expect their teams to follow the line. The eighth leadership style is charismatic
leadership. This leadership style relies heavily on the positive charm and personality of the leader.
This type of leadership is seldom considered to be effective because the success of projects and
initiatives are closely linked to the presence of the leader.

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CONTROLLING
A) Establish performance standards
i. Monetary terms
To open a KFC restaurant, it requires a lot of money at the beginning. KFC attains
advantages by delivering low cost products to the customers. KFC supply chain risk reduction
tactics are effective for multiple suppliers which reduces the dependency, monopoly and risk.
According to (The Borneo Post, 2011) it encourages sales, but the group noted that “its
profitability was affected by high costs of local poultry products and imported raw materials.
Management is actively taking steps to source for cheaper alternatives and review its marketing
programs to improve sales throughput at its restaurants”. Overall, KFC Malaysia’s restaurants
segment registered a 9.5 per cent revenue growth to RM1.888 billion while its integrated poultry
segment recorded a 10.2 per cent revenue growth to RM533.4 million against the previous
RM484.1 million.

ii. Unit produced


From the very beginning the originator of the KFC chosen the chicken instead of lamb as
an item. KFC offers a high-quality item to global showcase and they have a product enhancement
group that basically makes contemplations. With more than 19,500 units in more than 115 nations
and regions, KFC is the world’s second biggest restaurant chain after McDonald’s measured by
deals, and the world’s most well-known chicken brand. KFC’s menu has advanced from its
incredible Unique Formula pressure fried chicken “11 herbs and spices” and side dishes to
incorporate barbecued chicken, chicken strips, chicken sandwiches, hot wings, and desserts
(Uddin, 2020).

Table 1.2: Number of Kentucky Fried Chicken restaurants worldwide from 2010 to 2019

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iii. Number of defective products
According to (Shah Mujahid Uddin,2020) product quality and fast service delivery is
prerequisite for business strategies. KFC is famous for quality and service in chain restaurant. If
any customer becomes ill due to food safety issues, authority temporarily close the out late.

iv. Customer satisfaction


According to Hanaysha and Hilman (2015), customer loyalty can be obtained if the
product or services that are provided fulfil customer expectations and lead to customer
satisfaction. Customer satisfaction is determined through evaluation of customers’ experiences
with and perceptions of products or services and whether both of them meet customer
expectations in fulfilling their needs and wants. Freedom of choice affects customer satisfaction.
For example, restaurant customers could be satisfied and give good feedback when they have the
opportunity of choosing menu items for themselves. Other than that, customer loyalty can result if
provided products or services fulfil their expectations (Hanaysha & Hilman, 2015). Previous
research by Abdul and Zainal (2016), for example, explored the relationship between quality and
customer satisfaction using five independent variables: perceived value, emotional price,
monetary price, behavioral price and reputation

B) Compare actual performance against standards


i. Financial statements
The standard financial statements of KFC are they want to keep their costs as low as
possible while still maintaining the levels of quality, speed, dependability and flexibility that their
customers demand. The minimalization of costs is as important so that resources can be spared to
grow other areas of the business. According to the financial of KFC Holdings (Malaysia) Bhd on
11 February 2011, performance was reported that the company resulting a moderate improvement
on the services that provided by the company since it was established. Through its subsidiaries,
the company operates in three segments known as restaurants, integrated poultry and ancillary.
Since that, the company became strengthen and establishes franchises around Malaysia as the
financial performance show a good condition. Chairman of KFC Holdings said that sales at
restaurants since its open more than a year jumped 16 percent in 2008, double the rate of 2007
and then three times faster than the global average for KFC outlets. KFC Holdings (Malaysia)
Bhd., the best performer on the nation`s benchmark stock index, said it will sustain the fastest
growth in at least 10 years as demand for deep-fried chicken defies an economic slowdown (Chan
Tien Hi, December 3, 2008).

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ii. Sales report
The standard of KFC’s sales was as good as possible while still maintaining the levels of
quality that can approve customers’ satisfaction. According to the sales growth rates of KFC
Holdings (M) from year 2005 until 2009, it was shown that KFC Berhad remains by far one of the
cheapest mid-large cap consumer companies in Malaysia. It can be seen on the table of the
overleaf for regional comparison. The sales growth rate was increased from 2005 to 2009 for
example the Dividend Yield on year 2005 is 2.5 percent then each year been increased which year
2009, the yield is increased to 7.8 percent. It was reported that KFC Holdings generated revenue
of RM1, 206, 9 million which accounted for a 10.9 percent increase over 2009. Since the sales
increase over the country and show good performances, the number of Malaysian KFC outlets has
increased to 399 in 2007 and now was increased to 500 outlets all around Malaysia At end of
March 2007, the research house imputing that 2 percent of selling price was implemented by
Malaysian KFC outlets, and 3 to 4 percent selling price increase implemented at Singapore KFC
outlets in November 2006. Since the selling price increased, KFC branches were growing fastest
around nationwide. Apart from that, KFC Holdings (M) also increased the number of Ayamas
Restaurant outlets to 19 from 14 outlets for 2007 and then from 14 to 21 outlets for 2008. The
growth accelerated earnings by this company in 2QFY09 (+4.2%yoy to RM31.7m) as compared
with +1.4%yoy in 1QFY09. The higher growth was due to higher contribution and better margin
from KFC restaurant division.

iii. Production results


March 2007 witnessed the successful launch of KFC’s new “Colonel” logo, plus new staff
uniform and product packaging. KFC presented the Colonel Rice combo advancement, which
created excitement at the restaurants and improved throughput. Throughout the year, effective
brand building and marketing programmed were combined with innovative product offerings and
promotions. To provide their customers with greater menu variety and value they introduced
attractive new products such as Alaskan Fish Burger, Colonel Rice combo, Black Pepper Chicken
Chop, Chicken Poppers, Half-Half Meltz, Variety Bucket with Fish Fingers, and new X-meal
combos. Value meal promotions were carried out on a regular basis, offering great savings to
consumers. These value meals, which are much cheaper than ordering individual items, are very
popular among their customers. Furthermore, being a predominantly Muslim-Country, all meats
are slaughtered in accord to the Halal-method under the supervision of Shariah Advisory Council
and the Department of Islamic Development Malaysia. It shows that they manage to product new
product every year to growth their performance based on the standard that have been provided.

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iv. Customer satisfaction

Hypothesis Results

H1. The relationship between food quality and customer satisfaction Positive

H2. The relationship between service quality and customer satisfaction Positive

H3. The relationship between ambiance facilities and customer satisfaction Positive

Table 1: Hypothesis result of A Study on Customer Satisfaction Towards Ambiance, Service and Food Quality
in Kentucky Fried Chicken (KFC), Petaling Jaya

Based on the study that have been conducted, all the proposed hypothesis was
acknowledged since concurring to the survey, customers who were satisfied with the given
variables were ultimately satisfied with the overall experience of dining in KFC Petaling Jaya. A
restaurant is not just composed of the food or menu it is offering, it is a combination of many
factors which lead the way to satisfaction of the customers who visit the restaurant. It shows that
KFC Petaling Jaya is doing a great job by always priorities the customer and it was reach to the
standard that have been setting.

v. Formal performance appraisals


The performance appraisal isn't a modern framework to the organization. All most all
organization utilize this performance evaluation to assess their employees formal and informally.
The main aim to determine the effective performance appraisal is to meet the organization’s
objectives. One of the mechanisms to evaluate performance of employees is 360 Feedback. 360
Degree Feedback is a system or process in which employees receive confidential, anonymous
feedback from the people who work around them. This typically includes the employee's manager,
peers, and direct reports. The feedback forms include questions that are measured on a rating
scale and also ask raters to provide written comments.
Managers and leaders of KFC organization used 360 Feedback as a development tool to help
employees recognize strengths and weaknesses and become more effective. The feedback process
gives people an opportunity to provide anonymous feedback to a coworker that they might
otherwise be uncomfortable giving. Feedback recipients gain insight into how others perceive
them and have an opportunity to adjust behaviors and develop skills that will enable them to excel
at their jobs. It helps the organization to reach the standard.

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CONCLUSION

Business Prospects and Sustainability

The success of KFC derives from several factors. The internal review of the company
shows that the firm has built a range of strengths. For example, KFC has incorporated a principle
of customer focus that has strengthened its dedication to ensure that consumers reach a high
degree of satisfaction. KFC often introduces new products and new innovative meals to meet
local tastes, thereby increasing market share. In addition, KFC focus was placed on how their
meals can meet the ever-changing taste and preferences of the market they serve. This is also why
many customers like their products. Besides, franchising has allowed KFC to extend its
operations both on the domestic and international markets. Implementation of corporate-level
policies, including product growth and business development, has strengthened the company's
potential to increase its market share. KFC also spend 2% of its income on advertising and use
print media and most recently, online advertising to market their products. For examples,
advertising media include televisions, newspapers, billboards, pamphlets and the internet. KFC
also distributes utilities to the customer, such as parking, waiting, etc. KFC positions its outlets in
strategic areas such as universities, schools, city offices or some other sector, most of which are
occupied by young people and some adults. In conclusion, with the existence of fast food services
produced by KFC, they are confident that it can increase the level of other services in the market.
KFC is a sustainable business as their service will always be well received. The business will
continue to grow stronger and bigger in the world.

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