JOHN MOLSON SCHOOL OF BUSINESS
Graduate Diploma in Business Administration
Professor: Ronald Ferguson
October 28th, 2013
Montreal, QC – Canada
The scenario used and analysed here, for the purpose of this assignment, is a true scenario with true managerial issues, where I once found myself in, a long time ago, in the role of an employee: a traditional and well-known restaurant was facing issues against the great competition that had been formed through the previous year. The area where the Restaurant was located was a growing neighbourhood that was becoming each day more popular and populated. It was predictable to expect that the commerce in the area would develop and expand, but the establishment’s administration was not prepared for it and did not know how to properly handle the situation and how to use it in its behalf. The service offered by the Restaurant just continued to be the same as it always was. They believed that an already traditional establishment should not need to change to compete, that its own reputation should be enough to keep the old clientele coming and they trusted, as always, that the old clientele would bring new clientele by word of mouth. This new scenario could be and should be a great opportunity for the Restaurant to grow and to expand its capacity, its revenue and of course, its profit, but the way things were being handled there, the company was being led to the opposite direction. The incapacity and incompetence of the administration was dragging the establishment down and it would for sure end in bankruptcy in a matter of few months, if continued the way it was. The competition was “stealing” all the audience. With all the options around, the public wanted to go to the “cooler” and new places. Novelty and innovation are characteristics that really attract the clients within this industry. With the major drop in the clients attendance and consequently in the company’s revenue, all the employees were feeling demotivated and frustrated and the Restaurant service was getting significantly worse each day. It is important to highlight that almost every employee who works in this industry is compensated with minimum hourly wage plus commission, and it is the commission that makes it worth (or not) to keep on working in a certain place. Usually, low or none commission means frustration and renunciation. Staff turnover is the most expected consequence. The problem was actually deeper than it seemed and like a snowball on its way down a hill, it was getting bigger each day. Other issues to consider were the rise of internal conflicts and disputes and the augmentation of destructive behaviours like slouch, sabotage and the stealing of the company’s property. To be able to understand better the situation where the Restaurant was in, it is important to understand how was the establishment’s culture and its organization structuring, and of course, to also understand what was going on in the mind of the employees at that point. The Restaurant operated under individual work commissioned compensation, which means that if a waiter, for example, served a certain table, whatever amount of commission gained for that particular table was almost entirely his and, as already discussed, with low sales, the amount of commission coming in was very few. Therefore, the way the waiters were finding to try to boost their already short gains was running ahead of each other to make sure they would serve the bigger tables and the fancier clients. The staff was competing against itself and for obvious reasons that is hardly healthy for any company that provides service. The work schedules were another reason for dissatisfaction. The way they were built, nobody ever had any weekend days off and every week it changed, so there was no consistency. One week an employee could have Monday and Wednesday off and in the...
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