KFC Crisis Management: Navigating Challenges

1. b) Analyse and evaluate principles and strategies of risk and crisis management within the context of the Hospitality and Tourism industries

1. c) Recommend and justify risk and crisis management techniques considering legal, financial, ethical, environmental and sociocultural impacts

1. e) Devise appropriate risk and crisis management strategies throughout the entire planning process

Flood. Cyber-attack. Supply chain failure. Loss of key staff. Natural disaster. These are all crises a modern business may face, which is why business continuity planning  is so important. A major feature of business continuity planning is risk identification and management. Business continuity, and more specifically risk and crisis management is about having a plan to deal with difficult situations confidently when they arise causing the least amount of disruption to day to day operations and with minimal long-term impact to the business.

In Assessment 1 you were asked to perform an Environmental Scan and Risk Identification Report for one of the five (5) businesses below. In Assessment 2 you will use your Risk Identification table to formulate a Risk and Crisis Management Proposal/Plan.

Thredbo Ski Resorts

Coogee Bay Hotel

Sari Club Bali

Costa Concordia Cruise ShipRCM301_Assess 2_Risk and Crisis Management Proposal Page 2 of 6

KFC

Your Risk and Crisis Management Proposal/Plan should:

Include your table from Assessment 1 making any changes necessary after seeing feedback

Identify three (3) risks, from a mixture of categories and types

For each risk:

1. Describe risk type and the level of risk to the business
2. Suggested strategies/methods of control to treat each risk
3. Timeframes for each strategy
4. The stakeholder responsible for specific parts of the plan
5. Resources required such as money, staff and external help in mitigating the risk
6. Future action such as regular checking and updating of risks, if needed
7. The plan of action should the risk activity eventuate despite prior planning
8. Conduct a brief business impact assessment if the risk occurs

Risk Identification for KFC

KFC is considered to be considered as one of world-famous chain of fast food restaurant. In the year 1952, it was founded by Colonel Harland Sanders (Richards & Aldgate, 2018). KFC stands for Kentucky Fried Chicken. The head quarter of this organization is located in Kentucky United States. This particular store aims to sell salad, chicken pieces and wraps but their food is considered to be fried chicken.

In the coming pages of the report, an idea has been provided regarding the various type of risk in KFC has been discussed in details. After that the risk type and its level has been discussed in details.

Risk category	Risk type (Human, physical, environmental, financial etc.)	Stakeholders affected	Likelihood rating (A,B,C,D,E)	Consequences rating (1,2,3,4,5)	Risk control methods (elimination, substitution, engineering, administration, process/ equipment)
External	economical	Internal stakeholders	A- high	4-higher	administration
External	political	Internal and external stakeholders	C-medium	3-medium	administration
External	natural	Internal and external stakeholders	E-low	5- catastrophic	engineering

The three biggest risk which can be encountered in KFC are Supply chain failure, Loss of key Staff and lastly cyber-attack.

Type of Risk and Impact on Business  

Type of Risk	Likelihood	Impact on Business
Failure of Supply Chain	High	Unreliable inputs: Effective supply chain mainly ensure the fact that the raw materials arrive on time (Smith, 2016). A poorly managed supply chain can easily bring halt to production. Without any kind of proper delivery inputs, the assembly line of the organization can easily dormant. In this scenario, the employee does not any kind of work for performing which can easily leave the organization to satisfy the time-sensitive orders.

A large number of method can be used for tackling supply chain failure like stockpile Inventory, diversify of supply base, develop of back failure and management of product demand.

Stockpile Inventory: The main goal of inventory is all about proper management of any kind of disruption which is considered to be simple one (Hussain, 2014). The main factor of inventory level is of various critical components. It comes up with various kind of finished products.

Diversification of supply base: Dividing the sourcing activities between the given supplier which serves in protecting the business of KFC (Farrell, 2015). It can work by proper ramping from various source due to unaffected supplier.

Back of Supplier: Backing up of supplier is considered to be a well-known strategy for protecting supply chain.

Managing the demand of product: Two main strategy can be used for managing product demand that are switching and rationing (Liu et al., 2016). By using switching strategy, an organization like KFC can easily take certain number of step for encouraging customers. By using rationing strategy, an organization like KFC make use of certain number of step for distributing limited supply.

Strengthening supply chain: All the above stated strategies are good for understanding the disrupt.  But there can be some other step can be easily taken for improving the supply chain.

 The time of the strategy would be around 3 to 6 months (Shoyemi, 2014). As the strategy comprises of five steps that are stockpile inventory, strengthening supply chain, managing demand of product, diversification of supply base so that huge time is needed.

There are two stakeholders which are associated with supply management team like operation and sustainability

Supply Chain Failure

Operation team: This particular team is responsible for understanding the decision process on the given services and technologies (Harris, Ali & Ryu, 2018). It can easily track, store and remove any kind of products which is needed for facility.

Sustainability: Sustainability is considered to be best kind of internal champions and cheerleaders for the program. It can easily benefit the various stakeholders like reduction of cost and enhancing employee engagement.

A large number of resources are required for overcoming the various risk in supply chain management like

Insurance of Purchase Cargo: A certain amount of money will be invested in insurance which is taken to be an important factor for various stages of the growing organization like KFC.

Partners for risk planning: Team members should work with various suppliers, carrier transport, center for data management and customers. It mainly helps in ensuring recovery at the time of disaster.

Review of risk: The identified risk of supply chain in KFC should be identified on regular basis. All the changes in the supply chain should be identified on regular basis (Cole, 2015). Preparation can be taken to be as one of the best method for understanding any kind of disruption in supply chain.

If the discussed methods do not work, then KFC can easily choose some other methods of mitigating risk with supply chain like

Priority to probability and impact: All the scenario of risk cannot be covered so the potential risk should be prioritizing by analyzing the likelihood of risk (Rejeki, 2015). A proper plan should be developed for understanding the contingency starting with high-impact of risk scenario.

Ensuring the quality of supplier: Supplier can easily effect the reputation of any organization. For ensuring the quality of suppliers, the mode or way of treating employees should be good.

If there is failure of supply chain management in KFC, then it can easily effect its business.

Uneven distribution of cost: Lowering of distribution cost is considered to be as one of the major functions of supply chain management (Gruner et al., 2018). Without a cost efficient chain, various organization like KFC can failure to reduce the overall cost.

Unreliable inputs: Proper and effective supply chain is considered to be effective that ensures that the raw materials at proper time for production. While a poorly managed supply chain management can easily lead to halt in production.

Type of Risk and Impact on Business  

Type of Risk	Likelihood	Impact
Loss of key staff	High	Loss of key staff with KFC can easily result in devastating effect on both morale and productivity (Zhang et al., 2015). The potential loss can easily hit the overall economy of the organization.

Loss of Key Staff

The loss of important employees with organization can easily bring huge amount of loss to KFC. A large number of steps can be taken for overcoming the problem like:  

Planning of elements: Contingency plan can easily have huge amount of impact on the business (Omer, 2018). The first or beginning step is all about setting up of goal so that it the current employee can be easily be replaced.

Transferring of Risk: Key personal insurance can easily transfer the risk with your staffer. This is particular kind of policy can be easily used for death or disability of the key employees in KFC.

Around 4 to 6 months is needed for implementing the given strategy that is planning and transfer of risk. The strategy cannot be implemented at once; they cannot be implement at once.

There are mainly four key stakeholders in an organization like employees, shareholders, customers and lastly owners.

Shareholders: Shareholders are considered to most attentive for any organization like stakeholders (WANG & LUO, 2016). Shareholders are considered to be group of investors which can affect the ownership of the organization like KFC.

Employees: Changing viewpoint of employees is taken to be responsibility of corporate for social responsibility. As per CSR, employees of KFC are considered to be one of the major asset.

A large number of steps can be taken for reducing the risk of employee loss within the organization like

Job analysis audit with the job interview: A job analysis audit behavior should be there for understanding the job simulation and behavior assessment. It is considered to be helpful for understanding the job preview for both candidate and managers.

Giving a proper employee orientation: The employees hired by KFC at present can be greatest resource for tomorrow (Jana & Das, 2017). If the higher authorities of KFC like manager and other executive take part in new employee retent

Managing employee retention is considered to be an important factor for KFC. It is mainly inclusive of preserving of organization culture along with lowering of personal cost (Välikangas, 2016). Various governing organization has claimed the fact that minimum cost of organization is in recruiting, low production. This problem needs to avoided as it can easily incur huge amount of cost to KFC.

A large number of steps can be easily taken for preventing employee loss like

Feedback: The staff of KFC needs to provide feedback at all the given time on the various phases like development or any kind of issues related to work (Bhadra, 2017). Employ can easily make use of open-door policy which can help various employees for understanding their importance.

Cyber-Attack

Time off: Providing a competitive salary is considered to be a well-known factor for retention of employees. It is considered to be an important factor for understanding the need of the staff members of KFC.

There are large number of effects of employee loss of an organization like KFC.

Customer relation: Productivity tends to suffer when the given employees are responsible for understanding the various function of the organization. The current customer waste focus on teaching the new employees with large number of product or services.

Cost involved in overall turnover: When the best employee of the organization leaves the organization like KFC, they can easily take more talent into the competition.  

Type of Risk and Impact on Business  

Type of Risk	Likelihood	Impact
Cyber Attack	High	A successful cyber attack on KFC can easily have huge amount of damage on the reputation of the organization. It can easily affect the bottom-line along with business standing and customer trust. The impact of security breach on organization can easily be distinguished into legal, reputation and lastly financial.

A large number of steps can be easily taken for preventing cyber attack on KFC like

Secure Software: Depending on the nature of the business, there is requirement of security software. It is mainly inclusive of various antivirus software like SSL certificates, POS tools, endpoint security software.  

Backup of important data: When the various malware like ransomware can easily cripple all the system or network or even delete all the data. It is important to have back up of all-important data.

For the implementation of two strategy, there is need of time around 1-2 months’ time as it requires approval from various department of KFC.

Employees: Employee are considered to be as one of the fundamental parts of the organization like KFC.

Customers: IF the customers of KFC are satisfied then they are satisfied then it can easily result in overall improvement of the organization.

Password management: Efficient password management is needed for maintaining the security of website of KFC. The given password needs to enough strong which needs to be checked on regular basis.

Secure configuration: The corporate policy needs to secured so that a proper and secure baseline can be easily developed for it. All the disability from the system can be easily removed and a proper patch should be there against vulnerabilities.

Employee Training: Proper training should be given to employees who come with various aspect of the society. It also highlights how the security breach takes place is important. It can small mistake which are done by employees of KFC.     

Reputational damage: Trust is considered to be an important factor for customer relation. Cyber-attacks can easily damage the overall reputation of KFC. It can easily lead to loss of customers, loss of sales, reduction of profit.

Stakeholders and Mitigation Strategies

Conclusion 

From the above pages it can be easily stated that this report is all about KFC. The organization has 5200 restaurants in more than 109 countries. They have been selling more than 300 products in these countries. On an average basis they have serving more than 12 million customers. KFC is a part of well-known brand that is Yum which is considered to be largest organization in the domain of system restaurant. The restaurant is located in various regions of the world. A list of strategy has been discussed which can be used for controlling each type of risk in KFC. After that, timeframe and stakeholder responsible for each part of the plan has been discussed in details.

References 

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