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KFC-JAPAN
Written Case #
Prepared By Dana Pearson
(067)
Prepared For Dr. Colin Boyd
Date Nov 7, 1
Class MBA 88.
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Dick Mayer, the CEO of KFC is faced with making some tough decisions. KFC
is in the midst of change. Faltering U.S operations in the late 170s lead to the
implementation of strategic planning processes. These processes proved to be very
effective in turning around a potentially disastrous situation. Mayer is currently
wondering if and how these strategies should be adapted to KFCs international
operations, in particular KFC-Japan.
Loy Weston has built KFC-Japan from the ground up. Weston is an entrepreneur
by nature. This is clearly evident by his forte into airplane leasing, coffee machine sales
and various other ventures. Having the characteristics of an entrepreneur, Weston savors
autonomy. Accordingly, he has built KFC-Japan while playing by his own rules.
Weston has taken the liberty to change layouts, product offerings and marketing styles;
all without consulting head office.
Opposing management philosophies have caused Weston to develop a we-they
mindset. He is very resentful and aloof towards corporate head office. This is evident in
his obvious disdain for head office visits, required reporting style and advertising styles.
This has resulting in a communication breakdown between Weston and corporate
headquarters.
Weston views headquarters attempt to introduce a strategic planning process to
the Japanese market as unnecessary. He feels that corporate headquarters has no feel for
the Japanese culture or business environment, yet are trying to impose their management
philosophies. Management on the other hand does not want to impose a ridged system.
They want to use strategic planning to provide a set of guidelines. Management is
flexible in that they want a system that is adapted to best fit what was needed for the
Japanese market place. They wanted a system that would ensure consistency in terms of
product quality and performance measures. These differences in opinion are due to
Westons perception of the situation as a power struggle. Weston is concerned that he
will be reduced to the position of an order-taker, something that is very hard for an
entrepreneurial spirit to accept.
Weston has made no effort in developing a working relationship with head office.
He has segregated himself and this has lead to the defensive position that he is currently
in. I believe that headquarters and Weston have irreconcilable differences. Weston has
lost sight of the fact that he is part of a larger organization. He has developed animosity
towards corporate leaders and their ideals. As well, Weston has not been able to
effectively expand into the Taiwan, Korean, Thailand, and Hong Kong market places.
All these areas had been rated as high priority counties by market potential analysis.
Accordingly, I would recommend that Weston be forced into early retirement.
Changes should also be made at headquarters. An open and effective
communication network should be established. This must start with top management and
permeate down throughout the organization. Management must clearly and explicitly
outline responsibilities and expectations. They must create an environment of trust, and
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accountability. Emphasis on multidisciplinary teamwork should be the cornerstone of
KFCs corporate culture. This mindset should improve the communication and
accountability between all facets of the organization. Simultaneously, headquarters
should also closely examine their recruiting criteria. It is quite evident that Loy Weston
was not a good fit with the current management style. KFC should work on recruiting
people who are free thinkers, yet team players; people who can think outside the box,
yet are accountable for what is expected of them.
Continued growth in Japan is a concern for Dick Mayer. Mayer realizes that a
dogmatic approach to managing Japans operations is going to prove ineffective.
However, he does want to work within a semi-flexible strategic planning framework. He
wants to develop a level of product and quality which is consistent across KFCs global
operations. Accordingly, Loy Westons replacement should be someone who has been
exposed to KFCs new management philosophies. The new person must be a good
communicator, flexible and comfortable with the concept of structured and researched
growth. Mayer realizes that it is going to take culturally sensitive analytical research in
order to decide where and how to expand the Japanese operations.
Expansion into Korea, Taiwan, Thailand, and Hong Kong are also concerns for
Mayer. These areas have been identified as areas of high potential growth. I suggest
that Mayer hold off on making any expansions into these countries. Correcting the
situation in Japan is going to consume a lot of time and resources. As well, lessons
learned form Japan could possibly be extrapolated to these other markets. In the
meantime, Mayer should commit resources to exploring the markets of these countries.
Solid analytical research will provide insight into the competitive environment that KFC
will face in these countries. In addition to performing an environmental analysis, Mayer
could use this time to select and groom managers to run these various operations. This
would allow him to select individuals who are consistent with his management style, and
who will fit well into KFCs corporate culture.
Effective leadership, as well as deliberate and researched growth should position
KFC well for the future. Loy Weston, although described as a real go-getter, is more
trouble than he is worth. As such, it is in KFCs best interest to let him go. I believe that
this could be the first step towards KFC developing a progressive corporate culture.
Executive management must take a leading role in guiding this new organization. They
must effectively communicate the vision and goal of the organization throughout. This
will create a unified mindset among KFC employees with respect to future expectations.
As well, the need for effective communication cannot be understated. Lack of
communication is what got KFC into trouble in the first place. Goals and expectations
were not being communicated. Effective communication systems will allow for the
timely dissemination of information throughout KFC. It is time for change at KFC. I
believe that the suggested changes will propel KFC to future success.
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