Service Organisation & People : Final Exam Submitted by :Sreehari J , IIMC Date :04.02.

2014 Case : The way Forward : A Management Dilemma Q1. What went wrong with Aftabs business ? Describe the symptoms you noticed , especially under the context of this course. The case can be considered as a classic case of a business failure due to revenue reduction due to the poor service quality as perceived by the consumers. Now the reason for the consumers getting a poor service perception will greatly depend on the FLEs or the service staff and the supervisors in this particular case. These staff form the first point of contact for any customer and it is imperative that these employees perform full justice to what their job demands. Before I conclude that this is a case of only service failure, let me also examine the business model in light of the service delivery , process/equipment and system followed by Florence. First of all the location chosen for the restaurant seems to be reasonably well thought about. The products that were planned to be offer to the customers for eg the oriental dishes , burgers snacks, thirst quencher bar etc were differentiating factors. Other process/equipment components such as separate areas for various segments of customers were also a nice touch. Now coming to the service systems and procedures which includes the staffing, the definition of tasks , and other procedures to be followed by the employees , it is found that there are concerns in this area. From the hiring of Rehan as the restaurant manager, his role was specified but not adequately specified. Especially the incident where he was later told that he had no authority to fire an employee is an example. Also the qualification of the staff hired that was based on loose hypothesis that Florence could turn first time job seekers to loyal staff was not a good move. All throughout the hiring process and the day to day management, the lack of involvement of Aftab also created an owner agent conflict. Another issue that I came across was the restaurant timings and the management of staffs shifts were not done in a scientific manner and standardised manner .This will have two effects. One is the effect on the businesses P/L statement due to poor cost management and secondly on the motivation of the employees due to high uncertainty in the work. Now coming to the Service delivery aspect. I am starting with the service staff. There was gross failure in the service quality from the side of the FLEs. These can be attributed to various reasons. Firstly , the service staff did not have any experience nor their training was satisfactory. Customers complaining about the lack of knowledge of the service staff is a clear example to that. Obviously the service staffs were not intrinsically motivated. So it was necessary that they need to be extrinsically motivated by providing adequate pay, pro rata share in the TIPs and empowering them. None of these boxes were ticked by Rehan. His leadership style was mostly overpowering type than being a power building leader or empowering leader.In the empowerment pyramid the service staff did not even have the first level of meaning and competence ( figure below)

Intrinsic Motivation

Impact

Self - determination

Meaning ; Competence

Now coming to Rehan. He is person who is a Theory Y personality and taken initiatives. However he was not managed well by Aftab . The point at which he lost his complete motivation and hope in a future with Florence was the time when Aftab confronted him for firing one of his employees without consulting him. This was a problem that could have been avoided by two ways. One is that if Rehan had done a good job motivating his employees and secondly if Aftab also was involved in the day to day management decisions ,designed the job responsibilities and scope of Rehans as well as other employees , things would have been different.

Q2. What would you recommend to Aftab to recover his business failure? Describe each of your recommendation in sentences, not in simple phrases. Prioritise your recommendations from the viewpoint of urgency and importance. Relate your recommendations with the concepts and frameworks you learned in this course where appropriate. Recommendations below are in the decreasing order of urgency or importance. 1) Design the Job requirements and responsibility of every staff, which includes the service staff, supervisor, the chef etc and communicate to them clearly. 2) Identify the employees that have acquired competence and shown initiatives and lay off low performing employees. Hire experienced and qualified people wherever possible and provide them with adequate training to ensure that the heterogeneity in the services among different FLEs are minimised. 3) Reduce the capacity of the restaurant to a more manageable level with the available staff / increase the staff so as to cater to peak demand situation as well. 4) To bring back old customer and to attract new customers, try to bring in new marketing initiatives and offers to boost the footfall. A change in location also could be thought about ( if possible) 5) Hiring a new restaurant manager can be done , but after Aftab takes care of the business himself for some time so that he can detect problems in the future after before it goes out of hand, even after he hires a manager.

6) Redesign the incentive scheme to the employees . From the Herzbergs two factor theory,try to include hygienic factors as well as motivators. Try to convert the employees to intrinsically motivated bunch by empowering them in small increments 7) Ensure that the employee feedback are also taken into account while making decisions so that they fell more ownership in the firm and perform better. 8) Ensure that the Chef has all the equipments that are required to make the offerings in the menu within optimal time and quality. Basically the service excellence diagram that was discussed in the class stands as a framework

Adequate Physical assets which make service reliable and satisfiable

Attract, motivate, and retain the best suitable FLEs

Excellent attitudinal customer contact

CUSTOMER SATISFACTION

Appropriate competencies and procedures which make service safe and economical

Profit