Course Name & Code Entrepreneurship | MBEMT

Level of Study Master | MBA, IBM, MSc

Semester – Academic Year Sem: 1 – AY: 2023-2024

Marks
Assignment Topic Organizational Culture and Innovation
/100
Type of Assessment Individual Assessment

Assessment No 2

Deadline Date Teaching Week 13, 2023

Name : Saif Al Mamari

Student Name & ID ID : 231047

Total Marks Obtain:

Overall Feedback & Comments:

Lecturer Name & Signature:

Mahfoodh Al Sabbagh
Introduction
In the dynamic landscape of ever evolving world, businesses are compelled to embrace
innovation and calculated risk-taking for sustainable growth. Two key pillars pivotal to this
are corporate entrepreneurship and organizational culture. Corporate entrepreneurship is also
termed as intrapreneurship, involves cultivating an entrepreneurial spirit within the
organization’s framework. Under this, a team or individuals from the organization are
supported and encouraged to assume initiatives to identify, develop and pursue innovative
opportunities. This concept is a departure from the traditional top-down approach,
emphasizing the importance of bottom-up innovation.
Organizational culture encapsulates a set of shared values, beliefs, and behaviors that pave
the way for members of the organization to interact and work towards common goals. A
robust organizational culture with continuous learning and adaptability is essential for
fostering an environment conducive to innovation and becomes a breeding ground for
corporate entrepreneurship. The symbiotic relationship between corporate entrepreneurship
and organizational culture dictates the level of innovation that can be achieved.
Brief profile and history of KFC
KFC formerly popular as Kentucky Fried Chicken is an iconic brand of fast-food restaurant
chain, head quartered in Louisville, Kentucky. Founded by Colonel Harland Sanders in
Corbin, Kentucky in 1930 as a roadside restaurant mainly offering deep fried chicken with a
distinguished recipe made up of a secret blend of 11 herbs and spices. Now KFC is a
worldwide phenomenon and is the second largest fast-food restaurant chain operating
globally with more than 26,000 restaurants in over 150 countries and territories around the
world, presently owned as a subsidiary of Yum! Brands (KFC website, 2023).
From its humble beginnings, KFC quickly rose to prominence credits to the vision of its
founder who identified the potential in restaurant franchising concept. The first franchise
restaurant of KFC was set up in Salt Lake City, Utah in 1952 and rapidly expanded in the
coming years. KFC disrupted the market by its unique offering back in the day and
challenged the dominance of hamburger. KFC was also one of the first American fast-food
chains to expand internationally, opening outlets in Canada, the United Kingdom and Jamaica
by the mid-1960s. Through the 1970s and 1980s it experienced mixed fortunes and went
through a series of changes in corporate ownership and finally was sold to PepsiCo. Under
PepsiCo the chain continued to expand and venture into new markets, prominently in 1987 it
became the first western restaurant chain to open in China and expanded rapidly, which is
now the company’s single largest market. PepsiCo spun off its restaurant division as Tricon
Global Restaurants, which is now known as Yum! Brands. (Wikipedia, 2023)
Fast food restaurants have always been appealing to customers due to their affordability,
quick service, convenience, accessibility, and consistent quality. The affordability and quick
dining concept of fast-food restaurants have not only made them a staple in global culinary
but have also positioned them as a cultural phenomenon. This enduring popularity reflects the
industry’s adeptness at understanding and meeting the demands of the consumers.
Analysis of present literature
Innovation is considered to be one of the key factors that influence the long-term success of a
company in the competitive markets of today. As a result, there is a growing interest in the
further study of the determining factors of innovation. Today, the focus is on these factors
related to people and behaviour, emphasizing the role of organizational culture, as a factor
that can both stimulate or restrain innovation, and therefore affect company performance.
However, there is little empirical research linking these variables (Naranjo, 2015).

Organizational culture can be defined as the values, beliefs and hidden assumptions that the
members of an organization have in common (Miron, Erez, & Naveh, 2004). Such shared
values form the basis of communication and mutual understanding and affect employee
behaviour through its two main functions: internal integration and coordination (Hofstede,
1988; Martins & Terblanche, 2003). Thus, culture can stimulate innovative behaviour among
the members of an organization because it can lead them to accept innovation as a basic value
of the organization and foster commitment to it (Hartmann, 2006).

Given the importance of innovation in firm success, a number of studies have attempted to
identify its main determinants (Crossan & Apaydin, 2010). In general, they can be grouped
into individual level, organizational level, and environmental level. Within organizational
level, the literature refers to size, organizational design, strategy, leadership, human resource
practices, financial support, and organizational culture. Out of them all, the ones that stand
out most are organizational design and organizational culture (Damanpour, 1987, 1991;
Mumford, 2000).

Cameron and Quinn (1999) Defined four cultures according to these two following
dimensions: flexibility and discretion compared to stability and control, and external focus
against internal focus and integration. They identified four types of organizational cultures by
combining the aforementioned variables with six organizational aspects which are
dominating features, organizational leadership, employee management, the organizational
glue, strategic emphasis, and success criteria.

The externally oriented adhocracy culture prioritizes adaptability and change. It is typically
observed in businesses that aim to lead their industries and in organizations that function in
dynamic environments. Creativity, entrepreneurship, and taking calculated risks are the
guiding principles of an adhocracy culture. Flexibility is also valued in the clan culture, albeit
it is inwardly concentrated. Clan culture companies are known for their emphasis on
teamwork, employee involvement, and corporate dedication to their staff. A market culture is
externally focused and exhorts stability and control. This culture's guiding principles include
competitiveness, consistency, and goal achievement. Lastly, a hierarchy culture concentrates
on internal organization while still being control oriented. Efficiency and strict respect to
standards, rules, and laws are two of its core values. (Sanz-Valle, Naranjo-Valencia, Jiménez-
Jiménez, & Perez-Caballero, 2011).

Strategies and Approaches for Sustainable growth

There are several ways to improve company success, a couple of which are customer-centric
and innovation-based. An innovation-based approach entails encouraging staff members to be
creative, providing resources, and supporting their adoption of fresh concepts in order to
continuously enhance processes, goods, and services. When a firm adopts a customer-centric
approach, it prioritizes the needs and experience of its customers. This approach increases
consumer loyalty and fandom. In the case of KFC, the menu selections were varied in various
areas to suit the local climate and customer appetites. This is because the company has
researched local needs and made necessary adjustments as needed. This modification allowed
the organization to operate for a longer amount of time in several nations and with a variety
of products.
Various strategies can be adopted by the organization in order to maintain growth and be
sustainable. Digital transformation strategy is when the organization embraces the digital
technologies and uses them to their advantage to place them in lead position in the market.
This is a very crucial way to stay ahead of competition in this technology driven world. Some
of the key technologies include e-commerce, data analytics, artificial intelligence, and other
advancements. Diversification strategy lays out the idea of pursuing various new markets by
diversifying the offerings and product range of the organization, this strategy spreads the risk
thinner and ensures the organization of seizing new opportunities. Differentiation strategy
involves offering a different kind of product in the market and stand out to receive premium
prices and also build customer loyalty. In the case of KFC, these strategies are used to their
advantage. KFC has already embraced various technologies and is already having its own e-
commerce website to door deliver its products to customers, owning a proprietary website
ensures there is no fee payable for any other platform owner and the data of the consumption
stays with the rightful owner.
In order to evaluate and mitigate the ideas of the organization, there are a number of tools
available, lets discuss a few of them. Balanced scoreboard first introduced by Rober S.
Kaplan and David P. Norton 1992, has become a crucial tool to get a comprehensive view of
the organization’s performance by evaluating its success across four key perspectives which
are financial, customer, internal processes, learning and growth. By utilising this framework,
organizations can ensure that all aspects of their operations are aligned with their overall
vision. This strategic planning and management tool provides a holistic view on the
organization and encourages long term focus on achieving success rather than short term
financial gains. SWOT analysis, developed at the Stanford research institute in 1960’s, is
simply listing out Strengths, Weaknesses, Opportunities, Threats and analysing them to arrive
at a concrete decision. By identifying these key factors organization can make better
informed decisions. By recognizing their strengths, they can leverage them to their advantage
and by recognizing weaknesses, they can work on improving them. Analysing the
opportunities and threats in the external environment allows the organization to anticipate
challenges or advantages that they may face in the future. Business Process Reengineering
(BPR), was first proposed by Micheal Hammer in 1990’s. This tool aims to optimize and
redesign the existing business processes to improve the efficiency and productivity. BPR
involves thorough investigation on the business processes present in the company and
identifying the areas of improvement and implementing positive changes to align with the
long-term goals of the organization.
Challenges to tackle
There are a lot of challenges to overcome in order to foster better organizational culture and
have a sustainable growth. Resistance to change is one of them, as known to humankind there
is always a resistance faced while looking to change the present conditions. The employees
and the existing organizations structures may resist the changes associated with the corporate
innovation and newer ideas due to the fear of the unknown or concerns about the job security.
This slows down the process of implementing the changes and make it difficult for the
organization to pursue their goals. Bureaucratic hurdles also slow down positive change as
the hierarchical structures do not possess the agility and speed required which leads to delays.
The delays caused may be blunders as the organization may miss to seize the opportunity at
the right time. As the traditional organization cultures focus on mitigating risks, it will hinder
with the acceptance of endeavours by the organization that have risk factors. This results in
the organization leaving the idea of expansion and leave them behind in the market. Lack of
proper resources or lack of obtaining the required resources will pose challenge in allocation
of required amount of encouragement to the team to pursue the ideas, these maybe financial
resources or human resources. Cutting down on the budget for the teams will result in
discouragement and may also result in organizations rethinking their future endeavours also.
But the main hurdle in the corporate entrepreneurship is unclear vision in the organization. If
the organization is not particular about the execution of its ideas to achieve its goals and do
not have a clear vision, then all the work and resources will not be concentrated at the main
goal, and this will result in mismanagement as well as waste of the resources. Fast-food
chains are not immune to these hurdles, in the case of KFC the core of its business is the
recipe it follows, and it is hard to bring change in a popular offering as it may disrupt its loyal
customers.
Strategies to overcome Hurdles
There will be hurdles in every organization or any business, what is of utter importance is the
strategies that are adopted to overcome those hurdles. The organization may use few
strategies through its management to overcome the hurdles posed in the organization to
achieve its goals. Managers should be ready to lead by example to foster change in the
employee attitude and encourage them to adept change, this will ensure that the organizations
management and the work force are in tandem with each other, and this inclusive energy will
the drive the organization faster towards innovation. Promoting a culture of learning in the
organization will ensure that the work force is well informed of the emerging technologies
and also is ready to adopt to any new challenge form the external world. The well learnt work
force will drive the innovation from the lowest level of the organization and will be pivotal in
the success. Establishing clear metrics and objectives to the total work force and each
element of it will encourage the organization and its members to pursue for improvement,
this competitive spirit will make the organization stand out in the market and ensure that it is
ready for any challenge posed to them. Rewarding the employees after recognizing them with
the metrics will add more encouragement to them. Creating an environment in the
organization that supports the individuals with their improvement is also pivotal for the
employees to feel inclusive and encouraged. Cultivating inclusive culture will ensure that
there is better communication between different parts of the organization, and this will ensure
the agility in the organizational processes. KFC as an organization implemented these ideas
and went with a customer satisfaction as a metric to evaluate the performance of each of its
ventures and offering in the menu, this made the organization gain loyal customers and also
longevity in its business.
Conclusion
In conclusion we have an idea of how organizational culture and innovation affect corporate
entrepreneurship, the journey of KFC encapsulates this essence. The relationship between
culture and entrepreneurship dictates a company's innovation level. KFC is used as a case
study, tracing its history from a roadside restaurant founded in 1930 to a global brand with
over 26,000 outlets today. Factors in its success included embracing franchising and
expanding internationally. The various tools present in the world lay the required foundation
to achieving this. Businesses must foster a culture suited for the present realities to navigate
through the complexities of the rapidly changing world. Organizations must encourage
innovation and strategically adapt to challenges to become a leader in any market. The vision
clarity and communication of the same to the other parts of the organization is essential to the
success of the business. The proactive approach to the employee empowerment and
recognition reinforces the commitment to long-term goal and growth.