MBA Management Report: KFC Company Overview and Employee Turnover

This report provides a comprehensive analysis of KFC's management practices, encompassing both internal and external factors. Part A offers an overview of KFC, including its mission, objectives, and position within the competitive market, supported by SWOT and PESTEL analyses. These tools assess KFC's strengths, weaknesses, opportunities, and threats, as well as the political, economic, social, technological, environmental, and legal factors impacting the business. Part B focuses on a research report that investigates employee turnover within KFC. The research uses primary data collected through interviews, identifying issues such as low wages and lack of motivation as key contributors to employee turnover. The report also reviews relevant literature and proposes steps to address these issues, aiming to improve employee retention and overall organizational performance. The study highlights the importance of aligning management theories with practical implications within a real-world business context.

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Table of Contents
Introduction......................................................................................................................................2
Part A:..............................................................................................................................................2
Overview of company..................................................................................................................2
SWOT analysis............................................................................................................................3
PESTEL analysis..........................................................................................................................5
Part B:..............................................................................................................................................7
Research Proposal........................................................................................................................7
Problems faced by KFC...............................................................................................................8
Literature Review.........................................................................................................................8
Research Methodology................................................................................................................9
Discussion..................................................................................................................................10
Steps to overcome the issues......................................................................................................10
Conclusion.....................................................................................................................................12

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Introduction
Management is an art of getting things done through others and includes various functions such
as planning, organizing, leading, directing and controlling the organizational activities. Business
environment consist of external and internal environment that affect the operation of business for
long run (Morden, 2017). The world is moving and changing faster day by day according to
trend and people lifestyle. The tools that are used to analyses the business environment are
SWOT and PESTEL analysis. Management take decision on the basis of facts and figures and
with proper analysis, planning, organizing and controlling all these functions of management
helps in to achieve the organizational goals (Erasmus et.al, 2016). This report consist of practical
implication of all the management theories in an organization for that KFC has been chosen and
how these theories help the managers to take decision in the this organization in order to achieve
goals. Further sections of this report give insight about the issues in KFC and how management
should solve the issues all these are discussed with the help of management theories and concept.
Part A:
Overview of company
Kentucky Fried Chicken (KFC) was founded by Harland Sanders in Louisville. KFC is leading
player in restaurant chain specialized for fried chicken with 22,621 outlets across 135 countries
in the World. The company owns three more brand that are Taco Bell, Wing Street and Pizza
Hut. KFC is famous for its pressure fried chicken that he invented with mixes of 11 herbs and
spices. KFC expanded its range of products and started offering wraps, chicken sandwiches and

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much more. The company operates in Africa, Asia, Europe, Middle East, North America and
Oceania (KFC, 2019).
Vision: To be the leading group in the restaurant chain in ASEAN region by delivering quality
products to satisfy the needs of customers.
Mission: To improve shareholder value, maximize profits and sustain in this competitive
environment by delivering the best for the society.
The objectives of KFC are to deliver products to customer with the best quality, and to maintain
innovation in the organization with continuous improvement, to build the organization where
employees work with dedication and excellence and to earn profits for survival and growth of the
company (KFC, 2019). The management structure of the company is simple at operational level
and corporate level. In top level, CEO and head of zone followed by regional head and the each
department head under that area manager than outlets of KFC at operational level. Further
information of the company can learn through its analysis of micro and macro environment or
internal and external factors that are discussed below.
SWOT analysis
This strategic tool helps in understanding the micro environment factors that have direct or
immediate impact on the decision making process of management in the organization. This
section give insight about strengths and weaknesses of KFC that comes in internal assessment
and threats and opportunities comes in external assessment (Omer, 2018).
Strengths

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KFC has strong brand image in the market as the company is the second largest restaurant chain
after McDonald in the world. The competitive advantage that makes company different from
other competitors is its chicken recipe of 11 herbs and spices. Further, KFC offer quality
products and services to its customers as per the standard of the country and by following all the
rules and laws. Strong and loyal customer base is the main strength as the company target upper
class which don’t think much about price changes and due to that KFC advertisement
expenditure is low that is the goo indicator forte company (KFC, 2019).
Weaknesses
The problems that are identified in KFC are products not for the health conscious people, lack of
innovative products and research & development, over franchising in the countries led to poor
quality and less control over the operations (Rahman, 2019).
Threats
Threats are the issues in the market that might affect the company survival in long run that are
stiff competition from competitors like McDonalds, changing needs of the customers, shifting of
customer preference to more healthy food and culture and sentiments of people mainly in Asian
countries. Further increasing animal diseases are also threat for KFC as company mainly offers
chicken products to customers and there is no other alternative with the company (Genoveva and
Siam, 2017).
Opportunities
There are various opportunities for the food services countries as food industry is growing day
by day across the world. Availability of cheap labors in the countries helps the company to boost

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up their profits. Further, company expands more by understanding the changing need of
customers and can target market that is still untapped by the company (Genoveva and Siam,
2017).
PESTEL analysis
Macro environment includes all those factors that have greater impact on the organization, and
affect decision making process of management in KFC. External factors that impact KFC
operations can be understand by using PESTEL analysis tool which stands for “Political,
Economic, Social, Technology, Legal and Environmental” (Hamilton and Webster, 2018).
Political Factors
Political factors are related to the stability of government in the country, rules and regulations of
the country and taxation policy. All these factors have direct impact on the decision making of
managers in an organization. Such as high taxation policy in the country reduces the profit of
KFC due that company might change its decision and expand in the countries where tax policies
and taxes lower (Lang and McKee, 2018).
Economic Factors
These factors are related to growth and opportunities in the country for the business. Economic
factors affect the profitability of the company as higher standard of living countries people can
spend more and that means sakes of the company will be more that lead to increase in revenue
(Gusarov and Diadiuk, 2019).
Social factors

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These factors include preferences and habit of people in the society as per their culture and
behavior. KFC customize taste of food as per the society preferences and choice. Social factors
have great influence on the operations of the company and decisions making of management as
customers are the part of society and their habits and choices changes as per the social
background (Quang et.al, 2018).
Technological Factors
KFC adopted all the technology in their operations in order to improve the efficiency of
company and their employees. KFC websites and other system are up to date and at operational
level all the purchasing and packing is automate. But ay changing technological environment
also affect the company not in greater extent but to some extent (Quang et.al, 2018).
Environmental Factors
Environment analysis is important for the company as the organizations are getting resources
from the society and environment. KFC activities or operations mainly depend on the
environment factor because company gets raw material or chicken by killing animals and that is
harming the life cycle this has great influence on some countries such as in India beef is not at all
acceptable by the people in some areas. This condition affect the company operations if because
of its activities environment are exploited this have to pay by the company (Harrington et.al,
2017).
Legal Factors
Legal factors are related to the laws and policies of the country in which company operates. KFC
has to follow all the rules and regulation of the countries as per the law and standard in order to

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survive in the market. Each country has their laws and set standard relating to hygiene and food
safety. For instance, UK has come up with new regimes and “introduction of age discrimination
legislation and incases in minimum wage” all these comes under legal factor. KFC had bare
heavy penalties in different countries because of lack of food hygiene (Gusarov and Diadiuk,
2019).
From the above analysis it is known that business environment has direct impact on the manager
decision making ability, and operations of the company. In KFC, operations are affected mainly
by the political, social and technological factors. Further, it is also understood that KFC followed
the management principles and theories in the organization such as division of labor,
impartiality, unity of command, centralization and authority and responsibility. KFC
management is following functions planning, organizing, leading, controlling and Assurance.
Part B:
This section is related to the research on issues in KFC management and to properly analyses the
situation and understand these issues an interview was conducted with the employees of KFC in
which all the questions related to their working environment, wages and motivation factors were
asked. The primary method of research helps in collecting fresh information or new data through
conducting surveys, interviews and questionnaire. To know the management issues in KFC
interview method is chosen for primary research and through that some issues were highlighted
by the management that are discussed below and its impact on strategic and operational
dimension of KFC. For collecting information secondary and primary sources of research are
used in secondary source information is collected from journals, articles, magazines and
newspaper to find out the employee turnover reasons and solutions. The objective of this

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research is to understand the employee turnover concept and its impact on the performance of
KFC.
Research Proposal
This research is focus on the employment turnover rate in KFC and its impact on the
management and the performance of organization in the market. In this research, the main skills
that are used by an individual is problem solving skills. In order to retain employees and to
reduce turnover management have to take some action and steps. Employees nowadays need
more than the basic pay in order to satisfy them KFC has to add some additional benefit for the
workforce. Employee turnover affecting the organization performance in following way as by
increasing hiring cost, less productivity, efficiency cost and replacement cost all this affect the
performance and profitability of KFC (Mathieu et.al, 2016).
Problems faced by KFC
Employees are the important resource for any organization their growth and development depend
on the organization decision making and growth. From the interview with employees in KFC and
from middle level managers it is known that employee turnover rate of the company is more
reasons behind this are low wage, lack of opportunities, partiality and biasness and less
motivation. Due to that employees or staff becoming ineffective as a result they deliver late to
customers, complaints from the side of customer are increasing, employees are leaving without
informing the management of the company (Nica, 2016). All these factors are making customers
dissatisfied as staff of KFC is not listening, delivering and solving problems of customer.
Sometimes manager support the employees in breaching the code of conduct of KFC.

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Literature Review
According to Hom and Lee 2017, Employee turnover is defined as the percentage of workers
who leave the organization in a year. Higher the rate more will be the topic of concern for the
management because cost of recruitment, training cost will increase for the organization. In food
industry retention rate has increased by 150% and organizations like McDonald and KFC are
facing problems due to low retention rate (Adnan et.al, 2018). Turnover of employees is not
good for the management and for overall organizational performance. If a productive and
efficient employee resign from the company it has direct impact on the overall productivity and
performance of the organization. In place when new employees are hired they cannot give that
productivity at initial stage that lead to increasing cost of operations for the company (Hossain
and Hossain, 2012).
Employee retention is important for the long term survival of the company in the market, this is
seen that in good service industry the employee turnover increasing because of low wages, and
unhygienic environment to the staff and employees. This lead to disappointment amongst all the
workers and to overcome this problem companies should change their remuneration system
(Basnayake and Hassan, 2015). Organizing principles to be followed in the service sector by
including organizational values while framing HRM policies. Compensation and employee
retention are related to each other or have positive correlation. Employee salary structure is
related to their motivation and satisfaction whether in monetary or non-monetary form (Adnan,
2019).
The organizations reduce employee turnover by implementing various programs for employee
retention and it resultant in increase in productivity from the side of employees and they
contribute more to the organization. According to Anand and Yeung, 2018 employee turnover is

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an issue from early age of industrial revolution. Ton and Huckman, 2008 said that “people want
more from work than money” but from the different studies it is known that the most important
aspect for employees are personal time, growth, attention from supervisor and working
environment. There are various factors that lead to employee turnover but mainly employees are
dissatisfied because of pay scale and poor working environment (Zhang, 2016).
Research Methodology
The research methodology that is used in this report and to achieve the aim of the report is
qualitative and quantitative method that are best to evaluate the end result of from the data
collected through primary and secondary source. Resources are used to collect data includes
internet connection, books, journals, published articles and magazines (Flick, 2015). Analysis is
made on the on the basis of qualitative data and from that conclusion and recommendation is
drawn about the organizational performance because of high turnover of employees. All the data
collected is free from any ethical issues and collected using appropriate and ethical sources
(Silverman, 2016).
Discussion
From the analysis it can be said that employees are leaving KFC because of lower wages and
dissatisfied because of poor motivation policies and retention program of KFC. The basic pay
scale or employee salary at each level of department ensures the satisfaction level. Further it is
known that promotion policies of KFC related to delivering of extraordinary performance by the
employees. Promotion policies of the company prove to be helpful in reducing the employee
turnover in service sector. From the interview it is known that most of the employees that are
working in the company will quit if they get any better opportunity that showed that the
employees are not loyal towards the organization that will decreases the efficiency and affect the

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company performance in long run and lead to customer dissatisfaction. Employees said that KFC
main focus is to earn profit and the company is not focusing on the employees. KFC has to focus
on its employees as without the efficient employees company will not able to perform well and
that directly hit to the company profit and brand image in the market.
Steps to overcome the issues
It is suggested from the analyses of KFC management structure and organization policies
regarding reducing employee turnover and motivation that the company should change
remuneration structure and include more non-monetary benefits such as promotion, appreciation
and holiday tours and packages. Further, KFC can outsource its recruitment process in order to
get the best and trained people that can survive in the service sector that will reduce the cost of
hiring for the company and KFC can focus on its core areas. Company can retain its employee by
offering higher wages or pay than its competitor, right compensation structure and salary range
for similar job will attract more skilled people towards the company and encourage existing
employees to retain in the organization. The employees at god position in the organization don’t
need money or position, as per the Maslow theory the stage comes when individual need status
and acknowledgement in the society. KFC should also develop an effective training program and
time to time development programs to develop the skills of their employees according to
changing time (Kim et.al, 2017).
From the study it is known that there is lack of appreciation by the supervisor that is the reason
that employees feel demotivated and after sometime leave the job. KFC should promote
employee encouragement and recognition in the company and celebrate small achievement of the
employees this will boost up their morale and employees will feel motivated and valued.
Company can also take intuitive to encourage employees to take participate in decision making