Pizza2go-Case Study PDF

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RMIT University Vietnam BUSM 4185 – Introduction to Management

ASSIGNMENT 2 Subject Code:

BUSM4185

Subject Name:

Introduction to Management

Location & Campus

RMIT Vietnam, HCMC

Student Name:

Ngo Phuong Uyen

Student Number:

s3695426

Teacher’s Name:

Antoine Goupille

Word Count:

1420 words (excluding Reference)

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Table of Content

1. INTRODUCTION:..........................................................................................................................3 2. IDENTIFICATION OF ISSUES AND PROBLEMS:.........................................................................3 3. POSSIBLE SOLLUTIONS:................................................................................................................4 3.1. ADJUSTMENT IN MANAGEMENT STYLE AND THE CEO......................................................4 3.2. BALANCE LEADERSHIP AND STYLE OF MANAGEMENT....................................................4 3.3. IMPROVING ORGANIZATION POLICY.....................................................................................4 4. RECOMMENDATION:......................................................................................................................5 4.1. STRATEGY: ADJUSTMENT IN MANAGEMENT STYLE..........................................................5 4.2. STRATEGIES: IMPROVING ORGANIZATION POLICY............................................................5 5. CONCLUSION:..................................................................................................................................5 Reference list:.........................................................................................................................................6

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1. INTRODUCTION: Pizza2Go, a Vietnamese pizza company which is one of the largest in the world is a pizza chain with a community of franchises and more than 50 nationally retail stores. This company has become popular owing to the success in their shares and the high rate of sales. Pizza2Go has provided for a large consumption with over a million pizza per year and earn a great amount of profit thanks to the huge optional menu. This is an advantage helping them to attract a lot of shareholders who want to participate in their franchising network. Actually, franchise is to acquire the benefits of marketing strategy of another independent business of the franchisor (Rubin, 1978). But there is a true story behind this flashy accomplishment. Franchisees who firstly though this is a profitable company turn into stressed because of insane strategies in management. The company policy seems to be more oriented on the auction rather than their profit. To them, higher number of stores in the network results in more valuable acquisition the head office gains.

2. IDENTIFICATION OF ISSUES AND PROBLEMS: The major issue with Pizza2Go originates from the CEO. The CEO is adopted a management style based on data reminding of Frederick Taylor's scientific management theory (Taylor, 2003). Even though this method of management has convinced Pizza2Go some certain success, it still can be indicated the imbalance in this too scientific administration style according to Mintzberg (2004). This has a negative impact on not only employees but also stores’ productivity. Based on the case study, the CEO Mrs. Nguyen has not have a good plan and actions to drive the company passing the challenges except her general public. When the public statements for the dealing ways are so positive such as forcing up labor cost 50% over next 4-5 years which also means more loyalty with employees, more engagement between staffs, training program and rewards for motivating workers, a contrast situation happened to the employees in the behind scenes. Competition between franchisees will be high when resources are oriented, as in established industries (Lambkin and Day, 1989). Because of such harsh competitions, the franchisees were running after profits then lead to the position of running out the stores due to not being able to afford passing on the increasing high expenditures. In addition, the shortcoming of political skills and ethics are also reasons. Ethical behavior management is one of the most common and complex issue that challenge business organization (W.Edward Stead, Dan L.Worrell, Jean Garner Stead, 1990). Complaints from worker about horrible working condition that they have to work long hours close to high-degree ovens without a break or air-conditioning. There is a shortage of employee security, more seriously is threat of physical violence when workers are reluctant of speak out their sufferings from abuse and danger when doing the delivery. As a result, those have a detrimental issue on the workers’ health and steadily push them to the limits. The ambiguity of wages also affects to employees’ unhappiness. The satisfaction level of salary is determined by the simultaneous assessment of current wages versus some comparable personal standards (Rice, R.W, Phillips, S.M, McFarlin, D.B, 1990). Many workers are depressed due to widespread underpayment and not always response staffs their full standard entitlements. The franchisee was exploiting workers by decreasing their staff working hour to deny their extra payment, therefrom hiding the store’s poor sales. Evidence is that a worker has to work about 50-60 hours a week but his pay-off is often decrease it to 40-43 hours because of the attract penalties. It means his extra work is denied pg. 3

nonsensically. Profit-focused has forced franchisees to mistreat their employees; moreover, lowering cost of products and pressure of competition intensification drove the franchisees to take these drastic actions.

3. POSSIBLE SOLLUTIONS: 3.1. ADJUSTMENT IN MANAGEMENT STYLE AND THE CEO Pizza2Go management style seems to be too scientific. They should not only focus on productivity but should be on welfare of their employees as well. It would be better to add more options such as training and incentives rather than just pretending everybody is a robot. Because of having so many franchises, monitoring all of them would be an issue. Developing a managing system where the employees can work in a happy and motivated environment with the help and great connection to the manager. This will help Pizza2Go pass on current challenges and also boost the organization’s revenue. CEO is a person holding power which is the aptitude to drive an organization, they have greatest influence on people who are in a state of dependence such as staff. Replacing to a new CEO who is more supportive and confidential to turn Pizza2Go a negative to a positive. The company needs a CEO who can take more actions rather than those public statements. Moreover, by changing CEO, the organization can easily receive new ideas and plan from employee that may be effective to the company (Kaplan, 2015).

3.2. BALANCE LEADERSHIP AND STYLE OF MANAGEMENT Instead of being too inflexible in utilising Taylorism, incorporating a balance of scientific and leadership characteristic. Consequently, manager will evolve into a transformational leader who can inspire and support their employees (Asrar-ul-Haq and Kuchinke, 2016). This not only help the employees feel understood by their boss, but also improve the relationship between all members in a company, cross out the distance between manager and workers. Additionally, this would be an advantage to Pizza2Go when workers are more close to their managers, no fear remains and worker could feel free to speak out their opinions especially problems during their work. To alter the management style means to accept changing the organizational culture of the workplace.

3.3. IMPROVING ORGANIZATION POLICY 3.3.1. Employee policy Working condition is one of the most important factors that directly affect to both productivity and spirit of workers. Promulgating a standard rule to every franchise store such as break and wage paying term. Paying workers their salary the correct working hour rate included overtime, manager who deny the employee’s extra hours payment should be punished. Guarantee the security of employees during their working time, especially their honor. 3.3.2. Franchise policy The current policy of Pizza2Go is a huge pressure to franchisees. Franchisor should stop forcing franchisees to run after profits. Deducting the franchise fees and other costs can reduce burden pg. 4

tax. It is also advantaged in lowering franchisee’s stress in running the store and reduce the probability of manager hamper to the employees. Less franchise but more productive, better than when supple is more than demand.

4. RECOMMENDATION: 4.1. STRATEGY: ADJUSTMENT IN MANAGEMENT STYLE Training the staffs appropriately with not only working skills but also a correct behavior set. Declining wrong current attitude of the head office that just hire manager to improve the store numbers. Organizing more company events to better understand about employees and connect them all together especially relationship between manager and staffs. Hiring more supervisor to monitor how services and operations a franchise performs. More active in upgrading the employees with the newest technology to catch up the current trend, this helps the organization works more effective and efficiency.

4.2. STRATEGIES: IMPROVING ORGANIZATION POLICY 4.2.1. Strategy 1- Improving employee policy Improving the policy of employees includes working environment and motivation. For working environment, repair the store’s substructure such as adding air-conditioning system to make sure that worker is working in a standard environment. Besides, employees are also required to follow rules of the workplace. Securing employee to follow the company policy is one key access the organization success (Tyler, 2005). Despite the command and control model really reflects the power of a manager, there should be a justice in this situation. Manager and staffs have to respect each other, and anyone is over control of behavior will be punished. Rewarding for hard working employees to motivate by a tip or a compliment on the star board. Enforcing a rule that avoid customers from abusing or attacking staffs. 4.2.2. Strategy 2- Improving franchise policy Making sure there is an agreement contract that franchisees have to follow the franchisor’s requirements. Franchisor should provide franchisees with supports during their start-up period. Training the franchisees to run store according to the organization standards in some aspects such as store designs, sale rate. Giving an affordable expenditure for franchisees so they can be more accommodating in earning profits. Focusing more on profits rather than on sales.

5. CONCLUSION: To summary, Pizza2Go company is in short of a right administration. The problems that Pizza2Go is facing are related to franchise, ethics, politics and management system. Based on the case study, it can be interfered that every business organization is essential to understand the value of ethics by following the organizational culture; to pay attention to employee’s sensation and the balance of bonding between leadership and management style.

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Reference list: Pilling, Henson, Yoo, 1995, ‘Competition among franchises, company-owned units and independent operators: a population ecology application’, Journal of Marketing Channels, pp.177-195. Taylor, 2003, Scientific Management, Reprint Edition, Routledge, New York. Mintzberg, H 2004, “Managers Not MBAs: A hard look at the soft practice of managing and management development”, Berrett-Koehler, San Francisco. Stanworth, 1995, ‘The franchise relationship: entrepreneurship or dependence?’, Journal of Marketing Channels, pp.161-176. Rice, Phillips, McFarlin, 1990, ‘Multiple discrepancies and pay satisfaction’, Journal of Applied Psychology, p.386. Stead, Worrell, D.L. and Stead, J.G., 1990, ‘An integrative model for understanding and managing ethical behavior in business organizations’, Journal of Business Ethics, pp.233-242. Kaplan, 2015, ‘Truce Breaking and Remaking: The CEO’s Role in Changing Organizational Routines’, Advances in Strategic Management, Vol 32, pp.1-45. Asrar-ul-Haq, Kuchinke, 2016, ‘Impact of leadership styles on employees’ attitude towards their leader and performance: Empirical evidence from Pakistani banks’, Future Business Journal, vol. 2, pp 54–64. Tyler, 2004, ‘Promoting Employee Policy Adherence and Rule following in Work Settings-The Value of Self-Regulatory Approaches’, Brook. L. Rev., p.1287.

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