A Great Idea for the Tom Browns Group - Essay Example

?Case Study Contents Contents Introduction 2 The Cultural Issues 3 Key Managerial Problem 7 Recommendations 9 Conclusion 12 Reference 13 Introduction Globalization has opened the doors for the investors to invest in the sunshine sector in the new and emerging market globally. It has enabled the business houses to diversify themselves and enjoy the benefits of working in different emerging economies. Companies which are operating in the stage of maturity or decline of a particular industry of a country or region but their products have higher or sufficient demand in the other parts of the world often takes the advantage to move or penetrate in the new markets which in turn enhance the life of the product line. Globalization has paved the way for international investment across the world. Business activities are generally affected by a number of factors like the political condition of the foreign country, the economic situation of the prospective region, the legal issues or the laws regarding the business or other related issues, technology availability, environmental issues of the country, social norms, local customs and rituals, cultural, aspects of the country, the other aspects influencing the cross culture management etc. Therefore apart from financial viability of the investment, these factors have to be analysed in detail before making any decision. Wrong assessment of any of the criteria mentioned above could lead to the failure of the project. The present case of La Napoli restaurant highlights the flaws in cross culture management and overall mismanagement in managerial functions of the restaurant which has declined the overall performance of the restaurant. The case focuses how the failure of managing the cross culture issues and other basic managerial issues has adversely affected the organisational performance in terms of profitability, managerial efficiency and revenue. The Cultural Issues The case highlights the major flaws which resulted in to the decline of restaurant of an established business chain. Though the idea of Compia (a renowned Italian-American chef) of setting an authentic Italian restaurant was fair but it bumped off because of ineffective and inefficient management of cross culture issues which are very important for international investment. This segment highlights the cross culture issues which adversely affected the performance of the restaurant. The cultural dimensions of a country or region have a major impact on the organisational performance especially on the human resource activities. As per Greet Hofstede there are four cultural dimensions that are power distance, uncertainty avoidance, individualism & collectivism, masculinity & femininity and short term versus long term orientation (Heidtmann, 2011, p. 41). In order to identify and assess the problem and symptoms of cross culture issues, it is very important to analyse the cultural dimensions of the host country Hong Kong. Figure 1: Cultural Dimensions of Hong Kong (Source: itim, n.d) The power dimension signifies the extent of expectation and acceptance of unequal distribution of power. The power distance dimension of Hong Kong is 68. This signifies that the people of Hong Kong believes in superior subordinate relationship and accept unequal distribution of power as per the organisational hierarchy. The individualism dimension of Hong Kong is very low. This signifies that the people of Hong Kong, works for the group’s interest instead of working for themselves. They believe in working collectively. The 57 score in masculinity dimension index shows that the people there are success driven. As per the score of uncertainty avoidance index it can be said that the rules and regulations are quite flexible and can be adapted as per the situations. People there are long-term oriented which means that people there worries for future which in turn signifies that job security is a major concern for them. The major cultural issues which have been identified while analysing the case are as follows: The first major issue which affected the restaurant is insensitive behaviour and strong criticism of Compio towards the existing cuisines available in the market which were rich in local taste. This signifies that Compia did not have any regard for the local taste. Local taste signifies the cultural influence on the taste. A person who does not have any regard to the local taste and highly criticise it implies that the person do not have any respect for the local culture. In order to succeed in the foreign land it is very important to identify and respect the foreign culture. Thus it is the first major cause which affected the performance of the organisation. The second major issue is the mismanagement of collectivism dimension of the culture. As per the Hofstede Model, Hong Kong has a collective culture. This signifies that the people there believe in working in group and for them the interest of group comes before their individual interest. This aspect of Hong Kong’s culture signifies that people there likes to feel that they belong to the organisation and for them the organisation is a part of their family for which they can sacrifice their individual interest and gains. Compia did not let the staffs and other employees to participate in decision making no such task was allocated to them which can make them feel that they belong to the company. In fact the behaviour of Compia was so rude that the staffs cannot associate them as the integral member of the organisation. Instead of initiating teamwork and instigating the feeling of belongingness, Compia was interested in dictating his orders to the staffs. In fact the manager who encouraged teamwork and made the staffs to feel that they belong to the team was also sacked by Compia. The third and most important cultural issue which resulted in increase in employee turnover and adversely affected the organisational performance is the mismanagement of long- term orientation cultural dimension. Inefficient management of this dimension has resulted in various problems in the restaurant like increase in employee turnover, lack of good and efficient employees, decline in the overall organisational performance etc. As mentioned in the section that the culture of Hong Kong is high in long term orientation. This indicates that the people there are future oriented which means that they plan for future. Hence job security is an important aspect of the culture of Hong Kong. As the restaurant was unable to generate the target revenues and as more and more management staffs left the organisations due to some or the other organisational conflicts, a sense of insecurity of future of the organisation and lack of job security made many efficient people leave the organisation. When Compia was supposed to assure the employees about the security of the organisation’s future he showed his anger and irritation on everyone, this made the matter worse. Apart from these major cultural issues another issue which affected the performance is discouragement of local language. Compia recruited only those staffs that have the knowledge of spoken English but the other official language which is also spoken across the city that Cantonese was not given much importance. As restaurant is a service sector therefore the front line staff should have the knowledge of both official and local language so that customer interaction could be done in an effective way. Thus the discouragement of the local language would have also affected the performance of the restaurant. Key Managerial Problem The key managerial problem facing by the management of the La Napoli management is the cross cultural issues arising in the restaurant. The management of the company is not so efficient to maintain the cultural issues arising in the company as the high employee turnover even in the top of the management shows. The profit of the company is not up to the mark. When a company wants to spread its business in the foreign countries then the company management has to look after the cross culture issues that arise. The customers of the company is from foreign as well as the lower level employees. The management of the company includes the executives from different parts of the world. The management team include three assistant managers who are from different parts of the world- one is a young American Chinese man, David. The other person is Indian who has the work experience in Hong Kong where the restaurant was situated. The third Assistant manager was from England. The consultant for organizing the purchasing systems was German. The head chef and the baker were from China who had not such experience of preparing the Italian Cuisine. The lower level staffs also from different countries. Very few of them are Chinese. They are mainly from Philippines, so that there is a major problem as they can’t communicate with the customers in the local language. The head of the restaurant is Luigi Compio who is Italian. The main problem of the Italian- American head chef Compio was that he has tried to hire the staff with little experience so that he can mould into his own image. He has not tried to understand the culture of Hong Kong and the other countries. Compio’s view was to employ the people in relatively low wage. He has tried to employ the people of that country in lower wages which is not justified for the people of that country; they are not ready to bother it. The problem of the head chef is his attitude. He used to misbehave with his employees. He has showed off the power he have. The power dimension index is not same for all the countries. The founder of the restaurant should have considered these factors. When a company used to employ the employees who are from different parts of the world then certain dimensions should be keep in mind as the Hofstede’s cultural dimensions suggest. The four dimensions that should be keep in consideration as suggested by Hofestede are the power distance index, Individualism and collectivism, masculinity versus femininity and uncertainty avoidance. Moreover there are some problems regarding some other issues like the language problem. The founder of the restaurant Compio has tried to operate the industries in his own way. When the restaurant employees are from different countries, different cultures then the founder should have emphasized more on the cultures of different employees. He should have taken more calm way to deal with the employees. The problems started right from the beginning of the restaurant. The management team more precisely the founder should recruit the staffs after analyzing the needs. It can be said that the planning was not robust. He needs the employees with whom can he communicate properly and the understanding between the employees should be better. He was also failed to manage the conflict. Conflict arises several times during the operations. He should not take the way of hiring and firing. All the employees he has hired are not with the organization at present. The employees were clear about their responsibility at the time of hiring. But when they were working in the organization they found it tough to cop up, as they found that their responsibility has changed. It was the effect of the founder’s policy. When the employees were working as per their responsibility they have to face criticisms from the company founder. For these reason they have to find another job. The founder of the organization has long term view but there was lack of long term strategy. For making the restaurant profitable for long term he should value the cultures of the employees, recruiting the right staffs that have some experience. He should clear the principles of the restaurant to the employees and assign responsibilities to all of them. The management should have been more organized. Recommendations In this present scenario the Tom Brown restaurant group has called a meeting where they want to decide about the future of La Napoli. The new venture of the group was looking attractive at the time of inception but the restaurant has performed badly in the last financial year. In this year the restaurant has failed to make a good reputation in the country, also there was a bad reputation of the restaurant as an employer. The board of Tom Brown restaurant group should make some policy so that the restaurant can gain good reputation in the public as well as gain a good reputation as an employer. For doing this the company management need to change the responsibilities of the founder of that restaurant, the head chef Compio. If the company management allows Mr. Compio to continue the business in his own way then the restaurant will also incur loss financially and also have a poor reputation most probably. So the management of the Tom Brown restaurant group has to take a tough decision about the restaurant. The venture of the company had the potential to get success, as in Hong Kong there was no authentic Italian restaurant. All the Italian restaurants offer Italian food with a Hong Kong or Chinese flavour. So this was an opportunity for the group to diversify their portfolio. So the company management should not take the decision to wind off the restaurant. The researcher is suggesting some ways which the management can take so that they can get out of the present condition and thus make a profit in the next financial year. As the Tom Brown restaurant group is the financer of the restaurant of the group then they are able to take the decision regarding management structure of the company. They should not leave the management power only on Mr. Compio. The company management should consider that Compio may be a master chef but he is not a good manager at all. So for gaining more profit in the next year the management should bound the area of responsibility of the founder of the company. The area of concern of the founder should be in the kitchen itself. Along with all the employees the master chef should provide explanation to the company board of directors. The company has to attract the customers as well for gaining the profit. So they should change their food menu. The food menu of the restaurant of the company should include the foods which the local people like most. Along with that they should offer them the authentic Italian foods. The company management should emphasized more on retain their employees. The hiring and firing culture should be discarded by the management. The company has to recruit the persons from the domestic country as they know the language of the country people. It would be easy for communicate with the domestic people. For providing them Italian foods the company management has to hire the employees from the foreign countries. For retaining all the employees the management has to understand their culture, respect their culture so that they become motivated and dedicate 100% towards their job. According to the Hofstede model the cultural dimensions for different countries are different. Their orientation towards power, their process of work (Either they prefer to do team work or not), their long term orientation are different (ITIM, n.d.). The management should consider all these matters and thus prepare a model so that the employees become motivated and they become dedicated. Conflicts arise in all the organization. It is the responsibility of the management to manage the conflict effectively so that the organization doesn’t get affected much for the conflict between two employees or one employee and the management. When the conflict arises and if that is lower, the management should take steps to manage that conflict in that primary stage. There should be an effective model for handling the grievance of the employees. The employees should have a proper area where they can tell about their grievance. The concerned persons should take steps to solve that problem. If that employee is not satisfied with that solution he can approach higher management for his grievance. The higher management should properly handle that grievance. The management should take the win-win approach, they should approach the problem like the two parties are in one part and the problem is at the other part (Fisher, 2000, p.5). That is right step to handle the grievance of the employees, so that they can feel that they are the important part of that organization. The management should change the structure of the management and they should not give much power to the founder of the restaurant. They have to employ staffs of different countries as they are offering foreign foods to the domestic country. But they need to respect the different cultures of the different countries, manage the grievance properly, as well as the food menu should be changed. In this way they can generate more profit in the next financial year and increase the reputation of the restaurant in the local community and also can earn reputation as a good employer. Conclusion It was seemed to be a great idea for the Tom Brown’s group to open a new restaurant which will offer authentic Italian food. The area of interest of the Tom Brown’s group is that it would diversify their portfolio. The idea was the brainchild of Luigi Campio. The master chef wanted to take the lead of the restaurant and wanted the financial backing of Tom Brown group. The idea was good in the sense that the group can offer authentic Italian food to the customers but right from the start of the business the process was wrong. The founder of the restaurant has recruited the top management who are from various countries but during the operation he has failed to manage them, there was issues repetitively regarding the culture. The process of Campio was to hire the staffs in a less remuneration and mould them into his own image which was a wrong approach towards the employees who are from different cultural backgrounds. Because of these problems the employee turnover rate was higher and the profit of the company was lower as well as the customers was not interested for the restaurant. In this situation the management of Tom Brown’s group arrange a meeting for deciding about the future of the restaurant. The researcher has suggested that they should respect the domestic country’s culture and the employees’ culture. The management should take the management power in their hand, respect the food habit of the customers and retain the employees properly by increase their remuneration and listen to their grievance. Thus the company can effectively diversify their portfolio and earn profit in the next financial year. Reference Fisher, R. (2000). Sources of Conflict and Methods of Conflict Resolutions. [Pdf]. Available at: http://www.aupeace.org/files/Fisher_SourcesofConflictandMethodsofResolution.pdf. [Accessed on: January 14, 2012]. Heidtmann, D. (2011). International Strategic Alliances and Cultural Diversity: German Companies Getting Involved in Iran, India and China. Germany: Diplomica Verlag. ITIM. (No Date). Dimensions. [Online]. Available at: http://geert-hofstede.com/dimensions.html. [Accessed on: January 14, 2012]. Read More