Improvement of Corporate Culture by Fast Food Industries: Analytical Essay

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How fast food industries improve corporate culture by their stakeholders

Introduction

There is a saying goes “Necessity is the mother of invention.” Based on the need of convenience people need, fast food industries have become more essential in the economy life and filed nowadays. The corporate culture is a critical factor for company performance-enhancing and expansion of the market, on which the engagement of stakeholders could potentially increase the valuation of brand impression and culture. Kokemuller, Neil. (n.d.) indicate that stakeholders have increased influence on business activities in the early 21st century as community citizenship and social responsibility been consistently integrated into business management. With the growing complication of the industry and organization structure, stakeholder has become an influential element to construct corporate culture among fast-food companies. This essay holds the view that the integration of stakeholders and corporation would positively affect corporate culture. At the same time, further analysis based on stakeholders’ influences on a corporate culture with theories and concepts would be illustrated afterward, regarding four aspects, which are the founder, the employee relationship, the competitors, and the customers’ relationship.

Mode of argument

Integration
With
Stakeholders
Founder
Influences
Competitors influences
Employee relationship
Customer relationship
Improvement of corporate culture

Founder influences

The role of founders in the formation of the corporate culture is irrefutably important. According to Nelson T. (2010), he mentioned that the founding of new ventures fuels competition delivers new products and services to the marketplace, and even creates entirely new categories of industry. Schein (1983) also indicated that the founders often start with their own theory of success and develop the culture based on their previous cultural experience and personal traits. The founders usually have their own intuition, philosophy, and presumption of the industries nature to operate their organization. As a primary stakeholder, the founders will prove more amenable to accept the challenge and guarantee the survival of the company. Furthermore, founders are more consisting of manage things which would reflect the corporate values. On the other hand, it may not be the most efficient to short-term viewpoint, which is positive to the maintenance of corporate culture, while several managers are concentrating on the short-term economic circumstance. (O’Reilly III, Caldwell, Chatman, & Doerr, 2014). So founders actually become the willingness to absorb risk and determinant of innovation base on their characteristic. In short-term, founders are trying to stimulate the novelty in new section although it may somehow be hazardous and wouldn’t gain benefit or improvement. The incentive of novelty by founders have a great influence on the employee to build an innovative and bold culture, which signify the attraction of talent recruitment, improvement of competitiveness and the successful reaction of a corporation.

For the case of the link between organizational culture formation in the fast-food sector, Ray Kroc has a meaningful contribution to the formation of McDonald’s organizational culture. Without him, the well-known American fast-food chain might not have become the emblematic global brand nowadays. According to Barbara Farfan (2019), Because of Kroc’s sales and part-time jobs experience, he found out the potential and the cleverness of the fast-food restaurant concept the McDonald’s brothers had created. He first thought about capitalizing on the McDonald’s brothers outstanding restaurant chain concept from the aspect of milkshake machine sales. Instead, Kroc had to be a national franchise agent for the McDonald’s brothers in the end. The life of Ray Kroc had filmed as “The founder”, it disclosed the initial strategy of McDonald’s. With the teamwork of Ray Kroc managing in the Midwest and the McDonald brothers managing their California location, the company gradually began to expand. Kroc had developed a franchise model that allows the company to scale faster, having rapid and high development across the United State. However, just as the McDonalds brothers had worried about controlling the processes and operations to the top standards that create and deliver on the brand promise. Kroc quickly figured out that among franchise owners selling fried chicken and mashed potatoes, while others let their restaurants and parking lots filled with trash. The brand strategy and franchise model was spinning out of control. To solve this difficulty, Kroc tried to move his perspective from selling hamburger franchises to owners who would find their own lot to build on to become a real estate developer who offered a turning point solution to potential franchise owners. The shift in mindset has to do with control (Benjamin Warsinske, 2017).

Employee relationship

Employee relationship is an essential influence of the company’s culture and performance. Roos and Eeden (2008) point out that the employees’ motivation and job satisfaction would determine corporate culture and performance. With an energetic working attitude and positive job satisfaction, employees tend to enhance corporate’s creativity and productivity. For the example of management of employee relations, Huawei, the Chinese communication devices vendor, conducts the employee shareholding system. The system shares both the responsibility and the benefit with the employees, which formed its diligence culture. (De Cremer & Tao, 2015) Ownership increases employees’ recognition and motivation, which create a tight link between employee and company revenue. The system and employee dedication construct a strong culture of contribution and diligence.

Another case of organizational culture related to the employee, Kentucky Fried Chicken, as known as KFC, world-famous fast food restaurant. KFC has more than 20,000 branches in 123 countries. According to Bob Phipps, the chief people officer for KFC SOPAC, he said: “If an employee is not trained, developed or looked after, then they’re not going to provide a great consumer experience.” (Craig Donaldson, 2015). To bolster the managers throughout this process, a manager component was created to expedite the manager to prepare for a goal-centric discussion with the employee. KFC also provides mentoring and coaching competencies, as well as a counselor and help the employee in completing their short and long-term targets (HCA, 2016). The revised culture improved the performance and innovation after several improvements, lead to the well-known global market share.

Customer relationship

As the consumer fast food industry, customer relationship and satisfaction has become influential to the marketing strategies and the quality of the products. Customer relationship has been considered as a highly desirable result of the marketing process. Conrad, Brown, and Harmon (1997) indicate that the customer tends to motivate companies to form the culture that puts the customer in the center of the firm’s thinking about strategy and operations. The customer-centralized culture empowers staff to deliver the brand experience to customers, which leads to better user experience and higher loyalty of customers. (Van Bentum & Stone, 2005) The integration of customer and corporate culture enable the companies of fast food to spread their products to broader users, gain a higher market share, hence express a customer care brand impression in the industry.

Subway, an fast food restaurant franchise that sells salads and submarine sandwiches, it has roughly 45,000 branches over the world and it is also the second biggest fast-food advertiser in America. In the purpose of building customer loyalty and customer relationship, Subway did some questionnaire to know what is their brand exposure. They designed questions such as “Have you ever heard of Subway?”, “How often do you visit Subway within a quarter?” and “How will you rate service quality at Subways”. As the result, 86% of responders recognize Subway, 68% of the responders will visit Subway once to twice within a quarter and about 89% of the customers have a good impression of Subway. According to the analysis, Subway can grasp the information and get close with their consumer. Consequently, create more customer value and build will relationship with customers.

Competitors Influence

Competitor is a challenging factor to fast food corporate performance and organizational culture. With the pervasion of branches worldwide and the development of technology, the environment complexity degree of the fast-food industry has become higher. The competitors had kept emerging with the prosperous development of technology and the transforming trend of the fast-food market, which becomes an influential factor to maintain self-development. The competitors and competition can induce the company to preserve its innovation by conducting secrecy policy.

With intensive competition and innovation bottleneck in the fast-food industry strong secrecy culture, the technology corporation can preserve the innovative technology development and strategy, further maintains the competitiveness in the market. The secrecy policy prevents leak of crucial technology, therefore maintain employees’ loyalty and avoid business spy behaviors. For the case of strong secrecy, each KFC restaurants must pay five cents on each chicken as a franchise fee, in change for Sanders’ “Secret blend of herbs and spices”, using his name and likeness for promotional purposes and the right to feature his recipe on their menus and (Liddle,1996).

Conclusion

After analyzing the influences of the founder, employee relationship, customer, and competitor relationships on the corporate culture, the stakeholder has become part of corporate culture formation among the fast food industry. The company’s value is considerably affected by founders managing philosophy and experience, which would motivate the culture of innovation. Enhancement of employee job satisfaction and enhancing attitude would result in higher productivity and the recognition of the company. By the competition and integration with other vendors among the industry, the company would develop the culture to motivate competitiveness. With the reaction and loyalty from the customer, the fast food companies are more likely to form the customer-centralized culture, further gain the market share and brand goodwill. By and large, the integration of stakeholders and corporation would positively affect the corporate culture.

Reference

Barbara Farfan. (2019). The Man Who Built McDonald’s Values and Brand. Retrieved from https://www.thebalancesmb.com/mcdonalds-mission-statement-2891825
Benjamin Warsinske. (2017) ‘The Founder’ Reveals Early Brand Strategy Behind McDonalds. Retrieved from https://brandedworld.co/brand-strategy-mcdonalds/
Conrad, C. A., Brown, G., and Harmon, H. A. (1997). Customer satisfaction and corporate culture: A profile deviation analysis of a relationship marketing outcome. Psychology & Marketing
De Cremer, D., & Tao, T. (2015). Huawei’s culture is the key to its success. Harvard Business Review
HCA. (2016, November 15). How KFC is helping managers help employees. Retrieved from https://www.hcamag.com/au/news/general/how-kfc-is-helping-managers-help-employees/147446
Kokemuller, Neil. (n.d.). How Do Stakeholders Influence Business Activities? Small Business – Chron.com. Retrieved from http://smallbusiness.chron.com/stakeholders-influence-business-activities-18754.html
Liddle, Alan (October 14, 1996). ‘Leon W. ‘Pete’ Harman: the operational father of KFC has many goals — and retiring isn’t one of them’. Nation’s Restaurant News. Archived from the original on May 8, 2013. Retrieved July 1, 2012.
Nelson T. (2010) The Role and Influence of Firm Founders. In: Bournois F., Duval-Hamel J., Roussillon S., Scaringella JL. (eds) Handbook of Top Management Teams. Palgrave Macmillan, London
O’Reilly III, C. A., Caldwell, D. F., Chatman, J. A., and Doerr, B. (2014). The promise and problems of organizational culture: CEO personality, culture, and firm performance. Group & Organization Management
Schein, E. H. (1983). The role of the founder in creating organizational culture. Organizational dynamics
Van Bentum, R., and Stone, M. (2005). Customer relationship management and the impact of corporate culture—A European study. Journal of Database Marketing & Customer Strategy Management
Wanda Roos and René Van Eeden. (2008). The relationship between employee motivation, job satisfaction and corporate culture.

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