LEADERSHIP STYLE It is similar to McDonalds & is also Situation Leadership Theory based which stands on the idea that

leaders need to alter their behaviors depending on the major situational factor. In using the Situation Leadership Theory, leaders decide the task areas they want to influence, by assessing the individuals readiness level and then selecting the leadership style(like telling, selling, participating and delegating) corresponding to that level. It focuses on two behaviors; Task Behavior and Relationship Behavior. Task Behavior is the leaders tendency to spell out duties and responsibilities of the group (Davidson and Griffin, 2003). And Relationship Behavior is how much the leader uses two- way or multi-way communications, including listening, facilitating and supportive behaviors (Davidson and Griffin, 2003).
The table below gives the leadership style in KFC: Leadership Style Adopted Telling Selling Participating What is the style Giving direction, what to do and how to do it. Specific directions to willing and enthusiastic Two communication, supportive Readiness Level low readiness situations low to moderate readiness situations moderate to high readiness situations Manager Level Trainee Manager/Assistant Manager Assistant Manager/ Trainee Manager

Restaurant General Managers

/Consultant/Assistant Manager

Delegating

Completion of task with little or no direction or support.

high readiness situations

Restaurant General Managers/ Assistant Managers

MOTIVATION SCHEME
KFC is a client of the O.C. Tanner Company, which specializes in helping companies motivate employees through comprehensive recognition solutions. According to its director, marketing and corporate communications, KFC has the lowest turnover rate in the fast food industry because it is a fun place to work. The company ensures that coming to work is not something employees dread by making the day as enjoyable for its workers as possible. Employees have been given the autonomy to have fun on the job: they can start standing ovations for they whenever they want, can sing songs for birthdays etc. (Kufahl & Agoglia, 2003). Staff retention should be a major concern for employers because it has been proven time and again that if the company is ever in a financial mess, it has to deal with the added loss of employees resigning and leaving the company, right when their energy and work is needed the most. KFC is one of those companies which realizes this factor. It has incorporated a lot of recognition programs in its culture, like Floppy Chicken, or KFC President Charles Rawley's Bulldog Award to motivate employees and keep them happy (Serving up a bucket of recognition, 2001).

Mission:
TO SELL FOOD IN A FAST, FRIENDLY ENVIRONMENT THAT APPEALS TO PRIDE CONSCIOUS, HEALTH MINDED CONSUMERS

Vision:
OUR PASSION, AS A RESTAURANT COMPANY, IS TO PUT A YUM ON PEOPLE'S FACES AROUND THE WORLD, SATISFYING CUSTOMERS EVERY TIME THEY EAT OUR FOOD AND DOING IT BETTER THAN ANY OTHER RESTAURANT COMPANY. THE UNIQUE EATING EXPERIENCE AT EACH OF OUR RESTAURANTS MAKE OUR CUSTOMERS SMILE AND INSPIRE THEIR LOYALTY FOR LIFE. TOWARD THAT END, OUR ASSOCIATES AROUND THE WORLD ARE TRAINED TO BE CUSTOMER MANIACS.'

Objectives

Strategic objectives

Expansion into all major urban cities resulting in market leadership Multi-brand Innovation and becoming a top of the mind brand in fast food industry Market leader in terms of employee welfare and customer satisfaction

Financial Objectives: Strong Cash Generation and Returns Increasing the profit margin from 11% to 17% through improved operations and reduced overhead costs

CSR ACTIVITIES

Yum! Restaurants as part of its CSR initiative has six KFC stores across the country that hire people with hearing -and-speech impairment. At first instance, the Kentucky Fried Chicken (KFC) outlet at Vasant Kunj Fun Mall in New Delhi is like any other of the fast food chains outlets, with the conspicuous image of Colonel Sanders welcoming you. But when you head to the counter to place the order, you might be startled by the attendant greeting you in sign language and pointing towards a badge pinned to his shirt, which reads point out your order.
: KFC Scholars Program Description: If you are graduating from high school this year and planning to enroll in one of your states public colleges or universities, then you are eligible for the $20,000 renewable KFC Scholars Program. Winners will receive $5,000 per year for each of four years, for a total award of $20,000. In order to maintain eligibility, winners must carry at least 12 credit hours per semester, maintain a GPA of 2.75 or higher, and work at least 10 hours per week beginning the 2nd year of funding. Applicants must have a minimum GPA of 2.75 and be able to demonstrate financial need (via your FAFSA so be sure to complete it early!).

ENVIRONMENT UNDER WHICH COMP IS WORKING (EXTERNAL ENV.) The External environment of an entrepreneur consists of the political, technological, social, legal and economic segments. All of these are not an immediate part of the entrepreneurs venture yet they have an impact on his enterprise. Let us now examine the lements of the External environment of the KFC one by one POLITICAL The main groups which pose a threat to McDonalds in India are: 1.Anti Western/MNC factions 2.Health Activists 3.Environmentalists 4.Animal Welfare Activists 5.Son of Soil Campaigners

From the very first day of opening its restaurant, KFC faced problems in the form of protests by angry farmers led by the Karnataka Rajya Ryota Sangha (KRRS).The farmers leader, Nanjundaswamy, who led these protests, vehemently condemned KFC's entry into India, saying that it was unethical to promote highly processed 'junk food' in a poor country like India with severe malnutrition problems. Nanjundaswamy expressed concern that the growing number of foreign fast food chains would deplete India's livestock, which would adversely affect its agriculture and the environment By late 2003, PETA intensified its campaign against the cruel treatment meted out to chickens by KFC through protests at regular intervals. Celebrities like Anoushka Shankar, daughter of the legendary sitar maestro Ravi Shankar, directly supported the cause of PETA. Anoushka, a sitarist herself, wrote a letter to the top management of PepsiCo condemning the continued cruelty of KFC in spite of repeated requests of PETA. The organization also had the support of other celebrities like the famous cricket player Anil Kumble (based in Bangalore), popular Indian models like Aditi Govitrikar, the late Nafisa Joseph and John Abraham, who promoted vegetarianism. Film actresses like Raveena Tandon and Ameesha Patel also took up the cause of animal abuse.

SOCIAL The customs, norms and traditions of the society also play an important role in either hindering or promoting enterprise It is very important for a MNC to understand the socio-cultural background of their customers in the host country.
Social FACTORS CONTRIBUTING TO KFCs SUCCESS IN INDIA Reducing the psychic distance by handling over of operations to local people so that customers could relate to them more easily. Able to adapt to cultural differences, tastes and preferences. For example keeping in mind the Indian tastes buds KFC launched a fierier ZINGER BURGER. Got an edge since chicken is a staple dish and is taken more frequently in Asian countries. More accustomed to take out food over the counter. The target customer of KFC [upper, middle and above] are health conscious and hence to cater to their interest Kentucky fried Chicken changed its name to KFC. Price sensitivity of the two economies drove KFC to introduce menus that were easy on the consumers pocket.

Social FACTORS IN INDIA THAT GO AGAINST KFC KFC is perceived as a restaurant serving only chicken-Indian families obviously wanted more varieties. Believed to be expensive .. no value for money. Wanted to position itself as a family restaurant , not as a teenage hangout Ambience was missing. Perceived differences in eating habits. Tried to target the vegetarian segment. However this backfired as in India having veg food cooked in a non veg kitchen doesnt come out well with the vegetarian segment.

ECONOMIC India has today achieved a GDP of 7.7% and aspiring for 8.5 % GDP in next financial year. Liberalisation, Globalisation and opening of economy in India, has increased the space for business operations. It has also opened channels for foreign investors, banks, insurance and infrastructure companies to start operations. The resultant competition, rapid and complex changes have generated uncertainties, which have to be handled by the entrepreneurs. KFC facing strong competition from McDonalds was forced to slash down the rates of its products. So far, the products of KFC, which is the largest brand of Yum Restaurants, a company that owns other leading brands like Pizza Hut, Taco Bell, A&W and Long John Silver, were priced between Rs 65 and Rs 500. This was introduced with its new Streetwise Menu.With prices as low as Rs 25 and not crossing Rs 99 in the Streetwise menu KFC is taking on market leader McDonalds which had come up with a Happy Price Menu starting at Rs 20. The youth today like anything with value. They want a place to hang out, to connect, to have a chat and eat at the same time. We want KFC to be just that, says Dhruv Kaul, Director Marketing, KFC India. The game plan is clear KFC now wants to become the new adda spot for students and hopes that larger volumes will make up for the thin profit margin of the new menu. The company plans a 360 degree campaign to promote the new range. We have kept prices to a minimum. And the range consists of vegetarian items because we value our vegetarian customers and know some prefer to have vegetarian on certain days of the week along with our popular chicken items, adds Kaul. In the Streetwise range, one can choose from veg snacker (Rs 25), chicken snacker (Rs 30), snack box with chicken and fries (Rs 55), Rizo consisting of rice, dip and fried chicken (Rs 99) and a Mini Krusher (Rs 39).

CUSTOMERS
According to Unnat Verma, director, marketing, KFC India, there is a change in lifestyle, consumer behaviour and consumption patterns. Eating out has become a way to consume freshly cooked food, particularly for those who cannot get home-cooked food to office every day, says Verma. Clearly, the office-going segment will be a strong target for KFC. Therefore, it is safe to say that the target audience for KFC includes young working adults, with or without kids, and essentially, youth, from SEC A and B, aged between 25 and 30, living in cities. The brand appeals a lot to men, say the results of a study KFC conducted, and men are the core decision makers in terms of initiating what will be eaten.

COMPETITOR KFC has 107 restaurants across 21 cities in India.McDonalds India had more than 220 quick service restaurants in India. Dominos Pizza, which began operations in India in January 1996, has over 378 stores across 55 cities in the country. (Nirulas, one of Indias oldest food chains (completed 75 years in service in March 2009), has a network of around 62 outlets in five states across Northern India. Nirulas, established in 1934 has interests in hotels, restaurants, ice cream parlours, pastry shops and food processing plants. Nirulas was the first to introduce burgers in India The market-share of different players is given below: AMBAREEN DRAW THE 2 DIAGRAMS

LEGAL The laws of the country can make the process of setting up business very lengthy and difficult or vice-versa. Many times one hears of people complaining of the bureaucratic procedures in India, which act as a damper on new venture creation. The labour laws and legal redressal system also have a bearing on business operations. Patents, Agreements on trade and tariffs and environmental laws also need to be studied. Copyright, trademark infringement, dumping and unfair competition can create legal problems in the shape of long drawn out court battles. Simpler legal procedures can facilitate the process of new venture creation and its smooth functioning including setting up of ancillaries, foreign tie-ups and joint ventures.

Center for Science in the Public Interest (CSPI) announced a class action lawsuit against KFC for using partially hydrogenated oil, which contains trans fat, to cook its fried chicken, French fries, and other foods. CSPI is seeking damages for a Maryland doctor and "all other persons who purchased any food item at a KFC restaurant in the District of Columbia that was prepared with products containing trans fat" at any time over the past three years. The group also wants the court to order KFC to stop using trans fats in preparing its food, or to warn consumers, "immediately prior to purchasing any food prepared using trans fat, that the food is prepared with trans fat products." In fact, CSPI said in its press release that the court could require KFC to post "signs in restaurants that say 'KFC's fried chicken and certain other foods contain trans fat, which promotes heart disease"'" in order "to protect the consumer from known dangers.
The regulatory authorities found that KFC's chickens did not adhere to the Prevention of Food Adulteration Act, 1954. Chickens contained nearly three times more monosodium glutamate (popularly known as MSG, a flavor enhancing ingredient) as allowed by the Act. Since the late 1990s, KFC faced severe protests by People for Ethical Treatment of Animals (PETA), an animal rights protection organization. PETA accused KFC of cruelty towards chickens and released a video tape showing the ill-

treatment of birds in KFC's poultry farms. According to PETA each bird that KFC puts into a box or a bucket had a miserable life and a frightening death. People would be shocked to see our footage of a KFC supplier's employee who walks through a barn, carelessly lighting lamps and letting flames fall on the terrified birds. The air inside these filthy barns reeks of ammonia fumes, making it difficult for the birds to breathe.

How does KFC manage diversity?

For KFC, diversity is not a target - it's a way of life and a way of doing business. Everyone can and does make a difference in our organization. One of its HWWT2 principles -Believe in all People - underscores the importance of actively seeking diversity in others; believing everyone has the potential to make a difference; and coaching and supporting every individual to grow to their full capacity. This adds perspective and depth to everything we do. We've also found that a diverse team makes for better problem solvers, services all our customers more effectively, and creates a richer culture for all of us to enjoy.

Sources/References:

www.kfc.com www.yum.com www.datamonitor.com www.ebscohost.com www.casestudyinc.com www.hoovers.com knowledge.insead.edu www.bangalorebest.com www.referenceforbusiness.com www.consumerpsychologist.com www.hinduonline.com www.karmayog.org www.lawyersandsettlements.com news.franchiseindia.com www.fnbnews.com www.mydigitalfc.com earthygoods.co.in ivythesis.typepad.com www.springerlink.com mgmt.iisc.ernet.in www.mcdonaldsindia.com www.whoswholegal.com

businessandeconomy.org money.cnn.com in.finance.yahoo.com unic.academia.edu www.du.ac.in