Change Management at KFC and McDonald's: A Comparative Analysis

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UNIT 17 UNDERSTANDING AND LEADING
CHANGE
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Table of Contents
LIST OF FIGURES.......................................................................................................................3
INTRODUCTION........................................................................................................................4
OVERVIEW OF KFC AND MCDONALDS.....................................................................................5
LO1........................................................................................................................................... 6
COMPARISON OF IMPACT OF CHANGE ON ORGANISATION’S STRATEGY AND
OPERATIONS- MCDONALDS & KFC.......................................................................................6
ASSESSING DIFFERENT DRIVERS FOR CHANGE AT MCDONALDS AND KFC...........................7
LO2......................................................................................................................................... 11
INTERNAL AND EXTERNAL DRIVERS AFFECT TEAM, INDIVIDUALS AND LEADERSHIP.........11
MEASURES TAKEN TO MINIMISE NEGATIVE IMPACTS OF CHANGES.................................12
THEORIES AND MODELS TO EVALUATE ORGANISATIONAL RESPONSE TO CHANGE..........15
LO3......................................................................................................................................... 17
DIFFERENT BARRIERS TO CHANGE AND THEIR INFLUENCE ON DECISION MAKING OF
LEADERS............................................................................................................................. 17
FORCE FIELD ANALYSIS.......................................................................................................19
LO4......................................................................................................................................... 21
DIFFERENT LEADERSHIP APPROACHES TO DEAL WITH CHANGES......................................21
MODELS AND FRAMEWORKS WHICH DELIVER ORGANISATIONAL CHANGE EFFECTIVELY.23
CONCLUSION.......................................................................................................................... 26
REFERENCES........................................................................................................................... 27
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LIST OF FIGURES
Figure 1: Burke Litwin Model................................................................................................. 12
Figure 2: Lewin’s Change Model.............................................................................................15
Figure 3: Lewin force field analysis.........................................................................................19
Figure 5: Kotters eight step model.........................................................................................24
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INTRODUCTION
A particular behaviour in an individual, team or organisation can be altered by an inevitable
process of change taking place. In order to sustain the competitive environment change is a
vital process that needs to be implemented effectively so as to attain the desired future
goals and success metrics (Cameron and Green, 2015). The changes therefore at KFC and
McDonalds will be compared in this comparative report which will undertake the
identification of the drivers to change by applying SWOT and PEST model and the impact will
be analysed in terms of the strategy and operations. In the further part of the report the
impact of the changes on the individuals, leadership and team behaviour will be compared
by undertaking proper evaluation and then by applying different models the impact of
changes can be minimised so as to implement the changes in organisations effectively.
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OVERVIEW OF KFC AND MCDONALDS
Kentucky Fried Chicken (KFC) is considered to be an American Fast food restaurant chain
that is specialised in fired chicken and is second largest chain after McDonalds. It serves
products and services such as chicken sandwich, fried chicken, desserts, breakfast, and
salads and so on.
McDonalds on other hand is the largest American fast food chain of restaurants founded in
the year 1940. It mainly services the products and services such as chicken, hamburgers,
desserts, coffee, wraps, and French fires and so on.
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LO1
COMPARISON OF IMPACT OF CHANGE ON ORGANISATION’S STRATEGY AND
OPERATIONS- MCDONALDS & KFC
Change
According to Cameron and Green (2015), change can be defines as the set of process which
aims to bring in about a difference to the present situation and condition to a different
situation and condition. In the business terms there can be both positive as well as negative
change that can impact the business performance positively and can even lead to
unfavourable circumstances for the business. These changes therefore are required to be
effectively implemented so as to control the business and seize a forthcoming opportunity
(Hayes, 2018).
Changes at KFC
KFC is revamping its menu and is driving towards the change in entire menus so as to save
its customers around the waist and for the same it has also announced a change in its iconic
menu of golden fried chicken that aims to cut down the calories by 20% by 2025 (Schonter,
2018).
Changes at McDonalds
One of the recent changes announced by McDonalds is that it will focus on reducing the
greenhouse emissions by 36% till the year 2030 (Economy, 2019). This will bring in about the
changes in its strategy as the new strategy will be aligned to address the global climate
change and in addition to this McDonald’s also omitted to reduce to a 31% of the emissions
intensity across its supply chain till the year 2030 (Hayes, 2018).
Comparison of the changes that impacted the strategy and operations of both
organisations
The changes announced and undertaken by both KFC and McDonalds are having a
considerable impact over its organisational strategies and operations. For instance bringing
changes in the menu by KFC has prospective impact over its operations as it can lead its
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customers to swap their fries for a healthier side and this can open new doors for KFC to roll
out even a vegetarian menu later (Cameron and Green, 2015).
However changes in the McDonalds strategy also impacts on the supply chains of the
organisation which lead to an impact over its operations. Due to the same, it also faces an
impact over its strategy as its leaders are calling for the climatic actions and have joined
Chicago renewable Energy Challenge that has helped in meeting the climatic goals of
McDonalds. This has therefore brought about the changes in the strategy and operations of
the business (By et al., 2012.
ASSESSING DIFFERENT DRIVERS FOR CHANGE AT MCDONALDS AND KFC
In order to analyse and assess different drivers for changes at KFC and McDonalds a PEST
and SWOT analysis will be conducted so as to identify the internal as well as external
drivers.
SWOT ANALYSIS
McDonalds:
Strengths Weaknesses
It has strong brand equity worldwide
It has consistency in its food range (Bhasin,
2019)
It has overseas market and an effective
balance sheet position (Krull, 2010)
The dividend growth rate has been declining
slowly (Krull, 2010)
It has weak product development
The income growth and market share is also
declining
Opportunities Threats
It has opportunity for growing dining out
market (Krull, 2010)
It can effectively responding to social
changes by innovating within healthy
The competitors are all pervasive and there
is threat due to the fluctuations in foreign
exchange rates
Due to recession in the economy the
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lifestyle foods
It is focusing on CSR by reducing impacts
over community linkage and environment
(Bhasin, 2019)
retailers sales may also be affected (Bhasin,
2019)
Hanging demographics may also lead to
threats
KFC:
Strengths Weaknesses
It has strong global presence in the non-veg
food segment (Bhasin, 2019)
The customer base is a loyal one due to its
secret chicken recipe
It has wide range of its menu and food
offerings
One of the weaknesses is of the supply chain
and distribution issues which leads to closing
of its few stores in the UK
It faces issues of managing its franchisees
due to conflicts in operational issues (Bhasin,
2019)
Opportunities Threats
It has opportunity to expand in new
geographies that have increasing buying
propensities
It has opportunity from catering to the new
food demands and needs of millennial by
introducing healthy food in menu which are
low in calories and fats (Bhasin, 2019)
It faces some threats due to the food quality
as laws becomes quite stringent in few
countries
It also faces stiff competition from its
competitors that keep on growing their
market share by introducing new products
PEST ANALYSIS
McDonalds
Political Economic
Due to the increasing international trade In the developed countries like the UK there
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agreements it faces opportunity (Greenspan,
2018)
The governmental guidelines related to
health and diet may emerge for it as a threat
as well as opportunity
Due to the evolution of the public health
policies it can face threats in future
is slow and stable economic growth which
emerge for McDonalds as an opportunity
It also has opportunity to grow and expand
through the expansions in the high growth
developing markets of Asia (Greenspan,
2018)
Social Technological
Due to the social trends the consumer
behaviours can be influenced which in turn
lead to buy the fast food rather than to cook
at home (Greenspan, 2018)
Due to the cultural diversity it can face a
threat which may have diverse set of
consumer preferences
Due to the moderate R&D activities in the
restaurant industry it can have some
opportunities as compared with its
competitors
Due to the technological changes the trend
of online orders is rising which leads to
increase in sales (Greenspan, 2018)
KFC
Political Economic
KFC needs to obey the policies laid out by
government of the UK (Kasi, 2015)
The price policy also needs to be obeys to
run the business in accordance to the
income distribution of the people
This is second element which is affected by
the national and global economic factors
KFC focuses only on the upper class people
and thus introduces its meals
The interest rate and GDP rates also impacts
KFC in future (Kasi, 2015)
Social Technological
The demographics of population of the UK Due to the new technologies it effectively
maintains its financial statements and thus
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impacts the marketing of the KFC’s products
In order to meet with the different cultures
of different locations it offers different food
range in its menu keeping in mind the same
(Kasi, 2015)
calculates all the change in net income and
loss (Kasi, 2015)
ORGANISATIONAL CHANGES AND ITS TYPES
At different organisations there are many changes that take place amongst which the
structural changes and the strategic changes form main heads (Burke, 2017).
Strategic change
This type of change is the one which is adopted by an organisation towards new strategy
that helps in dealing with the situations. The strategic change is adopted by the McDonald’s
which brought change in current strategy and has developed a new strategy which focuses
on reducing greenhouse emissions (Windolf, 2018).
Structural change
This type of change is the one where the organisational culture of changes in the product or
structure is ensured by redefining its keeping in mind the needs of the current market and
the employees at different level (Burke, 2017). This type of change has been adopted by KFC
who has brought change in its menu keeping in focus the health needs of the consumers.
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LO2
INTERNAL AND EXTERNAL DRIVERS AFFECT TEAM, INDIVIDUALS AND LEADERSHIP
From the above analysis conducted in terms of identification of the internal as well as
external drivers leading to changes at KFC and McDonald’s it is quite evident that the
internal as well as external drivers to change leads to changes in the strategies and
behaviours. These changes can impact the individuals, teams and organisational behaviour
(Burke, 2017).
For example due to the changes in the changing focus of McDonalds it decided to focus on
reducing the greenhouse emissions and contribute towards community (Hayes, 2018). This
has impacted the leadership as well as the organisation behaviour as dye to the same the
leadership’s style got changed. The focus of the leaders moved towards implementing the
new strategies and controlling the operations so as to implement the desired change
effectively (Schonter, 2019).
In case of KFC the change in the products of the food menu led to the impact on the
individuals as it became quite difficult for the customers to accept these healthy options and
few customers on contrary still connoted that they choose KFC for its healthy menu options.
Thus this brought about changes in the individuals perceptions (Northouse, 2018).
Due to the need of technological innovation and changes in the menu both KFC and
McDonalds witnessed an affect over its team, individuals and the leadership. Thus both
internal as well as external drivers of change affect the above and ensure the business
success by devising the changes accordingly (Burke, 2017).
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MEASURES TAKEN TO MINIMISE NEGATIVE IMPACTS OF CHANGES
At McDonald’s and KFC in order to overcome the negative impacts of change on the
organisation behaviour some of the measures will be taken so as to mitigate and
understand the effect of the changes on organisation. This can be done by applying Bruke
Litwin Model as under:
Burke Litwin Model
Figure 1: Burke Litwin Model
(Source: Stone, 2015)
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