KFC shakes up management: 90 workers axed under reorganization plan

Nation's Restaurant News, June 26, 1989 by Milford Prewitt

KFC shakes up management

LOUISVILLE, Ky. -- For the second time in as many years, Kentucky Fried Chicken has overhauled its management structure, this time slashing its divisional field-service network in half and eliminating 90 workers in the process.

The reorganization calls for merging two separate field-service activities, both of which provided the same support services to company-owned units and franchisee outlets but which had separate management and staffs.

Don Parkinson, former vice president for the Eastern United States, was elevated to the new post of senior vice president of operations, with each new division vice president and general manager reporting to him. Parkinson reports to Steve Fellingham, president of KFC-USA.

"The net effect of this is that management will be closer to the field offices, which in turn will be closer to the franchisees, who in turn will be closer to the people who are most important in all of this, the customers," said Gregg Reynolds, a KFC spokesman.

Under the reorganization plan, KFC will consolidate nine divisions into five and maintain 12 regional field offices.

The plan creates a Northeast Division headquarters office in Baltimore, a Southern Division in Atlanta, a North Central Division in Chicago, a South Central Division office in Dallas, and a West Division office in Santa Ana, Calif.

Regional offices will be located in the five divisional headquarters cities and Philadelphia; New York; Orlando, Fla.; Charlotte, N.C.; Detroit; Houston; and San Francisco. Kansas City, Detroit, San Francisco, and Charlotte were formerly divisional headquarters cities.

Some franchisees said they supported the downscaling but regretted that some regional managers they worked with over the years were dismissed.

"I see this as a very positive move," said Wayne Jones, president of Marcus Restaurants, Milwaukee, a 34-unit KFC franchisee. "Every large company in America is looking for ways to save administrative and overhead costs. So I don't think this will affect the franchisees.

"But I do hate to see a few of the old-timers retire. They were very good, but fortunately they left a lot of good, young people behind them."

Allan Scott, vice president of finance and general manager of Marshall Scott Enterprises, a 10-unit franchisee in St. Louis, said he wished the company could have saved some of the jobs.

Scott said he had typically dealth with the Kansas City staff, one of the divisional offices now shuttered.

"I don't know what has happened to some of the people over there," Scott said. "It's sad to see people you've known and worked with lose their jobs."

Appointed to the division vice president and general manager positions are Gary McCain in the Northeast; Ray Cabana, South; Dennis Gramm, North Central; Michael DeNoma, South Central; and Chuck Rawley, West.

McCain, Gramm, and Rawley are veteran KFC operations executives, and Cabana joins KFC from Taco Bell, where he had been Southern Division vice president of operations. DeNoma, formerly the Cincinnati area manager, joined KFC in 1988 from Pepsi-Cola International.

The 90 discharged employees represented a broad spectrum of job classifications ranging from clerks to divisional managers, but Reynolds said he did not have enough information to delineate specific job functions. Nor could he say what percent of total field service employees the discharged workers represented.

The changes eliminate a layer of field-service management the company has wanted to do something about since the late 1970s but has been unable to do anything until 18 months ago, Reynolds noted.

In fact, the company's streamlining comes nearly a year after the company discharged 90 headquarters staffers in what was described as a decentralization plan.

Reynolds said the company had been contemplating the reduction of the field-service operations for at least a decade but more pressing objectives -- principally a need to improve food quality and customer service -- made the cutback a lesser priority.