MBA540 SaintLeo Tipping In Restaurants & United Airlines Case Studies

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2 Case Studies 1 Page Each Managerial Ecomics. 1 on United Airlines and 1 on Tipping in Restaurants. See Attached Documents. XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

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Managerial Economics and Organizational Architecture, Sixth Edition 379 Chapter 11 Organizational Architecture 363 vards. All firms ements worldwide and trucks. routings, not to lear bombs. The ainer's current hers with such ANALYZING MANAGERIAL DECISIONS: Tipping in Restaurants In most restaurants, waiters receive a large portion of their compensation through tips from customers. Generally, the size of the tip is decided by the cus- tomer. However, many restaurants require a 15 cent tip for parties of eight or more. Using the con- restaurants require tips from large parties. cepts from this chapter, discuss (a) why the practice of tipping has emerged as a major method of com- pensating the wait staff, (b) why the customer typi- cally decides on the amount of the tip, and (c) why per- y—the tric acid was r called a on interstate banking fell in the 1980s, the North Carolina Banks—especially BB&T, NCNB (now Bank of America), First Union and Wachovia (who merged in 2001) exploited their experience in acquiring banks to create a statewide banking system to create regional and then national banks. These banks have been operat- ing quite successfully, in part because their organizational architectures were bet- ter-suited to the new regulatory environment. As another example of how changes in the environment can affect organiza- he businec 100 Managerial Economics and Organizational Architecture, Sixth Edition 215 k rice equal to the in Figure 6.4). otes entry and costs and thus Chapter 6 Market Structure 201 ANALYZING MANAGERIAL DECISIONS: United Airlines price. g-run market (price is de- the quantity inimum av orium price o exit or to 50 but the The WSJ recently presented data suggesting that United Airlines was not covering its costs on flights from San Francisco to Washington D.C. The article quoted analysts saying that United should discon- tinue this service. The costs per flight (presented in the article) included the costs of fuel, pilots, flight attendants, food, etc. used on the flight. They also included a share of the costs associated with running the hubs at the two airports, such as ticket agents, building charges, baggage handlers, gate charges, etc. Suppose that the revenue collected on the typi- cal United flight from San Francisco to Washington does not cover these costs. Does this fact imply that United should discontinue these flights? Explain. and view ribes the e elastic- es imply orne by all the relevant input markets are perfectly competitive, generally no firm in the in- dustry will be able to make economic profits over the long run. It is important for managers to consider this likely reality when they make investment and other strate- gic decisions. ber of Strategic Considerations or nothu match economists' idealized conditions for perfect A 11 mente
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Analyzing Managerial Decisions: Tipping In Restaurants
The practice of tipping is increasingly being used in various industries as a form of
compensation and appreciation of the staff based on the service provided. The reason of that
increase is primarily because by tipping, especially in restaurants, it motivates the staff and
for some entities such as restaurants that do not have a minimum wage they allow the practice
as a strategy to help them retain and motivate their staff. There is also the added advantage of
fostering a friendlier and personalized service. Some customer also tips to ensure that the
good service they received is carried on to any future encounters with the waiters and servers
at the said restaurant (Lynn).
When it comes to tipping, the customer typically decides on the amount considering
that it is given voluntarily (Lynn and Kwortnik). The customer's decision will also be guided
by how satisfied they are with the kind of service accorded, and with the motives t...


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