Application of Organizational Theories: Case Study: Café Expresso

Introduction

Organizational Theories is usually regarded as the ability of the firm to cope up with the rapid change happening around its business operations. By definition it covers the study of the following elements within the organization:

• Organizational Designs
• Organizational Structures
• Relationship of the organization with the external environment
• Behaviour of the managers and other employees within the organizationCafé Expresso one of the top three companies from the coffee house industry has more than 6000 stores throughout the world. With about 500 stores across UK and Ireland it today employs more than 7000 employees globally. The figures are astonishing whereby it has served over 35 million customers each week over the last decade. The company has been managing it well but since there has been rise in competition it has lost a considerable market share to the new as well as the old competitors. Here the organizational theories come into play where there seems to be flaws in terms of the different aspects of the organizational theories. The business report below evaluates the changes and the company’s performance (both internally and externally) by relating it to the following concepts of the organizational theories and practices:

• Leadership
• Team work
• Diversity
• Human resource management Practices
• Performance management systems

A brief study of the possible impacts of the company’s new policies and steps is provided along with the suggestions if there can be any possible things which the company may adopt to reach the top position it had.

Literature Review

The recent years has seen several coffee bars come up on making the competition tougher for the existing companies. Both the new as well as the old players are seeking new ways for providing innovative offers as well as services to beat the other rival and gain sustainable competitive advantage. Upon evaluation the management at Café Expresso conducted by Ben Thomson revealed some facts which have been the reason behind the drop in the market share of the company. The study reveals the customers who are loyal to the company and regularly visit their outlets, the variety of the services on offer and the level of services offered by the other competitors. The key findings have been related to the 5 concepts of organizational theories and practices as mentioned below:

Leadership: Ben Thomson as the management head of the company took the initiative to make the company reach the top level as it had been before. In order to make their customers feel special he initiated the new campaign by creating a new value statement ‘Nowhere else makes you feel good’’. This actually was aimed to spread the message that at Café Expresso customers not only comes for coffee but also to have unforgettable experiences. Further he appointed a new Kam Patel as the HR manager to look after the entire internal management within the organization. Kam introduced several new initiatives which were targeted to improve the present conditions and hence make the company reach newer heights.

• Human resource management Practices:As an initiative to keep the employees happy she focussed on the key elements of the business strategy and to reduce the employee turnover. This included introduction of learning and development, talent management, employee involvement and communication, better compensation and benefits, etc. A new term was coined for the associates labelling them as the partners to the company. A better communication level was developed and each and every employee irrespective of their designation was advised to spend some part of the day on the floor of the store. A new mentor and buddy system was introduced in order to train the new recruits and guide the subordinates. With better incentives and salaries the employee turnover was brought down from 50% to 25% and addressed the concern of low pay.The other focus of the company seems to be on the retention strategy which had been backed by quality of compensation and other numerous benefits on offer. The management proposed the plan of offering share option schemes to its partners as a measure of encouraging partner ethos. Further to facilitate the promotion of its business the management entitled every employee with a 30% discount scheme at all its stores across the globe.
• Team Work: The new recruitment policy and leadership policies facilitated the team work within the employees and further helped in building strong professional relationships among all. In the past the level of employee involvement seemed to be quite low where which now gets addressed by the new system in place where the views of each was given importance. The team work within the company although was working well was not well organized. The reason behind this was solely no regular briefings and awareness what actually was the target and where the company was moving to. The new HR manager introduced the policy of holding regular team briefings for introduction of regular information on the performance of the business and conveying the messages to all the partners. In order to work collectively this is one of the best possible measures which the company has taken. Here ever store member and partner would be able to communicate and present their views. They are now also prompted for upward feedback and presenting their new ideas. To reflect how the plans have been progressing and evaluate the efficiency levels an annual engagement survey was introduced, the result of which was published and provided to every partner of the company.
• Performance Management System: It seems that there was defined performance management system before. The recent changes brought a change in the performance management system where every partner agreed that objectives and development needs was important that too in both terms of technical skills as well as knowledge and behavioural skills. Further the performance review was set to be reviewed every 6 months which included the manager, peer, and customer reviews. Thus it meant that a better measure of performance was in place to ensure that efficiency of the operations was checked and compared against the right parameters.
• Diversity: Ben under his priorities listed diversity as one of the aspects to be looked into. For the employees as well as the customers the main priority was to promote diversity among them and valuing each individual. All the steps mentioned above seem to have worked for the company where the customer service feedback had improved and the market share of the company increased over the months of implementation. The effects of Human Resource Management the implementation also seemed to have worked as the employee turnover was reduced to 25% from 50% earlier. Moreover the industry stats made it clear that Café Expresso had moved on to the number two spot in the industry. The overall strategic changes besides showing positive impact are a perfect example of the leadership changes which can bring about a change in the business of an organization. Both Ben Thomson and Kam Patel seem to have worked in the right lines to improve the current scenario of the company to gain the competitive advantage. Innovation clubbed with an improved leadership system is what has worked out in the case of Café Expresso.

Conclusion

The case study presents an array of organizational theories to be understood and learnt. It presents the past as well as the present scenario of Café Expresso after the changes and implementation were made. Some of the learning’s which can be cited from the above report would be as follows:

Leadership: Ben Thomsan and Kam Patel here show an excellent command over the decisions they took and implemented. The results show the following characteristics of a good leader which was pretty evidently seen among the both:

1. Confidence: The way things and policies were implemented shows the level of confidence they had for the decisions they were taking. With an exact view of what they were about to do made them implement the new changes with ease and confidence. The results of the same were clearly visible after they performed better (PHD Management 2011).
2. 2.      Enthusiasm: A good leader needs to be enthusiastic about the things he do. Both the innovative minds especially Kam Patel showed the enthusiasm to work for the better.
3. 3.      Determination: After the drop in market share Ben seemed pretty determined to gain back the lost market. He made the right moves and was determined to reach the top spot again. This presents a great learning for the importance of determination in leadership (SmallBusiness.chron 2012).
4. 4.      Courage: One of the most essential elements of a leader is the courage to make changes and take decisions. Both Ben and Kam had the courage to go beyond the old conventional practices that had been there for years. The courage resulted in a positive result which shows the importance it has for the success of a firm and its growth.

Human Resource Management: Kam Patel has done a great job where she has addressed all the vital elements of a HR system. With newer methods being implemented she took the effort to involve the entire team at Café Expresso from every corner of the globe. Some of the things learnt from the changes in the Human Resource Management are:·         Fairness and firmness: The new defined system seems to be fair and firm where employees concerns as well as their needs have been well addressed (Free Hrm 2012).

• ·         Commitment: With increased teamwork the commitment level of the employees are set to increase. This is one of the best changes which seem to have been done by Kam where all the partners are scheduled to meet and put in their views. A good HR system is valued in terms of the commitment within the organization and these changes certainly seems to boost the commitment levels of the employees and partners as they now get the opportunity to be involved in a much better manner.
• ·         Motivational: The new policies where top priorities are given to the demands and needs of the employees seem to be very motivational. Moreover the training programmes clubbed with the retention policy was a great motivational effort made by the management. Some of the steps like recognition of personal achievements and reward for better performance are among the best means to motivate the employees and further enhance their efficiencies (Human Resources IQ 2011).

Recommendations

All the measures taken by the management and the HR personnel seem to have done wonders for the company to lift it back to the 2^nd spot. However with time that would pass on the competition is set to get intensive and hence trouble the company in some way or the other. One of the major concerns about the present scenario would be that others would imitate the idea of Café Expresso which can make it less popular. Some of the suggestions which might be handy for the company would be as follows:·         Innovation: This is very crucial, especially after the company has shown that it has something different to offer to its customers. Here the company needs to evaluate its new approaches and keep updating as well as adding new dimensions to it on a regular basis. People usually like change and if a coffee giant can offer some lucrative deals or make them feel special they are sure to get popular.

• ·         Promote Employee involvement: A company runs on its employees, hence the management needs to lay stress to encourage the employees to be actively part of the entire operations. Their suggestions, recommendations as well as their active participation in the day to day operations would highly be effective. Moreover when the employees of an organization are shown that they are important it heavily contributes to the progress of the company while increasing the efficiency (MBA Discussions 2011).
• ·         Advertise: The Company has been highly benefited by the word of mouth advertising and it should always be the motive to get popular. However with increased competition the company would need to advertise its offers over every form of media that is available. Especially the social media networks are one of the powerful sources to reach public and get popular.
• ·         Motivation and Reward for Efforts: The management needs to address the low scale pay for which there was a pretty high employee turnover ratio. With the right set of remuneration it not only reduces the employee turnover but is a form of motivation which tends to increase the efficiency level of the employees. Besides the regular remuneration there needs to be incentives and rewards for efforts. Usually employees appreciate to be recognized for their efforts, therefore with the right performance management system in place the HR needs to provide incentives and rewards so that people are more inclined to work better.
• ·         Offer newer Products: One of the keys to success for a coffee shop is the variety of drinks and eateries on offer. Café Expresso would need to continuously make the USP of offering newer drinks or food items on a regular basis. With ideas such as drink of the month or food for the week could well attract people to try out their newer offerings.

All options above clubbed with the already implemented steps need a constant monitoring and follow up from the management and HR manager so that the progress and its impact can be evaluated and if any errors are found gets rectified.

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