UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Bui Chau Sang INEFFECTIVE OPERATIONAL MANAGEMENT A CASE OF PAPA GARDEN MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Ye[.]
UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Bui Chau Sang INEFFECTIVE OPERATIONAL MANAGEMENT: A CASE OF PAPA GARDEN MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2018 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business Bui Chau Sang INEFFECTIVE OPERATIONAL MANAGEMENT: A CASE OF PAPA GARDEN MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: NGUYEN THI MAI TRANG Ho Chi Minh City – Year 2018 EXECUTIVE SUMMARY Due to high quality of life and increase in free time and income, enjoyment of cuisines has been given considerable attention – leading to a significant growth of fast-food restaurants, especially in the central area of Ho Chi Minh City such as District 1, which has turned it into a key factor of most young people’s cuisine desires In business development of restaurants like McDonald’s BT, Burger King, Double B Spagetti, Con Ga Trong, Papa Garden has been facing with fall in sales volume and low level of customer satisfaction in period of 2016 to 2017 since its first launch in 2016 In food industry, operational management is playing a vital role of a successful business performance of any service organizations The aim of this study is to investigate the main cause and the main problem leading to these above symptoms and then provide potential suggestions for attainable improvement The findings of this study identified that ineffective operational management is the key factor that results in low sales performance and low evaluation of customers on their experience at Papa Garden in comparison with others Based on discussion and theories informed, this study also offered potential solutions and action plans to improve poor service operations management and overcome difficulties in low business performance and customer dissatisfaction The two potential solutions that restauranteurs and many researchers have suggested include holding seminars, counseling sessions and team building activities; and applying recruitment and selection programs Through insights of Board of Management and related theories informed, it is obvious to take consideration to execute the alternative solution of holding seminars, counseling sessions and team building activities at this time for improvement ACKNOWLEDGEMENTS This study was conducted as my thesis under the level of Master at the Master of Business Administration Program in 2018 I would like to express my sincere thanks and gratitudes to Professor Nguyen Thi Mai Trang for all her supervision, encouragement, valuable suggestions and precious advices throughout the period of this study I would also like to take this opportunity to show my gratitudes to my colleagues at work and classmates at ISB for their continuous support I must also send my sincere thankfulness to my parents and friends for their continuos support and encouragement Bui Chau Sang TABLE OF CONTENTS EXECUTIVE SUMMARY ACKNOWLEDGEMENTS LIST OF FIGURES LIST OF TABLES INTRODUCTION 1.1 The restaurant background 1.2 The restaurant’s vision and mission PROBLEM CONTEXT 2.1 Global fast-food restaurants industry 2.2 Vietnam fast-food restaurants market 2.2.1 Current situation of Papa Garden in comparison with key competitors 13 PROBLEM IDENTIFICATION 16 3.1 Potential problems 18 3.1.1 Ineffective operational management 18 3.1.2 Inadequate inventory management and personal hygiene issue 20 3.1.3 Weak human resource management 23 3.2 Problem validation 24 3.3 Cause –and –effect diagram 27 POTENTIAL CAUSES 29 4.1 Poor supervision from managers 29 4.2 Insufficient adequate staff for efficient operations 31 4.3 Lacking of strong interaction between departments 31 4.4 Cause validation 32 ALTERNATIVE SOLUTIONS 34 5.1 The first alternative solution: Applying recruitment and selection programs 34 5.2 The second alternative solution: Implementing seminars, counseling sessions and team building activities 36 ORGANIZATION OF ACTIONS 41 6.1 Action plan from Papa Garden 41 6.2 Effectiveness measurement through taking actions 44 CONCLUSION 45 SUPPORTING INFORMATION 46 REFERENCES 69 LIST OF FIGURES Figure 1: Papa Garden’s Menu Figure 2: Global fast-food market's revenue share in 2017 Figure 3: Brand value of the 10 most valuable fast-food brands worldwide in 2017 Figure 4: Fast-food revenue in Vietnam from 2014 to 2017 (in million U.S dollars) Figure 5: Top best-selling fast-food restaurants in HCMC from 2016-2017 Figure 6: Customer’s evaluation on service quality of Papa Garden and surrounding fast food restaurants Figure 7: Reasons for why customers not intend to re-visit Papa Garden Figure 8: Cause –and –effect diagram LIST OF TABLES Table 1: Top 10 best-selling fast-food restaurants in HCMC from 2016-2017 Table 2: Customer satisfaction scores of Papa Garden and of restaurants around District Ho Chi Minh from 2016-2017 Table 3: Sales volume of Papa Garden and other restaurants around District Ho Chi Minh City in 2016, 2017 and first months in 2018 Table 4: Explored factors of restaurateurs and customer’s evaluation on management issues Table 5: Estimating cost for recruitment and selection process Table 6: Estimating cost for group meetings and team building activities Table 7: Action plan Table 8: Board of Management’s expectations in improvement of current situation of Papa Garden INTRODUCTION 1.1 The restaurant background The restaurant industry is the sphere of business which is rapidly growing nowadays In Vietnam market, entrepreneurs pay considerable attention to this field as it is becoming more in demand and widespread There is a strong competitiveness on the market in this area, thus it is essential to frequently improve the quality of service to satisfy customer’s needs and desires The better the service is provided, the more profitable the company is In view of life is getting more intense, the fast-food concept restaurants are gaining more and more popularity among full-service restaurants due to its time efficiency and cost saving In customer’s viewpoints, fast-food used to be associated with something unhealthy and calorics, however, those thoughts have considerably changed recently Increasing restaurants are offering healthy and delicious food which can fit people with gainful diets In Vietnam, there are many vegetarians, hence lots of restaurants tend to offer as many choices as possible to satisfy customer’s specific needs Papa Garden restaurant is one of the fast-food concept restaurants in Vietnam which offers healthy and beneficial food As the high level of competitiveness on the market, it is more important to overtake the quality of service, to make customer satisfied and be able to establish a loyal customer base and then boost revenue respectively Based on that, customer satisfaction and service quality research were conducted to enhance the restaurant’s effectiveness of operations and to atttract more customers for higher profitability 1.2 The restaurant’s vision and mission As Vietnam has been taking more and more steps advanced to become a developmental country in 2020s, the restaurant industry sector is more considered as one of the most important sectors in Vietnam In facts, the number of well-known fast-food chains in Vietnam is continually increasing KFC, Pizza Hut, Lotteria, Carl’s Jr., especially McDonald’s and Burger King – the two biggest name in the world of fast-food chains have been currently presented in Vietnam Most restaurants are located in busy areas like large supermarkets, main streets and tourism destinations This truly attracts plenty of customers In other sides, it indicates that there is a strong competition among these big brands in this area today; thus it it more necessary to make differences, continous innovations or to enhance the quality of services provided to meet customer needs and desires Papa Garden is a two-year-old restaurant with fast-food concept famous for its healthy and delicious food The restaurant offers a variety of vegetarian options, meals containing meat The main products are Papa’s bread, fried chicken fingers, fried rice with chicken, fried rice with minced meat and spaghetti Moreover, Papa Garden also offers various types of special beverages such as Green tea ice blended, Choco chip ice blended, Peach tea, Mint tea, Caramel frappuchino and many others fresh smoothies and juices Customers have a considerable possibility to choose from various ingredients with precise origins to experience Besides, Papa Garden offers catering for various occasions for a party or event of ten people Reservation can be made no later than four days before the event and they are processed during the weekdays only There is an official web page of Papa Garden on Facebook where customers can access and leave messages or make reservations for the catering specifically indicating the meal plans and number of attendances The menu is provided both in Vietnamese and English and it is shown as belows: Figure 1: Papa Garden’s Menu (Source: Operation Department of Papa Garden) PROBLEM CONTEXT 2.1 Global fast-food restaurants industry According to Transparency Market Research(1) – a global market research, analysis, and intelligence firms with offices in India and the U.S, the global fast-food market was valued at approximately 495 billion USD in 2014 and is expected to reach 645 billion USD by 2020, growing at a CAGR of 4.5% between 2015 and 2020 The global fast-food market observed significant expansion in North America in its early years 44.2% of global revenue share is estimated in North America, with 40% of global revenue concentrated in the United States It indicates that North America is really a large market for the fast-food concept Other developed regions also have a high concentration of industry revenue, including Europe at 17%, with a particularly high concentration in Germany (and France to a lesser extent) the powerhouse economy of the EU In the coming years, however, the non-traditional fast-food markets are expected to generate a significant chunk of the global revenue – these include Asia Pacific and Rest of the World Asia Pacific also makes up 4.2% of global revenue, and includes Australia and partly Vietnam, which has a strong affinity for fast-food(2) In addition, peer pressure among consumers to switch to Western eating habits is also a key factor influencing the growth of this market Georgraphically, North America stood as the largest market for the fast-food concept followed by Eroupe and Asia Pacific In North America, the busy lifestyle of individuals that does not leave adequate time for fresh cooking on a regular basis and dependence on convenient restaurants are driving the market It is obvious that the development of fast-food market is turning to Asia, especially developing country like Vietnam As shown in Figure 2, the sector of global fast-food restaurants market is categorized into the four segments by geography in 2017 Global Fast-Food Market's Revenue Share in 2017 North America Eroupe 35% 4% Asia-Pacific Rest of the World 44% 17% Figure 2: Global fast-food market's revenue share in 2017 (Source: Transparency Market Research in 2017) In the whole market, some restaurants chain – a group of related ones based in different locations that are operated either by franchise agreements or under shared corporate 22 shared that I strongly dissatisfy that the restaurant not give effective food handling periodically compared with other restaurants like McDonald’s, Jollibee and Double B Athough I have been an acquaintance of Papa Garden and still like experiencing at there, but I think you should improve the management efficiency of this process In my opinion, one of reasons is ineffective inventory management leading to slow services and food quality In addition to inventory management, staff personal hygiene is another important issue at the restaurant In term of service industry, neatness, cleanliness and maintaining hygiene of people and spaces is a manadatory standard in every hospitality establishment (as cited by Lee HK et al(22)) Staff should be aware of understanding the importance of maintaning cleanliness and hygiene in the workplace and setting as the first priority Ms Le Thi Thu Trang – Server at Papa Garden stated that Sometimes, the floor and the tables are oily and watery which makes the customers feel uncomfortable to dine in As a consequence, the customers, especially the children, had the risk of falling down due to this slippery floor Dirty tables and chairs will result in the growth of bacteria in the restaurant, which will affect the health of the customers As a role of Staff Supervisor, Ms Truong Thu Thao mentioned that Staff personal hygiene requirements are not met when working uniform of employees are not regularly changed to maintain a neat and clean appearance Sometimes, there are some employees who consume food in the kitchen and adjacent areas This not only negatively affects on our reputation but also reduces efficiency of food production If this hygiene issue is not improved, then the customers, especially the regular customers, will seek for a new restaurant In term of customer’s viewpoints, Mr Vu Hoang Nguyen truly shared that I think that personal hygiene activities including cleaning, sanitation are not maintained and sustained effectively to ensure the high standard quality of services In some cases, the restaurant not stick to standard policy on staff using a pressed uniform, nails cut and maintained, wearing light make-ep and perfume As Mr Ho Phuoc An mentioned about the importance of hygiene standards that We have to work harder to prove we deserve customer’s money they paid Cleanliness and hygiene are essential to make us difference We need to guarantee every area of an establishment, especially the toilet, is spotless and in long term, it can help us build customer confidences and establish relationships meaning that customers are more likely to return Investment in sanitation and hygiene is really an investment in business growth In term of food production, Nonaka et al(23) stated that personal hygiene in restaurants and 23 implementation of hygiene standards and procedures for staff is the best way to gain the trust of customers Due to the importance of maintaining personal hygiene in restaurants for health standards, each person working with food preparation has to keep a high degree of cleanliness and a tidy external appearance In addition, the impact of food quality has positive relationship between food quality and customer satisfaction as well as their behavioural intentions and organization’s sales and profits (Ha, Jang(24)) 3.1.3 Weak human resource management In term of human resource management, “people” are regarded as individuals who poss technical skills, good interpersonal skills, positive attitude and can work well independently or together within a team; and service firms need to work closely with their human resources (HR) departments and devote special care in selecting, training, and motivating their service employees (Khan MA(25)) According to Voss C(26), behaviours and competencies of staff play a major role of the success of service operations, and human resource managers should take considerations to manage workforces with main tasks including manpower, customer planning, design of job, selection and termination, training and development, motivation and promotion of workforces Mr Truong Tuan Tai – Staff Manager, told that In addition to insufficient personnel, the restaurant also faces the issue of incompetent employees which reduces and costs the whole food service operation Employees are not alert of their jobs, sometimes they tend to neglect taking orders from customers who already chosen food and had been in the restaurant earlier than others, and thus customers have to wait for them until finalizing their orders or cleanning up the table They not acknowledge customers by smiling, eye contacting with unfeigned interest when taking orders from customer and this makes them unpleasant and dissatisfied Futhermore, negative attitude of employees such as irritation, annoyance, bad temper, impatience and unwillingness to help also contribute to slow service of the restaurant as these things reduce customer retention or make them become bored and unengaged with the resraurant All of these likely cause reducing customer loyalty and then leading to loss in sales and profits in the long term In the perceptions of customer, Mr Nguyen Tan Tai – who frequently visited Papa Garden for last months, criticised that The restaurant has incompetent staff with bad service manners when some of them tend to ignore my suggestions or even they are ignorant of menus of the restaurant After my straight opinions, they still not attend to my complaints, therefore these issues remain unresolved Sometimes, they appear in bad temper, unhappy and unready to help I think 24 the restaurant should hire more competent staff for better service Shimmura et al(27) stated that customers expect staff to what is expected from them from taking food orders, moving them to kitchen and serving the ordered food Customer satisfaction can be achieved by providing excellent service and competent staff to them such as a warm friendly smile, courteous mannerism, willingness to serve and an empathetic demeanour; and thus these positive attitudes help restaurants not only retain existing customers, but also attract more new ones, translating to higher sales and revenue (Engetou M(28)) Bad attitudes in customer service are contributed to the slow service of restaurants and customers are not treated well by staff with courtesy and kindness, then they would be likely to spread the negativity and tell a number of people of their poor experiences (Seel Richard(29)) 3.2 Problem validation Based on above discussion and analysis, it is clear to realise that symptom of customer dissatisfaction and low sales performance derives from three problems relating to the quality of services: ineffective operational management; inadequate inventory management and personal hygiene issue; weak human resources management In order to propose potential solutions and take some actions for betterment, it is much more important to explore which problems are truly main produce the symptom of low sales results and unexpectedly low level of customer satisfaction at Papa Garden In regard to inadequate inventory management and hygiene issues, despite of negative impact on food preparation, handling and slow service delivery, this problem can not be solved prematurely because of some typical rationales as follows Firstly, Papa Garden is not able to improve and upgrade inventory management system in a short time As the system is a complex process, it can be not effectively applied for operations with a small scale of the restaurant comparing to larger slace of competitors Moreover, efficiency of inventory management mostly depends on external elements and objective existences like purchasing enough fresh and season products; implementing regular equipment maintenance (freezing system, goods transport machine) to ensure purchased raw material has to be frozen in good portions; difficulties in find the consistency from supplies to provide fresh and seasonal food material; unexpected changes of weather affecting ingredients spoilage, which are out of manager’s control and needs more time and human resources for better improvement According to Barrish D(30), inventory management is a complicated managerial process which needs lots of resources and cautious preparation, especially during the conceptual stages, ingredients and materials prone to seasonality and occasional 25 unavailability Secondly, from customer’s perspective, in food process, personal hygiene and cleanliness are negative signs of slow delivery to their experience However, this issue often occurs due to lacking of sufficient strict supervision from managers and supervisors and enough personnel for operations between departments It should be considered that strict supervison and training programs are needed to implement to hinder food poisoning and enhance the quality of service (Phillip S and Anita E(31)) In term of service standards in hospitality management, Ndife et al(32) emphasized that as hygiene and cleanliness are key factors supporting the business as well as determinants in the overall success of restaurants, managers need to pay more attention to supervise, monitor and controll all activities in operations and especially in food process not only to ensure the high standard of food handling, but also to reach remarkable business performance Mr Do Hoang Hieu – Head Chef also acknowledged that One of the most key issues from effective inventory management is about suppliers In facts, it is not difficult to find suppliers, but the challenge is that how to aproach the consistent supplier to provide food in demand This happens for seasonable raw material and food due to instability of suppliers Consequently, it requires our managers have to continously look for appropriate suppliers in order to protect our process from discruprion However, it is quite difficult to that due to higher cost Mr Truong Tuan Tai also emphasized that In my opinion, inadequate inventory management and hygiene issues is part of problems existing in our operations As you may know, this problem can impact on the efficiency of food process, however we can handle them due to sufficient human resources with cautious monitoring and controlling in our extent I mean that supervision and controlling inventory levels is key factors in the success of our operations as they help operators control inventory levels, reduce items loss and improve profitability indeed Regarding to people, it is not a key factor leading lower customer satisfaction low sales results in the restaurant In facts, not many workers in Papa Garden are incompetent and they truly lack of relevant qualifications to jobs Self-training and development sessions can be regularly applied to help some incompetent ones enhance their ability and grow inside with the aim of embracing customer’s needs in the long term As a role of owner, Mr Truong Thu Thao acknowledged that Inadequate personnel definitely lessen the effectiveness of operations; but in term of current range, the restaurant can fix it through using available resources and on-the-job training method not only to improve required skills and build a closed relationship, but also to ensure service delivery on time without further delay 26 Mr Ho Phuoc An also affirmed that The challenge of staff management is truly a very hard and long process In facts, basic mechanical work can be easily learned and trainned, the right attitudes and manners are more difficult to reach As these skills are prone to naturally born, thus it is hard to learn and this often costs an expensive process of training and selection In my opinion, this problem can not be solved immediately due to large amount of time and money Accordingly, this issue only emerges when there is an existence of interpersonal conflicts, low skills and demotivated spirits that lead to terrible performance Thus, it is not a big problem that directly affects level of customer satisfaction and behaviour intentions As explained by Brown et al(33), restaurants should pay more attention to build self-training, performance appraisals and develop competency models and managerial skills such as problem solving, conflict management in long term goals; and it can not be solved in short time if there is an exsistence of human issues such as meager skills, limited training, lead to high turnover, unstable workforce, poor service delivery Importantly, it can be seen that ineffective operational management is considered as the main problem that directly affect customer satisfaction and decrease in sales performance at Papa Garden through the period of 2016-2017 In the restaurant, management’s weakness has the most negative impact on the quality of services and further leading to customer complaints at the restaurant and bad sales result because of two main reasons as belows Firstly, supervision and management are the most important determinants to the success of any service organizations today Corporations always need a good process of management and the ability to analyze their business performance from all aspects to ensure that they run properly and profitably (Chandrasekar K(34)) As most of the insiders who joined in the indepth interviews acknowledged that the key reasons leading to customer dissatisfaction and low sales performance at the restaurant is related to supervision, staffing, operation and multi-departmental interactions, we are supposed to fix this problem as soon as possible to recover the efficiency operation of Papa Garden Mr Le Nguyen Tri Dung judged that We have to accept that management has been playing a vital role in effectively operating restaurant’s activities, especially the sales and services delivery to customers Literally, difficulties in monitoring and controlling all aspects of operations, including supervising staff’s daily tasks and managing them efficiently, are big obstacles for us to obtain the high quality of services and profitability In order to raise sales volume up, or at least improve customer retention, we need to solve this problem absolutely Mr Truong Tuan Tai said that 27 As the above speech about my points, in term of hositability management, connection and cooperation are key determinants to get successful operations of service In addition to building good policies of management, good recipes for delicious food, sufficient sources of material and standardised hygienes, ability of communication and inspiration with teamates on daily works is a fundamental element of a sucessful restaurant Secondly, most of customer’s complaints come from weak management structure Due to this inadequacy, the restaurant are not able to help employees understand their roles and responsibilities at work; and role of managers is vague that they can not open communication and sufficient support with each other associated with strong motivation to build a good workplace environment to every staff As Ozdimar B and Caliskan O(35) stated, due to personnel shortage and poor management, restaurants can not pay attention to serve the number of customers, to keep track of items ordered, most profitable dishes and further lead to inventory loss Bateson JE(36) also emphasized that in term of services management, some difficulties with controlling the quality of service encounter, especially mistakes happening during the process of operations like a conflict of control between staff and managers are visible to customers, and it leads to their uncomfortable feelings In addition, when these things get overlooked, it also causes disputes and frustration in customer experience Mr Thai Thanh Binh also told that As I mentioned before, lacking of sufficient supervision and monitoring from managers is the key reason of slow services delivery I think that when the restaurant improve strongly interaction and communication between staff and managers, your current situation can be better and it can attract more customers to visit From above discussions and validations, it is obvious to realise that high level of customer dissatisfaction and low sales performances at Papa Garden restaurant mostly derives from ineffective operational management Therefore, we should find out potential causes of the main problem to validate them to choose the key cause which most impact on low sales results and customer dissatisfaction at the restaurant 3.3 Cause –and –effect diagram From the results of group discussion with suitable respondents together with related theories informed, the cause –and –effect diagram can be developed as three main groups depicted as follows: 28 Insufficient adequate staff for efficient operations Poor supervision from managers Incompetent managers/ supervisors High turnover rate Overuse of employee empowerment Ineffective operational management Customer dissatisfaction Low sales results Staff’s work stress Conflicts between staff and managers Lacking of strong interaction between departments Figure 8: Cause –and –effect diagram (Source: Syntheses of discussion and findings in case of Papa Garden) According to above cause –and –effect diagram and in-depth interviews, it can be found that ineffective operational management is the main problem leading to decrease in level of customer satisfaction and sales volume dropping down in two recent years Obviously, in short term, it affects the quality of services provided and the number of visitors or customers who are utmost important assets of Papa Garden, but in long term it negatively impacts on the restaurant’s business performance and sustainable profitability Because of the urgency and importance of this problem, it forces Board of Director of Papa Garden to truly focus on validation, clarification of it and find out the best solution to overcome as soon as possible Most of people who join in-depth interviews including restaurateurs and frequent customers all indicates that the key problem leading to the low sales results and customer dissatisfaction is relating to ineffective operational management Nonetheless, there is no 29 denying the fact that two other problems such as inadequate inventory management, personal hygiene and weak human resource management also negatively affect business activities and level of customer satisfaction at Papa Garden However, in facts, they are less emergent than ineffective operational management and it can not be solved absolutely with limited sources and timing in short term As a consequence, it is crucial to pay more considerable attention to the key one: ineffective operational management POTENTIAL CAUSES As acknowledgements from respondents through in-depth interviews and theories informed, there are three causes leading to ineffective operational management: poor supervision from managers; insufficient adequate staff for efficient operations; lacking of interaction between departments In order to enhance the level of customer satisfaction and raise sales volume up, we need to validate those causes to choose the most important one and then suggest solutions for fixing it for attainable improvement 4.1 Poor supervision from managers Davis B et al(37) emphasized that in term of food and beverages management, the bulk of managerial work is in supervision aspect, and the more excellent in supervision of staff and monitoring all aspects of sales activities, the greater profitable and effective operations the service organization achieve According to Thompson AA et al(38), effective supervisions can be reached by qualified competencies of managers in solving operational problems In facts, many complaints from respondents within Papa Garden are relating to abilities and competencies of supervisors and managers in term of managing operation activities Ms Le Thi Thu Trang – Server stated that I realise that many supervisors and managers want their employees to work for “them” This is really a mistake They are too authoritative to influence staff by their position power and regularly criticise them for small mistakes In addition, I feel uncomfortable and unfair with the way of managing and handling incidents as well as treatments with staff Mr Nguyen Huu Dung – Kitchen Staff acknowledged that In my opinions, I see that some of supervisors are really incompetent with bad manners, skills and attitudes They often display their know-it-all attitudes to impose on inferiors Morover, they just refer ordering than listening to staff’s feedbacks and suggestions without inspiration I think with current manager forces, we are not able to operate all activities effectively and further decrease sales so far In addition, some complaints come from empowerment in controlling and monitoring staff activities in the restaurant In term of restaurant industry, Keiser TC(39) noted that 30 empowerment quality is one of important factors that help restaurants perform and manage works effectively to deliver high quality service together with provision of high level of customer satisfaction and long term financial and sustainable business success According to Awamleh NA(40), the concept of empowerment enables the managers to perform well and help others work under their tight supervision to handle unforeseen problems situations and to achieve successful business performance In addition, empowerment can encourage employees to make decision and enhance responsibilities and motivation in their routine work, as well as improve the quality of services, customer satisfaction and ultimately increase sales volume in the long term (as cited by Lashley C(41)) Despite of the importance of this concept, in the case of Papa Garden, there are some situations of overuse of empowerment by chosen staff that negatively impact on the overall performace of operations Mr Ho Phuoc An mentioned about this issue that At Papa Garden, managers often empower their responsibilities for employees who have been worked for a long time, around six months to a year to allow them rights to make decision in handling unexpected problems situations such as customer complaints or operational mistakes etc However, this empowerment makes converse effect on management efficiency of whole operations in the restaurant Some empowered employees are free to use their rights to treat others bad and make systematically wrong decision without close supervision from managers In facts, it causes poor controlling and supervision in management of operations at Papa Garden and further our restaurant will loose customers and lost profitability due to overuse of employee empowerment Mr Le Nguyen Tri Dung also said that As a role of manager, I see that empowerment is not suitable to apply for the restaurant As employees are not able to use their empowerment responsibly, thus in most cases they will not involve their managers to manage and deal with operation problems Regarding to empowerment concept in hospitality management, Tsaur SH et al(42) also emphasized that employee empowerment is considered as an important factor for success in any service organizations with benefits such as motivating and encouraging employees to feel more enthusiastic about their job to give quick responses to difficult situations at works; however overuse of empowerment can have negative effects on service quality and strict supervision for its operation efficiency In short, managers must be able to supervise all operations within the restaurant and monitor a periodic basis in the performance of team functions such as order taking, food preparation and cooking to ensure positive financial results (as cited by Ban V(43)) 31 4.2 Insufficient adequate staff for efficient operations Staffing is another important function of operational management and it is a key process to achieve great business performance in any service organizations (Sureshchandar GS et al(44)) Lacking of sufficient staff for effective operations is prompted by some managers who are directly involved in managing each part of departments Mr Truong Tuan Tai – Staff Manager at the restaurant, aslo shared that I realise that the restaurant has been facing with high turnover rate for the last six months It is difficult to run operations and other activities smoothly and effectively with insufficient personnel This issue indicates that we should pay considerable attention to carefully review our selection, training and especially policies for employee retention Mr Le Van Hoang – Shift Supervisor acknowledged that I see that common complaints from customers are from limited workforces for right feedbacks and thoughtful caring In my opinion, this deficiency can be derived from significantly low employee retention They tend to quit their jobs due to many unexpected reasons With the limitation of personnel, we are suffering lots of difficulties to operate all activities effectively and slow service delivery and low sales performance are unavoidable results Mr Le Thanh Nhan also confirmed his above opinions that As I mentioned, I totally agree that insufficient staff is a big problem due to increasingly turnover rate We can not ensure effective implementation of operations with this deficiency and therefore our quality of services is not really good as our expectations Bufquin D et al(45) stated that inadequate implementation of operational management is in consequence of insufficient personnel and this inefficiency of some management policies and practises will cause low business performance and long-term financial results 4.3 Lacking of strong interaction between departments In term of hospitality management, Becker JA et al(46) stated that interaction and communication among departments play a very important role of successfully financial results in any service companies, and bad communication have a disastrous consequence on all areas of operations Huselid MA et al(47) also emphasized that one of reasons of weak interaction between departments in food and beverages shops is from staff’s work stress Talking about this issue, Mr Le Nguyen Tri Dung straightforwardly shared that Due to the poor interactions and relationships between employees and managers, there can be direct effect on the restaurant’s performance I realise that supervisors are not alert at all times to employee’s reaction, as they not provide encouragement and stimulation for 32 staff to maintain and enhance work performance at all As a result, there is a lacking of effective cooperation, collaboration and sufficient communications to connect people with a constant endeavour and moral encouragement and this leads to inefficient operations In addition, managers can not create favourable conditions for creative working and freedom of expressions and actions and sometimes conflicts amongst employees and managers occur It further results in the resignation of some staff They leave the restaurant as they are not able to cooperate and interact with co-workers and managers as well as to strive for excellence and fairness while dealing with customers, hence the quality of service delivery becomes worse and causes low sales results so far Mr Ho Phuoc An also stated that The interaction within each person of the teams is very crucial As a result, when managers periodic staff appraisals, give them enough advices or comments, they really know the staff We would be amazed when they want to work, remain associated with the restaurant and have a desire to contribute to make it even better Therefore, by this way, we not only have good control of the whole operations in each team, but also encourage a spirit of cooperation, collaboration to ensure the food and service delivery are satisfied by customers For my thoughts, weak connection among departments is caused by heavy workload that staff suffer and misunderstanding of communication when they work with together Michael R et al(48) emphasized the importance of building intimate communication that it is much more effective, beneficial and rewarding when organizations foster meaningful relationships between each individuals In addition to professional competence and positive attitude, excellent interpersonal interaction skills greatly influence group performance and motivate the amount and effectiveness of teamwork in service companies (Josiam et al(49)) 4.4 Cause validation Based on above discussion and validation, among three factors, it can be obviously recognized that poor supervision from managers and supervisors is proved to be the key reason of ineffective operational management because of its impact on level of customer’s satisfaction and low sales results in Papa Garden’s business performance Through operation department’s records collected by confirmation from insiders of the restaurant and some customers, we can get more deep insights of their view of points and perspectives on thoses issues together with group disscusion and literature review Most of customers and staff indicated that they were dissatisfied with issues of incompetent supervisors and managers which have high percentage 60% Moreover, overuse of employee empowerment is seen as a significantly negative factor whether employees are not happy and expected to 33 burden their workloads anymore, with highest percentage of 78% Table 4: Explored factors of restaurateurs and customer’s evaluation on management issues Evaluation of respondents Explored factors Agreed Dissagreed To be considered Incompetent supervisors/managers 60% 25% 5% Overuse of employee empowerment 78% 12% 10% Not having enough staff for timely services 45% 35% 20% Tensional expressions from staff 38% 33% 27% Conflicts between staff and managers 39% 35% 26% (Source: Papa Garden’s Operation Department records) Depended on above report, we strongly believe that poor supervision from supervisors and managers is the major cause of ineffective operational management The two typical reasons which are illustrated by above discussion and theories informed, includes incompetent supervisors/managers and overuse of employee empowerment that directly impact on operational management as a whole As for customers who are frequent experiencing at Papa Garden, it directly affects their satisfaction due to incompetent personnel, management of whole operations and they are no longer interested in the services and food of the restaurant At this time, they still experience at Papa Garden, however it is obvious to realise that they are most likely to turn on services and food of other restaurants in the future if Papa Gardes has still not changed this situation For staff of the restaurant, weak managers and mistakes in their management will lead to job dissatisfaction, low efficiency and productivity In facts, a limited number of staff forces managers ought to delegate supervision to team members with the most skills or seniority, but overuse of employee empowerment is a major reason of poor monitoring and controlling as well Literally, poor supervision from managers is a top root for operation inefficiency and common customer complaints on service quality in most restaurants (Pundt A(50)) 34 ALTERNATIVE SOLUTIONS In order to solve the biggest factor causing ineffective operational, Papa Garden’s Board of Management gave some potential directions and actions to all departments, especially operation department in order to propose the best solution for improvement Mr Ho Phuoc An – Owner and CEO of Papa Garden stated that No doubts, management issues are the most key problems which are directly affecting efficiency of the whole operations in Papa Garden In order to make the situation better and brighter as well as retain our loyal customers and increase sales volume so far, we need to improve abilities of saleforces and key managers in effectively controlling and Tải FULL (75 trang): https://bit.ly/3Tgompb monitoring relating activities Dự phòng: fb.com/TaiHo123doc.net Some studies and researches demonstrated that there are two potential solutions that we should take considerations to implement for improving operational management such as hiring new effective managers through recruitment and selection process; establishing relevant seminars, counselsing sessions and team building activities 5.1 The first alternative solution: Applying recruitment and selection programs In Papa Garden, poor supervison from mamagers is really a vital issue that the restaurant has been facing over the time In facts, supervision is not applied in a proper way or there is not enough supervision from managers that employees feel as they are being too inattentive watched and policied, then this decreases overall employee morale and their productivity and further leading to slow service delivery According to Gangi et al(51), supervision is an extremely vital part of a workplace that intends to maximize its success potential; employees need to have the proper instruction and sufficient support to guarantee that they are doing their jobs correctly, and with minimal risk of error It naturally follows, when a company has poor supervision, there is not responsibility for taking action for the prevention of problems, mistakes, accidents and injuries; as well as it can remove a very important part of the employee support process, eliminate the opportunity for operation efficiency and financial performance (Aguinis et al(52)) Therefore, according to Koys DJ(53), hiring process should be set up to find out right quality managers who are competent and qualified to make sure all of day-to-day operations run smoothly due to plan to counting income and tracking expenses In addition, Hailu K et al(54) emphasized that in term of hospitality management, the importance of hiring competent managers is very critical to business’s success that it is a difficult process to choose experienced candidates who are able to take ultimate responsibilities to perform a wide range of tasks to run daily operations, such as checking up on customer’s needs, supervising and monitoring 35 employees, tracking inventory, training new ones, dealing with suppliers, and handling other miscellaneous duties Mr Ho Phuoc An suggested that As a role of an ultimate decision-maker of our business, I realise that some managers has been lacking of necessary abilities to manage operations effectively When their important role becomes faint or they not take necessary steps to correct problems immediately, disciplinary action is warranted In my opinion, it is now crucial to hire supervisors and managers who should have at least two years of managerial experience and being able to work at high pressure with leadership skills and abilities to supervise personnel, operate activities in service area, hospitality entrance Moreover, it is necessary for managers who have good communication, interaction, motivation and willingness to support employees, which not only could help improve employee’s skills, knowledges and performances, but also help maintain a good relationship between them and employees According to Cotterchio M et al(55), for the effectiveness of the whole operations and in order to meet customer satisfaction and long term profitability, restaurants need to build recruitment programs with a tight process to select qualified and excellent candidates Moreover, Collings DG and Wood G(56) aslo had a similar perspective when they considered recruitment and selection process as necessary that recruitment channels should be used to utilize to attract more potential applicants, such as job advertisements, paper-based, internet, socia media and word-of-mouth recruitment The previous findings also supported the recent trends in a decade the popular use of the Internet through application of socia media and corporate website for recruiment purposes has provided organizations a highly cost effective method to attract and select potential candidates (Beardwell J and Claydon T(57)) According to Armstrong M(58), it can be clearly said that there are some steps in selection processes, including interviews, ability testing, personality assessment, work sample tests or situational judgement tests, and integrity tests Mr Ho Phuoc An also stated that Tải FULL (75 trang): https://bit.ly/3Tgompb Dự phòng: fb.com/TaiHo123doc.net It would be necessary to conduct recruitment and selection process in order to find the best suitable candidates with the restaurant’s need This process should be carefully prepared to ensure the fairness, efficiency prior to holding One of effective steps that we need to consider is to look back previous cases of wrong managers to analyse and understand root causes of them to hire more new suitable candidates for betterment Accordingly, some benefits and costs when applying appropriate tools in recruitment and selection programs are described as belows: Benefits: 36 Fulfilling the missing vacancies with the most appropriate and potential candidates to fit job needs of the restaurant Repairing mistakes from previous managers/ supervisors with new good spirits and high responsibilities to run operations smoothly and effectively Increasing productivity of the whole operations with adequate implementation of management practises and function, lessening stress and depressions due to heavy workload Involving all operations to manage, monitor and control more sufficiently to reach long term profitability Utilizing and optimizing times and efforts of employees in various functions to manage operations closely to boost sales performance Providing new hires sufficient knowledges to understand a general picture of operations and business activities for efficient management Costs: Breakdown of hiring costs indicates: The cost of advertising agency fees is VND 20,000,000 The cost of third pary recruiter fees is VND 15,000,000 The cost of employee referral incentives is VND 3,000,000 The total cost of recruitment and selection process is VND 38,000,000; with the average cost-per-hire is VND 2,750,000 Table 5: Estimating cost for recruitment and selection process Estimating cost # Type of cost Advertising agency fees 20,000,000 Third pary recruiter fees 15,000,000 Employee referral incentives 3,000,000 Total 38,000,000 (VND) (Source: Papa Garden’s Human Resource Department) 5.2 The second alternative solution: Implementing seminars, counseling sessions and team building activities From above analysis, validation and synthesis of judgements from various researchers, it can be clearly remarked that overuse of employee powerment is one of the major causes 6674349 ... (Source: Papa Garden’s Operation Department) According to data from Operation Department of Papa Garden, figures indicates that sales volume of the restaurant has gradually decreased in the last two... from 201 6-2 017 Table 2: Customer satisfaction scores of Papa Garden and of restaurants around District Ho Chi Minh from 201 6-2 017 Table 3: Sales volume of Papa Garden and other restaurants around... personnel and operational procedures to accomplish Thus, management is one of key factors leading to the success of any organizations Mr Ho Phuoc An – Owner and CEO of Papa Garden acknowledged that Management