Second to One: How Burger King Still Lacks Behind Behemoth McDonalds

Burger King is the second largest fast food restaurant chain in the world behind McDonald's. Bought in 1967 by the Pillsbury Company, Burger King has tried many different advertising schemes to pass McDonalds. Moreover, Burger King went through eight presidents and six chairmen in hopes of catching the industry leader throughout the 70's. By the mid-80's Burger King and Pillsbury were having culture problems. Pillsbury believed in a more conservative work environment well, Burger King elected to use a loose highflying approach to their work place. However this would change when British Grand Metropolitan bought the two. Burger King was forced to become a more conservative and "button-down" like Pillsbury. Work hours became intense, a dress code was strictly enforced and top management remained separate from their subordinates, making it difficult to communicate with them.

This would all change in 1992 however, when Hurricane Andrew destroyed Burger king's main offices. As workers tried to put back the pieces of their lives, Burger King was understanding and became lenient with their employees. They allowed their employees to dress any way they wanted and allowed them flexible hours. Barriers were brought down between top management and their subordinates. The hurricane changed the way business was done dramatically, but work was still being done.

CEO Jim Adamson felt that the attitude of the workers and the environment was better after the hurricane. Therefore, Burger King's new building was decorated in hamburger tones, middle-level workers were given the best views, and there were no doors put on any offices allowing communication to remain open between all employees. "In addition, Adamson developed a six part strategic plan code named Operation Phoenix". The plan is designed to improve menus, operations, facilities, value strategies, marketing and operations. At the same time their goals are to open up more international units and bring back past successful advertisements like "have it your way".

Relative Chapters (3,10, 13, and 15)

Chapter 3 deals with the organization's environment and how the company must adapt and overcome the environmental problems it has faced. The case deals mainly with corporate culture; Burger King changed from a mechanistic to a more organic structure, to allow for a better work environment.

Chapter 10 deals with change and that is exactly what Burger King did after the hurricane. They went through a structural change and a culture/ people change that has created a more related and happier work environment.

Chapter 13 deals with Leadership in the Organization. The CEO Jim Adamson saw the way the workers better responded to the new culture and through his vision and leadership, Burger King had the courage to change its way of approaching the fast food market.

Chapter 15 deals with Communicating in Organizations. Communication was one of the major problems between top management and their subordinates. Lines of communication were reached; this allowed ideas to be discussed openly and freely without feeling inferior to the top executives.

Discussion Questions

What are the advantages and disadvantages of the changes Adamson is making at Burger King?

The advantage of the changes Adamson is making is that lines of communication have become open between top management and their subordinates. In addition, workers feel more relaxed and less pressure than they did before. On the other hand, there are disadvantages to this new style as well. Top management might feel somewhat cheated, they have worked very hard to get to the top, yet middle-level managers have the best views. Moreover, a loose environment is not always the best, there are times when a more button down serious approach is necessary.

Who benefits from the changes at Burger King if they are successful? Who is hurt if the Changes prove not to work or to be detrimental?

If Burger King is successful, all employees will benefit, from Adamson down. In particular, the middle to lower level employees will benefit the most. They receive nice offices and they enjoy a much more relaxed work environment. However, if the change is not successful Adamson along with middle to lower level employees will suffer the most. The dress code will go back into effect, top management will go back to the top offices and communication between the two will become nonexistent.

Do you think that the changes at Burger King will enable it to remain successful? Why or why not? What other changes might you suggest?

I feel the changes made at Burger King will enable them to be successful. I feel that a more open relaxed environment allows for a happier work place. In addition, the happier your employee's are the better they will perform for the company. I also feel that communication between top management and their subordinates is important, ideas can come from where you least expect it and it is important to recognize those ideas no matter what level of management they come from. Moreover, other changes that Burger King might want to try may be giving stock to their employees. I feel this is a good way to bring the employees into the company. Instead of just working for Burger King they would become part owners and they would try that much harder, because no one wants their own business to fail.

Additional Problems

I think the main problem is that the business keeps changing hands, and they cannot seem to keep their top management team intact. Burger King needs to decide what is important to them and they must be willing to keep their top officials happy. If they can manage to do this, they might be able to come up with the proper marketing strategy to catch McDonalds.

Updated Information

Burger King CEO James B. Adamson did change the overall strategy to get the company back to what he called its core competencies. Adamson simplified everything, how hamburgers were not only made and sold, but how they were advertised, as well. He also, pushed Burger Kings basic strengths, like flame broiling, the campaign, ran the company $250 million. In addition, he gave operators a bigger say over which menu items they will push with local ad dollars. Despite all of the changes Burger King remains the No. 2 burger chain in the world. Moreover, they only have 6.1% of the fast-food sales, a far cry from McDonalds 83%. Although, they are a far second, the changes in Burger King have worked. The company has posted a 28% increase in operating profits, to $77 million, for the year ended September 30, 1994. Helping performance was the sale of 211 company-owned stores during the year to franchisees, which garnered $64 million. The continued performance improvement has impressed lenders, who have committed to issuing more than $500 million in loans and credit deals to franchisees for capital investment (Nation's Restaurant News). All this has made Burger King executives happy, but Burger King did experience another setback as James B. Adamson resigned in 1995. Robert C. Lowes former CEO of Grand Met's European food sector replaced him. Lowes is a capable replacement, but this continual change in top management continues to hurt Burger Kings attempts to be the number one hamburger chain in the world.