MGT101A: Managing in a Global Environment - Management Assignment

Internal Code: MAS3290

Management Assignment:

With their years of experience in the restaurant business, Robert Basham, Timothy Gannon and Chris Sullivan, founders of Outback Steakhouse, were acutely aware of the hygiene factors in the food-service industry. Outback is an Australian-themed restaurant founded in the US that deliberately adopts an Australian theme, sells Australian menu items and is decorated with Australian artefacts. While the average restaurant is designed to maximise the number of customers at the expense of the food preparation area, Outback puts the emphasis on providing the best possible spaces for servers and kitchen staff to do their jobs effectively, even at peak business times. Outback’s dinner-only policy and maximum five-day working week give managers and staff time for a life outside the restaurant, which cuts down on employee turnover. Each server handles only three tables at a time, ensuring first-class service to customers and higher tips for servers. To motivate managers, Outback provides ownership. After making a US$25000 investment and signing a five year contract, Outback managers receive 10 per cent of the earnings of their restaurants each month. In 2012 this provided the average manager with a total of about US$118600 per year, far above rest of the industry. In addition, managers receive about 4000 shares that vest at the end of five years. Regular staff also participate in a share ownership plan. Managers are further motivated by the level of responsibility Outback bestows on them. Restaurant managers have the authority to make their own decisions rather than merely implement decisions dictated by headquarters. Has Outback’s motivational approach worked? In December 1994, six years after its launch, there were 210 Outbacks, with revenues estimated at US$544 million. As Timothy Gannon put it, ‘We believe if you treat employees as if you were one of them and give them the right environment, they will blow you away with their performance.’ (Finegan 1994). By 2004- 2005, Outback boasted 1105 restaurants and revenue of US$3.3 billion, with 82 875 employees! (Mauder, 2004). Outback’s co-founders, who are all significant shareholders in the parent company OSI, have innovated with kerbside takeaway, Internet booking and new brands, menu items and formulas combining to keep them at the leading edge. The founders clearly believe and live the idea that they succeed through their people, known as Outbackers’. By keeping their employees motivated, and ‘having a good time’, Outback’s executives know that their customer service will be good. By 2012, Outback’s successful approach to motivating its staff has led to expansion to 21 countries with many hundreds of restaurants operating in numerous brand names, with such growth signifying a company and group of managers who are clearly getting a lot of things, including staff motivation, right. Questions: 1. What theories of motivation underlie the way in which Outback’s leaders motivate their managers and staff? 2. Discuss how empowerment is employed in the Outback Steakhouses to meet higher motivational needs and suggest practical ways in which other staff could also be motivated through empowerment. 3. If you are given the task of communicating the recommendations made in question 2 to your employees, how would you go about it?