Individual Project

KFC & Pizza Hut

A comparison of management styles of home & host country

Muhammad Furqan Zeb

01-111072-182
BBA VII-B
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KFC (Kentucky Fried Chicken)

KFC Corporation (KFC), founded and also known as Kentucky Fried Chicken, is a chain of
fast based in Louisville, Kentucky, in the United States. KFC has been a brand and operating
segment, termed a concept of Yum! Brands since 1997 when that company was spun off
from PepsiCo as Tricon Global Restaurants Inc.

The company was founded as Kentucky Fried Chicken by Colonel Harland Sanders in 1952,
though the idea of KFC's fried chicken actually goes back to 1930. The company adopted the
abbreviated form of its name in 1991. Starting in April 2007, the company began using its
original name, Kentucky Fried Chicken, for its signage, packaging and advertisements in the
U.S. as part of a new corporate re-branding program; newer and remodeled restaurants will have
the new logo and name while older stores will continue to use the 1980s signage. Additionally,
Yum! continues to use the abbreviated name freely in its advertising.

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KFC in Home Country (Kentucky, US)

The home region of KFC is in Louisville, Kentucky, in the United States.

Mission

To sell food in a fast, friendly environment that appeals to pride conscious, health minded
consumers.

Organizational Structure

Since its inception, KFC has evolved through several different organizational changes. These
changes were brought about due to the changes of ownership that followed since Colonel
Sanders first sold KFC in 1964. In 1964, KFC was sold to a small group of investors that
eventually took it public. Heublein, Inc, purchased KFC in 1971 and was highly involved in the
day to day operations. R.J. Reynolds then acquired Heublein in 1982. R.J. took a more laid back
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Wikipedia.org/KFC

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http://kelley_keith.tripod.com/mgmnt5313.html

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approach and allowed business as usual at KFC. Finally, in 1986, KFC was acquired by PepsiCo,
which was trying to grow its quick serve restaurant segment. PepsiCo presently runs Taco Bell,
Pizza Hut, and KFC. The PepsiCo management style and corporate culture was significantly
different from that of KFC.

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PepsiCo has a consumer product orientation. PepsiCo found that the marketing of fast food was
very similar to the marketing of its soft drinks and snack foods. PepsiCo reorganized itself in
1985. It divested non-compatible units and organized along three lines: soft drinks, snack foods
and restaurants. PepsiCo Worldwide Restaurants was created to create synergism between its
restaurant companies.

Business Culture in United States

1. Goal and achievement oriented

2. Highly organized

3. Freedom-loving and self-sufficient

4. Work oriented and efficient

5. Friendly and informal

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Hofstede’s Cultural Dimensions of US

There are only seven (7) countries in the Geert Hofstede research that have Individualism (IDV)
as their highest Dimension: USA (91), Australia (90), United Kingdom (89), Netherlands and
Canada (80), and Italy (76).

The high Individualism (IDV) ranking for the United States indicates a society with a more
individualistic attitude and relatively loose bonds with others. The populace is more self-reliant
and looks out for themselves and their close family members.
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http://kelley_keith.tripod.com/mgmnt5313.html

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http://geert-hofstede.com/hofstede_united_states.shtml

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The next highest Hofstede Dimension is Masculinity (MAS) with a ranking of 62, compared
with a world average of 50. This indicates the country experiences a higher degree of gender
differentiation of roles. The male dominates a significant portion of the society and power
structure. This situation generates a female population that becomes more assertive and
competitive, with women shifting toward the male role model and away from their female role.

The United States was included in the group of countries that had the Long Term Orientation
(LTO) Dimension added. The LTO is the lowest Dimension for the US at 29, compared to the
world average of 45. This low LTO ranking is indicative of the societies' belief in meeting its
obligations and tends to reflect an appreciation for cultural traditions.

The next lowest ranking Dimension for the United States is Power Distance (PDI) at 40,
compared to the world Average of 55. This is indicative of a greater equality between societal
levels, including government, organizations, and even within families. This orientation reinforces
a cooperative interaction across power levels and creates a more stable cultural environment.

The last Geert Hofstede Dimension for the US is Uncertainty Avoidance (UAI), with a ranking
of 46, compared to the world average of 64. A low ranking in the Uncertainty Avoidance
Dimension is indicative of a society that has fewer rules and does not attempt to control all
outcomes and results. It also has a greater level of tolerance for a variety of ideas, thoughts, and
beliefs.

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Trompenaar’s Cultural Dimensions of US

Achievement vs. Ascription

In an achievement culture, people are accorded status based on how well they perform their
functions. High achievers are given status in achievement-oriented countries like US. Achievers
must continue to prove their worth, as status is accorded based on their actions.

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http://geert-hofstede.com/hofstede_united_states.shtml

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http://www.suite101.com/content/trade-culture-dimensions-a42575

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Individualism vs. Communitarianism

People make their own decisions and achieve success alone in highly individualistic countries
like US. Emphasis is on personal responsibility and decision-making, and negotiations are made
on the spot.

Internal vs. External

In an internalistic culture like the United States, people believe that what happens to them is their
own doing.

Neutral vs. Emotional

In an emotional culture like US, feelings are expressed naturally and openly. People smile a great
deal, talk loudly when excited and greet each other with enthusiasm.

Specific vs. Diffuse

In what is called a specific culture, individuals are open to sharing a large public space with
others and a small private space they guard closely and share with only friends and associates.
Specific cultures like United States show a strong separation between work and private life.
Invitations to public spaces are common.

Time Orientation

In sequential cultures like the United States, people tend to do one activity at a time.
Appointments are strictly kept, with a strong preference for following plans.

Universalism vs. Particularism

Universalistic countries like US focus more on formal rules than relationships. Nations
characterized by high universalism believe that their ideas and practices can be applied
worldwide without modification.

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http://www.suite101.com/content/trade-culture-dimensions-a42575

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The Culture of KFC

The culture at KFC is an inclusive one. Everyone looks out for one another and gets along. Our
people are our culture and that makes for a diverse mix of personalities and good times.

The dynamic is such that you can be yourself, meet new people and find you enjoy going to
work. You'll feel part of the culture, supported and encouraged, right from the beginning. If ever
you have a concern, our Open Door policy means there is always someone available to speak to.
If you want more from your career, you need only ask. And if you need to make time for
something outside of work, our flexible hours will allow you that freedom.

Cultural Dimensions in KFC

KFC is using femininity dimension which means caring for others in a society and working for
the good quality of life for the general public.

Actually, they were focusing on business-to-consumer format. And they designed it in such away
to reflect the local community so that people feel free to come in and find the lowest prices for
the products. For this purpose management believes that open communication is important for
understanding and meeting our customers and associates (employees) needs and wants. As it is
one of the most important part of the culture where employees feel that there will be no biasness
and due to less power distance managers will do fair decisions.

In KFC culture, Sun down rule is very effective where top management or associates have to
reply within 24 hours which shows that how much they value their customer’s time and want to
help them quickly by cooperating with the team members.

 Team Culture is much more appreciated in KFC. The managers work in a friendly
environment & also give opportunities to employees to become a part of decision making
process. These are some dimensions of this culture shared by the managers of KFC.

1. -Guiding
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http://www.kfcjobs.com.us/managers/culture.aspx

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 2. -Collaborating/Coaching

3. -Diversity/Flexibility

4. -Openness/Sharing

5. -Active

6. -Involvement of others

For managers work to live is their philosophy at KFC. It's about balancing a challenging and
rewarding career with the flexibility to live a little. It's about mixing a lively, friendly culture
with some exceptional management training to help you achieve career aspirations

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Environment Analysis of KFC

Micro Environment

Company

KFC is the multinational company that has chain of fast food restaurants all over the world. In
world it has 9033outlets out of which, 5120are based in us, KFC is growing rapidly, by having
their strong relationship with their customers and the trust which they have developed, in the past
years, employees are the main assets of the company, and so they are very much concerned. The
company has very organized check and balance system, which is used for the evaluation of the
employee and the individual outlet as well.

Suppliers

As they are in food industry suppliers have a great impact on their service. They try to ensure
better quality.

Customer

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http://www.scribd.com/doc/24326651/Kfc-Brand-Plan

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They are the base for any business KFC think more about consumer and try to provide food
according to consumer demand.

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Competitors

Their competitors are

1. Mc Donald’s
2. Boston chicken
3. Church’s and Popeyes

Employees

Employees are asset for the organization so if they are not satisfied there is some problem and
we see here is service problem because they failed to maintain good relation with employees.

The Macro Environmental Forces

These are not controlled by the company and are environmental forces.

Demographic Factor

It designed food according to taste of population .They influence consumer to visit their store by
giving specific offer. They try to gain competitive advantage by creating point of difference.

Political Factors

Political factor is that they were sued because of not following contracts they have a good
relation with government they can avoid these or can minimize this kind of negative effect.

Cultural Factors

KFC is always concerned about the culture and ethical values of the community. They serve food
that goes with US culture. They takes care of ethical and moral value of this community.
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http://www.scribd.com/doc/24326651/Kfc-Brand-Plan

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Pepsi Acquisition of KFC

The Kentucky Fried Chicken (KFC) was acquired by Pepsi-Cola, Incorporated (PepsiCo) in

1986. The KFC is a fast food restaurant chain based in Louisville, Kentucky and is known
worldwide for its fried chicken. On the other hand, the PepsiCo is a global beverage and snack
company. At that time, the PepsiCo was expanding in quick service restaurant segment. They
found out that fast food marketing was very similar to soft drinks and snack food marketing. The
company formed the PepsiCo Worldwide Restaurants to create synergism among its restaurant
companies.

 Replacement of KFC managers by Pepsi.co managers.

 The old styles of laid back management changed to performance driven management.
 The job security becomes unstable after the acquisition of KFC by Pepsi.co
 Pressure on the managers increases to create good public relations.
 The corporate culture remains the same.
 The relationship with franchisees becomes poor, however later on it becomes stable.

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Performance Driven Management of KFC

KFC is building a culture of personal growth and engage talented people, through disciplined
performance management system. They are committed to cultivating a performance-driven
culture that rewards results. That's why they have rigorous performance management and goal-
setting processes at all levels of the company.

On a personal level, employees develop and review their goals annually with their managers,
defining expectations that meet and exceed the objectives. During performance reviews, the
results of how well goals were or were not met are discussed and evaluated, which feeds into

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www.scribd.com/doc/35703431/KFC-final
http://findarticles.com/p/articles/mi_m3190/is_v20/ai_4353786/
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http://www.scribd.com/doc/35703431/KFC-final

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salary actions. This criteria-driven system is all about improving performance and developing
people. As part of the process, employees create individual development plans. Salaried
employees use the performance management system, while hourly employees use a goal-setting
process. Although the systems differ in some ways, the end objective is the same—to align each
employee's work to company and unit business goals.

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KFC in Host Country (China)

Since 1987, KFC opened the front door in Beijing, the first Chinese restaurant to the present,
came to China has been 21 years. 肯德基在中国的 21 年 ， 是 “ 立足中国、融入生活 ”的 21 年 ，
是“为中国而改变，全力打造'新快餐'”的 21 年。 KFC in China, 21 years, is "based in China,
into the life" of 21 years, is the "change in China, to create 'a new fast food'," the 21 years. 21 年
来，肯德基一直都在努力探索，把最贴心的服务回馈给广大中国消费者。 KFC has been in the
efforts to explore the most intimate service back to the majority of Chinese consumers. 如今中
国肯德基已在 450 个城市开设了 2100 余家连锁餐厅，遍及中国大陆除西藏以外的所有
省、市、自治区 ，是中国规模最大、发展最快的快餐连锁企业。 Now China has 450 cities
KFC has opened more than 2,100 chain restaurants in mainland China except Tibet in all
provinces, municipalities and autonomous regions, and is the largest and fastest-growing fast-
food chain.

China is a multi-ethnic country, different series, different styles of food culture has a long history
in recent years, in addition to the diet, ethnic style, continue to develop in China, the Chinese still
continue to absorb more new flavors, new ideas and new mode of operation dining. 肯德基正是
为了满足中国餐饮业发展的需求，于 1987 年进入具有悠久饮食文化的古都北京，从而开
始 了 她 在 这 个 拥 有 世 界 最 多 人 口 的 国 家 的 发 展 史 。 KFC is to meet the needs of the
development of China's catering industry in 1987 into the food culture has a long ancient capital
of Beijing, which started her in the world most populous country's development.

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Culture of China

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KFC in China Secret Recipe for Success by Warren K. Liu
http://knowledge.insead.edu/KFCinChina090323.cfm?vid=195
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http://en.wikipedia.org/wiki/Culture_of_China

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The Culture of China is one of the world's oldest and most complex cultures. The area in which
the culture is dominant covers a large geographical region in eastern Asia with customs and
traditions varying greatly between towns, cities and provinces.

We will analyze the different elements existing in Chinese culture basing on criteria put forward
by Geert Hofstede, who set up a huge study about the way culture influences working
relationships in a multicultural environment

Five cultural dimensions have resulted from his study, representing the major values present in a
society. These are the following:

• The concept of power and hierarchical distance (Power Distance Index)

• The degree of individualism or collectivism (Individualism)
• The degree of masculinity (Masculinity)
• The control of uncertainty (Uncertainty Avoidance Index)

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Chinese Corporate Culture

The Chinese culture is distinguished from the Western culture in many ways, including how
business is conducted. For example, the Chinese prefer to deal with people they know and trust.
On the surface, this does not seem to be much different from doing business in the Western
world. But in reality, the heavy reliance on relationship means that western companies have to
make themselves known to the Chinese before any business can take place. Furthermore, this
relationship is not simply between companies but also between individuals at a personal level.
The relationship is not just before sales take place but it is an ongoing process. The company has
to maintain the relationship if it wants to do more business with the Chinese.

 High centralization
 Low degree of bureaucracy
 Strong entrepreneurship culture

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http://geert-hofstede.com/hofstede_china.shtml

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Power Distance Index (PDI)

This criterion shows the way how inequalities of all kinds are perceived and handled (physical,
intellectual, wealth and power), but also the degree of acceptance of authority and distance
towards it. It shows that this criterion is very high for China (80), while in Asian countries the
average is 60, and in France it is 68.

Individualism versus Collectivism

China is a country that has been strongly marked by collectivism, as it shows a very low degree
of individualism (20), contrary to France (71), which is a very individualist society. Otherwise
stated, the Chinese society has a strong loyalty towards the group, which is strongly influenced
by the importance of the role of the family and the relationships within the family. The
individual has little autonomy and decisions are deliberated.

Degree of Masculinity against Femininity

China is relatively more masculine (55) and it is the Asian country that has the highest degree of
masculinity following Japan. This degree is influenced by the tremendous discrimination in
China towards girls. The policy of birth control that was introduced, basing on one single child,
has been followed by a strange increase in girls' mortality.

Uncertainty Avoidance Index (UAI)

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http://geert-hofstede.com/hofstede_china.shtml

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China presents a high degree of acceptance of uncertainty, which is a characteristic of a society
that does not try to take control of the future, and that is not afraid of unforeseen situations.

The degree of long-term orientation

This means that perseverance and economy are the basic values in China, these values being
taught by Confucianism, which is widely established in China. Also, Chinese culture is neutral,
contrary to the French culture which is affective. Which means that in China feelings are not
readily expressed and physical contact avoided, while in France like in all other Mediterranean
cultures the behavior is expressive and gestured, and people like to express their feelings and
physical contact.

Culture of KFC in China

By the mid-1990s, there were 100 fast food restaurants around Beijing; the convenience,
efficient service, comfortable environment, pleasing music and jovial atmosphere garnered fans.
Office workers enjoyed grabbing a quick bite on their way to work, and friends enjoyed relaxing
over a soft drink. However, certain eagle-eyed managers noticed that some people never dropped
in when they passed by. Some customers complained that fast food was not as good as their
Chinese cuisine, and that it lacked variety. KFC restaurants were almost empty during the
traditional celebrations of Spring Festival and Mid-autumn Festival, while Chinese restaurants
were heaved and bustled.

The reason is cultural differences. KFC is distinct American brand. Differences between China
and US politics, economics, social development and ideology became obstacles to international
enterprises operating in China. Corporate culture could not be understood or accepted here,
especially in the restaurant field, where culture plays a crucial role.

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Localization Strategy of KFC in China

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http://resources.alibaba.com/topic/531563/KFC_s_localization_strategy_in_China_.htm
http://www.allbusiness.com/company-activities-management/operations-supply/5214239-1.html

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Whether measured by number of restaurants, revenue, or market share, KFC is far and away the
number one restaurant brand in China. Even more striking is its dominance over McDonald's, a
position that is reversed in nearly every other country. McDonald's has 800 branches in China,
compared to KFC's 2200 and, with KFC opening 300 new branches per year, the gap is
widening.

KFC China is not just outperforming the competition. In 2007 it contributed more than 20
percent of global revenue of parent company Yum!, whose brand portfolio includes Taco Bell
and Pizza Hut. It is a proportion that is likely to grow up to and beyond 50 percent, according to
Taiwan-born Warren Liu, a former member of the company's Greater China executive
committee.

The first important move was to recruit a local senior management team; not so simple in 1987
when KFC opened its first restaurant not far from Chairman Mao's Mausoleum in downtown
Beijing. Back then nobody in Chinese mainland had experience of running a fast food chain, so
KFC did the next best thing.

It was crucial for firms trying to enter the market back then to have an understanding of China
and the Chinese cultural context "so deep that it is intuitive," to understand the Chinese people's
"mixed feelings, of love and hate about the West, to understand Chinese history, language, the
influence of Confucianism, Buddhism and Taoism, this is especially important if you are in the
consumer goods industry."

The second factor underpinning KFC's success, according is product localization. The company
has constantly sought to adapt its offerings to the local palate. For some years customers have
been able to order congee (rice porridge). But after some time KFC was selling youtiao [a kind
of Chinese doughnut].

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"KFC's localization strategy has been a key to the company's success," "This includes the
integration of all aspects of KFC's operations including product development, human resources,

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http://www.allbusiness.com/company-activities-management/operations-supply/5214239-1.html

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supply chain management, logistics and quality control," said J. Samuel Su, president of Yum!
Brands International Greater China.

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Inter-cultural Management Mode

KFC have absorbed the Chinese cultural elements of showing respect, recognition,
understanding, assimilation and amalgamation, while maintaining the substance of the Western
culture of efficiency, freedom, democracy, equality and humanity. This inter-cultural
management mode, with American business culture at the core, supplemented by Chinese
traditional culture, provides reference for international enterprises which need to adjust, enrich
and reconstruct their corporate culture to enhance local market flexibility.

There are, however, certain conditions essential to inter-cultural management mode. On the
objective side, there must be similarities in environment in order for the two cultures to connect
and synchronize. KFC embody an accommodation of the fast tempo of modern life: a product of
development and a market economy. Their resultant speed and efficiency are only meaningful in
countries with a market economy. China's rapid economic development offered the
environmental conditions corresponding to fast food culture. Services offered by fast food chains
express their full respect for freedom, an American value, as well as the psychological statement
of Chinese open-mindedness that yearns to understand and experience the Western lifestyle. Two
cultures proactively crashed, connected, and assimilated.

Analysis of KFC

KFC in Host & Home Country:

KFC has been now acquired by Pepsi Co. Now the management of the KFC is hired by the Pepsi
Co, so there are different management styles as compare to those who are started by Colonal
Sanders. Now there are no laid back management is changed to performance driven
management. KFC is very much closer to the culture of US. As US is the home country for KFC.
The fried chicken & the fast food is basically the west culture which is adopted later on by other

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http://www.chinadaily.com.cn/english/doc/2004-06/01/content_335488.htm

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countries. KFC is using femininity dimension which means caring for others in a society and
working for the good quality of life for the general public.

It is one of the most important part of the culture where employees feel that there will be no
biasness and due to less power distance managers will do fair decisions. In KFC team work is
more preferred as compared to individual work but rewards are given individually to employees.

The best thing of KFC is that they didn’t change their management styles when they were
starting business in China. But they started the localization strategy which means that they will
provide products which are according to the culture of China.

China is relatively more masculine society then US. So this thing affects the culture of KFC in
china a little bit, but still the main focus of KFC is to serve their customers & provide the best
quality, but obviously their ultimate purpose is to gain profit.

KFC have absorbed the Chinese cultural elements of showing respect, recognition,
understanding and assimilation, while maintaining the substance of the Western culture of
efficiency, freedom, democracy, equality and humanity. This inter-cultural management mode,
with American business culture at the core, supplemented by Chinese traditional culture,
provides reference for international enterprises which need to adjust, enrich and reconstruct their
corporate culture to enhance local market flexibility.

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Cultural Comparison of US & China

PDI Power Distance Index

IDV Individualism

MAS Masculinity

UAI Uncertainty Avoidance Index

LTO Long-Term Orientation

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http://geert-hofstede.com/hofstede_dimensions.php?culture1=95&culture2=18#compare

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 21
Pizza Hut

Pizza Hut (corporately known as Pizza Hut, Inc.) is an American restaurant chain and

international franchise that offers different styles of pizza along with side dishes including pasta,
buffalo wings, breadsticks, and garlic bread.

Pizza Hut is a subsidiary of Yum! Brands, Inc. (the world's largest

restaurant company with approximately 34,001 restaurants, delivery/carry-
out locations, and kiosks in 100 countries.

Currently based in Addison, Texas (a northern suburb of Dallas), Pizza Hut

is relocating its headquarters to Legacy Office Park in nearby Plano when
the lease on its current building, which it has occupied since 1995, expires
on December 31, 2010.

Concept

Pizza Hut is split into several different restaurant formats; the original family-style dine-in
locations; store front delivery and carry-out locations; and hybrid locations that offer carry-out,
delivery, and dine-in options. Many full-size Pizza Hut locations offer lunch buffet, with "all-
you-can-eat" pizza, salad, bread sticks, and a special pasta. Additionally, Pizza Hut also has a

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http://en.wikipedia.org/wiki/Pizza_Hut

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number of other business concepts that are different from the store type; Pizza Hut "Bistro"
locations are "Red Roof"s which offers an expanded menu and slightly more upscale options.

"Pizza Hut Express" and "The Hut" locations are fast food restaurants. They offer a limited menu
with many products not found at traditional Pizza Huts. These types of stores are often paired
in location with a sibling brand such as Wing Street, KFC or Taco Bell, and are also found on
college campuses, food courts, theme parks, and in stores such as Target.

Pizza Hut in Home Country (Wichita, US)

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Mission Statement: We take pride in making a perfect pizza and providing courteous and
helpful service on time all the time. Every customer says, "I'll be back!"

We are the employer of choice offering team members opportunities for growth, advancement,
and rewarding careers in a fun, safe working environment.

We are accountable for profitability in everything we do, providing our shareholders with value
growth.

Objectives of Pizza Hut

 To provide world-class facility and taste to its customers in a cost effective way.

 To maintain uniform taste across all its outlets.

 To present its products when and where the customer wants within committed half an
hour time.

 To delight the customer, i.e. more beyond satisfaction.

Business Culture in United States

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http://www.samples-help.org.uk/mission-statements/pizza-hut-mission-statement.htm

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 1. Goal and achievement oriented

2. Highly organized

3. Freedom-loving and self-sufficient

4. Work oriented and efficient

5. Friendly and informal

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Hofstede’s Cultural Dimensions of USA

There are only seven (7) countries in the Geert Hofstede research that have Individualism (IDV)
as their highest Dimension: USA (91), Australia (90), United Kingdom (89), Netherlands and
Canada (80), and Italy (76).

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http://geert-hofstede.com/hofstede_united_states.shtml

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 The high Individualism (IDV) ranking for the United States indicates a society with a more
individualistic attitude and relatively loose bonds with others. The populace is more self-reliant
and looks out for themselves and their close family members.

The next highest Hofstede Dimension is Masculinity (MAS) with a ranking of 62, compared
with a world average of 50. This indicates the country experiences a higher degree of gender
differentiation of roles. The male dominates a significant portion of the society and power
structure. This situation generates a female population that becomes more assertive and
competitive, with women shifting toward the male role model and away from their female role.

The United States was included in the group of countries that had the Long Term Orientation
(LTO) Dimension added. The LTO is the lowest Dimension for the US at 29, compared to the
world average of 45. This low LTO ranking is indicative of the societies' belief in meeting its
obligations and tends to reflect an appreciation for cultural traditions.

The next lowest ranking Dimension for the United States is Power Distance (PDI) at 40,
compared to the world Average of 55. This is indicative of a greater equality between societal
levels, including government, organizations, and even within families. This orientation reinforces
a cooperative interaction across power levels and creates a more stable cultural environment.

The last Geert Hofstede Dimension for the US is Uncertainty Avoidance (UAI), with a ranking
of 46, compared to the world average of 64. A low ranking in the Uncertainty Avoidance
Dimension is indicative of a society that has fewer rules and does not attempt to control all
outcomes and results. It also has a greater level of tolerance for a variety of ideas, thoughts, and
beliefs.

24
Trompenaar’s Cultural Dimensions of US

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http://www.suite101.com/content/trade-culture-dimensions-a42575

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Achievement vs. Ascription

In an achievement culture, people are accorded status based on how well they perform their
functions. High achievers are given status in achievement-oriented countries like US. Achievers
must continue to prove their worth, as status is accorded based on their actions.

Individualism vs. Communitarianism

People make their own decisions and achieve success alone in highly individualistic countries
like US. Emphasis is on personal responsibility and decision-making, and negotiations are made
on the spot.

Internal vs. External

In an internalistic culture like the United States, people believe that what happens to them is their
own doing.

Neutral vs. Emotional

In an emotional culture like US, feelings are expressed naturally and openly. People smile a great
deal, talk loudly when excited and greet each other with enthusiasm.

Specific vs. Diffuse

In what is called a specific culture, individuals are open to sharing a large public space with
others and a small private space they guard closely and share with only friends and associates.
Specific cultures like United States show a strong separation between work and private life.
Invitations to public spaces are common.

Time Orientation

In sequential cultures like the United States, people tend to do one activity at a time.
Appointments are strictly kept, with a strong preference for following plans.

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Universalism vs. Particularism

Universalistic countries like US focus more on formal rules than relationship. Nations
characterized by high universalism believe that their ideas and practices can be applied
worldwide without modification.

Culture of Pizza Hut in US

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By creating a warm and vibrant atmosphere for their customers, Team Members and Managers
create one for themselves too, which makes working here hugely enjoyable and rewarding.
Enjoyable because everyone in the team wants to get involved and do their best. And rewarding
because we're never slow to let someone know when they've done a great job.

When they see potential, they want to make the most of it. That's why they put such a big
emphasis on training and support - ensuring that everyone knows our procedures inside out,
while giving budding Managers the skills they need to be a great Pizza Hut leader.

In a nutshell, they’re a people business that serves food, rather than a food business that serves
people.

In Pizza Hut there is a special culture which is introduced for the General Managers. The
culture is to provide them a sense of; ownership, responsibility & leadership. Pizza Hut
implemented an organizational structure in which senior executives lead by example in
channeling enthusiastic support toward unit-level operations.

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There are some of the standards that the management of Pizza Hut has to fulfill. These are the
standards which became the culture of Pizza Hut:

 Cleanliness 

 Hospitality 

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http://www.careersatpizzahut.co.uk/html/culture.htm
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www.pizzahut.com

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  Accuracy 

 Maintenance 

 Product 

 Speed 

Management Styles in Pizza Hut

All the cultural dimensions of Hofstede & Trompenaar affect the management styles of Pizza
Hut in its home country. People are in the dimension of individualism, they want to achieve their
own goals but on the other hand in Pizza Hut the team work is given more preference even the
managers encourages the team work & also involves his/her employees in the decision making
processes.

There is a competitive atmosphere in the Pizza Hut. It is because of the masculinity dimension of
culture. Pizza Hut always has the policy of making a relationship with the customers through
loyalty with the customers. Power distance is less& it is affective in the restaurant environment
as it becomes easy for the lower level employees to approach the upper management. Their main
focus is on the dimension of achievement. Mainly this is the dimension which can be applied on
the managers of Pizza Hut as they are achievement oriented people. The culture of US is an
emotional culture, so the management of the Pizza Hut always designs their policies which are
not against the values of that society. Time orientation is the dimension which affects the
consumer behavior and as well as the work behavior of the employees in Pizza Hut. That is why
speed is an important factor while serving the customers.

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Pizza Hut in Host Country (India)

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 Pizza Hut entered India in 1996, and opened its first restaurant in Bangalore. Since then it has
captured a dominant and significant share of the pizza market and has maintained an
impressive growth rate of over 40 per cent per annum. Pizza Hut now has 95 outlets across
24 cities in India; and employed nearly 4,000 people by end of 2004. Yum! has invested
about US$ 25 million in India so far; this is over and above investments made by franchisees.
Yum! Brands Inc is the owner of the Pizza Hut chain worldwide. A Fortune 300 company,
Yum! Brand own Kentucky Fried Chicken, Pizza Hut, Taco Bell, A&W and Long John
Silver’s restaurants worldwide. Yum! generated more than US$ 25.9 billion in worldwide
sales in the year 2003, and has more than 33,000 restaurants in over 100 countries. Pizza Hut
is believed to have close to 50 per cent market share of the organized pizza-retailing segment
in India. According to an article in Financial Express, the market size of the pizza segment is
around US$ 87 million and currently growing at the rate of 15 per cent to 17 per cent per
annum. According to Pizza Hut sources, most of their outlets are financially successful,
encouraging further expansion. In India, the average investment for each outlet is US$
275,000-335,000 and is borne by the franchisee.

Corporate Culture of India

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Hofstede’s Cultural Dimensions of India

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http://geert-hofstede.com/hofstede_india.shtml

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India has Power Distance (PDI) as the highest Hofstede Dimension for the culture, with a
ranking of 77 compared to a world average of 56.5. This Power Distance score for India
indicates a high level of inequality of power and wealth within the society. This condition is not
necessarily subverted upon the population, but rather accepted by the population as a cultural
norm.

India's Long Term Orientation (LTO) Dimension rank is 61, with the world average at 48. A
higher LTO score can be indicative of a culture that is perseverant and parsimonious.

India has Masculinity as the third highest ranking Hofstede Dimension at 56, with the world
average just slightly lower at 51. The higher the country ranks in this Dimension, the greater the
gap between values of men and women. It may also generate a more competitive and assertive
female population, although still less than the male population.

India's lowest ranking Dimension is Uncertainty Avoidance (UAI) at 40, compared to the world
average of 65. On the lower end of this ranking, the culture may be more open to unstructured
ideas and situations. The population may have fewer rules and regulations with which to attempt
control of every unknown and unexpected event or situation, as is the case in high Uncertainty
Avoidance countries.

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Trompenaar’s Cultural Dimensions of India

Particularism

Indians believe that the environment controls them so they accept fate and conform to it.

Communitarism

Strong family values and caste system.

Neutral v Emotional

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http://www.scribd.com/doc/35808378/Trompenaars-Cultural-Dimensions

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 Indians tend to be neutral in displaying affection but are allowed to show assertiveness.

Diffuse

Friendships and cordiality is expected.

Achievement v Ascription

Most Indians value ascription because of their reliance on the caste system.

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PIZZA HUT-CULTURE/SUBCULTURE

The Pizza Hut ensures that it adds an Indian touch to all the varieties of pizzas that it makes
available to Indian customers. Various delicious combinations are tested at the Indian Pizza Hut
franchisee outlets by blending the original menu with Indian favorites to make fresh salads,
garlic based breads, soups, yummy pastas and delicious desserts.

According to Pizza Hut, the Indian food heritage is very rich, and hence Indians like local
flavors. The Tandoori range of pizzas, which was developed locally, has a menu mix of over 20
per cent.

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Positioning of Pizza Hut in India

At Pizza Hut the belief is that every pizza has its own magic, thus making it a destination product
which everyone seeks. It is this belief that has ignited the passion to create, innovate and serve
the finest product the industry has to offer, while setting standards for others to strive to
replicate. Pizza Hut is committed to providing uncompromising product quality, offering
customers the highest value for money and giving service that is warm, friendly and personal. A
critical factor in Pizza Hut's success has been its unique dining experience. Crewmembers at
Pizza Hut strive each day to provide 'customer mania' - the kind of service that ensures that every
visit of the customer is a memorable one. Pizza Hut's constant endeavor to provide extra value –
whether it is pizzas which are available to suit every price range, new promotions or the

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introduction of innovative product ranges - that puts a 'Yum' on every customer's face - has
allowed it to increase its presence in India to the current 139 restaurants across 36 cities.

Analysis of Pizza Hut

Pizza Hut in Home & Host Country

Pizza Hut is owned by Yum brands. Yum brands is a subsidiary of Pepsi Co. Pepsi Co has the
same policy for Pizza Hut which they have for KFC. The policy is to enforce the performance
driven management.

There is vast difference in the cultures of US & India. Both of them have different percentages in
all the dimensions. It is the most difficult task for the management of Pizza Hut to start their
operations in India. They started the localization strategy as KFC has done in China.

In US the power distance is low but in India it is on the highest level. As there is a rigid cast
system in India. In India it will be a problem for the employees of Pizza Hut to approach their
higher management.

Both the cultures have the highest rate of masculinity which creates a competitive environment.
The company’s ultimate goal is to expand its operations & gain profits. But on the other hand
they are following their objectives which are to provide best goods & services to their customers.

Long term orientation: Pizza Hut through its services tries to create loyal customers & they are
also working on customer relationship management. India & US has a high level of this
dimension (long term orientation), so if we relate their culture with the culture of Pizza Hut, we
can conclude that this dimension has a high level in Pizza Hut. The management of Pizza Hut is
also concentrating on retaining their customers.

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Cultural Comparison of US & India

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http://geert-hofstede.com/hofstede_dimensions.php?culture1=95&culture2=42#compare

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PDI Power Distance Index

IDV Individualism

MAS Masculinity

UAI Uncertainty Avoidance Index

LTO Long-Term Orientation

Analysis of KFC & Pizza Hut

Both the fast food restaurants are owned by Yum Brands. Yum is a subsidiary of Pepsi Co. The
beverages business is very much different than the food business. So, that is why Pepsi Co has
made a separate subsidiary which will control the restaurant business.

Other then KFC & Pizza Hut, Taco Bell is also a restaurant of Yum Brands. KFC & Pizza Hut
both have many similarities in the management style because both are acquired by Pepsi Co.
Pepsi co is introducing the performance driven management systems in both restaurants. US
are the home country of both the restaurants, so there organization culture is not very much
different. Another important thing is that both the MNC’s are adopting the localization strategy.
As in this study I have discussed about the localization strategies of KFC & Pizza Hut. There is
vast difference in the culture of countries in which these MNC’s are operating. India is totally a
different culture with different percentages of dimensions. The culture of china has its own
priorities. Both the MNC’s have played a strategy in which they introduce their home culture in

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the host countries but after some time they try to bend their products according to the culture of
host countries in according to capture a large market.

The first priority of these MNC’s is to introduce the same level of customer service which they
are providing in the home country. The people of world are very much influenced by America’s
culture. So they will easily accept their culture & attracted towards their brands.

Both the MNC’s when start operating in the host countries, the first step is to hire the branch
managers & employees from the host country, because they are local people & they have much
knowledge about the culture of their country.

KFC has made its name in China & it is the market leading restaurant in China. On the other
hand Pizza Hut is successfully operating in India but there are some strong competitors which
are a threat for sales of Pizza Hut.

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