REPORT: This report looks into various aspects of management and organisational behaviour. Management and Organisational Behaviour Produced for: Ms Jennifer Park Leciester College of Professional Studeis Produced By: Maidul Islam Chowdhury Student Number: HND/LCPS/9340 Date: 12 January 2009 CONTENTS PAGE TitlePage Introduction………………………………………………………………………………………………… 2 Comparisons and Analysis………………………………………………………………………….. Denny’s Organisational Structure………………………………………………………………… 4 Leadership Style Within Denny’s…………………………………………………………………. 5 Three Motivational Theories and Implementing them on Denny’s…………………. 6 Team in Denny’s and Influences/Effectiveness of Teamwork………………………… 7 Impact of Technology on Team Function……………………………………………………… 8
Introduction The organizational structure is an instrument of coordination of activities and control of the actions of its members. The organizational flow chart shows how its resources are distributed and how they are managed, giving “officially” shape to the communication and decision -making channels. When we define the structure to be adopted by the company, it would be wise to have always present its different purposes and functions. For the purpose of this report The cosen company is Denny’s.
Denny’s is America’s largest full-service family restaurant chain, consisting of 373 company-owned units and 1,177 franchised and licensed units, with operations in the United States, Canada, Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. For further information on Denny’s, including news releases, links to annual reports and other financial information, please visit the Denny’s website at www. dennys. com. The company was selected as they are a food/hospitality provider and I hope to pursue a long term career in this sector or set up my own enterprise.
The Company urges caution in considering its current trends and any outlook on earnings disclosed in this press release. In addition, certain matters discussed in this release may constitute forward-looking statements. These forward-looking statements involve risks, uncertainties, and other factors that may cause the actual performance of Denny’s Corporation, its subsidiaries and underlying restaurants to be materially different from the performance indicated or implied by such statements.
Words such as “expects”, “anticipates”, “believes”, “intends”, “plans”, “hopes”, and variations of such words and similar expressions are intended to identify such forward-looking statements. Except as may be required by law, the Company expressly disclaims any obligation to update these forward-looking statements to reflect events or circumstances after the date of this release or to reflect the occurrence of unanticipated events.
Factors that could cause actual performance to differ materially from the performance indicated by these forward-looking statements include, among others: the competitive pressures from within the restaurant industry; the level of success of the Company’s operating initiatives, advertising and promotional efforts; adverse publicity; changes in business strategy or development plans; terms and availability of capital; regional weather conditions; overall changes in the general economy, particularly at the retail level; political environment (including acts of war and terrorism); and other factors from time to time set forth in the Company’s annual reports, including but not limited to the discussion in Management’s Discussion and Analysis and the risks are identified. Risk Factors contained in the Company’s Annual Report for the year ended December 26, 2008. 1 Comparisons and Analysis There are several different types of organizational structures to choose from.
Just to give an example, a simple and functional structure so as to better understand what is on the basis of its design are to be used for this report. Although many of us are not aware that there is or that we are using a business plan, the “simple structure” is often used in the small-sized family companies, which is basically build up by two hierarchic levels: the managing owner and the employees. In this case, the manager holds most of the managing responsibilities, and there is not a clear definition of the tasks of the remaining employees. The company operates under the personal control and the individual contact of the manager with his employees. Obviously, this type of structure is feasible only when the company to has a certain size.
When the company grows it is more and more difficult for just one person to have the control of the whole company. Another type of structure often used in small-sized companies or in companies with a reduced range of products and/or services and, mainly, in stable environments, is the so-called “functional structure”. It consists in dividing the work and in allocating authority and responsibility according to the classical management areas: * Financial; * Production; * Marketing / Sales; * Personnel / Human Resources Management; * Organizational. In here, there is a functional expert who leads each unit or department in the respective area. Top managers hold the global coordination of departments.
The great advantage of this type of structure is to get synergies and greater efficiency, joining several experts. On the other hand, its biggest disadvantage is the difficulty in having knowledge when necessary. Often, this can encourage “division”, affecting the whole company. We are now going to list others, the feature and /or the main cause associated with it being known: * a functional structure (or by functions) exists when we group the common activities into departments / areas / units. * a structure by geographic location is adopted when there is a strong need of supplying products or services in several geographic areas, the activity of the company being organized around regions or areas, each one being a miniature of the mother company. a structure by products or services happens when the activity of the company is determined by the different types of supplied products and services, through factors such as quantity and complexity. * a structure by processes and technology is actually followed when the complexity of these processes require grouping of certain activities of the company. 2 Denny’s Organisational Structure Denny’s Corporation (NASDAQ:DENN) today announced that the Company has redesigned its organizational structure to support its ongoing transition to a franchise-focused business model. The Company has completed an extensive review of its organizational structure in comparison with many prominent franchise systems. In April, the Company realigned its senior leadership with three executive officers reporting to the Chief Executive Officer.
The Company has restructured the organization under this leadership to effectively execute its new strategic direction with primary emphasis on sales, brand and franchise. Additionally, the Company has created four Regional Vice Presidents of Operations (RVP) positions that will have accountability for the performance of both company and franchise restaurants within a geographic region. The RVP’s and their support teams will manage an integrated effort to drive guest counts, sales and profitability while ensuring operational excellence. The Company is also strengthening its marketing focus with resources dedicated to sales, consumer insights, innovation and an enhanced local marketing effort through a strategic collaboration with Denny’s operational leadership.
Nelson Marchioli, President and Chief Executive Officer, stated, “Through the success of Denny’s Franchise Growth Initiative (FGI), the mix of franchised restaurants in the Denny’s system is now up to 76 percent. In our quest to become a franchisor-of-choice in the restaurant industry, we must continue to evolve our corporate structure and mission to focus on driving sales, expanding the brand and providing valuable support to our franchisees. We have determined that to be competitive in today’s challenging operating environment it is necessary to reallocate resources and streamline our structure. We see many opportunities ahead for the Denny’s brand and look forward to working with our franchisees to capitalize on our growth prospects. The new organizational structure increases brand and franchisee support, but also allows for consolidation of certain departments and job functions resulting in the near-term elimination of approximately 50 positions. As a result of these staff reductions, the Company expects to incur a restructuring charge attributable to severance and other expense of approximately $5 million in the second quarter of 2008, which will be paid out over the next 12 months. Additionally, the Company expects to realize annualized savings of approximately $6 to $8 million in core general and administrative expense (which excludes share-based compensation and annual incentive compensation). This expense reduction will phase in during the second half of 2008. 3 Leadership Style Within Denny’s
Leadership style is the manner and approach of providing direction, implementing plans, and motivating people. Kurt Lewin (1939) led a group of researchers to identify different styles of leadership. This early study has been very influential and established three major leadership styles. The three major styles of leadership are (U. S. Army Handbook, 1973). * Authoritarian or autocratic * Participative or democratic * Delegative or Free Reign Although good leaders use all three styles, with one of them normally dominant, bad leaders tend to stick with one style. The leadership style used within Denny’s is mostly participative with presence of the other two styles.
This style involves the leader including one or more employees in the decision making process (determining what to do and how to do it). However, the leader maintains the final decision making authority. Using this style is not a sign of weakness, rather it is a sign of strength that your employees will respect. This is normally used when part of the information is available, and employees have other parts. Note that a leader is not expected to know everything — this is why you employ knowledgeable and skillful employees. Using this style is of mutual benefit — it allows them to become part of the team and allows you to make better decisions. Three Motivational Theories and Implementing them on Denny’s a) Broad Theory: The latest approach in Achievement Motivation is an integrative perspective as lined out in the “Onion-Ring-Model of Achievement Motivation” by Heinz Schuler, George C. Thornton III, Andreas Frintrup and Rose Mueller-Hanson. It is based on the premise that performance motivation results from way broad components of personality are directed towards performance. As a result it includes a range of dimensions that are relevant to success at work but which are not conventionally regarded as being part of performance motivation. Especially it integrates formerly separated approaches as Need for Achievement with e. g. social motives like Dominance.
The Achievement Motivation Inventory AMI (Schuler, Thornton, Frintrup & Mueller-Hanson, 2003) is based on this theory and assesses three factors (17 separated scales) relevant to vocational and professional success. This theory can be implemented as Denny’s is a dominant hospitality growing company and employees come from all backgrounds. b) Self-determination Theory: Developed by Edward Deci and Richard Ryan, focuses on the importance of intrinsic motivation in driving human behavior. Like Maslow’s hierarchical theory and others that built on it, SDT posits a natural tendency toward growth and development. Unlike these other theories, however, SDT does not include any sort of “autopilot” for achievement, but instead requires active encouragement from the environment.
The primary factors that encourage motivation and development are autonomy, competence feedback, and relatedness. c) Cognitive Dissonance Theory: Suggested by Leon Festinger, this occurs when an individual experiences some degree of discomfort resulting from an incompatibility between two cognitions. For example, a consumer may seek to reassure himself regarding a purchase, feeling, in retrospect, that another decision may have been preferable. Another example of cognitive dissonance is when a belief and a behavior are in conflict. A person may wish to be healthy, believes smoking is bad for one’s health, and yet continues to smoke. This theory is not applicable to Denny’s. 5 Team in Denny’s and Influences/Effectiveness of Teamwork
A multicultural workforce can present difficulties in fostering teamwork and communications because of different communication styles and cultural norms. Large companies such as Denny’s, which may have to coordinate teams located in different regions or even different countries, have especially large challenges to overcome. In the case of Denny’s teams whose members are geographically dispersed, some members may find it difficult to effectively interact with team members whom they have never met face-to-face because their culture places strong emphasis on face-to-face interactions. Some cultures also encourage significant sharing of one’s personal life during business transactions.
Such sharing may be difficult to accomplish effectively, and team members may feel uncomfortable sharing, when they do not meet in person. Some countries are also far more accustomed to using technologies to communicate like e-mail and instant messaging than others. Different time zones can also create challenges in scheduling meetings that may require some team members to work at unusual times. Even when a team is located in the same place, communication styles can be a source of problems. For example, different cultures have different preferences regarding personal space boundaries. People from one culture who are accustomed to having very little personal space can wind up chasing around those who like a lot of personal space and keep trying to restore the spacing.
The person having to chase may feel that the other person is exhibiting hostility. Some cultures promote team problem-solving more than others. A person whose culture encourages being submissive to his or her superiors may be reluctant to interact in a group setting with higher-level people. The person’s quietness may frustrate people from a different culture seeking that person’s input and give them a poor impression of that person even if the individual is an excellent individual contributor. Language can also be a barrier to effective teamwork and communications. Different levels of language ability can result in confusion and inefficiency.
Misunderstandings can potentially be hidden for long periods of time and cause significant problems before they are discovered. Denny’s has employees from various different countries and they faced heavy losses in previous years after a discrimination ruling. However, despite these obstacles, Denny’s find a multicultural workforce essential because they have to do business effectively with many diverse cultures in order to be successful. Often, the best source of information about how a product or service will be received by a particular part is to involve people from that part in its development and marketing. Furthermore, no one country or culture has a monopoly on talent.
As the global economy becomes increasingly competitive, incorporating people from many backgrounds is essential. Unique skills and lower costs became accessible to Denny’s when they broadened their work forces. Provided that Denny’s recognize potential sources of misunderstandings and educate their employees accordingly, the problems and inefficiencies that can be associated with teamwork and communications in a multicultural environment can be overcome. 6 Impact of Technology on Team Function Increasing globalisation, advancing technology and potential gains from effective team performance offer exciting promise for advancing organisational productivity.
Teams attempting to work together on common work objectives while remaining in geographically dispersed work locations experience significant challenges. Denny’s teams struggled with communication, collaboration and coordination in their work, and while not every group of people at work should become an interdependent team of players, those who have urgent performance challenges requiring multiple inputs stand to gain from an increasing use of current technology to enhance their teamwork. Developments in technology have advanced so rapidly that corresponding systems at Denny’s have not been able to keep pace. Although they now have electronic tools with great potential to enable superior team performance, many continue to sit on the shelf.
Managers are too busy to learn the technology placed on their computers, technologists see technology as a stand alone tool, and the new frontier of socio-technical possibilities remains out in the distant horizon, locked behind the limits of the company’s current paradigm of understanding. The experiences represented in the team scenarios bring us closer to understanding some potential benefits and challenges associated with technology enhanced teamwork, especially for Denny’s as they are geographically dispersed teams. It is critical that the social and technical systems keep pace with one another during this period of rapid growth, change and learning curve.
An urgent performance challenge drives the need for collaborative work which is then supported by technology to enhance the teamwork. High-performing teams who have mastered technology enhancements and developed the corresponding human/social systems have made significant improvements in their productivity. They are able to continually build upon each other’s work, retrieving prior work and adapting it to new situations without reinventing the materials each time. Using asynchronous communication technologies, (e. g. groupware) they are able to produce collaborative work products faster by rapidly exchanging information in a virtual workspace.
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