This report on analysis of management of Pizza Hut would not have been possible without the kind support and help of the management. We take this opportunity to express a deep sense of our gratitude to all of them for their cordial support, valuable information and guidance, which helped us in completing this task through various stages.
We also take this opportunity to express our profound gratitude and deep regards to our Instructor and Mentor Ms. Shagufta Rafif for her exemplary guidance, monitoring and constant encouragement throughout the course of this report.Â
Table of Contents
SCOPE OF THE REPORT
This report on the management of Pizza Hut incorporates and analyzes different aspects of planning, organizing, influencing and controlling. Where necessary, the distinctive areas have been examined with the support of different management tools, models and techniques.
The report also evaluates growing trends in the restaurant business with special focus on the challenges Pizza Hut is faced with. It also assesses the strengths of the business and how it has been able to survive in this recessionary era, where many restaurant businesses are making heavy losses.
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A special focus has also been given on the goals setting, goals congruence and the management approaches to address the growing market competition.
Staff retention, professionalization and their well being has also been critically evaluated in this report with bringing to light the areas, where the staff input, ownership and empowerment have been accepted and given due weightage.
Products sustainability with special promotions and usage of other medium for marketing has also found space in this report to highlight potentials threats and hidden opportunities available to Pizza Hut management in this sector. Underpinning the supply chain and contribution to the society as a whole by the management of Pizza Hut has also been focused.
Though making pizzas and selling them is our business, however we always feel proud to make a perfect pizza. We also emphasis in provide caring and useful services to our customers so that when they go out, they always wish to come back.
Our staff members are also proud of having us as their employers. They would prefer to work with us rather than joining any other organization. The reasons being simple, we look for their well being, provide them with opportunities for their development and they are rewarded in great manner making them feel honored and privileged.
While taking care of all above things, we are also mindful of the value we add to our shareholders, who place their confidence in our competencies of making profits.
VISION OF PIZZA HUT
We never believe in mediocrity. We believe that in this highly competitive market, only those survive which produce everything that is best. Best not only in terms of product, but best in terms of quality of services provided, the best in terms of the environment and ambience of the restaurants, the best in terms of business, the best in terms of network and franchise and above all the best for all those who tend to visit our restaurants.
Pizza Hut logo.svg
Ever since the industrialization began, many businesses have seen ups and downs. There has been history of many products making their way to the consumers' home through markets and fading overtime with the invention of new technology or becoming extinct for other reasons.
The food industry and restaurant business also saw this upheaval in the last century. However, in last few decades, this business has seen a tremendous rise with many world famous brand restaurants mushrooming the big and small cities of the world.
During that era of prosperity, Pizza Hut was established by PepsiCo in 1977, an American chain. The company owned it till 1997, when it was sold to Yum! Brands, Inc., which also owns the restaurant chains of KFC and Taco Bell. As per latest report, there are 6,000 Pizza Hut restaurants in the United States, whereas, 5,150 restaurants are in other countries of the world. In Karachi, the company has 21 restaurants, whereas, there are another 20 restaurants in other cities of Pakistan, bringing the total numbers to 41.
Always on Time
Marked to Standard
Pizza Hut, as its name suggests is popular for selling Pizza of different flavors (Chicken Tikka flavor is Pakistan's most demanded product), however , alongside pizza, it also sells Pastas, Salad, Chicken Wings, Breadsticks, Garlic Bread and Beverages.
There are different formats adopted for the restaurants' designs. We can find a restaurant where all varieties are available with options of dine in, take away or home delivery. However, in our own city, we can find some outlets just offering take away options. In these outlets, we may not find all the varieties due to limited space and staff.
As mentioned above, the Pizza Hut owning company also has KFC and Taco Bell, so in some parts of the world (not in Pakistan), these sibling restaurants are co-located. We can find Pizza Hut restaurants in middle class even in lower class localities. They can be found in college campuses, food courts of shopping malls and some big stores like Target and Walmart.
Yum! Brands has been frontrunner in fulfilling its social responsibilities. It has invested in many educational, social and health sectors, thus playing its part in reducing poverty, malnutrition and illiteracy in the world. It has also established Yum Foundation, through which many donor funded programs are undertaken. The group is not oblivious of its responsibilities of providing pollution free environment and has given it due importance and emphasis by devoting financial resources. In Pakistan, the franchiser of Pizza Hut invests in education sector of the country. In previous year floods, the franchiser not only provided donation to the affected people but allowed to use its outlets for donation collection. Many times, the Edhi Foundation has also used Pizza Hut restaurants for collecting donation.
The board of Directors of Yum! Brands has an unambiguous policy of designing their restaurants in such a manner that they not only ensure environment sustainability but proving to be a source of income generation of other small traders of the area and vicinity.
In restaurant business, the customers are always king and every effort is made at Pizza Hut to satisfy the customer requirements and the complaints are addressed on the spot. Apart from customer satisfaction, Pizza Hut is also a proud employer of thousands of employees in Pakistan and across the globe. It has always invested in developing professional skills of their staff and has given honor and dignity to them, which is perhaps not available in small restaurant businesses. We can see the way employees of small restaurants are treated and the remuneration they receive in exchange of their services. The employees of Pizza Hut feel proud becoming part of an International chain, which has inculcated teamwork and responsibility in them to strive for better services and thus in end getting satisfied customers, willing to come again and again.
Pizza Hut has contributed greatly in shape of taxes to the government. It has provided jobs to thousands of employees and suppliers, who provide food related materials to these restaurants on a daily basis. The presence of these restaurants in different parts of the city and country ensures that small suppliers like chicken merchants, vegetable sellers have become partner in the business, which creates more jobs and opportunities for these businesses. It contributes to the supply chain in a greater way with sustainability of the systems at forefront.
Pizza Hut has maintained high ethical standards and has never compromised on quality materials being used in its various products and quality services being provided to the customers. It is also mindful of its responsibilities to the shareholders and follows good corporate governance policies which endure lasting impacts on the society in which it operates.
Planning is the process of determining how the system will achieve its objectives. It is the systematic development of action, program aimed at reaching agreed business objectives by the process of analyzing, evaluating and selecting among the opportunities which are foreseen. While making plans the management of PIZZA HUT has been cognizant of their missions, goals, strategies, policies etc. as elaborated below.
PIZZA HUT OBJECTIVES IN PLANNING
Making perfect pizza
Provision of courteous and helpful services to the customers
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Offering opportunities to growth, advancement and rewarding careers in a fun safe working environment.
Working for profit maximization.
Providing the shareholders with value growth
The major objective of Pizza Hut is to achieve customer satisfaction which can be made possible by achieving the objectives of the company. If the company is successful in achieving its objectives, they will themselves make their customers pleased and satisfied.
As the key product of Pizza Hut is "pizza," the first and foremost objective of Pizza Hut is to make a perfect pizza and manage to achieve customer satisfaction. Pizza Hut has always strived hard to provide people with such meals that they find irresistible and which are allowed in their religions and cultures. Time to time new deals are being offered to the customers to achieve customer satisfaction Demographics are always kept in mind before experimenting with a new kind of pizza, as it is the people who have to like the product and help the company in increasing their sales.
The second objective of Pizza Hut is to provide courteous and valuable services to its customers. Pizza Hut ensures that their staff is trained enough to know how to treat their customers. They are trained to be friendly and well mannered. If a customer complaint is received, the staff is always told to 'believe' in whatever the customer says and then solve the problem accordingly. Doing this makes the customer delighted by the services that are provided to them, wanting them to come to Pizza Hut the next time as well. If one customer is satisfied that one will bring hundred customers along with him and if one is dissatisfied that one will take away hundred customers. Briefing sessions are also held each day in which the staff members are given briefing about what they did well in the whole day and what are the things that they need to improve. The objectives and the strategies to reach those objectives are also told to them each day, to make them work accordingly.
Third objective of Pizza Hut is to provide its staff member opportunities for progress and development together with a secure working environment. In-house training sessions are also organized for the staff members. The staff also sees their career path and growth within the organization and they also put all their energies in making organization possible to achieve its targets. Since goals achieved by the organization will finally result in growth of the staff as well. Although, we can see slumps in many industries but food industry is probably the only industry which has seen growth in recession period and is flourishing. This is all because of the dedication and sincerity of the staffs, who are encouraged and kept motivated. A safe and healthy working environment is also provided to them to make sure that they are happy enough to ensure the company's progress, as if the employees are happy with what is provided to them they will always work hard to achieve the objectives of the company. In order to make them happy, they are given incentives such as bonuses, meals, cash rewards etc as well.
The fourth objective of Pizza Hut is profit maximization and giving their stakeholders (government, owners, customers, supplier, employees etc) significant growth. The Company does all the things mentioned above in order to maximize their profit and make their market standing better. Attaining all these objectives and making the customers satisfied will make the company earn profits.
The fifth and final objective is to provide value growth to its shareholders. If a company is making profit, the ultimate gainers are its shareholders alongside the community in which it operates and similar is true for Pizza Hut. Many of its restaurants across the city and country are making a sizeable profit, which is adding value growth to its shareholders, who have reposed confidence in the corporate governance of Pizza Hut.
MANAGEMENT BY OBJECTIVE (MBO) IN PIZZA HUT
Management by Objectives refers to the mutual agreement of managers and subordinates over company's objectives. In a given time, it is expected the objectives to be achieved and those who have contributed greatly in the attainment of these objectives, should be rewarded. In Pizza Hut weekly meetings of the managers are held on a regular basis and sub ordinates are also invited in the meeting to give their input and feedback of the outcomes of previous meetings. The plans and other modus operandi are discussed for implementation and they are monitored on a daily basis. The suggestions and observations of the staff, mainly the Front of House staff, are highly appreciated. The staff is encouraged to put forward their suggestions for the improvement of services being provided and the food being served. Moreover if the staff members perform well in achieving the objectives, they are rewarded with recognition, cash rewards, bonuses etc. Pizza Hut gives them recognition by announcing 'employee of the week.' The picture of that employee is sent to the area and regional offices which helps in making a good image of the employee in front of the senior staff.
As the decisions regarding the goals of the company are made by both managers and subordinates by stating ideas which are later listed and evaluated, thus, we can say that the strategy that Pizza Hut uses for making decisions is 'Brainstorming.'
Internal Environmental Scanning
Pizza Hut has grown into a stature of big restaurant chain in a very short period of time. Proper planning, monitoring, ensuring availability of adequate resources, timely corrective measures and quality food & services have contributed greatly to its rise in already very competitive market.
The Pizza Hut brand is widely known all over the world and has its outlets in many countries. The market standing of Pizza Hut is very high. Whenever a person thinks of eating pizza, Pizza Hut is the first name that comes into one's mind.
The greatest strength of Pizza Hut comes from inside. The highly skilled labor is professionally trained with emphasis on quality services. Detailed job descriptions of the staff, career growth ladder, top down goals attainment policy of the management and governance are a few of the contributing factors in the success story of Pizza Hut.
Needless to mention the main focus has always been customer satisfaction. The management always strives to do whatever is possible so that when the customers go out they not only are satisfied with the food, environment, services etc but they become Pizza Hut's ambassadors and recommend others to their products.
In-house training sessions are organized for the staff members. They are kept informed about different achievements through news bulletin. High performers are rewarded every month and their names and designations are considered for special increments and promotions. There are many ways of rewarding front of house (FOH) staff members like giving them cash rewards, free meals or deploying them on hot tables where customers prefer to sit more likely.
Pizza Hut has played its due role with respect to CSR. Ensuring pollution free environment, contributing to the communities and societies in the projects of education, health and taking part in alleviating poverty in the areas, where they operate, are some of the achievements, Pizza Hut is proud of.
Being an international brand they also have strong financial resources as the materials used by Pizza Hut in making pizza are not local, as used by other pizza making companies. As Pizza Hut is a multinational company and the materials that it uses comes from outside Pakistan and is fresh and healthy for its customers.
Pizza Hut also offers free home delivery together with online delivery for its customers who wish to consume pizzas at their own place. Due to this the people who don't want to go out for dine-in can have pizzas from Pizza Hut, rather than opting for some other restaurant, within 30 minutes free of the costs of home delivery.
Although Pizza Hut is famous for pizzas, however, it also offers desserts, beverages, salads, pastas etc. for its customers. Other than that it has a variety of flavors in pizzas as well. Some flavors that it puts forward are seasonal like Double Masti, whereas some continue throughout the year.
No company can be perfect or remain perfect vis-à-vis its goals and objectives. As the goals evolve so do the companies as the time passes by. Pizza Hut has also experienced slums in its business due to following weaker policies. In Pakistan, where local restaurants have also entered into the pizza selling business with much cheaper prices and with more varieties, Pizza Hut has stuck to its prices robustly and offers very limited promotional deals to its customers. As a result, in many areas after making huge losses, it had to close its outlets only to move to more posh areas.
Although, there are varieties of other items available for sale in Pizza Hut restaurants, however, the hot selling item is pizzas and salads. Despite best efforts and reward policy to its staff, the management has not been able to increase the sales of pastas, desserts and beverages.
External Environmental Scanning
Unlike local restaurant businesses, due to its global presence, Pizza Hut has always got edge over other local and international restaurants chains. It has got thousands of restaurants around the world, serving millions of customers every day with same variety of food. This hallmark of Pizza Hut, no matter which locality, city or country it is located, the quality of food and the ambience of the restaurant is always fascinating and captivating. The aroma which comes out of the serving food has no match with other pizza selling restaurants. This uniqueness of Pizza Hut has always found it most demanding restaurant when it comes to eating pizzas.
Like all businesses, Pizza Hut is threatened with the arrival of other competitors. The competitors not only offer products cheaper in prices but the quality of the products has also been up to the mark. Another area which poses challenges to Pizza Hut is law & order situation of the city particularly and the country generally. The sectarian violence has affected the revenue of Pizza Hut greatly and its restaurants, which are located in middle class localities and are the worst sufferers.
Pizza Hut also focuses on PEST (Political, Economic, Social, and Technological) to check the demographics based on which they can decide which product should be given more emphasis and which deal should be discontinued.
PEST (POLITICAL, ECONOMICAL, SOCIAL, TECHNOLOGICAL)
The worsening law & order situation in the city particularly and the country generally has greatly affected all businesses and Pizza Hut is no exception. Sectarian clashes, bomb blasts and strikes have all played their role in declining revenue for Pizza Hut. Many restaurants of Pizza Hut, which are in sensitive localities have registered poor financial results mainly due to less number of customers visiting them, late night deals are rendered of no use and even due to lack of transport, the staff members cannot reach their restaurants. Due to poor law & order situation, the customers prefer to have home delivery, however, the city situation again becomes hindrance and delivery staff find it difficult to reach the customers' homes.
If a country is developed than its economy will be good and the per capita income of the people will be high. As a result people will spend more money on food items and other products. In our study we came to know that since the products of Pizza Hut are comparatively expensive, people of average income occasionally visit their restaurants. Further, due to ever growing popularity of pizza among the Pakistani people, more international and local chains of restaurants have opened these services like Pizza Point, Pizza Next, Pizza One, Largesse etc. and are available on very cheaper prices. Although quality of the ingredients used by other competitors is debatable however because of low prices, they have given tough competition to Pizza Hut. The management of Pizza Hut is aware of this and has taken measures to counter them by offering deals and midnight packages. They also sell pizza coupons offering economical deals with "buy one get one free" options.
The management of Pizza Hut is also mindful of social environment of our country. Every person has his own value, religion, belief which is always dear to him. While offering services to its valued customers, Pizza Hut has always taken note of it and has desisted from offering such services which may offend or hurt the feelings of their customers whether they be religious, cultural or any other. Demography of the population in which the restaurants operate is also very important, like in Pakistan, chicken tikka flavor is very popular since people like to dine out for barbeque and if that flavor is available in pizza or burgers, people love to give them a try. Pizza Hut has managed itself very well in this respect and has assimilated itself quickly in the Pakistani culture. Before opening a restaurant, a thorough survey is undertaken to identify the demography of the population living in the area, income bracket in which it falls, eating habits and how frequently they go out for dining and which dishes they usually prefer for dine-outs. Based on the results and final conclusion, a decision is taken for opening of restaurant or otherwise.
Like the effectiveness of technology in other areas, it has a great impact on the Pizza Hut running. It has state of the art equipment like baking ovens, IT devices etc. It is ensured that an order placed at any restaurant does not take more than 20 minutes to be served for dine-in and 30 minutes for home delivery. In some selected areas, an online service for ordering pizza has also started and yielding good results for the management.
Business Portfolio Analysis
Star (Pizza & Salad)
Question Mark (Drinks)
Cash Cow (Sides & Desserts)
High Relative Market Share Low
Star is the position where the market growth and the market share of a product are high. In case of Pizza Hut, pizza and salad are at this position. They both have a good market standing and their demand has highly increased within no time. Pizza Hut offers pizzas of different flavors preferred by a lot of people, whereas salads are also popular among people and are consumed in the time when they are waiting for their main courses to be served.
Cash Cow is the ideal position where the market share of a product is high but its market growth is low. Sides and desserts of Pizza Hut have a high share but are not preferred by a lot of people. They are not popular among masses, however, as they have a good market share; growth is possible by making a few changes and modifying the products according to the needs of the customers
Question Mark is the position where the market growth of a product is high but its market share is low. Beverages offered in Pizza Hut most appropriately fit in this position as they are preferred by people when offered to them as part of a deal but otherwise they are not the ideal choice of the customers who come to Pizza Hut. The sales of these items can be increased by increasing their market share.
Dog is the position where both the market share and market growth of a product are low. Pastas offered by Pizza Hut very much fit into this position as Pizza Hut does not offer large variety of pastas, nor does it invest large capital to improve its product. In order to make the sales of pastas high, Pizza Hut should divert some of its revenue generated from pizzas and salads towards pastas and present larger varieties of it, thereby increasing its market share which will result in its growth as well.
INCREASING THE SALES OF A PRODUCT
Pizza Hut encourages its workers to increase the sales of those products which are not doing good business by giving them duty at the hot tables as a reward. These are the tables where the customers are most likely to sit. It even gives cash reward to the staff who works hard in increasing the sales of such product. The staff members are given salary bonuses as well for accomplishing this task.
Every product goes through at least five phases of its evolution. First phase is called introduction phase, where the product is produced and marketed for consumption. This introduction phase is always important. If the product gets approval of the consumers, it goes through second phase of growth. Which means since the demand is increasing the supply will increase which will result in growth of the product. In third phase the very same product reaches at maturity level. Every producer wants to see his product reaching this level, as at this level the profit maximization is very high and product becomes a star for the manufacturer. After this level the product goes through saturation phase. At this stage most of the consumers would have used this product and hence it reaches at a saturation level. It also implies that further demand for the product is not possible due to various reasons. No manufacturer or producer will want its product to reach at this phase. In order to defend the product reaching this stage, they bring in innovations in the product and if this is not possible then they introduce another product, which again start the cycle as mentioned above. After saturation phase, the product's decline starts and it is considered as dogs according to business portfolio analysis.
Introduction Growth Maturity Saturation Decline
One of recently introduced products P'Zone can be put at introduction stage. The demand for the product at this time is very low, however, the management of Pizza Hut is very optimistic about the product gaining popularity in the coming days.
Recently, Pizza Hut management has also focused on increasing the sale of its sides & desserts. They have also made it part of their promotional deals like garlic bread is now available with many deals. They are expecting that this will increase the sales of sides and desserts in a big way and thus their profitability margin.
Pizzas of different varieties and salads are their most selling items and can easily be plotted at maturity phase. The management of Pizza Hut is continuously striving to keep this product at this stage for all the time, because this is the most revenue generating item and if this fails, the company will fail itself.
Drinks can be plotted at saturation stage, since a very few customers buy drinks. Drinks are part of many deals and one does not feel need to buy extra drinks while dinning in.
Sale of pasta can be described as reaching decline stage. Rarely a customer comes who demands for pasta. Although many efforts at Pizza Hut are made to increase the sale of pasta, however, it seems that this product has reached its decline stage and may not stage a comeback. The management will need to introduce another product similar to pasta to attract customers.
Followed by planning, the organizing is the second most important function of management system. It is a function in which the combinations of human, physical and financial resources all bring to gather the desired results. They all are equally important and absence of anyone can put adverse effects on the results. According to Chester Bernand, "Organizing is a function by which the concern is able to define the role of positions, the jobs related and the co-ordination between authority and responsibility".
Organizing function is performed by following steps:
Identification of activities
Departmentally organizing the activities
Classifying the authority
Coordinating authority and responsibility relationships
Organizing plays an important and central role in management system. In organizing process, it is the manager who uses his skills to utilize the organizational resources efficiently.
Primary mechanism managers use to activate plans
Maintains relationship between all organizational resources.
Division of work
Growth and diversification
Sense of security
Establish formal lines of authority
The things are executed by different managers. All these managers ensure that whatever work is being done in the company is to achieve the company's objectives.
Organizing at Pizza Hut
As Pizza Hut is a multi-national company, it has to focus more on organizing. At Pizza Hut, management organizes all its resources in order to implement the course of action it determines in the planning process. Through the process of getting organized, the management determines the internal organizational structure; establishes and maintains relationships and allocates necessary resources.
Pizza Hut has built an integrated executive-level structure and process to assess, guide and oversee Pizza Hut's worldwide activities. The company is engaged in a number of internal and external stakeholders along the way and will continue to engage additional stakeholders as the company moves forward in the journey.
Pizza Hut will continue to refine their structure as needed, as well as the ways in which Pizza Hut measures progress against the objectives, to enhance their capabilities and effectiveness.
According to the Organization Chart of the company, there is Restaurant Support Centre under which comes departments like HR, Marketing, Finance and Property and Field Operations, which runs the restaurants.
Role of Human Resource
The Human Resource department deals with the management within the organization. There are number of responsibilities that the HR department has to deal with. At first, the HR department of Pizza Hut is responsible for hiring members of staff which will involve attracting more employees, assigning them their positions and ensuring that the employees will perform the task. HR department of Pizza Hut is also responsible for organizing the people in entire company and also sets the day to day goals for the organization.
Role of Marketing Department
The role of Marketing Department of Pizza Hut involves a range of processes that is concerned with finding out what consumers want and providing them the product according to their want. This involves the 4 key elements which are:
Product: They find out that which product is more preferred by the consumers. In Pizza Hut, pizza is usually the product that is sold in ample amount in which mainly chicken tikka and cheese lover is the flavor that makes the highest sales as cheese is usually preferred by children whereas barbeque is the specialty of Pakistan, and so it is constantly being improved in terms of flavor and quality. The products that are making fewer sales are also being improved as well, according to the consumer's demand.
Price: If a person finds the prices of Pizza Hut higher than what they can afford, Pizza Hut offers deals for affordability. Although the prices are higher than other local pizza, however, the quality of the pizzas of Pizza Hut is a way more well as compared to other local pizza making restaurants. Pizza Hut offers certain deals on pizzas and other stuff that the customers finds attractive.
Place: for letting large number of customers visit the restaurants, they have to be located in areas where the customers find it suitable to go. As the law and order of Pakistan is getting worst day by day the areas where Pizza Hut is located are very ideal as they are situated in areas which are in the center of the city and where people frequently go for dine-out like food streets etc. They are not located in isolated areas or posh areas where only a particular group of people can go, and so they are built in areas where people find it convenient to visit. Moreover Pizza Hut tries to site its restaurants in areas where they do not have tough competitors nearby.
Promotion: Pizza Hut in order to increase its sales, promotes its products with the help of media. It has its page on face book, has its own official website where it offers online services to its customers. Creative advertisements are shown on the television attracting people to come to Pizza Hut and neon signs can also be seen on streets showing the deals that Pizza Hut offers.
According to the elements, resources are organized and plans are being put into action as mentioned above. Marketing department of Pizza Hut focuses on their product as to how their product shall meet the customers demand and even in tough competition, in what way, their sales should increase.
Role of Finance Department:
The finance department of Pizza Hut is one of the most important departments as it helps to provide financing as well as accounting information to make various decisions. Some of the roles of finance department are mentioned below:
Book keeping: The sales that Pizza Hut makes are recorded by this department. They record the products that are being sold each day, which prove to be beneficial to study the demographics and make changes in the products accordingly. Furthermore if a person complains about a product and demands another one free of cost in its replacement, all the details of the person are recorded and sent to this department after giving him what he demands for.
Profit and loss statements: It also keeps an account of the profit or loss of the company.
Update managers: MIS for the concerned managers is also provided by the finance department, enabling these managers to take appropriate measures if plans have got off tracked or likely to be missed some targets and goals.
Pizza Hut is among the leading companies that provides job positions with career advancing opportunities. Pizza Hut offers multiple job postings for interested individuals who wish to join the company.
Pizza Hut job positions and duties of an outlet are often listed for
Restaurant General Manager
Restaurant General Manager
Manager for Training
Front of House Staff/Kitchen Staff
Pizza Hut not only provides its employees with job descriptions and opportunities but also provides them with a career path, showing them where they can be in the future if they work in a way that is beneficial to the company.
Delegation Process at Pizza Hut
Delegation process at Pizza Hut comprises of 3 steps, which are listed below.
The first step that Pizza Hut HR managers focus is on assigning specific duties to the individuals. The duties are assigned according to the posts that an employee is designated and while assigning duties division of labor is always given consideration.
In second step, the HR managers grant appropriate authority to the sub-ordinates or in other words, few power of command is given to them. The subordinates are allowed to do only what the HR manager allows them to do.
In last step, HR managers create obligations for the sub-ordinates to perform and complete the assigned task. The assigned task is also allocated a time span in which it has to be completed. The one who performs well is rewarded at the end of the task.
Pizza Hut has strong local teams around the world with established supply chains and more than 1,000 international franchises. The franchise and joint-venture partners of Pizza Hut are now driving growth by opening a vast majority of new restaurants.
Pizza Hut's international business is one of the key factors that make them truly unique in the restaurant industry. New markets specifically in emerging economies such as Russia, Vietnam, Africa are being explored. The company continues to capitalize on explosive emerging market growth on a level that is unmatched by competitors. The company expects its category-leading position in emerging markets to fuel continued strong growth and this has been well supported by the decentralization policies.
Influencing is a process that guides activities of organizational members in the appropriate direction, which helps to reach the organizational objectives. Influencing includes leading, motivating, considering groups and communicating.
When an organization wants to execute a new strategy or if it wants to be effective and efficient, it needs to align employees' attitude in correspondence with the objectives. A motivated workforce is a pre-requisite to attain success. If the workforce is motivated, it will put in appropriate efforts due to which organization can fulfill its objectives.
Although, slumps can be in many industries but food industry is probably the only industry which has seen growth in recession period too and is still flourishing. This is all because of the dedication and sincerity of the staff, which is encouraged and kept motivated.
WAGES AND INCENTIVES
Employees at Pizza hut are given fair and market-compatible salaries. Employees are motivated by rewards. When they show good performance they are given cash rewards, free meals and are deployed on hot tables, where customers prefer to sit. To increase staff's productivity, the workload is proportional to the incentives provided. At pizza Hut, the top management believes that incentives are a great source of encouragement for the employees. When employees are given bonuses and extra benefits, they feel valued and hence work more effectively.
Staff members are sent abroad for further training. They are also paid for their higher education if it is relevant and can add value to the organization. In-house training sessions are also organized for the staff members to develop their skills. The staff also sees their career path and growth within the organization and they also put all their energies in making organization possible to achieve its targets because goals achieved by the organization will eventually result in the individual growth of the staff as well.
Every week, meetings are organized where employees are given sales targets for the next week and are apprised of the accomplishments made in the preceding week. The website is also regularly updated whereby not only employees but customers can also know our successes. The staff follows on face book and twitter and hence is part of the system. End of the month meetings are arranged and employees are informed about the successes and accomplishments.
Good performing staff members are recognized by announcing employee of the week. Their photographs are sent to the area and regional offices. They are given added points in their annual performance along with appraisal for their past year performance. Furthermore, the management strives to build an environment which promotes co-operation and collaboration among employees. Management creates a culture that embraces employees' traits and emphasizes rewards because it improves the relation between management and staff.
Pizza Hut has business coaches who provide business insight and give instructions to the employees. The coach tells about business initiatives, he organizes training activities and is the point of contact.
LEADERS AT PIZZA HUT
At Pizza Hut, outlet managers act as leaders. Outlet managers are highly motivated and their job is to direct and influence their sub-ordinates. Sub-ordinates report to him directly and he is responsible for solving employees' issues. He gives instructions to employees about what to do and how to do it; he also develops good relations with his co-workers and wins their trust to create a productive environment which ensures fulfillment of organizational objectives.
The area manager of Pizza Hut supervises all the outlets in the city. He keeps an eye on the performances of all outlets. He ensures accomplishment of projects and sees whether plans and decisions are properly executed or not. When an outlet performs well and generates high profits, the employees are rewarded by the area manager.
Regional managers of Pizza Hut are responsible for all the outlets in a particular region. They facilitate communication within the region. It is their responsibility to execute a strategy throughout the area. For example, when a particular deal is launched, the regional manager makes sure that it is implemented in all the outlets of the region without amendments.
Board of Directors
It is a body of members which oversees the activities of the organization. The members make the broad objectives and policies for the organization, review performances of outlet managers, area managers and regional managers. They ensure the availability of financial resources and approve annual budgets
Chief Executive Officer
The chief executive officer of Pizza Hut leads the development of the organization. He oversees the implementation of long term and short term plans in organization. He also acts as a liaison between the board of directors and management and he frequently communicates with the board of directors, managements and stake holders to make sure that organization activities are on the correct path.
Flextime is a work schedule which allows the employee to select the working hours according to his convenience. With this new concept, employees now are not bound to work at typical 9 to 5 timings. When employees work at their own selected timings, they put in more efforts so the productivity increases. At Pizza hut, employees can choose their shift i.e. they can decide whether they want to work in afternoon shift or evening shift. Since restaurants cannot afford to be understaffed, there must be certain number of employees in both the shifts.
GROUPS AND TEAMS
At pizza hut, they have both formal and informal groups. Formal groups include groups of waiters whose common goal is to serve the customers or the group of chefs. Task groups are also formed for some special project. Committees are formed to gather suggestions when a problem arises or when ideas are needed for the improvement of organization. Teams and informal groups also exist.
VROOM'S EXPECTANCY THEORY
When the employees are certain that their efforts will cause attainment of desired performance goals and that in turn would provide them rewards, they are motivated and put in their 100% efforts. Different people want different rewards. At pizza hut, the management is aware of the fact that people's individuals goal vary, therefore, they make sure that the rewards fulfill their expectations. To a lower level employee, cash rewards are given whereas; to an upper level employee rewards such as recognition are given to keep them motivated.
Employees perceive fairness when the ratio of their input and output is equal to his co-workers. When employees are treated fairly, they are motivated, but when they perceive inequity they either change their work input, try to change the compensation, try to change their own perspective or leave the situation. To avoid this, management at pizza hut makes sure that employees are treated fairly. Employees at the same level are given equitable wages and are treated equally. Management also makes sure that the wages are fair enough and market compatible so that employees are satisfied, because the more satisfies they are, the more efforts they put in.
Through the controlling function the company ensures that the activities that are being undertaken within an organization are going according to the pre-conceived plans. Therefore, it is the duty of the managers to have an understanding and a working knowledge of the fundamentals of the controlling function.
In Pakistan, Pizza Hut faces quite a few challenges to maintain their standards and their position as an international franchise.
Challenges of the company in recent times
The law and order of the city along with other issues in recent times has become a huge hurdle in the achievement of the goal that has been set by the management system of Pizza Hut. Due to target killings and sectarian violence, a small number of people come out their homes for dine-in.
Pizza Hut is not the only restaurant that serves pizza in Pakistan. There are other brands in the same sector which are much cheaper than Pizza Hut and are giving it a tough competition. In a high inflationary market of Pakistan, people tend to forego quality when it is the matter of money.
Other than the above problems, the common problem that the company now faces is the number of local brands that have opened their restaurants near the homes of the potential customers. These restaurants have formed a sort of food streets and when a customer comes to these food streets with a mind of eating pizza would change it after looking at a number of other mouth watering local dishes and may opt for a burger or a chicken tikka instead.
Responsibility in case of defective products
In case of a faulty product the following steps are taken by the Pizza Hut management:
If the customer complaint is minor, the matter is resolved by the on service staff. The on service staff is trained in such a way that they are to believe that the customer complaint is true. In this way the staff always finds a solution to the problem.
If complaint is major and the customer insists for non-payment of the bill, the issue is reported to the outlet manager. The outlet manager notes down the details of the customer in order to avoid inconvenience.
If required, the customer details are taken for verification and the manager takes appropriate action accordingly, thus ensuring the right of the customer and safeguarding the interest of the company.
The management is trained to accept the negative and positive feedbacks of the customers as without customer satisfaction it is hard for a company to grow.
Overcoming failed plans
If the plans fail due to any reasons, the Restaurant Manager and Supervisor take remedial measures to put the system back on the track. If they fail to rectify the situation then the same is reported to the area office for further necessary actions.
The products that are challenging for Pizza Hut to generate required sales are pastas, beverages and desserts and they try to overcome this challenge by rewarding the staff who put in extra efforts into selling these products by paying them with extra cash and bonuses.
CORPORATE SOCIAL RESPONSIBILITY
At Pizza Hut, they take great care of the social responsibilities. The company is playing its due role in education, environment, health and other social sectors.
Yum! Brands, the proud owner of Pizza Hut has very recently raised nearly $ 20.0 million during the World Hunger Relief campaign. They also provided eight million meals to the hungry people of the world.
Yum! Brands has also established a foundation, through which many philanthropic works are undertaken, ensuring that their contribution to educational, health and other social areas reap fruits and improvements are witnessed in these sectors.
Yum! Brands has also contributed to help halt the spread of HIV/AIDS in the developing world. It has supported the efforts for poverty alleviation and has given huge donation for the same.
The managers of Pizza Hut have also directed their efforts towards environment. An upmost care is taken to preserve the environment by using those stuffs which do not produce green gases and which do not cause damages to the ozone layer.
Apart from environment sustainability, other area where Yum! Brands has worked is health sector. Being in food business, it puts extra responsibility on them to ensure that maximum number of people have got access to hygienic and quality food.
Giving back to the community, where Pizza Hut operates, is one of the most followed policy of all franchisees of Yum! Brands. They ensure that economic activities are generated and more job opportunities are created in the areas of their businesses.
In Pakistan, the Pizza Hut restaurants have supported the noble cause of philanthropy and have allowed many institutions like SIUT, Edhi Centre to keep their charity boxes in the outlets. These restaurants also collected a substantial donation for flood affected people of Sindh.
In order to increase the sales of products that do not attract customers here, the products should be given a traditional flavor, in accordance to the culture of the area/country. For example, if the sales of beverages and desserts such as pinacolada or coffee are low they should try to introduce some traditional beverages/desserts such as lassi, falooda, halwa, zarda etc. Because some of the drinks that Pizza Hut offers are new to its customers as well as costly, the customers hesitate in buying such beverages in fear of wasting their money. Therefore, if these traditional beverages are offered, the sales of Pizza Hut are sure to increase.
Sometimes due to heavy rush, the space that Pizza Hut outlets occupy becomes short. As a result the customers need to wait sometimes for long time till they get enough space in the dining area. Although, for this purpose Pizza Hut has made a waiting area where the customers can make themselves comfortable, however, they should also offer them drinks keeping in mind the loyalty of the customers towards Pizza Hut that they are still waiting there rather than going to some other restaurant after seeing the occupied space.
There are many international and local chains of restaurants in the country and doing great business with the support of the customers loyalty. However, Pizza Hut is different in the manner that it not only provides the customers value for their money, but the courteous and friendly attitude of the staff, which is reflected the moment one enters the restaurant is worth applauding. The professionalism in the provision of the services and a splendid treatment given to the customers at every outlet is unparalleled.
The management of Pizza Hut is all out to ensure that every restaurant is a secure place for its occupants and once customers are in the restaurant, they are assured that no racial or other discriminations are meted out to them.
In our opinion, Pizza Hut restaurants in Pakistan are well managed and properly supervised chain of restaurants in the country.