Business Managing The Situation
Restaurant Co is a large group of hotels which has around 300 branches across UK and employee strength of 7000. They have started with a few outlets in 1990’s and have later on expanded its operations where they have been following a franchisee model. With the increase in the level of operations and the spread of the branches across the country, the HRM practices has also changed a lot which demanded it to be more holistic in nature. Most of the operational decisions are being taken centrally by the senior management but the operations staff at the branch level also had a fair degree of autonomy which they can exercise in managing their day to day affairs. In this report we would look at the situation in which the business is currently at and identify various strengths and weaknesses in its current approach in managing the situation. This would require a detailed analysis of the current corporate hierarchy, the EIP programs and various other initiatives that has been rolled out by the management. The complexity in managing various small business units and driving them towards achieving the common goal of the company is a difficult task to say the least. With this analysis we would be able to understand the factors that need to be focused on in order to ensure better productivity and thus increased bottom line profits.
Being a large restaurant chain they have to ensure that they monitor various stores based on their requirement. One of the key strengths that they have is that they have localized managers who would be taking the decisions for the stores individually. Even though there are flaws in the system, when the managers demand more autonomy on some of the issues, still this system works mainly because of the fact that the store managers would be the best ones to judge the situations and take decisions accordingly (By, Burnes & Oswick, 2011, p.7). There have been many HR initiatives that have been taken by the company to train these managers and later on take them to the next level of getting them involved in the operational decisions. Having a centralized control on key operational issues also is one of the main strengths in the current setup mainly because they would be able to make the necessary changes based on what the company goals are and looking at the current market situations. One improvement that they can make in the current setup is to involve the store managers while taking these decisions which would give those ideas as they would be the best judge on how these factors are going to affect their everyday operations.
Formal and informal EIPs that they have are also one of the strengths as this would help them in getting the productivity levels of the employees up and at the same time. This would increase the interaction levels within the system and having both formal and informal EIPs can actually increase the communication within the organization that would help them in implementing the changes quickly. Also both these complement each other in getting the message across to all the employees. This is also suitable in such a set up where the line managers work closely with the employees.
HR policies at RestaurantCo is less formal as it is found in most of the companies of the same size and hence it is more flexible allowing them to make the required changes quickly. This also would help them in cost cutting and at the same time employee satisfaction levels would also go up as they are being heard and the interaction with their bosses are not essentially formal always. This flexibility is what sometimes many large companies miss as they grow big in size. Semi Formal setups in companies can help them in getting close to their employees and thus understand the business at the ground level. Any changes made in such fashion would be much closer to the market situation. Leadership approach that is being adopted by the company is also very unique. As mentioned in the case their leadership approach as they describe is “lead by example” where the managers work hands on with the employees which would help them in understanding the challenges that the employees face and hence make the necessary changes that are required as and when required. This would also help them in taking a pro active stance on various issues as the managers get to know about the situation much before as compared to normal cases where the information is passed on through various levels of hierarchy. The company also aims at having a participative culture even though there are some changes that are to be made still to make it successful (Battilana&Casciaro, 2012).
Informal EIPs have worked well in the organization as the employee compliance and the satisfaction levels in the organization have gone up after the implementation of the same. This has improved the customer satisfaction also as the line managers have got a better control over the customer employee interactions with the help of these informal EIPs. Unlike many HR tools which are generally used for consultation, this has more or less become like a tool that can help the organization. Another thing that they have done gradually was to train their line managers to handle many things as the business expanded. This has made them multi skilled and at the same time line managers were also happy as now they have been handling various things that are related to business rather than just handling the day to day affairs of the business. This has resulted in them taking up more responsibilities and also there was a sense of ownership amongst the line managers which has resulted in improved store performances.
Communication played a key role in galvanizing this change and there were regular road shows and other top down communication initiatives that lead to an open communication structure within the organization. This has resulted in developing an open culture within the organization which would benefit them in the long run (Karp& Helgo, 2007, p.87). There have been many trainings and briefings that are given to the line managers who form an important part of the business model. This has also resulted in interdepartmental communication where the employees can voice out their opinion and at the same time can make sure that changes would be made to deal with the challenges.
As the organization grows large in size there will be many issues that would crop up and the company should be prepared to make the changes so that they can sustain in the market. In case of the current structure of RestarantCo, one of the main weaknesses in the existing structure is that even though the line managers are an important part of the overall business, some of the major decisions that are related to business are taken without their consent. This has led to dissatisfaction amongst the line managers (Eisenbach, Watson& Pillai, 1999, p.87). They are the ones who are dealing with the day to day affairs if the business and hence they should be made an important part in the business decision making so that the management can get an actual picture of the same. For example, as the business grew the supply from the vendors were made centralized thus taking the control away from the line managers; in one way this can give room for the company to negotiate with vendors as the order size would increase but at the same time the line managers who have to meet the customer quality standards have no say in this process.
Another major flaw that is there in the system is that the line managers feel too overloaded about their responsibilities as they have been made to handle many more things. This can be resolved by relieving them of some of the duties and let them focus on the business development of the company. Most of the line managers complain saying that these duties were forced upon them and it wasn’t informed prior (Gans, 2009). This clearly shows that they are not a part of the major decision making setup. This should change as the managers will have a feeling of being left out and this can stop them from dong that extra bit to make these changes successful (Carr, 2010, p.110).
The branches were not given importance based on the business transactions that they have. Larger branches should be given more attention as they will have to serve more customers and hence the support system for them should be more as compared to that of others. This is not happening in case of RestaurantCo as the larger branches have been complaining about the support that they are getting from the management.
EIP system even though it has been successful has not achieved the desired results due to the fact that the line managers had limited powers and hence they were not able to take the decisions on their own. They will have to wait for the command from the headquarters before making any decisions. This made the whole setup of EIP ineffective to certain extends. Some of the operational decisions taken by the top management were not in lines with the needs of the business as many line managers were unhappy about the same. This can happen if the top management is not taking the views of the people who are actually working and is on the field. They have to ensure that the major business decisions should be made post consultation with the line managers (Ford& Evans, 2001, p.16).
Making the supply chain operations centralized has also created problems as there were delays in delivery of the raw materials and also the line managers were complaining that they did not understand the needs of the branches. This should have been left to the discretion of the individual branches as they can predict the demand of the raw materials in a better manner. The business demanded a more informal approach but the top management was keen on having a professional approach for its HR policies. It has been found that some of the policy decisions that the top management made was inconsistent and this also has resulted in employee dies-satisfaction (Benjamin&Levinson, 1993).
One thing that is clear from the case that the management has not made any plans when they were expensing. In the event of a company expansion they would have planned the entire process in a better manner. In this case they have been identifying the requirements as and when they come and they have been trying to deal with it (Farais& Johnson, 2000). This has resulted in most of the line managers being overloaded with work and employees complaining about changes in the process overnight. This in turn creates a lot of ambiguity in the organization and can lead to rash decisions that can go wrong. The employees also don’t have a clear picture of how the business operations are going to change as they are not being included while taking the decisions (Carr &Gabriel, 2001, p.416). Due to the lack of support by the management non dealing with many operational issues., the branches are not able to look at the improvement in the existing setup rather they have been wasting there time and energy in getting these operational issue sorted out. Either the senior management is not taking these issues seriously or the line managers have not portrayed the importance of these issues so that these were unattended for so long (Cooney& Sewell, 2008, p.694).
Despite all these weaknesses the business managed to grow in size and volume just because they had a strong base. Going forward the management has to ensure that they prioritize these needs and make sure that they attend to them at the earliest. One of the immediate things that the company has to look at is that they will have to ensure that more control be given to the line managers and they should be made an important part of the decision making process. The top management should reassess where they would like to take the company in the next few years and this should be communicated to the employees beforehand so that any changes in the existing process would be accepted with the long term goals of the company. They should also reassess the training needs of the employees based on the recent changes that have happened and this should be done with immediate effect.
RestaurantCo has managed to spread their existence across the country by delighting the customers and ensuring that the service levels are at the best. As they have grown bigger in size there emerged various problems that is quite normal (Gotsill& Natchez, 2007, p.25). The management has devised various programs to bring about the change to match these demands. Some were successful and some weren’t. The EIP program and open communication culture that they have developed within the organization are the highlights in this case (Geppert, Matten& Williams, 2010). By having informal interactions with the employees the management has made sure that the corporate goals are being passed on to the employees effectively. There are some drawbacks as well. The line managers getting over loaded with work and them having limited access and control on daily proceeding is something the management has to immediately work on. There are several training programs and development programs that the management has planned for the employees. They should make sure that these training programs should be based on the requirements of the employees and necessary changes have to be made.
They should make sure that they keep an eye on the competition and adapt some of the techniques that are used by them. They should closely map the competition and make the changes accordingly so that they stay on top of the customer service levels. In order to make the changes they will have to ensure that they take a cue from the best HR practices that are being followed by other companies in various other industries also. Managing the change in an organization is a difficult and painful process, but if this is implemented in the right manner, it can take the business a long way. The smartness of the top management is to make sure that they get the employees to buy in to the changes that they have proposed and create urgency around the changes that are being proposed. RestaurantCo have made the right moves in terms of making the changes but they will have to ensure that they execute the same effectively to get better results and at the same time they will have to get the consent from the employees and make them an important part of these business decisions so that they show less resistance towards the same.
Battilana, J. & Casciaro, T. 2012, Change agents, networks, and institutions: A contingency theory of organizational change, Academy of Management Journal, 55(2), 381-398.
Benjamin, R. I. & Levinson, E. 1993, A framework for managing IT-enabled change, Sloan Management Review, 34(4), 23-33
By, R. T., Burnes, B., & Oswick, C. 2011, Change management: The road ahead, Journal of Change Management, 11(1), 1-6.
Carr, A. 2010, Critical theory and the management of change in organizations, Journal of Organizational change Management, 13(3), 208-220.
Carr, A. & Gabriel, Y. 2001, The psychodynamics of organizational change management: An overview, Journal of Organizational Change Management, 14(5), 415-421.
Cooney, R. & Sewell, G. 2008, Shaping the other: Maintaining expert managerial status in a complex change management program, Group & Organization Management, 33(6), 685-711.
Eisenbach, R., Watson, K., & Pillai, R. 1999, Transformational leadership in the context of organizational change, Journal of Organizational Change Management, 12(2), 80-89.
Farais, G. & Johnson, H. 2000, Organizational development and change management: Setting the record straight, Journal of Applied Behavioral Science, 36, 376-379.
Ford, M. W. & Evans, J. R. 2001, Baldrige assessment and Organizational learning: The need for change management, Quality Management Journal, 8(3), 9-25.
Gans, K. 2011, Should you change your thinking about change management? Strategic Finance, 48-50.
Geppert, M., Matten, D.& Williams, K. 2003, Change management in MNCs: How global convergence intertwines with national diversities, Human Relations, 56(807), 807-838.
Gotsill, G. & Natchez, M. 2007, From resistance to acceptance: How to implement change management, T+D, 61(11), 24-27.
Karp, T. & Helgo, T. I. T. 2007, Reality revisited: Leading people in chaotic change, Journal of Management Development, 28(2), 81-93.