Hooters, Inc.

Hooters, Inc.
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Hooters, Inc.
Hooters, Inc. is a renowned American chain of restaurants that is gaining international presence through rapid expansion. The company is under the leadership of Terry Marks as the chief executive officer since 2011. Indeed, this leader is expected to turnaround the company after it experienced as stint of poor performance, a task that is daunting, considering the stiffness of competition in the restaurant industry and general unfavorable business environment. Indeed, the company has projected a corporate image that is difficult to shed and image that is both its source of advantage and weakness as well.
The ensuing discussion focuses on Hooters, Inc and its leadership in order to identify where its challenges lie and where its hopes lie as well. As such, as SWOT analysis of the company shall be performed and its finding evaluated. Thereafter, an evaluation of the leadership of the company shall be performed and supported by theoretical frameworks. Finally, recommendations regarding how the present leadership of the company can achieve maximum success shall be provided.
A. Description of organization
A1. Hooters and its objectives
Hooters, Inc. (Hooters) is a privately owned chain of restaurants that is headquartered at Atlanta, Georgia in the United States of America. As a brand that is jointly owned by two organizations, namely Hooters of America, Incorporated and Hooters, Incorporated, it has differentiated itself among its competitors by having its waitresses uniquely and distinctively dressed with tight white tank tops and tight orange runner’s shorts. Indeed, the brand image is anchored on the sex appeal of its scantily dressed waitresses, who serve as the main attractant to its restaurants in addition to chicken wings as its signature specialty menu item. In fact, the name ‘hooters’ is an embodiment of this brand image, which was coined from an American slang meaning human breasts while at the same time denoting the ‘hooting’ calls associated with the owl, which is the company’s logo. Incidentally, this brand image has brought about the coining of the term ‘breastaurant’ to mean a restaurant that is distinguished by its scantily dresses female waiting staff.
The company is operating in a segment of the restaurant industry, which although riddled with controversy due to questions of morality and discrimination issues, enjoys better business performance compared to other regular restaurant segments. Nonetheless, the main competitors of Hooter’s, Inc. include Twin Peaks, Brick House and Tilted Kilt. As such, despite having more that 450 outlets that comprise of company owned restaurants and franchises, located in the United States and in other 24 countries, the company has experienced a decline in its business performance, particularly after the financial crisis of 2007-2008 and instability is leadership occasioned by ownership changes that had occurred recently.
Hooters, Inc. aims at creating a providing its clients with a sexually charged and relaxed dining atmosphere by engaging skimpily dresses waitresses and encouraging them to interact with customers freely and sometimes seductively. As such, the target of the restaurant chain is male clientele generally. The rationale behind this ‘breastaurant’ concept is that males and the youth are particularly attracted by an atmosphere that serves their sexual fantasies and evoke school and college memories. As such, Hooters achieves this by keeping its female servicers young, slim, and well endowed at their chests.
A2. Leadership practices
The current chief executive officer of Hooters, Inc. is Terry Marks, who joined the business organization in October of 2011. He came in when the company was struggling to regain its leadership position in the industry, with sales declining after they had peaked in 2007, when they stood at nearly 1 billion dollars. Indeed, he had realized immediately, that the company’s menu had not changed at a pace similar to that if its customers. In addition, he had found out that the restaurants were dated, the menu was stale and overpriced, and women avoided the premises. As such, Marks engaged immediately in a premise remodeling and menu expansion initiative.
Since then, Marks has employed a collaborative approach to his leadership practices whereby he listens to the customers and discusses these issues with his senior management staff and regular employees alike. By understanding that the image that is projected by the ‘Hooters Girl’ is what brings repeat customers and enhances customer loyalty, and that the core focus of the company has always been food, atmosphere and survive, Marks focused on enhancing the capabilities in the human resource at the company through training initiatives. He also helped hire a new top management team that was conversant with the fast transforming restaurant industry.
In addition, Marks’ leadership practices are hands on rather that acting as a corporate babysitter. He employs transformational leadership when he inspires his staff to be loyal to the brand while performing their duties ethically and remaining motivated despite the work stresses encountered (Gill, Flaschner & Shachar, 2006).
A3. Effect of current leadership on organizational culture
Organization culture is ‘the way organizations do things’. In other words, it is a system of shared beliefs, values and assumptions underpin how people in a given organization behave (Schein, 2006). The current leadership has endeavored to sustain the organizational culture at hooters because they realize that this culture is responsible for the organization’s successes in the past. Indeed, the culture at hooters is characterized by hard work and pleasant personality of its employees. As such, the current leadership endeavors to recruit highly motivated staff, consisting young, and hardworking people who would like to be associated with the brand. As such, the leadership ensures that the organizational culture of the organization is maintained.
B. SWOT analysis
Beneficial Detrimental
Internal factors Strengths
• Robust and iconic brand with international recognition
• Wide product portfolio
• Longstanding history
• Wide reaching presence within the United States and internationally
• Significant involvement on corporate social responsibility activities
• Employment of technology in its ordering system
• Reduced labor costs
• Robust financial position
• Mixed restaurant and pub business model allowing for longer operating hours Weaknesses
• Frequently engages in lawsuits regarding violation of employment laws
• Negative publicity emanating from scantily dresses female servers
• Occasions of stale food
• Menus with limited and standardized items
• Most foods are of high calorific value
• How employees should relate to customers not well defined
External factors Opportunities
• Diversification into merchandizing
• Entry into more market locations, particularly in emerging international markets
• Localization of menu items
• Close association with tourism Threats
• High and increasing competition
• Business concept subject to changes of or restrictions by legal frameworks of some foreign countries, thus limiting international expansion
• Customer preferences, particularly those base on sex appeal and objectification of women could change
• Rising cost of raw materials

B1. Strengths
One of Hooters, Inc. prominent strengths is its robust brand that enjoys both local and international recognition. Starting from the logo, to its corporate orange and white colors and to the dressing of its female servers, Hooter’s, Inc enjoys enormous brand awareness among customers. Therefore, customers of hooters associate the brand with relaxation, fun, and beautiful and sexy servers. This is particularly appealing to men and young people, who, in term, make the majority of the clientele that frequents Hooters. By having a brand that communicates the target market succinctly to the market, marketing efforts become more straightforward and easier to formulate and implement. In addition, the robust brand has enabled the company to launch its own products such as sauces, salt, and breading, which are gaining popularity in the market progressively.
The other strength of great significance is the employment of information and communication technology in the ordering system of the company. Indeed, Hooters, Inc. has a website through which one can order food items from the comfort of their homes or remote locations. In addition, the company uses its website to communicate to its clients about deals on food items, such as special offers. It also helps the company undertake promotional activities in a cost effective manner. Further, this service not only runs on personal computers but on mobile phones as well, which enables clients to interact with the company frequently and conveniently. Indeed, the employment of information and communication technology enables the company to extend beyond geographical limitations, which if well leveraged, could facilitate entry into new markets and thus globalize the brand.
B2. Weaknesses
Hooters, Inc. is losing much of its revenue paying for damages, fines, and costs of lawsuits. The business model of the company is courts much controversy because it closely borders discrimination issues. For instance, by projecting an image of the female servers who are blond, thin, buxom, and scantily dresses, the company has been accused of propagating policies that are sexually discriminatory. In other words, the company appears to objectify women as sex symbols, which has been a cause of sexual harassment. In addition, workers have been threatened with dismissal, and some have actually been dismissed because of adding weight. Further, men have been denied employment opportunities as service personnel.
Another weakness is lack of diversity of food items in its menus. This weakness is not only evident in the united states but also in international locations as well. Clearly, Chicken wing is the signature food item associated with the company and the rest of the food items, which include hamburgers, curley fries, sandwiches, are the typical American fast foods, which are often high in oils, salt, and red meat. As such, many of the menu items have not been domesticated to the locality of the market. This denies clientele foods that they are familiar to and the company, an opportunity to prosper it brand in different locations.
B3. Opportunities
Hooters could diversity its menu items in order to make them appealing to different people in different locations. This would improve the brand association of clients because of the close proximity and familiarity if the food items. However, such an initiative should be well communicated to the market through a diversity of communication channels. In addition, the company could associate its brand with tourism. Indeed, its business concept is iconic and its locations could easily become tourist attractions, which would contribute to the performance of the company.
B4. Threats
One of the biggest threats to hooters is changing regulatory environment. Indeed, since its business concept is controversial, it could invite changes in regulation that may restrict the regular operations of the company. In addition, in some countries that have strict dressing codes for women, the company may meet challenges attempting to enter such markets. In addition, the customer perceptions could also change with time. As such, the presentation of the brand, which appears appealing presently, may lose its appeal in future, particularly if it continues receiving negative publicity. In addition, the brand identity may prove to be too expensive to maintain if it continues to be associated with lawsuits, litigations, and ethical conflicts.
C. Leadership Evaluation
In the ensuing evaluation, three strengths, and three weaknesses of the current primary leader, the chief executive officer Terry Marks, were identified and interrogated. In addition, three theory based practices that would maximize the future success of the current leader and Hooters were recommended. The Path-Goal theory of leadership shall be employed in this evaluation. Indeed, this theory focuses on the responsibilities of leaders, which are setting clear goals, clarifying paths to their achievement and implementing reward systems that enhance the achievement of expected performance levels (Mulki, Jaramillo, & Locander, 2009; Sims, Faraj, & Yun, 2009).
C1. Leadership Strengths
The present primary leader, Terry Marks, has the following leadership strengths. Firstly, he communicates a unified message to all employees in the organization regardless of their location. Specifically, he is aware that some customers are embarrassed by what the brand has represented for a long time. However, he inspires his team to help communicate the brand values that would help remove the negative notions the brand of Hooters elicits. Secondly, he involves all levels of the workforce in decision-making. This collaborative approach to leadership has ensured that the workforce shares the same brand enthusiasm and loyalty because they own parts of the organizational decisions made. Thirdly, Marks is visionary because he is able to perceive how the chain of restaurants can be transformed with the changing times while maintaining their original appeal to customers. Clearly, according to the Path-Goal theory, the leadership strengths of Marks emanate from a deep understanding of the ethical challenges that Hooters experiences and the lack of a clear direction among employees on how to achieve organizational goals (Mulki, Jaramillo, & Locander, 2009). As such, the strengths that have been enumerated are a clear employment of the path-goal theoretical approach by the primary leader.
C2. Leadership Weaknesses
Terry Marks exhibits some leadership weaknesses. Firstly, he is not experienced in chain restaurants that operate in the ‘breastaurant’ segment of the industry. As such, he may lack fundamental insights pertaining to such borderline business approaches and thus tend to mainstream the restaurant’s business concept. Secondly, he has not been able to formulate and implement as standard operation code for employees and ensure its adherence. This is evident from the number of lawsuits that bedevil the organization even under his watch, meaning that some managers and employees often transgress against employment laws and ethical conduct. Thirdly, he may be lacking in cultural intelligence by not being cognizant of different acceptable dress codes in foreign markets and enabling employee diversification. This has caused legal challenges involving ethnic groups other than Caucasians, who have been projected as the ‘Hooter Girl’ identity from the inception of the chain. According to the Path-Goal theory, these weaknesses emanate from being insensitive to the situation under which the chain operates in different locations, thus exposing it to legal challenges (Mulki, Jaramillo, & Locander, 2009).
C3. Leadership Recommendations
The Path-Goal theory is resourceful to the primary leader of Hooters, Inc. because it would inform certain practices that would help maximize the future success of the leader and the organization alongside. Firstly, Marks should direct his energies at ensuring that the psychological wellbeing of the Hooter Girls is taken care of. Indeed, while some female servers are comfortable with the skimpy dressing and flirtations with clients, others, particularly in colder regions may find the dress code uncomfortable, while flirting may not be culturally acceptable there as well. By customizing premises depending on the situation of the location, the leader can ensure that the values of the organizations are still communicated to the customers effectively. Secondly, the leader should implement a reward system that is not reliant entirely on tips from the customers. This would ensure that employees maintain an acceptable level of ethical conduct. Thirdly, the leader should help formulate a succinct code of conduct for the organization, which should address harassment issues, discrimination issues and ethical dilemmas. By displaying genuine concern for working conditions of the employees, the primary leader shall be employing the Path-Goal theory (Sims, Faraj, & Yun, 2009).
References
Gill, A. S., Flaschner, A. B., & Shachar, M. (2006). Mitigating stress and burnout by implementing transformational-leadership. International Journal of contemporary hospitality management, 18(6), 469-481.
Mulki, J. P., Jaramillo, J. F., & Locander, W. B. (2009). Critical role of leadership on ethical climate and salesperson behaviors. Journal of Business Ethics, 86(2), 125-141.
Schein, E. H. (2006). Organizational culture and leadership (Vol. 356). Hoboken, NJ: John Wiley & Sons.
Sims, H. P., Faraj, S., & Yun, S. (2009). When should a leader be directive or empowering? How to develop your own situational theory of leadership. Business Horizons, 52(2), 149-158.