CASE - 1 PERFECT PIZZERIA Perfect Pizzeria Restaurants is a chain of 125 pizza establishments in the Midwest with headquarters in Madison, Wisconsin. There are three locations in Bloomington, Indiana with each location staffed by one manager and two shift leaders. The employees are mostly college students, with a few high school students performing the less challenging jobs. Nearly all of the employees, with the exception of some managers, are employed part-time and most earned only the minimum wage or slightly above. Lately they have been experiencing financial and employee problems particularly at the location near the Indiana University campus. First, to address the financial problems at Perfect Pizzeria, the manager’s compensation plan was changed so it was now based on food and beverage costs and profit goals. If the percentage of unsold or damaged food is very low, the manager gets a bonus. If the percentage is high, the manager does not receive a bonus; rather he or she only receives his or her normal salary. Their compensation was also based on the restaurant’s profit figures that must reach a certain level for the manager to receive a bonus. Thus the managers knew their evaluation depended on meeting these goals and therefore determined where they should focus their efforts. These profit and loss figures often fluctuate. Knowing the manager cannot be in the store 24 hours a day, some employees make up for their low paychecks by helping themselves to the food. An occasional slice or two of pizza by the 18 to 20 employees throughout the day/evening easily causes the percentage figure to rise. An occasional bucket of sauce may be spilled or a pizza accidentally burned. Sometimes the wrong size of pizza is made. When a friend comes in to order a pizza, extra ingredients are placed on the friend’s pizza. On and on it goes… In the event of an employee mistake or a burned pizza by the oven person, the expense is supposed to come from the individual employee. Because of peer pressure, the night manager seldom writes up a bill for the erring employee. Instead, the restaurant takes the loss and the error goes unnoticed until the end of the month when the inventory is taken and the financials are finalized. That is when the manager finds out if the food loss percentage is high and if there will be a bonus. (Next page) Over time, these loss figures increased. To address these problems at the Bloomington location, the manager took retaliatory measures. Previously, each employee was entitled to a free pizza slice, salad, and all the soft drinks he or she could drink for every 4 hours of work. Management decided to raise this figure to 6 hours of work before any free food. Since the employees had received this “free food after 4-hours” benefit for a long time they frequently ignored the rule and took advantage of the situation whenever the manager was not in the building. Therefore, the Perfect Pizzeria manager created an assistant manager position who could more closely supervise the shift leaders. Each shift leader was now responsible for a team of 3 - 4 employees who were given specific responsibilities for a particular job such as counter, delivery, food preparation, etc. Employee apathy grew within the pizzeria. There seemed to be a further separation between the store manager and his workers, who were once a closely knit group. The manager made no attempt to alleviate the problem, because he felt it would iron itself out. The employees who were dissatisfied would quit or they would be content to put up with the new regulations. As it turned out, there were many employee resignations. The manager had no problem in filling the openings with new workers, but the loss of experienced personnel was costly to the business. It didn’t take long for the new employees to become influenced by the more experienced employees and the unsold/damaged food percentage remained high. Then the manager took a bolder step. He eliminated all the benefits that the employees had – no free pizzas, salads, or drinks. The manager tried still another approach to alleviate the rising unsold/damaged food percentage problem and maintain his bonus. He placed a notice on the bulletin board, stating that: “if the percentage remained at a high level, a lie detector test would be given to all employees. All those found guilty of taking or intentionally wasting food or drinks would be immediately terminated.” This did not have the desired effect on the employees, because they knew if they were all subjected to the test, they would all be found guilty and the manager would have to dismiss all of them. This would leave him in a worse situation than ever. As the manager sat in his office listening to his beloved Cub’s baseball game, he analyzed the month’s profit/loss statements and knew the numbers were not going to be good. What he did not expect was that the loss percentage was actually increasing from previous months. Another problem developed at the Bloomington campus location when Jennifer, a recently hired night shift counter clerk filed a complaint with the regional manager. She stated in her complaint that she was always required to work the late shift and Bill the night manager was becoming a bit “too friendly”. In fact her complaint stated, the only way she could get off from work earlier than other employees was if she would agree to meet Bill on their nights off at Hoosier’s, a popular college student club down the street from Perfect Pizzeria. Additionally, there was a formal complaint from a group of male employees that only the attractive female workers were being promoted to assistant managers or shift leaders even though the men had worked at the restaurant longer than most of the promoted women. Their complaint had to be addressed immediately. The case assignment questions follow… PERFECT PIZZERIA – CASE QUESTIONS (It is important to use the textbook concepts as the basis for your answers; thus locate the bolded topics listed in each question in the textbook and PowerPoint slides and apply to your answers. Please type your responses by listing the question number/letter and then your answers to the questions.) 1. List two different managerial functions/activities the manager has performed. Then give specific examples or evidence from the case that explains these two management functions the manager has performed. (4 points) 2a. Which of the managerial skills was the manager best at? Explain. 2b. Which of the managerial skills did the manager need to improve? Explain. (4 points) 3. Choose one of the specific viewpoints on management theory and discuss how you would apply that at Perfect Pizzeria to improve the operations of the restaurant. Please identify the specific viewpoint and discuss in-depth how you would apply the viewpoint. (4 pts.) 4. List and/or give examples of four (4) different stakeholders or forces from Perfect Pizzerias’ external environment. Based on your knowledge of the restaurant and business environment, give a specific example of how each of these external factors could have a positive or negative impact on a restaurant like Perfect Pizzeria. Please be specific. (8 pts.) 5a. The case mentions that some employees put extra ingredients on their friends’ pizza or take a nibble or two of pizza during their shift. Please discuss whether you feel this is ethical and your reasons why you feel this way. (2 pts.) 5b. What actions could an organization like Perfect Pizzeria take to promote higher ethical standards by its employees? Using concepts from the textbook, explain how you would apply them to the situation described in question 5a at Perfect Pizzeria. (4 pts.) 6. Give one example from the case of a poor management action and then discuss two (2) specific ways you would correct the situation if you were the manager. (4 points)
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