Review Case Study Tom's Coffee Cup
Tom had always wanted to start his own business. He was talented in many areas and had great people skills. Tom has a BA in business and an MBA as well. He was having a hard time conforming to some of the norms in corporate America as he was an independent thinker. He made a good salary but worked long hours during the week and on weekends. He was married with two small children and a pet. He needed to support his family as his wife had decided to stay at home with the children.
Tom searched around for business opportunities and franchises. He was not afraid to make the jump into being his own boss as he had confidence. Tom's organization was offering buy-outs so he decided to take one at the age of 40 and use the money to begin a business. Tom was given a severance package of $50,000 to leave the organization.
It did not take much time for Tom to find what he thought would be a great place to start a coffee house. Tom's Coffee Cup was opened just down the street from the Ravens and Orioles stadiums in Baltimore, Maryland. Tom had a vision of offering a place for customers to come, relax and to make their daily routine more pleasant. Tom even posted his mission statement of "an atmosphere of quality for the quality people we serve."
Tom was running on adrenalin doing local interviews and promoting his business. He spent most of the money he had from a home equity line of credit and from the severance payout on renovations and purchasing premium coffee and baked goods. He recently added generously-sized pita sandwiches and hearty salads to his menu for lunch and he decided to also serve smoothies and wheat grass for the health conscious crowd.
The business was quite successful and Tom found that he needed additional help. Tom's wife was supportive but did not want any parts of the business as she had her hands full raising the children. Tom opted to hire a manager so he could devote more time getting free advertising on the radio via interviews and at the local Chamber of Commerce. After careful consideration, Willie Cheet was hired. Willie had extensive experience in the food service business and had even been a manager at a local restaurant.
Willie was hired at a base salary plus a percentage of the amount he saved the business monthly, which was contingent upon the previous month's operating expenses. Tom's eleven other employees were paid an hourly rate.
From what Tom could see in the first month, Willie was working well and seemed to be implementing processes that were saving the business money. However, unbeknownst to Tom, in an effort to increase his earnings, Willie implemented a cost savings program that included changing suppliers for coffee and condiments. This measure saved the business money but also reduced the quality of the products being sold by Tom's Coffee Cup. Willie also reduced the size of menu items and raised prices. When several of the staff members indicated that customers were grumbling about the reduction in size of products and increase in cost, Willie came back at them saying that the staff was spending too much time talking to customers and were wasting valuable resources. The next week when Willie posted the work schedule all of the staff had fewer hours for the upcoming week. When questioned, Willie said that he was forced to reduce hours and stated that everyone needed to get used to the changes that were coming down the pike.
The following week Willie held a staff meeting and rolled out a plan that would be effective the following week:
• Not only were the hours of every employee cut but two positions would be eliminated;
• Employees could not partake of free coffee or reduced lunch prices;
• Fraternizing with the customers was not allowed;
• Employees could not stand around and talk to one another;
• Cell phones were not allowed;
• Coffee and other drink refills would cost customers;
When the meeting ended, all of the employees quickly left. Although most employees were stunned into quietness, one or two employees openly complained about the impending changes and how they felt they were working in a sweatshop. One young woman stated that she felt they were sure to lose more customers now that they were not allowed to "fraternize" with customers.
Shortly after Willie implemented the changes, employees began noticing the impact of the changes Willie implemented. Customers began complaining and some of the regular customers stopped coming to the Coffee Cup. Customersthat stopped in did not stay. Sales began dropping and Willie threatened to cut more staff. Feeling unappreciated and overworked, employees refused to clean up at the end of a shift and Tom's most reliable staff started to call out sick. Customer service was suffering as the employees feared being congenial.
Willie was somewhat perplexed by what was happening and when approached by Tom, he pretended that the changes were for the best and that Tom's Coffee Cup was doing great. Willie assured Tom that everything was running smoothly and that he had everything under control.
Tom stopped in one day to talk further withWillie but Willie was on the telephone. Tom decided to ask several of the employees how things were going. Reluctant at first to talk, the woman who had previously mentioned that she felt the coffee house would lose customer, began telling Tom of the changes that had taken place. Tom took a quick look around the coffee house and could not help from seeing the lack of cleanliness change in products. He left the store before speaking with Willie. Later that afternoon, Tom contacted his friend, Justin Thyme, a self-employed management consultant to take a closer look at the business.
Case Study: Planning, Organizing and Leading
The presented case study illustrates the importance of the functions of management, planning, organizing and leading. Many entrepreneurs with dreams of starting their own businesses believe that managing a business is simple. This case shows what can happen when new owners do not pay adequate attention to important components of management.
The plan is not one in which the consultant tells Joseph Jackson that he should do this or do that or he needs to do this or do that but present in an action-oriented manner. Students are expected to make connections between the facts of the case study and concepts, theories, and ideas presented in the course material.
Required Elements to include in the Case Study:
•Students will act as the management consultant, Justin Thyme;
•Using what has been learned in the course thus far, look at every aspect of the business depicted in the case study and identify all possible issues related to planning, organizing and leading;
•Explain in detail how the identified issues have impacted the business;
•Students are expected to show what they have learned in the course by applying theories and concepts. Be sure to support your reasoning using the course readings.
•Make recommendations to Tom on how to improve the management of his small business.
Required Formatting:
•Write a consultant's report that is double-spaced, 12-point font, and between five and six pages in length excluding the title page and reference page;
•Title page with your name, the course name, the date, and instructor's name;
•Include a reference page;
•An introductory paragraph, a summary paragraph and the use of headings are required;
•Write in the third person from the perspective of Justin Thyme;
•Use the course material to support your reasoning. Outside resources may be used but the main resources should come from the classroom;
•Use APA format for in-text citations and references. You are required to use the e-text and at least two academic or highly respected business publications, for a total of no less than three references.
•In citing sources, the page number/paragraph of the cited source should be provided;