As a result of the increased competitive pressures on the company and the need to increase the speed at which they generated new drink, food and service ideas, the senior management team following Bill Rosenberg began focusing more on the will and instinct of workers over the use of extrinsic rewards. Instead of transactional leadership approaches that relied purely on extrinsic rewards, Dunkin' Donuts was evolving more in the direction of transformational leadership and a focus more on intrinsic rewards and task ownership. In conjunction with this shift in mindset was one that centered on increasing the quality of operations which led to many franchisees being let go due to not meeting the new minimum requirements (Martin, 2003). Most significant was the shift from relying on a tight chain-of-command organizational structure and the adoption of one that was more oriented towards allowing franchise, team and division leaders the freedom to be more transformational in their leadership and management strategies. What Dunkin Donuts was attempting to achieve was the development of many leaders throughout the organizations through the internalizing of job goals and responsibilities. It has been shown through empirical research that the greater the level of learning supervisors, leaders and managers facilitate, the greater the level of customer centricity and motivation to serve customers at or beyond their expectations as well (Lin, 2008). This research specifically found that those managers who are more oriented towards creating an organizational climate that nurtures learning also create the foundation for greater levels of customer service (Lin, 2008). The senior management team at Dunkin' Donuts as a result have moved away from the purely transactional leadership approaches...

This has in turn created more of a focus on intrinsic rewards and the approach of Theory Y-based management styles (Pojidaeff, 1995). In addition there is greater focus on how to create more balance in the lives of employees to ensure they don't get burned out. These work-life balance benefits are mentioned on the company's website. HP and many other companies are also focused on these strategies to ensure their employees stay health enough to contribute for the long-term (Cole, 1999).
Conclusion

Dunkin' Donuts' progression from transactional leadership to being more transformational in approach is exemplified in their reliance on more intrinsic reward management strategies. The increased global competition the company has faced and the critical importance of day-to-day product and service delivery has forced the company over time to concentrate more on intrinsic reward management strategies. Redefining the management philosophy of Dunkin' Donuts to be more focused on internalizing goals and intrinsic rewards is consistent with self-determination theories (Pojidaeff, 1995) and will assist the company in being more competitive.