South-Western - Management  
Fat's In the Fire for Burger King
Topic Leadership
Key Words Leadership, employee morale
News Story

From 2000 to 2002, Burger King's profits declined by 21%. Many analysts put the blame on a stale menu and dirty restaurants. The chain had been the number two choice for consumers for 50 years, just behind McDonalds. Unless dramatic changes are made, falling sales will put the company's second place position in jeopardy, opening the door for Wendy's. A new CEO, Gregory Brenneman has taken on the task of turning the ailing fast food giant around. Brenneman presided over a ceremony in September, 2004, wearing a giant Burger King mask and full King regalia, in which 700 corporate employees were given bonuses checks three times greater than what they had received the previous year. Brenneman felt the bonuses would boost the morale of the workers he needs behind him to bring the company back to success.

Besides boosting corporate morale, Brenneman also had his menu crew develop a new breakfast sandwich, the Enormous Omelet Sandwich-which will be introduced next year. He plans to take control of some restaurants by buying them back from franchisees to gain greater power over menu offerings and store presentation. He has also managed to lower costs from $1 million to $600,000 for each new store.

Brenneman proved his abilities to turn an ailing company around at Continental Airlines, where he advised the airline to cut $283 million in maintenance costs and helped the company to turn a profit within his first year's tenure. Brenneman learned from his experience at Continental that open and honest communication is key to promoting teamwork. He keeps in touch with Burger King Franchisees and employees via weekly voice mails.

Questions
1.

Read about leadership traits in your textbook. What leadership traits does Brenneman exhibit?

2.

In your opinion, will Brenneman's leadership techniques be enough to bring Burger King back to prosperity by 2006? Write out some reasons why you think this turnaround will or will not work and be prepared to defend your ideas in a class debate.

Source "Fat's In the Fire for Burger King,"Business Week, Nov. 8, 2004, p69-70.
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