36 The Implementation of Theory X and Theory Y Managements in Leadership

By Fung, Kin-Kei

Dissertation advisors: Dr. Wang, Kuo-Ching and Dr. Chan, Hsi-Chen

National Normal University Graduate Institute of Sports, Leisure and Hospitality

國立臺灣師範大學運動與休閒學院

運動休閒與餐旅管理研究所

碩士學位論文

X 理論和 Y 理論在餐廳領導的應用

研究生：馮建基

指導教授：王國欽

共同指導：詹悉珍

中華民國 104 年 6 月

中華民國臺北市

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X 理論與 Y 理論在餐廳領導的應用

2015 年 6 月 研 究 生: 馮建基 指導教授: 王國欽 共同指導：詹悉珍 摘 要

海峽兩岸和北美的餐飲業正蓬勃發展，而在不久的將來也會持續興榮。外食已成為

現代社會不可或缺的一部份，因其便利、經濟、實惠等特質，不僅是台灣和內地的民眾是

外食族，就連北美的學生和上班族也奉外食為圭臬。外食已經不只是每天的例行公事，更

是文化潮流的一環。本研究運用 X 理論和 Y 理論分析「鼎泰豐」、「王品」、和「海底

撈」三家等級相近且經營成功的中式餐飲連鎖店，以及「星期五餐廳」、「澳美客牛排

館」、和「麥當勞」等三家西式餐廳連鎖店。研究目的為辨識上述幾間企業的領導特質，

並探討 X 理論與 Y 理論實際應用在管理上的成效。最後依照理論將各餐廳分類，讓餐廳

持有人能夠將本研究之結果套用在經營管理上。本研究方法採用大量的文獻分析與線上問

卷調查是由九位學者與就業者填寫。最後，本研究的主要發現是大部分的餐飲連鎖店是導

向於 Y 理論。因為它對企業者和學者都有正面的發展空間。因此從這項研究結果有助於從

業者和學者在他們的領域範圍之應用。

關鍵字: X 理論和 Y 理論、標準作業程序、員工授權、獎勵

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The Implem entation of Theory X and Theory Y Managements in Restaurant Leadership June, 2015 Graduate: Fung, Kin-Kei Advisor: Wang, Kuo-Ching Co-Advisor: Chan, Tsi-Chen Abstract

Both Cross-strait and have a flourishing economic growth in the restaurant industry, and would be likely to expand their operations in the foreseeable future. Restaurant dining nowadays has become a common routine in the world of food and beverage industry. It is convenient, practical and inexpensive to dine out in Cross-strait, and as for living in North

America, that has become part of a social norm in working and schooling lives. Thus, the purpose of this research focuses on analyzing and implementing Theory X and Theory Y from the three successful Eastern franchises: , Wowprime, and , and three successful

Western franchises: T.G.I. Fridays, Steakhouse, and McDonald’s into any restaurant or catering business. By distinguishing each of its own characteristic approach on leadership when applying both theories to lead the employees in the organization will realize how effective their approaches can be when adapting them into practice. Methodology relies on literary analysis and online questionnaire survey filled out by nine scholars and practitioners. The results were most of these restaurant chains are Theory Y oriented due to its greatly appraised instrumental effects that could offer to the catering businesses. In conclusion, laying out each managerial practice to the corresponding category of Theory X and Theory Y will exhibit a much clearer perspective, enabling both practitioners and scholars to apply further knowledge in their fields of interests.

Keywords: Theory X, Theory Y, SOP, Employee Empowerment, and Performance Appraisals

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Acknowledgements

The sheer complexity, depths and magnitude of Theory X and Theory Y dissertation could not be written possible without Dr. Wang’s signature guidance on it, and so to extend my sincere gratitude, I want to thank my dearest and humblest advisor Dr. Gordon Wang who was willing to accept me into his advisory group 王家團隊 at the very last minute in 2014. His method of coaching his advisory students is beyond extraordinary! I was able to absorb his instruction fast and it helped me complete my thesis in just 10 months. It was indeed a miracle that I was able to catch up everything under one year before graduation. I can honestly say, without his balanced sets of Theory X and Theory Y method of supervision, I probably would not graduate in time! Thank you Dr. Wang, thank you for giving me a chance to shine! Finally, I would also like to say thanks to my co- advisor, Dr. Rebecca Chan, she was a tremendous help to me during the 3rd semester by providing various feedbacks. She was also great as one of the committees during the first and final thesis proposal. My parents are such wonderful people who have given me the opportunity to study in Taiwan for the very first time in my life. Therefore, I am extremely grateful for their love and support. These three years in Taiwan were the most memorable time in my life; I have met many great people during my study who were willing to help me, and for that reason I will cherish their friendships for always…

To end my acknowledgements, I would like to share a heartfelt quotation in my own words:

Nothing in life is impossible to achieve if one could cast aside doubts, fear and skepticism by willing to aspire; but also to have faith in one’s ability and potential. When the dream has finally come to fruition with a given path. Follow that path instinctively to where it will lead eventually. In the end, life is full of wonderful surprises!

THANK YOU NATIONAL TAIWAN NORMAL UNIVERSITY! v

Table of Contents

口試委員與所長簽字論文通過簽名表…………………………………………………...... i

論文授權書...... ii

摘要……………………………………………………………………………………………….iii

Abstract…………………………………………………………………………………………....iv

Acknowledgements……………………………………………………………………...………...v

Table of Contents………………………………………………………………………………....vi

Tables……………………………………………………………………………………………..x

Figures…………………………………………………………………………………………....xi

Chapter One (Introduction)……………………………………………………... 1

Section I Research Background…………………………………………………………1

Section II Research Purpose…………………………………………………………..8

Section III Research Propositions………………………………………………………...9

Section IV Research Process………………………………………………………...…..10

Section V The Importance of Research……………………………………………….12

Section VI Operational Definition of Theory X, Theory Y, and Theory XY………....12

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Chapter Two (Literature Review)…………………………………………...... 15

Section I Types of Restaurant and its Characteristics……………………………….15

Part I Current Restaurant Industry of Cross-strait………………………………………………15

I) 王品集團 (Wowprime)………………………………………………………………..19

II) 鼎泰豐(Din Tai Fung)………………………………………………………………...20

III) 瓦城泰統 (Thai Town Cuisine)……………………………………………………….21

IV) 乾杯食集團 (Kanpai Group)………………………………………………………….22

V) 爭鮮 (Zensen Express)………………………………………………………….23

VI) 三井(Mitsui)...... 24

VII) 海底撈 (Haidilao)……………………………………………………………………..25

Part II Current Restaurant Industry of North America………………………………………….26

I) Red Lobster…………………………………………...... 30

II) …………………………………………………………………………..31

III) Sushi Shop……………………………………………………………...... 32

IV) T.G.I. Fridays…………………………………………………………………...... 33

V) ……………………………………………………...... 33

VI) McDonald’s…………………………………………………………………………..34

VII) Schwartz’s……………………………………………………………………………35

Section II Introduction to Theory X and Theory Y by Douglas McGregor……………………...37

Section III Appling Theory X, Theory Y, and Theory XY with in Cross strait…….42

I) Din Tai Fung (鼎泰豐)……………………………………………...... 43

II) Wowprime (王品)………………………………………………………………….....53

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III) Haidilao (海底撈)…………………………………………………………………….68

Section IV Appling Theory X, Theory Y, and Theory XY with Restaurants in North

America……………………………………………………………………………………....82

I) T.G.I. Fridays………………………………………………………………………....83

II) Outback Steakhouse……………………………………………………………….....91

III) McDonald’s…………………………………………………………………………100

Chapter Three (Methodology)………………………………………………....117

Section I Sample Collection and Data Analysis………………………………………..117

Section II Content Analysis……...... 118

Section III Theory X and Theory Y Categorization……………………………………118

Section IV Research Analytical Process………………………………………………..120

Chapter Four (Research Results)……………………………………………...121

Section I Inference Behind the Analytical Explanations for Obtaining the Results…...121

Section II Process of Obtaining the Results from Returned Questionnaire Survey…..132

Section III Terminology and Original Sources Stated ………………………………...134

Section IV Final Results from the Returned Questionnaire Survey ……………………139

Section V Content Analytical Results …………………………………………………142

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Chapter Five (Conclusion & Suggestions)……………………………………147 Section I Primary Findings in Theory X, Theory Y & Theory XY……………….147

Section II The Implementation of Ten Chosen Theory X, Theory Y, and Theory XY in

Takara Restaurant…………………………………………………….153

Section III Conclusion on Takara Japanese Cuisine Restaurant’s Theoretical Management

Orientation…………………………………………………………...... 161

References (引用文獻)……………………………………………………162

Appendix………………………………………………………………………...168 Online Questionnaire Survey Sample…………………………………………………..168

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Tables

Table 2-1 Restaurant Chains and Franchises in Cross strait…………………………………….16

Table 2-2 Restaurant Chains and Franchises in North America………………………………....27

Table 2-3 Theory X and Theory Y Approaches……………………………………………….....41

Table 2-4 Characteristics of Theory X, Y, and XY with Restaurants from C.S…………………42

Table 2-5 Characteristics of Theory X, Y, and XY with Restaurants from N.A………………...82

Table 3-1 Participants’ Background Information……………………………………………….119

Table 4-1 Results based on Returned Survey…………………………………………………...133

Table 4-2 Terminology and Original Sources Stated…………………………………………...135

Table 4-3 Final Results from Theory X and Y Restaurant Categorization……………………..139

Table 5-1 Ten Chosen Theoretical Managements for Restaurant Implementation…………….148

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Figures

Figure 1-1. Research Process Flow Chart………………………………………………………..11

Figure 3-1. Research Analytical Flow Chart……………………………………………………120

Figure 5-1. Logo and Sign………………………………………………………………………149

Figure 5-2. Sushi bar (front) and (side)………………………………………………………....150

Figure 5-3. Dining area (front) and (side)………………………………………………………150

Figure 5-4. Tatami room………………………………………………………………………...150

Figure 5-5. Traditional Takara Sushi Platters…………………………………………………...151

Figure 5-6. Rainbow and Caterpillar Maki……………………………………………………...151

Figure 5-7. Sushi Champaign and Eurasian Fusion…………………………………………….151

Figure 5-8. Interior shot of Le Cours Mont-Royal…………………………………………….152

Figure 5-9. Exterior & Interior shot of Le Cours Mont-Royal………………………………...152

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Chapter One

Introduction

The first chapter is divided into six sections: research background, research purpose, research propositions, research procedure, importance of research, operational definitions of

Theory X, Theory Y, and Theory XY.

Section I Research Background

Chapter one will begin by introducing the current restaurant industry in Cross-strait and

North America. Cross-strait has a reputable name for ‘dining paradise’ where patrons are given a large array of dining selections from casual to fine dining. For instance, the food and beverage industry in Taiwan plays a very important role because of their hospitality services were well received by locals and tourists alike, and so the government could see that the hospitality and tourism industry has unlimited potentials for further development. According to the food and beverage revenue of Taiwan from 2003 to 2013 was $391.5 billion. The statement was released by the Ministry of Economic Affairs Bureau as it mentioned the rapid growth of the wholesale, retail, and catering service industry is looking very optimistic. In 2013, the annual income had reached $391.5 billion mainly from the growth of restaurant industry. The stunning rapid growth of the market is due to two reasons, the growth of domestic market as locals are dining out more frequently, and secondly, the increase of foreign travelers. This benefits both ways for tourism industry and catering service industry in Taiwan (餐飲服務產業，2014). The current popular restaurant types are hot pots, fast-food, xiao-chi (snacks), teppanyaki and set meals.

Evidently, the figure had rose steadily in the past and will continue to do so in the present.

According to the food and beverage analysis in from 中國網, the Chinese foodservice

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industry in 2014 has generated RMB $2.786 trillion with a revenue of 9.7%, which is on par (陳

曦霞，2015). The current market looked optimistic as the catering revenue growth increased in total retail sales of 12% in the past three years when it continues to expand financially and commercially. In 2013, the food and beverage industry had boost a retail sales of 1.12% which gives a total increase in annual income of $820.8 billion yuan. The growth of 2.2% showed positively as it significantly improved 4% higher than in 2012. In sum, throughout the financial year of 2014, the growing market of restaurant industry in China had achieved a steady rise to create a positive energy in all of its restaurant businesses. The current restaurant trend in China features a variety of Western brands like McDonald’s, , KFC, Hut, and etc.. They also have other brands from such as Wowprime Steak (王品牛排) from Taiwan, and

Yoshinoya (吉野家) from to compete with their own brands like Haidilao (海底撈), and

Waipaojia (外婆家)(陳曦霞，2015).

In , the food and beverage restaurant industry also plays a critical role as it soars high in the foodservice industry sales, which are expected to increase by 4.4%, or almost

CDN$3.2 billion, rising to CDN$71.1 billion in 2014 as more Canadians are showing their interests in dining out at commercial restaurants with a 2014 over-year increase of +2% (GE

Capital Franchise Finance, 2014). This is great news for the employment sectors as restaurants are the number one place where Canadians get their first job says Restaurants Canada president and CEO Garth Whyte. “We’re a training ground for thousands of young people every year, and in our industry they learn skills that will help them in any career”. The hospitality industry in Canada is in fact stabilized and healthy as it creates more job opportunities for every Canadian citizen (CNW A PR Newswire Company, 2014). In 2014, the restaurant industry of Canada generates 23 billion dollar with the help of social network such as Facebook or Tweeter for job searching that is used on their online platforms

(Huffington Post Canada, 2014).

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In the U.S, the food and beverage industry showed remarkable achievements in the total sales of food and of U.S social caters from 2009 to 2014, generated a whopping sale of US$8.67 billion (Statista.com, 2014). The current restaurants in North America are a mixed of ethnicities that offer a wide range of cuisines from Asian to Western. However most of these Eastern foods have been somewhat Westernized to adapt to their local taste preference.

As more and more locals from Cross-strait and North America are willing to dine out to restaurants in their country. This proves the food and beverage industry is indeed an important market segment for the economy. Hence, the motive of this research will explain the significance of incorporating Theory X and Theory Y into the restaurant business in leadership and managerial setting. It is suffice to say that all major restaurant chains or other types of business industry have been somewhat influenced or inspired by Douglas McGregor (1960)’s managements of Theory X and Theory Y. Referencing both theories allow restaurant owners to develop their own business managements.

The reasons and purpose for analyzing these particular three restaurants is due to both Din

Tai Fung and Wowprime restaurant chains are the largest and most successful franchises in

Taiwan that are able to expand its business operation overseas. Haidilao on the other hand, it is famous for its impeccable services that many restaurant giants such as KFC, and wanted to know its secret for success. They even invited Zhang Yong, the owner of Haidilao to the U.S to give a speech about his success in running and managing Haidilao (Zhao, 2011).

As for both Outback Steakhouse, and T.G.I. Fridays, they are doing extremely well due to their business management in employee empowerment. Outback Steakhouse was extremely well received in due to the introduction of American business culture to the country that there are no strong emphasises on hierarchy, everyone is treated the same and has equal

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rights to address their opinions, or share their thoughts. This intrigued the South Koreans, as they are brought up in a strong hierarchical society where they are told to listen and to obey their superiors regardless (Lee, Khan, & Ko, 2008). Fortunately, the American business culture works in Korea, and this explains the success of introducing an international brand like Outback

Steakhouse in foreign soil.

In T.G.I. Fridays’ case, their success may have to contribute to the so-called “mass customization”, where employees create a sense of belonging to which customers can feel intimated by the genuine care they receive. This includes giving out advices and counselling to customers in a way they can make the orders they want. Thus, it proudly enhances the personalized meal ordering experience customers can get when they do not know what they should order on the menu (Lashley, 2000). This is what T.G.I. Fridays meant for providing a service which “creates a sense of social connection to others” (Adelman, Ahavia, & Goodwin,

1994, p.14).

Finally, McDonald’s is the world’s famous and successful mega restaurant franchise that many restaurant chains like Din Tai Fung, Wowprime, and Haidilao have drew their inspirations when establishing their own business management. McDonald’s is a type of franchise that many business corporations wanted to emulate. The benchmark for choosing these restaurant chains would have to be successful, iconic, and influential that can represent the origin of their country.

For instance, McDonald’s, the monumental giant is originated from the U.S, so it is an iconic symbol of America’s success in restaurant industry.

The importance of incorporating Theory X and Theory Y by theorist Douglas McGregor

(1960) into today’s competitive world of business industry showed great advantages in management, according to Dr. Aydin (2012) of Okan University, Institute of Social Sciences. He argued that Theory X management is less effective than Theory Y management, because Theory

X managers emphasize the chain of command, reward or punishment motivational techniques,

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and close supervision of subordinate behaviours along rigidly behavioral parameters. Based on

McGregor’s argument of Theory X, it is a hindrance of helping organization to meet goals, solving problems, and delivering product in a reliable manner (Aydin, 2012). He even further stated that Theory X is less effective due to its individual-oriented working nature rather than group-oriented working nature in Theory Y. In other words, people working under Theory X environment are prone to work alone in tasks under heavy supervision by Theory X managers.

Hence, the outcome would be less productive than group-oriented projects. The only motivator is monetary reward that can make Theory X workers to produce more.

In Theory X, managers from an authoritative perspective assume workers are inherently lazy and will avoid working if possible. If the workers at one’s company exhibit such behaviors, then one can look at Theory X to develop the type of management tactics that is suitable in managing those type of employees. In a brief definition of Theory X, it is a hard approach that is designed to monitor employees’ daily working routine. Because there is not enough trust established among both parties, so employers are constantly monitoring whether employees would sneak out of the company for not working, or stealing company’s properties. Noticeable characteristics found in Theory X developed by most restaurant chains are physical and mental training, stipulations, regulations, standard operating procedure (quality service control), coercion, accountability, punishment with threats, bonuses, rewards, work appraisals, and benefits as a complete set of disciplinary system with incentives designed to persuade and to motivate workers from working hard for the company.

However, relying on just one theory is not enough to manage and lead the company of employees, and so McGregor (1960) developed another type of theory which is the opposite of

Theory X. He called it Theory Y, which is the Yang to the Ying of Theory X. It is universally believed that everything must need an opposite force to restore balance. Hence, Theory X and

Theory Y restore the balancing scale of management. Dr. Aydin (2012) even praised Theory Y

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for its effective management, because Theory Y workers will exercise self-direction and self- control in the service of objectives to which he is committed. That being say, Theory Y workers will produce more creative and innovative products and services because they are granted with autonomy within their areas of accountability, and they structure work so that workers have ample opportunity to identify problems and creative solutions to them (Aydin, 2012). In other words, people working under Theory Y environment are expressive, creative, and innovative in delivering favourable tasks to meet organizational goals. Hence, Theory Y management is more productive and effective than Theory X management because they are given the ability to elicit their true potentials

In Theory Y, the liberal perspective that managers view in their workers to be as productive, participative, and innovative. Each individual employee is considered as the most valuable asset, and so the company will treat them with respect by providing them the best working and living environment. They are the brains of the organization that will invent and create products and services for the public. In other words, Theory Y is a soft approach that is greatly appreciated by managers from their workers. Theory Y workers are not inherently lazy, they enjoyed working and always will think from the company’s perspective when making decisions such as waiving off cheques or giving away freebies to customers. Many companies are developing strategies that can influence their employees’ behaviours to be more Theory Y oriented. Hence, many companies begin developing incentive plans like rewards, bonuses and appraisals that not only can it help retain their employees from quitting, but it also can help motivate them to work as hard and to be as creative as possible. Therefore, Theory Y workers are being rewarded for their excellence in job performance and also for their creativities that has developed many brands, dishes and services in the company. Noticeable characteristics found in

Theory Y developed by most restaurant chains are academic learning, creativity, abdication,

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delegation, empowerment and decentralization which are all permeated throughout the organizational culture that is heavily influenced by trust and honesty.

Finally, Theory XY is the third theoretical management that was not developed by

McGregor, but rather it is a diversified managerial practice that combines both Theory X and

Theory Y together as an unified management applicable for either orientation. Thus, the practice is inclining towards a favourable democracy where managers view their workers to be either

Theory X or Theory Y depending on the situation. For example, rewards and appraisals can be applicable to both Theory X and Theory Y workers, but the intention behind the practice could be motivational for Theory X workers or to show appreciations for Theory Y workers. Another example is when both Theory X and Y employees are given an equal opportunity in employment and management training. To sum up Theory Y in just a few words is trust and integrity, it is essential for any business relationship with employees, partners and shareholders to have trust among themselves. Because trust is the force that can build up business and to improve the labor condition. If managers solely rely on using Theory X, employees will then leave the company, because there is no trust, benevolence, and compassion. However, if managers only adopt Theory

Y, then employees may find loopholes to take advantage of. Therefore it is important for managers and leaders to find ways to balance their business managements when using Theory X and Theory Y. Thus, unifying both managements as a whole can enhance the overall execution where Theory XY accentuates for showing a democratic view on management. Therefore it is important to integrate Theory X and Theory Y managements into the restaurant business environment as it can help managers to lead employees effectively in accordance to either or both managements he or she should use.

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On chapter two, Applying Theory X and Theory Y with Restaurants in Cross-strait and

North America. The purpose is to lay out each famous restaurant chain’s business managerial plan when they developed their ideas from adopting Theory X and Theory Y. There are 14 restaurant case studies in total: seven Asian restaurants from Cross-strait: Din Tai Fung (Taiwan),

Wowprime (Taiwan), Haidilao (China), Thai Town Cuisine (Taiwan), Kanpai Group (Taiwan),

Zensen Sushi Express (Taiwan), and Mitsui (Taiwan). Seven Western restaurants from North

America: T.G.I. Fridays (USA), Outback Steakhouse (USA), and McDonald’s (USA), Red

Lobster (USA), Tim Hortons (Canada), Sushi Shop (Canada), and Schwartz’s (Canada). The benchmark requirement in chapter two also serves a similar purpose mentioned earlier in chapter one that they must either be iconic, influential, or successful. A few of these restaurant chains such as McDonald’s (USA), Din Tai Fung (Taiwan), Haidilao (China) and Tim Hortons

(Canada)’s later became as influential in their country as their names grew into an iconic symbol of economic success.

The reason behind analyzing two different continents of restaurants. Such motive allows one to make a conclusion for each managerial approach. What is the difference between Asian restaurant managerial approach and Western restaurant managerial approach? What are the benefits found from each approach? Once all the differences in benefits are lay out in the conclusion; new managers and operators to opening their new restaurants can see clearly which strategy or plan is suitable and adoptable for their companies from analyzing these fourteen major restaurant chains.

Section II Research Purpose

The research purpose was to find out the final result for each of the restaurant franchise’s true orientation. Whether they are inclining towards either Theory X, Theory Y or Theory XY managerial spectrum. The most letters of either Theory X, Theory Y or Theory XY has been

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found in each of the restaurant and has determined its true orientation. In other words, the final result from each corporate managerial theory has been decided by the overall majority of the nine respondents.

Section III Research Propositions

The first proposition is that SOP or known as Standard Operating Procedure, employment training, bonuses, rewards, and performance appraisals, and rules and constitutions are the common managerial practices found in these six restaurants belong to Theory X management.

The logics and explanations behind the propositions were that each managerial practice described how the rules set by the restaurant are strict and in order to make workers comply to such demands, they must go through rigorous training and pass each phases before getting the employment. Those that satisfy the job requirement will get monetary rewards as an incentive to motive Theory X workers whose behaviour is lazy and passive which Douglas McGregor (1960) described his notion of Theory X workers from Theory X management.

The second proposition is that management training, recognition, learning motivation,

EAP or known as Employee Assistant Program, learning through visitations, creativity, ingenuity, and innovation, self-direction and self-control, communication and decentralization, and trust and relationships are the common practices which belong to Theory Y management.

The reason is that only Theory Y workers have the persistence and patient to pursue for greater perfection and they will not hesitate to find out if there is any possible opportunity for self- learning and self-upgrade in order to get promotion from the company. They have great potentials that have not yet fully realized by managers in the company. Their contributions in creativity will bring new innovating products or services to the company. Lastly, decentralization requires huge amount of trust between both employer and employee. In order to establish a long lasting partnership, trust is very important in decentralization. Without trust and relationship in the

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picture, decentralization will not be able to initiate. Decentralization is when superiors from the higher management give regional managers access to certain authorities. They will then have the power and responsibility to make important decisions.

Finally, the third proposition is that employee empowerment with restrictions or limitations belong to Theory XY management. The reason was that such managerial practice is inclining towards both Theory X and Theory Y spectrum which created a contradiction in the workplace. Since empowerment is inclining towards the Theory Y spectrum due to trust and honesty found in Theory Y workers, but limitations or restrictions included in empowerment is inclining towards the Theory X spectrum, simply because Theory X workers have the lowest level of trust in the minds of managers, so they will not transfer the empowerment to Theory X workers, but rather they feel safe handing it to Theory Y workers. However if managers cannot fully trust Theory Y workers, then they must think Theory Y workers have a slight possibility of being dishonest, hence Theory XY was developed in one’s third proposition.

Section IV Research Process

The scope of study is largely derived from secondary sources such as books, literature reviews, corporate financial annual reports, and other validated websites. All fourteen of the restaurant case studies are divided into two segments: current restaurant industry in cross- strait and current restaurant industry in North America. The content analysis of these restaurants are based on the most current secondary sources dating from 2010 to 2014. Some of the restaurants such as Wowprime and Tim Hortons have the most current events occurred from their business timeline. For instance, Wowprime will be launching its 15th brand restaurant sometime in 2014, called ITA, which is an restaurant, and Tim Hortons recently announced to have

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sold to for $11.4 billion for becoming a franchise merger. Those were the types of recent events that the restaurant chains took place in their corporate timeline.

From the fourteen restaurant case studies, only six of them including Din Tai Fung,

Wowprime,, and Haidilao from Cross-strait; and T.G.I. Fridays, Outback Steakhouse, and

McDonald’s from North America will be further analyzed for their business management from using Theory X and Theory Y by McGregor (1960).

Finally, the only limitation is acquiring full access to interviews with the six current

CEOs in Cross-strait and North America can be extremely difficult due to corporate permission and time constraint are the two biggest obstacles. The following flow chart exemplifies the research process in the finest detail from initial concept to the finished thesis dissertation.

Exploring research themes on restaurant management from the East and the West

Finding books and scholarly journals on restaurant chains managements

Analyzing each restaurant chain’s Receiving feedbacks and suggestions management and leadership role from panel judges to correct errors

Implementing Theory X and Theory Y Placing managements in the right category of managerial concepts into restaurant chains Theory X or Y after receiving all returned surveys

Designing and submitting questionnaire survey to 9 participants Conclusion on restaurant managerial orientation and implementation in Takara Japanese Cuisine Restaurant Classify each restaurant’s signature management and to describe their orientation

Figure 1-1. Research Process Flow Chart Source: Figure of this research was designed by oneself

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Section V The Importance of Research

The importance of research in classifying and analyzing Theory X and Theory Y management from these 6 restaurants are beneficial in many ways. For instance, the results can give future managers some important insights or ideas when establishing a restaurant business.

What type of practices from Theory X or Theory Y management should they implement into their business models. Hence, these future managers can take references from restaurants of the East and the West by making comparisons with each other whether such practices from Eastern restaurant management or from Western restaurant management are appropriate for their restaurant business setting. Finally, it can be served as academic purposes in all learning environments.

Section VI Operational Definition of Theory X, Theory Y, and Theory XY

According to Douglas McGregor (1960), his interpretation of Theory X management is that people are generally lazy, unintelligent, irresponsible and lack little ambition to climb the corporate ladder. So they must be coerced, persuaded, rewarded, threatened or punished to do the work. In other words, these are the type of people preferred to be directed or told how to do their job (McGregor, 1960). This explanation is a great example of a carrot and a stick approach to entice the unambitious employees to reach goals, only in their minds they just wanted to bite the carrot, which is the symbolism of rewards. So in order to induce them from moving forward, carrot and a stick approach or rewards can do the trick, but only temporary.

On the other hand, Theory Y, which McGregor (1960) explained is that people are not born lazy, and in fact they are willing to accept responsibility and to take every challenge to self- develop and learn. Mangers particularly view them as valuable employees, and that they have a lot to offer by unlocking their hidden potentials. In this case, managers are willingly to invest

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time, energy, and money on these employees, hoping they could make a huge difference in the company performance (McGregor, 1960).

As Zhang Yong, the owner of Haidilao, described his business ethics, he does not hire workers for the use of their hands but rather he hires them for the use of their brains in any unexpected situation (黃鐵鷹，2014).

According to the learning institutions established by these restaurant chains, there are two major types of training: physical (employment) and mental (management) that can be either belong to Theory X or Theory Y management. For instance, physical training such as trade and sports are designed to train employees’ culinary skills and to hone their bodies healthy, they belong to Theory X management. On the one hand, managerial training were to prepare current managers of becoming future leaders in any successful organization, belonged to Theory Y management such as University of McDonald’s, Haidilao University of Haildilao, and managerial training programs of Wowprime.

Lastly, Theory XY is a more democratic management that combines both theories that are used in a given situation where employee are authorized with empowerment, but with limitations or restrictions. The situation applied to both Haidilao, and T.G.I. Fridays whose managements limited employees from giving freebies like desserts or waiving off of cheques must indicate valid reasons for doing so. For instance, in situations that employees are giving freebies or waiving off of cheques is due to the avoidance of potential conflict with rude and unreasonable customers. Instead of bravely resolving the situation accordingly, most employees’ instinct would choose freebies or waiving off of cheques to avoid a direct confrontation with them. That is a violation of company policy for exploiting the use of empowerment. That is the reason why most restaurant organizations would not foolishly enough to give employees the key to fully access to

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empowerment. Since T.G.I. Fridays’ has a severe limitation of employee empowerment, therefore it is categorized in Theory X management. As for Haidilao’s employee empowerment, it is definitely more liberal than T.G.I. Fridays, hence it is categorized in Theory Y management.

Another situation involves where both theories can be applicable to Theory X and Theory

Y workers is bonuses, rewards, and wages but with different intentions behind the practice.

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Chapter Two

Literature Review

The second chapter is divided into four sections: the first section briefly introduces the various types of restaurant operations and their characteristics (Chain or independent, franchise, quick service, fast casual, family, casual, fine dining, steakhouses, , ethnic, and chef owned restaurant). The second and third sections introduce Theory X and Theory Y management in Cross-strait and North American restaurants. The final and fourth section will conclude chapter two by describing the operation of leadership within the restaurant setting.

Section I Types of Restaurant and their Characteristics

Chain or independent, franchise, quick service, fast casual, family, casual, fine dining, steakhouses, seafood, ethnic restaurants, and chef-owned restaurant. Each has its own advantages and disadvantages, and finally it is up to the owner’s decision over which is more suitable for his or her business venture. This section is divided into two parts: current restaurant industry of

Cross-strait and current restaurant industry of North America.

Part I introduces the current restaurant industry of Cross-strait that represents the most successful restaurant chains and franchises which already have established a cult following among frequent dining enthusiasts. Here are the current list of six prevalent brands that have truly dominated the foodservice for patrons to dine: Wowprime (王品集團), Din Tai Fung (鼎泰

豐) (Thai Town Cuisine (瓦城泰統), Kanpai Group (乾杯食集團), Zensen Sushi Express (爭鮮壽

司), Mitsui (三井) and Haidilao (海底撈) from China.

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According to Wowprime’s total revenue of 2014, the company earned 17 billion NT dollar (林潔玲，2014). Din Tai Fung did not reveal too much of its revenue of 2013, but it was reported to have earned the highest turnover rate of 48%. Now Yang, the owner of the franchise wished to lower the turn table rate by making servers to wear leather shoes instead of sneakers.

Because he does not want his precious employees to overwork themselves (王一芝，2014).

Thai Town Cuisine, the Thai cuisine restaurant empire has earned $19 billion NT in 2013 for its total revenue (王一芝，2013a). Finally, Kanpai Group was reported annually of earning over $7 million NT (張翔一，2013).

For other two successful Japanese chain restaurants in Taiwan: Zensen and Mitsui. Both restaurant chains were reported to be quite successful in their business. Zensen was reportedly to has earned $2.5 billion NT in 2007(陳建豪，2007), and Mitsui has earned $2 billion NT in

2013 (TVBS新聞，2014). All seven restaurants have great revenue results in the past and present, which make these restaurants a great study for the dissertation.

Table 2-1 Restaurant Chains and Franchises in Cross-strait Names Restaurant Types Characteristics Currently owns 15 major brands: 王品牛 Wowprime (Taiwan) Chains, steakhouses, 排,西堤牛排, 陶板屋, 藝奇, 聚, 石 Japanese cuisines, 二鍋,夏慕尼, LAMU 慕 Hot 7, 原燒, Hot pots (Japanese 品田牧場, 舒果,曼咖啡, 花隐怀石料 style) 理, 義塔 Teppanyaki ITA (Japanese style), Wowprime logo is the trademark It has 300 branches in Taiwan, China, and property of Wowprime Group BBQ-grill, Fried pork, Vegetarian, Coffee, Average price: NT$600-NT$1300 Italian cuisine, (CDN$22-CDN48)

Fine dining, family, Financially earned NT$15-17 billion in casual 2013 to 2014

Source: Wowprime (2015). Wowprime. TW: www.wowprime.com.tw (continue onto page)

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Table 2- 1 Restaurant Chains and Franchises in Cross-strait (continued) Names Restaurant Types Characteristics Din Tai Fung (Taiwan) Currently has 98 branches across the globe

Chains, Franchise, Landmark site visited by tourists Chinese cuisine, Casual, and locals

and family Din Tai Fung logo is the trademark Michelin One star rated restaurant property of Din Tai Fung Inc.

Specializes in , and dim-sums

Average price: NT$600-NT$900 ( CDN$22-CDN33) or more

Annually earned NT$1.2 billion in Taiwan and NT$3 billion overseas

Thai Town Cuisine (Taiwan) Currently has 30 branches in Taiwan, and 6 branches in China

Specializes in hot spicy curry and Chains, Thai cuisine, other traditional Thai dishes Casual Average prices: NT300-NT$500 (CDN$11-CDN$18)

Thai Town Cuisine logo is the trademark Financially earned NT1.9 billion property of Thai Town in 2013

Zensen Sushi Express Currently has 291 branches in (Taiwan) Taiwan, China, , and Chains, revolving sushi, fast casual service, and Specializes in sushi platters on the Japanese conveyor belt (all priced at $30 NT) Sushi Express logo is the trademark property of Zensen Average price: NT$300-NT$600 (CDN$11-CDN$22) or more

Earned NT$2.5 billion in 2007 (continue onto next page)

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Table 2- 1 Restaurant Chains and Franchises in Cross-strait (continued) Names Restaurant Types Characteristics Kanpai Group (Taiwan) Currently owns 7 brands: Kanpai （乾杯）, Old Kanpai （老乾杯）, Red Wine Kanpai

（紅酒乾杯）, Kanpai Bar, TAN （微風）, 黑毛屋，季月乾杯, and 八兵衛

It has 20 branches in Taiwan Chains, BBQ (Japanese Specializes in meat and seafood assortments: style), fast casual beef, pork, chicken, shrimps, clams, and service Korean appetizers (kimchi)

Kanpai logo is the trademark Drinks: Beer and soft drinks property of Kanpai Group Average price: NT$800-NT$2000 (CDN$30- CDN$74) (a la carte and drinks)

Financially earned NT $700 million in 2013

Mitsui (Taiwan) Currently owns 7 brands: Mitsui (三井), Mitsui Cuisine (三井料理美術館), Mitsui

Japanese Cuisine, Mitsui

Chains, Japanese Cuisine (明水三井), Kyoku Sushi (極壽司), cuisine, Mitsui Style (三井選品), and 三井 Cuisine Fine dining, chef- M. Mitsui logo is trademark property owned of Mitsui It has 10 branches in Taiwan

Serve the finest and freshest ingredients around the world

Source: Din Tai Fung (2015). Din Tai Fung. TW: www.dintaifung.com.tw (above) Thai Town Cuisine (2015). Thai Town Cuisine. TW: www.thaitown.com.tw (above) Zensen Sushi Express (2015). Zensen. TW: www.sushiexpress.com.tw/about.phh (above) Kanpai (2015). Kanpai TW: www.kanpai.com.tw/index.html (above) Mitsui (2015). Mitsui. TW: www.mitsuitaipei.com.tw/zhi/index.html (above) (continue onto next page)

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Table 2- 1 Restaurant Chains and Franchises in Cross-strait (continued) Names Restaurant Types Characteristics Haidilao (China) Currently has 80+ branches in China, and one in the US and in Singapore. Chains, Specializes in hot spicy soup packs sold in (Chinese style), grocery stores, and in restaurants. cuisine, Impeccable services like nail polishing, fast casual service, and shoe shining, and board games at the family waiting lounge. Haidilao logo is the trademark property of Haidilao Inc. Average price: $88 RMB per person (NT$434) or (CDN$16) Annually earned $312.7 million RMB

Source: Haidilao (2015). Haidilao. CN: www.haidilao.com/index.html

I. 王品集團 (Wowprime) was established in 1993 by Dai Shenyi; it is highly regarded as one of the most successful restaurant chains in Taiwan that created fifteen brand names within two decades, each has created its own unique service, food, mission philosophy and target market. Ranging from Japanese fusion, Japanese BBQ, French, Italian cuisine, hot pots, teppanyaki, tonkatsu, coffee shops to fruits and vegetarian cuisine. Each brand has launched its own marketing campaign, collaborating with media and credit card companies. It currently has

300 branches opened in Taiwan, China, and Thailand. The restaurants mainly specialize in the casual dining segment and only Wang Steak restaurant categorizes in the Western fine family dining segment (Chen, 2013).

Profitability wise in the first quarter of 2012, consolidated as a group, Wowprime achieved 55% gross margin, 13% operating margin, and 11% after tax net margin. None of the operating activities include interest revenue, licensing revenue from Tokiya Taoban Thailand operation, and minor loss from change in fixed asset. The company does not own any land of the restaurants, and hence, depreciation is minor and only around 4.2% of total cost of goods sold

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and selling, general and administrative expenses (Chen, 2013). In 2013, when the group is not consolidated, Wowprime achieved similar results of 53% gross margin, 11.6% operating margin, and 13% net margin (康和証劵投資顧問股公司，2013a). According to its financial statement from 2013 to 2014, Wowprime has earned $14.89 to $16.92 billion NT, and it is planning for an unit expansion up to 131 units from its existing 359 locations in 2014. In 2015, the enterprise hoped to expand another 10 units which give a total units of 500 locations (林潔玲，2014，

2015).

II. 鼎泰豐(Din Tai Fung) is an award winning restaurant chain originated from Taiwan, and it is the only restaurant brand from Taiwan to receive a Michelin star restaurant rating. It is touted as the most prestigious honor to receive such an acceptance. The restaurant specializes in xiaolongbao, a pastry filling that stuffed with pork and vegetables containing soup. It is a bite size delicacy adored by many tourists who are willing to pay a pilgrimage visit to the restaurant during their stay in Taiwan. It is suffice to say that Din Tai Fung is a landmark restaurant that represents the food and beverage industry in Taiwan. The establishment was once a cooking oil retailer founded by Yang Bingyi (楊秉彝) who was born in China but moved to Taiwan in 1948 as a result of the Chinese Civil War. Earlier in his life, he worked at Heng Tai Fung (恆

泰豐油行) for 10 years but soon found himself unemployed due to the store’s closing. Thus he and his wife Lai Penmai established Din Tai Fung, a cooking oil retailer in 1958. How did the establishment convert itself into one the most recognizable chain- restaurants in the world is rather legendary. In 1980, a veteran solider who specialized in making xialongbao asked Yang

Bingyi whether he can set up a food stand in front of the store to sell xialongbao. The food stand business became an overnight sensational hit and Mr. Yang immediately saw it as a business opportunity, he then decided to learn making the delicious bite size delicacy, later, Mr. Yang ended the cooking oil business, and start focusing on making and selling xialongbao as his main business, it later became a full-fledge restaurant in the 1980s. His son, Yang Jihua (楊紀華) the

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current operator and CEO took over the business and turned the brand into a multi- billion dollar empire across the globe.

Currently Din Tai Fung has 9 branches in Taiwan, 3 branches in Hong Kong, 1 in ,

24 branches in China, 13 branches in Japan, 6 branches in Korea, 18 branches in Singapore, 4 branches in , 12 branches in , 1 branch in Thailand, 5 branches in the United

States, and 2 branches in Austria (Din Tai Fung.com.tw, 2015). 98 locations worldwide.

Profitability wise, the restaurant founder refuses to go public with the company’s success but rather he chooses to give back everything that the company has earned to his trustworthy employees. He sees them as the most valuable asset and has a lot of potential to grow. Although no profit data available for public access but the company reported to have earned the annual revenue over NT$1.2 billion in Taiwan and over NT$3 billion worldwide for its overseas

‘franchise business (江睿智，2010). This remarkable feat has to deal with its successful managerial technique that the owner claimed to inspire from McDonald’s!

III. 瓦城泰統 (Thai Town Cuisine) was founded by Xu Chengyi (徐義) in 1990 and begins its restaurant operation in serving casual family style Thai food. In 1993, 瓦城 started standardizing its kitchen and utilizing the Point of sale system. The company placed most of its restaurants within shopping malls to ensure foot traffic that help intensifies shopping crowds.

Overtime, this gradually built itself a name for serving consistent Thai cuisines. The tremendous success of the first family style Thai restaurant 瓦城, led TTC to grow confidently by striking the iron while it is hot when it decided to roll out its second more trendy and contemporary brand

Very Thai (非常泰) which also served Thai food but targets at adolescents and younger adults.

To expand its food and beverage empire across Taiwan, TTC then launched its Chinese Hunan food brand 1010 in 2006. TTC currently has thirty branches in Taiwan and only six brands

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belong to the 1010 . The company offers the most authentic Thai food experience to diners and enthusiasts alike in Taiwan. TTC went public in 2011and is planning to open one hundred restaurant locations in Greater China in 2013. The first Thai Town (瓦城) restaurant is slated to open in Shanghai in 2014 (Chen, 2013).

Probability wise in 2013 the full year consolidated statement, TTC achieved 54% gross margin, and 14.2% operating margin, and 26% net margin. 2014 the full year was consistent at

54% gross margin, 14% operating margin and 29% net margin (康和証劵投資顧問股公司，

2013b). Then in 2012, the company reported to have earn $2 billion NT with an annual growth of 25% (王一芝，2013a).

IV. 乾杯食集團 (Kanpai Group) is a quick casual service restaurant chain founded in

1999 by a half Japanese and half Taiwanese owner named Hirade Shoji (平出莊司); the restaurant serves Japanese style BBQ called yakiniku and brings the kanpai toasting culture to

Taiwan. During his college years, the founder ran his first restaurant and later target at teenagers and young adults in his current restaurants. The young and feisty founder is vivacious and fun, he even created some drinking games such as kiss for free dish of pork, bottoms up at 8pm and get a free refill, this gaming activity instantly gains popularity among young adult patrons. The small restaurants generally situated in the alleys and you can hear echo of excitement coming from it.

The experience was quite memorable when going for the first time. Besides the current restaurants, Kanpai has expanded and introduced more premium brands such as Old Kanpai and

Red Wine Kanpai, all of which serve Japanese yakiniku but in a much higher end dining environment and more pricy dishes. The founder decided to open another product line called

Kanpai , which offers Japanese , the first location was opened in May 2012 and with the second location opened in 2013. In total locations, Kanpai currently has twenty restaurant units in Taiwan (Kanpai.com, 2015).

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Profitability wise, Kanpai has not yet made public, so there are no data available for public access. It was reported in 2013 that with twenty restaurants, Kanapi group earned NT$700 million (CDN$25 million) of revenue, or almost NT$30 million (CDN$1.5 million) per restaurant. Kanpai restaurants have smaller seating capacities and could not sit more than forty people each round which made the dining atmosphere cozy and fun (Chen, 2013).

V. 爭鮮壽司 (Zensen Sushi Express) is a quick causal revolving sushi restaurant chain founded in 1978 by Mr. Chin-Chiou Stanley Chen (陳津秋原本) in Taiwan. The company was originally started as a clothing export business but later divert it into a food and beverage business. In 1996, Chen set up his first sushi take out business and later that year he founded a revolving sushi restaurant. The concept was indeed a success, he expanded the operation into a wholesome food business. As of 2012, it opened 200 locations in Taiwan, 70 in Mainland

China, 20 in Hong Kong, 1 in Singapore. It plans to stretch its restaurant chains in the U.S sometime in 2013. The name Zensen is a play on words that sounds alike but has a dual meaning to it. The word literally means to compete with freshness but it sounds like ‘truly fresh’ in

Mandarin. Besides the catchy and memorable name, the company truly aims for freshness and this reflects the persistence and dedication of providing quality food at an affordable price. The emphasis on quality is serious business at Zensen as the ingredients to prepare for each dish, are sourced from numerous places of origin, some from points around the world, and where practical, locally. The mix of food ingredients may include tuna from Norway or Canada, shrimp from

Thailand, scallop from Japan, and rice from . Such procurement scheme will provide the company with careful selection allowing the restaurant to offer quality sushi at great affordable prices (Sushi Express.com.tw, 2015).

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Probability wise, it is not a listed company, and so it did not disclose any financial data to the public for reference. However it is reported to have earned an annual revenue of $2.5 billion

NT (陳建豪，2007).

VI. 三井(Mitsui) is a fine dining Japanese chef-owned cuisine restaurant chain originated from Taiwan and it currently has ten branches. The company was founded by a very dedicated chef named 黃奕瑞 in 1992. His insistence for freshness goes on the traditional way as Japanese sushi chef would get up early in the morning at 6am to the fish market to pick up the freshest procurements. He is a well-trained sushi chef that demands perfection at its greatest, so going to the fish market allows him to hand pick the best quality product. Mitsui takes sanitation seriously because it is something that cannot be seen which makes it valuable. Because sanitation can offer the freshest sushi, and this is what helped builds the foundation of the company. It is also setting a firm commitment to the customers that ‘you will get absolutely nothing but the best we can get for you.’ To maintain and preserve its absolute freshness of food ingredients; the founder improves their weekly turnover rate. In order to provide the freshest ingredients; he invented a

‘modifying menu’ in his business model which is unlike other conventional Japanese cuisine restaurants; it does not have a fixed menu. It solely relies on whatever ingredients available at the time being to prepare the dishes to customers. The end result will give customers huge surprises every day as they do not know what the menu will offer today or tomorrow! Mitsui imports seafood from all over the world to get the highest quality but in return selling to their beloved customers at a very reasonable price. It is like treasure hunting when eating at Mitsui, a customer would describe (張志誠，2007). The company currently owns seven brands: Mitsui (三井),

Mitsui Cuisine (三井料理美術館), Mitsui Japanese Cuisine, Mitsui Cuisine (明水三井), Kyoku

Sushi (極壽司), Mitsui Style (三井選品), and 三井 Cuisine M. Each brand has its own ranking

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quality, so customers will have several options to choose from when they consider dining at one of the Mitsui restaurants (Mitsui .com.tw, 2013).

Profitability wise, it is not a listed company that goes public, so there are no financial statements made available for public to access. However, it is reported to have annually earned

$2 billion NT (TVBS 新聞，2014).

VII. Haidilao (海底撈) company is one of the most successful quick service hot pot restaurant chains originated from Sichuan province, China which started out as a small shop selling "hot and spicy soup"(麻辣烫) and later it developed and expanded its menu range that gains positive reviews from customers and other restaurant counterparts. It was founded in 1994 by a businessman and CEO, Zhang Yong (張勇) who came from a small village in Sichuan. Over the past 16 years, it has owned more than 80 direct marketing stores in , Tianjin,

Shanghai, Nanjing and many other major cities. The first US outlet was opened in Los Angeles on September 2013 (Haidilao.com, 2012).

Service wise, Haidilao provides a very unique experience to patrons that largely contribute to its success. For instance, at the waiting lounge, customers can enjoy fruits and drinks, go online, and get their shoes shined or nails painted, all for free. They can even play poker or checkers. When customers get their table, Haidilao servers provide them with service beyond their expectations, such as using plastic bags to cover cell-phones to protect from food and grease, they even provide cleaning cloth for glasses! These are just one of the examples of thoughtfulness and considerations which makes Haidilao’s dining services superior than any other counterpart in the dining industry (Zhao, 2011).

Profitability wise, Haidilao is not a listed company that offers public stock options. So there is no disclose for detailed report. However, 時代周報 (2014) revealed that the company had

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an impressive revenue in 2012, it annually earned $312.7 million RMB. The net profit also went up to $400 million RMB that year (時代周報，2014).

Part II introduces the current restaurant industry in North America and several of its most successful franchises except for Schwartz’s, whose restaurant remains as a single location despite of its ultra-success that generated a cult following. Three brands are originated from Canada, and four brands are originated from the U.S.

The current dominating franchises in North America are Red Lobster (USA), Tim

Hortons (Canada), Sushi Shop (Canada), T.G.I. Fridays (USA), Outback Steakhouse (USA), and

McDonald’s (USA). The current famous landmark standalone restaurant in Montreal, Canada is

Schwartz’s. These restaurant chains in North America are immensely popular, particularly Tim

Hortons and McDonald’s. These two biggest franchises own over 7,000 locations combined worldwide. Tim Hortons is as big as Starbucks in the Canadian quick service restaurant segment.

It holds 62% of the Canadian coffee market, and whereas Starbucks holds 7%. Although Tim

Hortons is virtually unknown in Cross-strait including Taiwan and China, but it is indeed very successful in Canada. Red Lobster is another well-known franchise that has not introduce to the market in Cross-strait. It is very well-received in Japan as the number 1 seafood restaurant, it currently has 23 locations there. Both T.G.I. Fridays and Outback Steakhouse have restaurant chains in Taiwan. T.G.I. Fridays currently has 15 locations, and Outback Steakhouse has 5 locations. Although it may not be as popular as T.G.I. Fridays in Taiwan, but it is extremely popular in South Korea. It currently has 101 locations there! The main reason for its success, is the business model which will be further explained later at the Applying Theory X and Theory Y with restaurants in the U.S section. Finally, Sushi shop is the first Japanese cuisine restaurant chain that turns into a franchise from Canada, it is founded by MTY Food Groups, which is a huge food and beverage organization in Canada that owns 26 brand names. Lastly, Schwartz’s is

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a famous landmark site from Montreal, Quebec in Canada that is not a restaurant chain but it certainly has the capital and potential to do so. It is worth CDN$10 million for that restaurant.

Table 2-2 Restaurant Chains and Franchises in North America Names Restaurant Types Characteristics Red Lobster (USA) Specializes in seafood, and steaks

Currently owns 705 locations worldwide

Brand founded by Darden Restaurants sold to Golden Gate Capital for US$2.1 Chains, franchises, Red Lobster logo is the trademark billion (Jul 28, 2014) property of Golden Gate Capital causal and family mix Average price: US$30- US$60 (set meal) (NT$908-NT$1,817) or (CDN$32- CDN$65)

Annually earned US$2.62 billion worldwide Average Annual per sales: $3.7 million in 2013 Tim Hortons (Canada) Specializes in coffee, donuts, bagel, cookies, , soups, tea and juices

Chains, franchises, Currently owns 4,288 locations in N.A quick service, cafe, and the middle-east and shop Tim Hortons logo is the trademark 3,453 restaurants in Canada, 808 in USA, property of Restaurant Brands and 27 in the Persian Gulf region International

Annually earned $3.3 billion and grew total revenue of 4.3%

Average price: CDN$5- CDN$15 or more (NT$138-NT$414) Source: Red Lobster (2015). Red Lobster. US: www.redlobster.com (continue onto next page) Tim Hortons (2015). Tim Hortons. CA: www.timhortons.com/ca

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Table 2- 2 Restaurant Chains and Franchises in North America (continued) Names Restaurant Types Characteristics Sushi Shop (Canada) Specializes in traditional, creative, and innovative sushi (Asian and Western mix)

Currently owns 130 locations in Canada Chains, franchises, (Quebec and Ontario province) fast casual, Japanese cuisine, Chains owned by MTY Food Group: has sushi 26 brands

Sushi Shop logo is the trademark Average price: CDN$20 to CDN$40 property of MTY Food Group (NT$540-NT$1080)

Annually earned CDN$101.36 million revenue in 2013 by MTY Food Groups

T.G.I. Fridays (USA) Specializes in , BBQ, and steaks

Beverages: alcohol. Juice, and soft drinks

Chains, franchises, Currently owns 992 locations in the U.S casual-dining, and

bar Currently has 920+ restaurants in 61 TGI Fridays logo is the trademark countries: in Africa, Americas, Asia, property of Sentinel Capital Partners and TriArtisan Capital Partners Europe, and Oceania continents (USA not included)

Average price: US$20-US$40 per person (NT$634-NT1,2688)per person

Annually earned US$2.7 billion

Source: Sushi shop (2015). Sushi Shop. MTL: www.sushishop.com/en (continue onto next page) T.G.I. Fridays (2015). T.G.I. Fridays. US: www.tgifridays.com

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Table 2- 2 Restaurant Chains and Franchises in North America (continued) Names Restaurant Types Characteristics Outback Steakhouse Specializes in steaks and seafood platters (USA) Currently owns over 1,200 locations in

23 countries: North and , Chains, franchises, casual dining, Australian Europe, Asia, and themed steakhouse Annually earned US$2.45billion in 2013

Outback Steakhouse is the trademark property of Bloom’ Average price: US$25-US$35 per person Brands (NT$792-NT$1,110) per person Schwartz’s (Canada) Specializes in smoked meat sandwiches, poutine

Landmark restaurant: 80 years old Standalone, Hebrew cuisine, Delicatessen, fast Average price: CDN$12.64 -CDN$13.09

casual service, smoked (NT$341-NT$353) per person with meat combo order Schwartz’s logo is the trademark property of Schwartz’s Purchased by several Canadian celebrities for CDN$10 million McDonald’s (USA) Specializes in burgers, fries, chicken and etc.. Chains, franchises, , family Currently owns 3,500 worldwide Quick-service, locations in 119 countries hamburgers Average price: US$5.99 to USN$7.99 a combo (NT$190-NT$253) a combo meal McDonald’s logo is the trademark (combos) burger, fries, and property of McDonald’s Corp.

Financially earned US$28.1 billion in 2013 Source: Outback Steakhouse (2015). Outback. US: www.outback.com Schwartz’s (2015). Schwartz’s. MTL: www.schwartzsdell.com/ca/en McDonald’s (2015). McDonald’s. US: www.mcdonald’s.com

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I. Red Lobster is an American casual seafood restaurant chain that specializes in seafood, chicken, steaks and . The company currently has branches established overseas in

Canada, Saudi Arabia, the , Qatar, and Japan, in addition to the United

States. As of 2013, it is reported that there are 705 Red Lobster locations worldwide. On

December 19, 2013, the parent company which is located in San Francisco, California, Darden

Restaurants planned to sell or spinoff due to pressure from shareholders and investors. On May

16, 2014, Darden Restaurants officially sold Red Lobster to Golden Gate Capital for $2.1 billion

US dollars. Darden Restaurants, Inc. currently owns Olive Garden, Longhorn Steakhouse,

Bahama Breeze, Seasons 52, Eddie V’s Prime Seafood, the Capital Grille, and Yard House

(Edgar Online, 2013; Red Lobster.com, 2015).

The company was originally founded in March 1968 by entrepreneurs Bill Darden and

Charley Woodsby. The concept was created for seafood lovers whose first restaurant established in Lakeland, and in 1970, General Mills acquired Red Lobster as a five-unit company.

With the new backup system, the chain quickly expanded its operation in the 1980s (Red

Lobster.com, 2015).

During the 1980s, Red Lobster entered the Canadian markets by purchasing Ponderosa locations. The company generally maintains 25 to 30 locations in Canada, the bulk in larger urban centers in Ontario with smaller number in larger centers in all three Prairie Provinces. In

September 1997, due to financial loss, Darden Restaurants had no choice but to terminate all branches in the Quebec market and never attempted to enter the market in British Columbia due to corporate decision. According to the Darden annual 2013 report, Red Lobster earned $8,551.9 million US dollar domestically (Edgar Online, 2013; Red Lobster.com, 2015).

According to its financial statements of 2013 fiscal year, Red Lobster had generated

$2.62 billion in sales over 705 units worldwide. However it dropped 1.7% below in 2012, driven

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primarily by a U.S. same restaurant sales decrease of 2.2% partially offset by revenue from one net new restaurant. The decrease in the U.S. same restaurant sales resulted from a 1.8% decrease in the same restaurant guest counts combined with a 0.4% decrease in average guest check.

Average annual sales per restaurant for Red Lobster were $3.7 million in fiscal 2013 compared to

$3.8 million in fiscal 2012 (Edgar Online, 2013).

II. Tim Hortons is a Canadian multinational quick service restaurant chain that specializes in coffee, baked goods and sandwiches. It currently has 3,453 branches in Canada,

808 branches in the United State, and 27 in the Persian Gulf region. It was founded in 1964 by two Canadian hockey players named Tim Horton and Jim Charade for their initial venture in hamburger restaurants. Then followed by 1967, Horton partnered with investor Ron Joyce and decided to discard the hamburger business and went with coffee and baked goods venture. When

Horton died in 1974, Joyce assumed control over operations by expanding the chain into multimillion dollar franchise. The success of Tim Hortons franchises eventually overtook

McDonald’s as Canada’s largest food service operator (Tim Hortons.com, 2015). As of today, the company opened twice as many Canadian outlets as McDonald’s and the business quickly surpass those of McDonald’s restaurant operations in Canada of 2002. In 2005, the chain accounted for 22.6% of all fast food industry revenues in Canada. Tim Hortons now commands

76% of the Canadian market for baked goods and holds 62% of the Canadian coffee market whereas Starbucks positioned number 2 holds 7% (Tim Hortons Inc. Annual Report, 2013).

On 26 August 2014, Burger King agreed to purchase Tim Hortons for US$11.4 billion; the combined company, which will be majority-owned by Brazilian investment firm 3G

Capital and remain based in Oakville, will be the third-largest operator of fast food restaurants in the world (Patton & Giammona, 2014).

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According to its financial statements of 2013, the restaurant chain business generated 3.3 billion and grew 4.3% total revenue. System-wide sales grew 4.7% for the new restaurant development, and by same-store sales growth of 1.1% in Canada and 1.8% in the U.S. Operating income of $621 million was up 4.5%, consistent with top-line growth. Earnings per share increased 8.9% to $2.82, compared to their targeted range of $2.87 to $2.97 (Tim Hortons

Financial Report, 2013). This is good news to all stock owners.

III. Sushi Shop is currently the only quick service sushi restaurant chain that evolved into a franchise that owns over 130 locations in Quebec and Ontario. It does not plan to stretch its franchise operation across foreign soil. It is strictly a franchise that only runs in Canada. The restaurant branches are referred to as boutiques because they specialize in making gem like sushi that is both aesthetic and delicious. The franchise was founded in 2000 by chairman and CFO named Stanley Ma. He founded the restaurant because he saw an opportunity and hope to become the first to turn the business into a franchise. There is no information about the founder disclosed online. Sushi Shop is what the founder described as a creative, responsible and progressive company made up of people who love life and especially have deep passion in sushi. The team is dedicated to sharing the company’s passion of sushi to the customers and show them to appreciate the art of sushi and how important it is to be part of the healthy lifestyle and diet

(Sushi Shop.com, 2015).

The franchise is owned by MTY Food Group, founded in 1985. It currently owns 26 brand names: Thaï Express, Country Style, Groupe Valentine, Vanelli's, Extreme Pita, Cultures,

La Cremiere, Sushi Shop, Veggirama, Caferama, O'burger, Tiki Ming,Vie and Nam, Au Vieux

Duluth Express, Frankx Supreme, ChicknChick, Croissant Plus, Koya Japan, Kim Chi, Panini,

Tandori, Tutti Frutti, Villa Madina Mediterranean Cuisine, Sukiyaki, and the Canadian branches

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of Yogen Früz, Time, and TCBY with over 2200 units in Canada (MTY Group.com, 2013).

Profitability wise, MTY Food Group has generated $101.36 million revenue in 2013

(MTY Food Group Inc, 2014).

IV. T.G.I. Fridays is an American casual dining restaurant and bar chain that specializes in hamburgers, BBQs, and steaks. For drinks at the bar, it serves alcohol and cocktails. It was established in 1965 by Alan Stillman in New York. As of today, the success of the chain restaurant business owns 992 locations in the US and over 920 restaurants in 61 countries including several major continents: Africa, Americas, Asia, Europe, and Oceania (TGI

Fridays.com, 2015).

The restaurant chains’ main target audience is professional and white collar occupants, they seek for better services and premium food selections. In addition to the premium label it carries, the brand offers a fun atmosphere where people can go without knowing, but hoping to meet the other guests. In many ways it performs the community meeting point which Adelman et al., (1994) suggest will become an increasing feature of services in cities where many people live an individualized existence. T.G.I. Friday’s provides a service which “creates a sense of social connection to others” (Adelman et al., 1994, p. 140).

According to the financial statement of 2013, the restaurant chain currently has more than

900 restaurants in operation worldwide in 60 countries, and reported system-wide sales of $2.7 billion. T.G.I. Fridays currently employ over 70,000 people around the world (Carlson, 2014).

V. Outback Steakhouse is an Australian-themed American casual dining restaurant chain based in Tampa, Florida with over 1200 locations in 23 countries throughout North and South

America, Europe, Asia, and Australia. It was founded in February 1988 in Tampa by Bob

Basham, Chris T. Sullivan, Trudy Cooper and Tim Gannon, and is now owned and operated in

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the by OSI Restaurant Partners, and by other franchise and venture agreements internationally. Besides serving quality steaks, the menu also serves seafood, desserts and soft drinks. The target audience is mostly white collars and occasional families will come as well

(Outback.com, 2015).

Profitability wise, Outback Steakhouse has generated $2.45 billion US for its system- wide sales that boasts 767 locations in the U.S. Sales per unit is estimated around $3.19 million

US (Nation’s Restaurant News, 2014).

VI. McDonald's Corporation is the world's largest American family chain of hamburger fast food restaurants, serving around 68 million customers daily in 119 countries across 35,000 outlets. Headquartered in the United States, the company began in 1940 as a restaurant operated by the original founders Richard and Maurice McDonald; in 1948 they reorganized their business as a hamburger stand using production line principles. Businessman Ray Kroc joined the company as a franchise agent in 1955. He subsequently purchased the chain from the McDonald brothers and oversaw its worldwide growth. A McDonald's restaurant is operated by either a franchisee, an affiliate, or the corporation itself. McDonald's Corporation revenues come from the rent, royalties, and fees paid by the franchisees, as well as sales in company-operated restaurants

(mcdonalds.com, 2010). The current CEO and President is Don Thompson serving from 1990 to the present.

The history begins with the founding to the opening of a franchised restaurant by Czech

American businessman Ray Kroc, in Des Plaines, Illinois, on April 15, 1955, the ninth

McDonald's restaurant overall. Kroc later purchased the McDonald brothers (Richard and

Maurice)' equity in the company, an attempt to overtake the business which led its worldwide expansion, and the company became listed on the public stock markets in 1965. Kroc was also noted for aggressive business practices, compelling the McDonald brothers to leave the fast food

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industry. The McDonald brothers and Kroc feuded over control of the business, as documented in both Kroc's autobiography and in the McDonald brothers' autobiography. With the expansion of McDonald's into many international markets, the company became a symbol of globalization and the spread of the American way of life. Its prominence has also made it a frequent topic of public debates about obesity, corporate ethics and consumer responsibility

(Harris, 2009).

According to its financial statement of 2013, McDonald's Corporation had annual revenues of $28.1 billion, and profits of $5.6 billion. During the same year, the global sales increased 0.2%, and system-wide sales were up 3% and diluted earnings per share 4%. The company invested approximately $2.8 billion in new and existing restaurants. During the same year, the company returned $4.9 billion to shareholders through dividends and share repurchases

(McDonald’s 2013 annual report, 2014).

VII. Schwartz’s is a Montreal founded delicatessen restaurant established in 1928 by

Reuben Schwartz, a Jewish immigrant from Romania. The restaurant site is considered a historical landmark which has no franchise establishment but only a single location situated at

3895 Saint-Laurent Boulevard. It specializes in making old fashion smoke meat sandwiches, a stack of thin slice cut smoke meat served between two slice of thin toasts smeared in mustard.

There is no vegetable served as toppings for the (Schwartz’s Deli.com, 2015). Schwartz has always disliked the idea of expanding the operation into franchises, in fact several restaurateurs have offered to build Schwartz’s franchise operations in cities across North America but rejected by the owner. The reason is due to quality control may be hard to maintain and he enjoys the attention of customers from different parts of Canada or around the world coming to queue up in front of his restaurant (Schwartz’s Dell.com, 2015).

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In Taiwan, there is a restaurant chain called Din Tai Fung which specializes in making xiaolongbao and in Montreal, Quebec, there is a small restaurant called Schwartz’s which specializes in making smoke meat sandwiches. Both restaurants from different parts of the world have their own diehard fans whom are willing to spend their time and money to travel thousand miles away from home to the restaurant in the quest of pilgrimage. Both restaurants are legendary in their own rights. The restaurant is over 80 years old and its business ethics sticks with traditional methods of preparing smoke meat the old fashion way using a secret blend of fine herbs and spices marinated for ten days. The smoked meat is smoked daily and contains no preservatives but the award winning taste and freshness that adored by celebrities from all around the world coming to Schwartz’s (Schwartz’s Dell.com, 2015).

On March 5, 2012, Celine Dion, the songstress and her husband and manager Rene

Angelil, and restaurateur, Paul Nakis reportedly purchased Schwartz’s for CDN$10 million

(NT$270 million). The new owners would have the rights to but remain no intention in doing so, thus respecting the original owner’s decision (D’Astous, 2012).

Profitability wise, the restaurant did not go public since the new owners refused to have it expand into franchises. Hence, none of its profitability data is accessible to the public. Although there are no stats and figures to indicate how lucrative of a profit it earned in the past but the restaurant operation is worth $10 million and was purchased by new owners. Evidently, the restaurant is doing extremely well either with or without turning it into a franchise.

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Section II Introduction to Theory X and Theory Y by Douglas McGregor

Dr. Douglas M. McGregor (1960) was the brainchild behind the theories of human motivation which he called “Theory X and Theory Y”. The concept was developed in 1960s during his academia years at MIT Sloan School of Management and ever since of its introduction; it has been widely used in human resource management, organizational behaviour, organizational communication and organizational development. Most of the corporate plans and beliefs were developed through the concept of Theory X and Theory Y in many of the successful restaurant chains and franchises today. Later in the next segment, several real case studies of the current restaurant chains and franchise will be introduced and how Theory X and Theory Y have implemented and incorporated into their business managements and corporal beliefs.

As McGregor (1960) described both his Theory X and Theory Y have to do with the perceptions managers hold on their employees, not the way they generally behave. It is all about attitudes and not attributes. It is an unbalancing scale weighting between Theory X and Theory Y that most managers perceive the human nature and human behaviour within their employees.

In Theory X, a hard approach which McGregor (1960) notes and rests on three core management assumptions that are: 1) The average human being has an inherent dislike of work and will avoid at all cause if he can. 2) Because of this human characteristics of dislike work, most people must be coerced, controlled, monitored, persuaded, rewarded, directed, and threatened with punishment to get them to put forth adequate effort toward the achievement of organizational objectives. 3) The average human being prefers to be directed, wishes to avoid responsibility, has relatively little ambition, and wants security above all (McGregor, 1960).

In sum, Theory X managers only see the laziness in human behaviours and must exercise threats or coercion to achieve corporal goals. Therefore it is unfortunate to realize that managers have no faith in their employees working genuinely and believing they have no productiveness and only direction will lead the way. Finally, their lack of productivity show no

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ambition and work desire because they want the easy way out without taking any responsibility.

Another characteristic of Theory X is that work is segmented, industrially based, and individual tasks where their work environment would be in a machinery factory utilizing technology to control work and minimize human error. Any form of standardized operation set by the organization is considered Theory X. It is a form of absolute control designed to make the subordinates submissive to commands. The nature of this relationship between employees and employers has no trust among one another.

For example, the managers at Walmart took Theory X and view their employees as potential suspects of thefts in retail stores. By taking precaution to the next level, the corporate boardrooms even had video cameras installed and employees were instructed to always keep their hands above the tables in order to ensure no underhanded deals (bribery) were being made. To make matters worse in violating human dignities, an incident occurred in 2004, the New York

Times reported that some Walmart stores locked their employees at night to avoid potential theft of merchandise (Greenhouse, 2004). The more overtly practices of Theory X still persist in some of the enterprises and companies, so they are unlikely to be vanished all together. However not all practices from Theory X are deemed inhumane but in Walmart’s case, it had completely violated the laws of constitution in human rights and dignity. It is an unlawful practice to confine a human being in any form of public facility. The excessive nature of total authoritarianism is the way to control human behaviour, and so their work of productivity must remain standard.

Evidently, Theory X has many flaws that no one wants to associate with and so Theory Y was introduced to management by giving some redeemable quality of human nature, that not all human beings are born this way. They can be articulate, productive, resourceful, trustworthy and reliable. In other words; Theory Y is a soft approach that gives hope to all mankind in any managerial setting. Theory Y management views employees to be ambitious and self-motivated and possess the ability of self-control. It is believed that employees enjoy their mental and

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physical work duties being challenged. According to them, work is as natural as play. They possess the ability for creative problem solving, but their talents are underused in most organizations. Given the proper conditions, Theory Y managers believe that most employees will learn to seek and to accept responsibility and to exercise self-control and self-direction in accomplishing objectives to which they are committed. A Theory Y manager believes that, given the right conditions, most people will want to do well at work. They believe that the satisfaction of doing a good job is a strong motivation. Many people interpret Theory Y as a positive set of beliefs about workers which is true as McGregor (1960) believes that Theory Y managers are more likely than Theory X managers to develop the climate of trust with employees that is required for employee development. The employee development is one crucial aspect in any organization because it helps improve strengthening the bonding relationship between managers and subordinates when they are openly communicating with one another. This minimizes the difference between superior and subordinate relationships, creating a comfortable environment in which subordinates can develop and use their abilities. This environment would include sharing of decision making so that subordinates have something to say in decisions that influence them

(McGregor, 1960). For instance, Nucor Corporation, a major steel producers in the U.S contributes its success mainly based on Theory Y that lay out the four employment relations principles and they are: 1) Management is obligated to manage Nucor in such a way that employees will have the opportunity to earn according to their productivity. 2) Employees should be able to feel confident that if they do their jobs properly, they will have a job tomorrow. 3)

Employees have the right to be treated fairly and must believe that they will be. 4) Employees must have an avenue of appeal when they believe they are being treated unfairly (Nucor.com,

2015). Evidently, the four employment principles set by Nucor was designed to protect employees from unjust treatment and importantly to build up confidence in them so that in return they will enhance their laboring performance in a well-supported corporate environment.

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To conclude Theory X and Theory Y, they are crucial to be implemented in today’s contemporary managerial setting and both are interdependent on one another. A successful firm or enterprise cannot solely rely on just one Theory either X or Y. So it has to be combined harmoniously as one entity. Because there bound to be at times when a manager or leader will need Theory X to manage corporate standards and there are also at times Theory Y is needed to look after employees’ wellbeing. A well-balanced scale of corporate management weighting both

Theory X and Theory Y will show no discrimination towards employees and therefore it is an ideal practice to set up the commitment.

Lastly, Theory XY was not included on the table, because it did not acknowledged by

McGregor himself. However after analyzing a couple of the modern management by the current restaurant franchises. Managers had figured out a way to design their theories by incorporating both Theory X and Y together as one. For instance, this theory alone is applicable in two scenarios: employee empowerment with limitations and managements that both Theory X and

Theory Y workers can use . Empowerment has to deal with the amount of trust established between employees and employers. However that trust still cannot be completely engaged with

Theory X and Y workers. Hence, employers would only give them a limited authorization as a precautionary sign. That being say, the limited empowerment is a sign of skepticism in Theory Y workers’ overall honesty. That character trait is inclining towards Theory X spectrum which employers have a hard time trusting both Theory X and Y workers. If employers do have difficulty trusting Theory Y workers completely, then that means the workers are being treated as both Theory X and Theory Y characters. The final scenario is the management where both

Theory X and Theory Y workers can benefit from such as Wowprime’s SOP training institution that trains future employees and managers. There are actual academic credits that must be completed by every newly employed workers in the company.

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Table 2- 3 Theory X and Theory Y Approaches Theory X Theory Y The Hard Approach The Soft Approach Three Core Assumptions: Six Core Assumptions:

1. Inherently lazy, dislike doing work and 1. Enjoys working, and are welcome to will avoid it. challenges. Their physical and mental effort in work is as natural as play.

2. Intimidation through punishment and 2. Workers will exercise self-direction and threats or through persuasion by rewards and self-control in the service of objectives to appraisals to achieve organizational objectives which he is committed

3. No desire of climbing the corporate ladder 3. Committed to fulfill objectives which or self-development, avoids any responsibility serves as a function of reward to their and tasks, but wants security. achievement

4. Desire to learn, and to accept but to seek responsibility

5. Possess the ability to exercise imagination, ingenuity, and creativity in problem-solving, which are mostly underused by most organizations.

6. Given the proper working conditions, their intellectuals can be fully utilized.

In sum, Theory X managers treat their In sum, Theory Y managers treat their workers as irresponsible children who needed workers as responsible adults who are discipline through punishment and rewards to willing to seek responsibility and fulfilling make them do their jobs. the given job requirements.

There is no trust between employers and There is trust and loyalty in employees to employees. employers.

Source: McGregor (1960) The Human Side of Enterprise. New York, NY: McGraw-Hill

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Section III Appling Theory X, Theory Y, and Theory XY with Restaurants in Cross-strait

This section will discuss how the three most influential restaurant enterprises: Din Tai

Fung, Wowprime and Haidilao from Cross-strait implemented their Theory X and Theory Y into their business leadership and management. What are their secret ingredients used successfully conquering a legion of followers (employees and customers) around the world.

Table 2-4 Characteristics of Theory X, Y, and XY with Restaurants from C.S Theory X Theory Y Theory XY Standard Employee Assistance Creativity, Ingenuity, Employment and Operating Program (welfares) Innovation Management Training Procedure Din Tai Fung Wowprime (SOP) Din Tai Fung Wowprime Haidilao Wowprime (WU) (Central kitchen) Haidilao Haidilao Employee Bonuses, Rewards and (Logistics centers) Employment Empowerment Performance Appraisals Management Haidilao Din Tai Fung Employment Haidilao Wowprime Training Bonuses and Din Tai Fung Performance Appraisals (Dowry) Evaluation Haidilao Physical Training Haidilao (SOP) Self-improvement Wowprime Sweeping Reforms through Competition Haidilao Wowprime Apprentice Model Haidilao Learning Motivation Learning through Haidilao (HU) Visitations Rules and Din Tai Fung Constitutions Wowprime Wowprime Source: Table of this research was made by oneself

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I) Din Tai Fung (鼎泰豐) is easily one of the most recognizable leading brands in

Taiwan and part of its great success has to do with an effective leadership that the owner and company chairman Yang Jihua possesses. His father Yang Bingyi the founder of the company has taught his son ever since he inherited the business that “honesty and integrity is important than making money” because any form of dishonesty will ruin the company’s hard earned reputation. In other words it is difficult to earning trust than earning money. Once trust and integrity is firmly rooted, business will follow after. A straightforward concept with no gimmicks is the only reason that it has successfully turned the restaurant chain into a famous brand in

Taiwan. Behind the brand, one can see quality assurance and service integrity written all over it.

Another reason that the restaurant chain is successful was due to the superior D.N.A inheritance from the chairman to his company that mirrors his humble and genuine personality. A leader who possesses those qualities will lead his or her company in the right path. Yang has a dual personality of “demon and angel” when it comes to leading and managing his company of employees. Demon symbolizes Theory X management for having strict demands and angel symbolizes Theory Y management for being considerate and a gentle soul which both are a great symbolism to describe the human behaviour that is constantly conflicting in the battle between the two to settle for the right decision. In this case, Yang’s perspective of Theory X is based on demanding near perfection which requires his employees to offer dedication, commitment and motivation to achieve goals. This includes the regulation of quality control in all of the products and services which the company demands from its employees to follow (王一芝，2014).

Since Din Tai Fung is not a listed company that offers public stock option, then there is no details revealing its financial statement. However, according to author 王一芝 (2014), the company has spent 48% of its total revenue to give back to its valuable employees. It is also reported that the restaurant chains has sold over 2,8000 pieces of xiaolongbao in Taiwan of 2013

(王一芝，2014).

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Theory X management

Standard Operating Procedure (Controlled, and monitored)

Theory X management is mostly coming from staff training in the kitchen and in the dining area. Because “quality is life and brand name is responsibility” this notion was instilled deep into Yang’s belief from his father that when customers choose to dine at Din Tai Fung, it is because they put faith in the brand and hence it is a responsibility to deliver quality and service to customers. Upon establishing his Theory X management, Yang laid out three steps leading his empire: Step 1) Absolute Quality Control, Step 2) Total Service Enhancement and

Efficiency, and Step 3) Reassurance among Employees (王梅，2000).

Step 1) Absolute Quality Control:

Just like any other successful companies will absolutely require persistence and passion!

Because a company that has persistence and passion will instantly care for the quality of its product and continue to improve it otherwise. For instance, one cannot make a fuss over food cost because if that happens, the food quality will drastically decline and customers will notice it, and they will not return for patronage. This is why brand reputation is so important for keeping the restaurants in business. For instance in the dining area, returned dishes like fried rice or appetizer, and defective xiaolongbao are considered rejects and must not deliver returned dishes to new customers. This is one of the basic stipulations that employees must comply to ensure food quality (王梅，2000).

In order to assure absolute standardization in product quality, Yang organized a cooking competition in the central kitchen. He then asked six branches from Taipei to send an expert in fried rice to compete with each other. The idea was simple, he wanted to see whether timing and movement from these chefs are identical at the same pace. Luckily, he did not get disappointed, in fact timing and movement was unanimous and the taste was the same! This is one of the

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examples how he demands for near perfection when it comes to assuring for product quality (王

一芝，2014). Besides ensuring its SOP of all its branches locally in Taiwan, Yang Jihua also emphasizes the importance of the restaurant chain’s quality, service and control overseas. In order to maintain the higher standard which he established for his restaurant empire. He regularly sends a mystery shopper overseas to conduct a full inspection to make sure their QSC have met the company’s mandate. Yang himself would also disguise as a mystery shopper in his local branches. He would pay a surprise visit to one of his branches, and if he sees something wrong or did not meet his standard, he would immediately react his discontent by reprimanding the managers who are responsible for the QSC of that branch. If the poor QSC happens regularly in that branch, Yang would suspend the manager’s ownership and reclaim the restaurant unit. This proves that Yang cares a lot for the SOP of his restaurant chains and would take regular inspections to ensure that there is no manager in any of his branch tries to ruin the reputation of his hard earned restaurant name (王一芝，2014).

Training: (Pursuing for greater perfection in hellish fashion)

Nitpicking is one noticeable features found at Din Tai Fung as the chairman constantly strives for perfection and if he sees a flaw, the employee will need to redo it until he gets it right!

For instance, when a chef was asked to make xiaolongbao and put it into a steamer, Yang would double-check it and found out the chef made the buns 30 grams in size whilst he made the buns

20 grams in size, it was 10 grams bigger! Without saying a word, Yang threw out the faulty buns and demanded the chef to do it again. Another incidence involved several Japanese chef trainees who were dispatched to Taiwan to learn making xiaolongbao in the pursue of opening branches in Japan. Everyone thought of making xiaolongbao was easy but they all soon underestimated the difficulty that lies within. During the so-called “training from hell” Yang would spare no feelings of others when he sees something wrong and would correct it immediately. One time, Yang

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mercilessly scold at a chef when he sees he is still making the same mistake by poking the bun with too much force. Another chef also had been reprimanded by Yang when he saw the newly made xiaolongbao and called it “garbage.” To unleash his tantrum, he spared no expense by hurling the buns across the room and this reaction frightened the tearful chef as he felt humiliated. According to the author, this was the same chef who had his buns hurled at least three times by Yang. Yang is truly a demon in disguise but with a heart of an angel (王梅，2000).

Theory X management in the central kitchen is rigorously demanding as all the fresh ingredients required to make the final products be ready so inspections is a must. For instance, all employees working at each zone must suit up in white uniforms, and wear masks, hats and rain boots. The dress code is just a tip of the iceberg, every employee pre-entering each working zone must have their hands washed and sterilized in the bathing room. Their uniforms will then have the dust blown off repeatedly from head to toe. The procedure must be repeated as employees are entering to another zone. Each working zone is specified for one purpose: seafood zone, pork zone, poultry zone, vegetable zone and dough zone. Yang do not wish to have different ingredients placed in the same zone so he have them put in different zones to keep the food fresh and sanitary. In order to uphold the sanitary regulation, an inspector will pay a surprise visit by dashing to the room and take out the cotton swab then swipe it on the employee’s hand to see whether it is clean or not. Those that fail the test will immediately be punished. In the seafood zone, there are 40 employees peeling off shrimps within room temperature 15°C to ensure its absolute freshness. The seafood zone is for preparing shrimps for fried rice and other dishes. In the pork zone, all the meat slabs must be prepared within 7°C. The pork is to cut into different pieces that is good for certain dishes and then discard the rest. These parts are prepared for xiaolongbao, sweet and sour soup, and rice dumplings. In the poultry zone, all the chicken meat is prepared for soup and dumplings. In the dough zone, a noodle machine maker is manually operate by men, the noodles then roll up in individual ball. Finally, in the vegetable zone, the

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vegetables are rinse repeatedly by machine and dry up automatically. Inside the central kitchen, one can see that Yang demands the standardized procedure to be as fluid as possible, making sure that every product turns out to be in equal size, weight and taste (王一芝，2014).

Step 2) Total Service Enhancement and Efficiency

Yang has 7 mandatory demands from his employees. Firstly, Yang demands that the servers in the restaurants must mathematically calculate the average turn table rate. Because

Yang cares for his customers and tries to improve the situation by not making his customers waiting too long. For instance, on the weekend the restaurant is usually crowded so to provide enough space. Servers will allow the first batch of 60 customers to come into the dining area around 100 tables. Yang will reserve several tables (priority seats) for elders, and parents with children. These types of customers do not need waiting. Right after the first batch of 60 customers is served, servers will temporary block the entrance, allowing the first batch to finish their meals around 40 minutes or more, then the entrance will reopen. This is to enhance the efficiency flow of customers; thus preventing them from waiting (王梅，2000).

Secondly, the affectionate dining service feature from Din Tai Fung, according to the nationality of diners at the table, the meal serving sequences will cater to their likening. For instance, the Europeans prefer their soups to be served first, then appetizers, entrees, and desserts at the end. The Japanese prefers xiaolongbao to be served and later fried rice. The Chinese like to have everything served all at once. All this can be done with a push of a button as every serving details are computerized (王梅，2000).

Thirdly, Yang demands that their servers must put on a happy smile throughout the day which is a basic requirement from every restaurant chain in the industry. The key is to constantly remind to oneself that “customer is always right”. Yang simply explains this notion to his employees that “I’m the one who pays you salaries but the money is paid by customers”. In

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other words, Yang is the boss of his employees and customers are the bosses of Yang. Therefore

Yang wants his employees to serve their customers like bosses, knowing their needs by serving them with sincerity. Servers must practice smiling every day in front of a mirror before stepping out to work (王一芝，2014).

Fourth demand involves flexibility and agility in given situations. For instance, the head supervisor will constantly dropping pairs of on the floor and each time the server hears that clinking noise, he or she will deliver a clean pair of chopsticks. Next drilling practice is observation, when seeing a pregnant woman; serve her a glass of water, if it is children, serve them kids meal; when a customer take out his or her medication, serve water instantly; or when seeing customers fanning to cool off, adjust the air conditioner and serve water right away. These are the minor details that Din Tai Fung wanted to achieve from touching their hearts

Fifth demand from Yang, the chairman repeatedly emphasizes that not only we should treat our customers like bosses but we should also treat them like family so we should look after their hard-earned money. Servers are told not to recommend any pricy dishes and never allowed customers make too many orders. Reason is simple, Yang wants to maintain the food’s integrity that it should be finished off in a given time, because the take home leftovers will affect the taste quality if customers cannot finish all the food in one sitting (王一芝，2014).

Sixth demand from Yang, servers working at Din Tai Fung should never make customers leave when the restaurant is near closing time. In fact if there are customers sitting at tables chatting, servers should get as far away from them to avoid disturbance. When elderly customers leave the restaurant, make sure they get a taxi and when it is raining, grab an umbrella “愛心

傘”for customers to protect them from getting wet. These simple and kind gesture may leave a pleasant memory on every customer (王一芝，2014).

The seventh and final demand from Yang which he requires all employees from each division: mangers, assistant general managers, chefs, servers, dish washers and janitors all must

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submit a working log recording any particular incident happened on that day. This involves method of solution to problems and self-reflecting after dealing with the problem. Besides recording the working incidences on diaries, they can also include suggestions or recommendations that benefit the company’s progress. Or when employees feel depressed or have personal issue can also be stated on the diary. As Yang explains why it is necessary to submit diaries; for instance, an incident involved with a customer complaining about xiaolongbao’s taste as it was stated on a server’s diary. Yang and his manager quickly rewind the tape from the security camera to observe the incident, this process helps reduce further issues as

Yang and his teams tried to find out and resolve the issue. This is one of the typical examples how Yang manages to maintain product and service quality for all these years (王一芝，2014).

In sum, trainees and interns that sent to work at Din Tai Fung will not only help training their skills but also their characters as well. They all turn out to be well-behaved, motivated and disciplined. This is the importance of Theory X management called tough love, Yang will take care of their employees like their own children because he wants these kids to actually learn something and so sometimes these harsh training are just a mere reflection of his tough love; he cares for his employees and that is why he is demanding so much from them. According to the

HRM from Din Tai Fung, the retention rate is 70%. That is 70% of these interns choose to stay because Din Tai Fung makes them feel they are at home (王一芝，2014).

Other miscellaneous strict procedures involved servers marching vigorously in pair side by side; xiaolongbao must be made in 18 folds as the golden standard; servers must wear leather shoes instead of sneakers to feel classy and respectful around customers; every made product must be weighted on scale accordingly to a given gram and the number must be precise, otherwise redo it; drinking water must be soften by a water softener because hard water cannot brew good drinkable tea so that is why it is important to convert all drinking water from hard to soft; the washroom must be cleaned by the minute, and finally, every servers must clean and clear

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the table and disinfect it with cleaning alcohol and every tableware served on the table must be new and there must not have cracks or rips around edges of cups, bowls, spoons or chopsticks, otherwise these defects must be discarded and be replaced with newer ones on the table (王一

芝，2014).

Theory Y management

Step 3) Reassurance among Employees

This is a critical step as to continue the success of the restaurant chain business, Yang must find methodical ways to keep his senior employees working for Din Tai Fung. He thought about opening multiple branches for them to manage so in that way, it will enhance their desire and motivation continue working at Din Tai Fung, this explains the low turnover rate due to

Yang’s sincerity and kindness that touched every employee’s heart. Yang’s benevolence on his employee is well known. For instance, as soon as he learns that one of his employees is sick, he would personally book a clinical appointment for that employee (王梅，2000).

Employee Assistance Program (welfares)

Yang’s other part of management is Theory Y which he cares for his employees’ health and well-being because he treats them like family and that they are the company’s most valuable asset. Here are several examples of his Theory Y management approaches in which Yang conducts in his employee assistance program. He hires a nutritionist, several blind masseuses, and four social counsellors to serve his beloved employees.

1. Each branch will provide employees a nutritionist because their health and psyche is the company’s responsibility and so Yang must make sure they get a well-balanced diet before going off to work. Besides concerning their nutritious balance, he also wants his employees to

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get enough rest. Hence there is a resting room for each branch so that employees must get plenty of sleep for his or her next shift. On average, working every two hours must rest for 15 minutes.

Rest is one of the major components as Yang put it “our employees must be in their best shape and so rest is an essential part of working which shows vigor in their performance” (王一芝，

2013b).

2. Each branch will provide a blind masseuses to give employees backrubs as to soothe off the pain on the specific area. They also provide employees two foot massager machines if they failed to book for massages. This helps reduce their anxieties and stress.

3. The head-quarter of Din Tai Fung has a room that says “Happy Counselling”.

There are four professional counsellors waiting to assist any of the employees’ personal problems or just need someone to talk to. The purpose to include the counselling services is because Yang explains the company now has over a thousand employees and they have one thousand families to take care. It is the company’s responsibility to make sure that they are well nourished in the mind and spirit. This is logically understandable for employees working in such an intensive environment like Din Tai Fung, there are bound to be pressure, stress and depression. Yang wants their employees to get a certain relief from working in a stressful day.

Once their mental and physical stress is relieve, they will continue working. So this is a rinse and repeat behaviour as Yang wants his employees to maintain their absolute vigor which their performance will not be affected.

Theory Y management

Explore the world through learning: (Learning through visitations)

Besides being a fatherly figure to those young interns he is also generous enough to take them on field trips, allowing them to explore the city while they still can. Yang not only wants

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his interns to acquire working experience but he also wants them to be knowledgeable. He demands his manager to take these interns coming from south central part of Taiwan to the

Imperial Palace (故宮) a famous tourist destination and take them to Flora Exposition. Yang possesses both the authoritarian and parental figure as he wishes to see these young interns can get the best time of their lives besides working (王一芝，2014).

As Douglas McGregor (1960) the creator of Theory X and Theory Y stated that Theory X uses money as a form of major motivation to induce people from working. In other words “the employment contract is perceived as an agreement to accept direction in return for economic rewards”. In Theory X management’s perspective of human behaviour, people work for the sake of salaries and promotion, and really not for the sake of the company’s well-being (McGregor,

1960). However in Yang’s perception of his fellow employees, he rewards bonuses to his hard workers because he appreciates them and believes that they truly earn what they deserve. He also believes his workers genuinely working for him because they love him and he loves them too as a family. Hence in this Theory X managerial approach, rewards and bonuses are being given to the employees due to their hardship and dedication to the work they do, and Theory Y views employees as a valuable asset, and so Theory X must apply the incentives and rewards as a form of performance appraisal to Theory Y workers.

Theory XY management

Rewards, bonuses and performance appraisals (Applicable to Theory Y workers)

Yang knows how to give back to his employees by showing his sincere gratitude. He set up a bonus system to entice and motivate his workers to work hard. This system works as the monthly turnover as it reaches to a given standard, it will draw a portion of the business profit as bonuses to all hard working employees. Those worked over ten hours will automatically be rewarded with bonus pay. Yang’s generosity towards his employees shows his deep gratitude as

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he was once an employee himself and knew employee’s toilsome and so giving back to them is acceptable on his behalf. For the past two years around 47% to 48% of the business profit went to workers’ remuneration which was nearly a half of what the company made as Yang revealed (王

一芝，2013b).

Working at Din Tai Fung gives employees great salaries and benefits. Servers can easily earn up to NT$38,000 a month, college interns can earn nearly NT$30,000, and high school interns can earn nearly NT$22,000 but these do not include bonuses. As for incentives, it includes best smile award, best performance of the day award, foreign language award, and etc…

For a monthly bonuses and salaries combined can easily add up to NT$50,000 and more! Despite of the economic recession during SARS which affected the company’s total revenue, several managers and employees had suggested for a wage deduction, Yang understood their good intention but insisted upon giving out wages as usual because he not only thought about his employees but their families as well. This is part of the reason why employees adore Yang as their boss because they see him both as a fatherly figure and mentor (王一芝，2013b).

To conclude the Theory X and Theory Y management conducted by Yang Jihua, he uses rigorous demands from his employees to get the best results he wants but in return he then uses gratitude and caring affection to make up for his rigorous demands. All and all, he successfully earns the trust from his employees, and that is why they are still continuously working hard for him and refuse to leave!

II) Wowprime Enterprise (王品) is considered one of the most successful restaurant chains in Taiwan. Originally founded in 1990 and established in 1993 by Dai Shenyi (戴勝益), has currently developed 15 brands over the course of 21 years and more than 300 units opened in

Taiwan, China, and Thailand. According to its impressive achievement, it is one of the fastest growing companies in Taiwan that is able to develop so many brands within two decades which

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worth a market price of NT$30 billion. Wowprime’s success is not just sheer luck, behind its success requires dedication, sophistication, motivation and persistence to hold the company together that created over thousands of jobs, and giving away opportunities to everyone who has a dream of running their own restaurant and Wowprime is able to make their dreams come true!

Wowprime is a high-octane, high-caliber, and well organized enterprise that focuses on achieving goals as a family team. According to both author and vice chairman 王國雄

(2010), he describes his co-partner Dai Shenyi’s logics of operation behind their multi-billion dollar empire in three steps. Firstly, Wowprime has developed a deep philosophical Chinese belief of Confucianism that “man is inherently good and he cherishes everything he has” (仁民愛

物).

Such statement became the core value of Wowprime’s management; pay attention to each individual including every single family that is part of the company’s operation. The founder believes that from self-discipline to running a household is part of initiating the company’s development. Thus Dai created a doctrine of family values (一家人主義). He believes that by taking care of his fellow colleagues and employees wholeheartedly like family members and in return they will treat you like family as well. For instance, family-visits, relief funds, emergency funds and high executives cannot purchase extravagant cars are beliefs of treating each individual equally will create a harmonious environment without pride or prejudice. This is part of the ideal utopia that Dai wanted to see and he created it. Secondly, Wowprime is an extreme idealistic enterprise that is able to cultivate high efficient teams by rewarding bonuses to them instantly on a monthly basis and a key performance indicator that maintains the standardize operation is all part of the successful development of the company. Thirdly, Wowprime is an idealistic restaurant chain creator that helps their fellow managers to pursue their dreams in creating restaurant brands. This in effect will expand the team into a group of decision-makers making everyone a shareholder. Thus turning it into a high-octane and pro-efficient enterprise

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(王國雄，2010).

To sum up this highly sophisticated managerial technique, Wowprime is a parental type company that well balances its Theory X and Theory Y management in terms of taking care of their employees and sharing profits with them but at the same time employees are subjected to rigorous constraints. Those that break the law of discipline will be punished (陳芳毓，2013).

Theory Y management

1. Employee Assistance Program (welfares)

Family-ism (一家人主義) is all about care and humanity from a company’s perspective. To firmly establish a foundation of trust among employees in the company, this begins with forming family values and ties. For instance, when a fellow ‘family member’ is sick, the company will gather all the information of the hospitals and doctors saved in a computer database. The data will then be retrieved and analysed accordingly to locate the nearest hospital and the best physicians available, once the hospital is chosen, managers and colleagues will send their ‘love one’ to that hospital. When a family member is hospitalized, colleagues will take turns to visit the patient and ask doctors to regularly conduct a room check-up of that patient.

The first Theory Y management that Dai established for his two foundations: family relief fund and emergency fund. For instance, when a fellow employee is severely injured, unable to return to work. Both relief and emergency funds can be used for helping out and taking care of both the injured employee and his or her family. Besides injuries, those that worked within one year at Wowprime can benefit the company’s welfare. Regardless whether the cause of injuries is due to business or personal matter that permanently disable their ability to work. Wowprime is willing to take care of its fellow family member for the rest of his or her life! This is the kind of promise and commitment that Wowprime guarantees to everyone who chooses to work for it.

Hence, the purpose of this Theory Y management is to establish a safety net to prevent

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greed and resignation by job-switching. Dai firmly believes that human beings are not born heartless and so the only way to make employees to stay is by using sincerity and affectionate care to touch their hearts. In return these Wowprime’s employees will readily working for the company genuinely and they will not be tempted by other company’s high wages offer to lure them away. Another way to show the company’s affectionate side to their royal employees, is to establish foundations that can help fellow family members when they are in need.

The second Theory Y managing technique is to establish a family-tie between employees from conducting family visits. This can allow high ranking executes to learn more about their fellow restaurant chain managers. During these regular visitations, conversations may involve understanding the managers and head chefs’ current situations thus helping high-ranking executives to get a better impression of them. Because Wowprime is constantly searching for potential talents among these fifty employees and so it must undergo a rigorous audition of selecting the two outstanding employees that can possibly becoming a manager and head-chef working at one of the Wowprime’s restaurant chains.

Thus, the purpose of this Theory Y management is to create an assurance among employees that they are in good hands and that there are nothing to concern of because the company will take care of them no matter the cause. Once the employees get that impression, they will be easily managed and leaded (王國雄，2010).

The third Theory Y management involves abolishing the need of a doctor’s note. The purpose is to counterstrike the contradiction that employees may find in the ‘trustworthy’ culture that Dai promises to fulfill. For instance, if a high-ranking manager disapproves of an employee’s request for a medical leave because he or she was unable to submit a doctor’s note. Dai explains the conflict, if we insist to request our employees to submit a doctor’s note every time they request for a medical leave, then this implies that we do not trust them. This will cancel out everything we promise to treat our employees like families.

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The committees disproved of Dai’s request for appeal but he insisted to go on his way by advocating his belief that trust and confidence must approve. Employees only need to give a call stating his or her request of medical leave. He insists that it is not about management but rather about forming a trustworthy culture that every employee is trustworthy and that there is absolutely no reason to doubt them. In order to make these employees self-controlled and self- disciplined, managers must trust their employees wholeheartedly. Hence, when an employee is trusted, he or she will be honest because trust is the foundation of strength that holds the company together (陳芳毓，2013).

The fourth Theory Y management involves taking the entire crew of Wowprime on company vacations, and this is arranged from every September to November. The happy time activities included touring, dining and traveling. The traveling expense costs $NT30 million because Wowprime demands quality and wishes that every member of their colleague will have the best time of their lives. This is also another way to console their hard working employees over the year which they deserve (王國雄，2010).

Brand creations and innovations (Creativity, ingenuity, and innovation)

Lion Team Project, a concept derives from Theory Y management, which is employee empowerment, giving front-line employees the authority to make decisions and thus trying to get employees actively involved in business process. This is part of the self-control management where employees are given the authority and has the responsibility to deliver the task. Abdication plays a major role in the employer’s position as he is willing to discuss ideas with his employees as a colleague and so there is no threat or dominance to take place; the employee can then freely express his or her ideas without the fear of deferring to his superior and the differences can be resolved (McGregor, 1960).

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“Lion Team Project” allows Wowprime to innovatively creating new brands after another; the inspirational idea came from Dai, as one day he watched the Dancing Lion

Performance on the streets. There are four performers under the costume to mimic the movement and the one thatmoves the lion’s head is the leader. This suggested a philosophical meaning to him that his managerial technique must constantly be in motion to act fiercely and full of energy.

Dai quickly used his newly developed concept by rotating the job position of a front-line employee to help create a new brand. At the same time to encourage these senior employees to unlock their hidden potentials because they have a lot to offer and they just do not know yet.

For instance, Wang Kuo Xiong is the perfect example of job rotation as he was once an accountant but turned into the manager of 陶板屋 and 藝奇 chain restaurants because he was empowered by Dai and so he was able to live his dream. Dai then persuaded another one of his employees, a former financial manager to create a new brand. He saw the potential in 楊秀慧 and decided to promote her as the leader in the new brand restaurant. Yang chose Japanese BBQ as her restaurant concept and began doing her research as she tried over one hundred BBQ restaurants in 5 months. When she found the right restaurant, she then brought her head chef, manager, and creative team to try. The creative teams are responsible of menu development and décor design, and while the head chef study the cooking technique. Finally, to acquire more related information of Japanese BBQ, she chatted with a table of customers about their opinions on the dishes. After months and months of working hard in developing the new brand,

Wowprime finally launched 夏幕尼 in 2005, which was a critical success till this day as it opened 14 more units in Taiwan (陳芳毓，2013).

2. Studying through traveling (Learning through visitations)

Theory Y management involves taking employees to travel around the world to study about the food and beverage industry. This practice consists of Theory Y management because it

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encourages employees to develop and can have fun at the same time through dining and traveling. In order to create a particular brand within Wowprime Enterprise, it is mandatory to send 10 to 30 employees traveling overseas to study about the local culture of its gastronomy. For instance, before establishing 陶板屋, a Japanese styled BBQ cuisine, it is the job of the employees to do their ‘homework’ by dining their way through BBQ restaurants in Japan and at the same time, record the restaurant menus, and observe the services and décor.

Theory Y management would require employees to eat at least five times a day and take pictures of the dishes they tried and take notes as well. Besides taking photos of the interior décor and menus, they also must chat with the owner and head chef to get the complete experience. When the crews return to Taiwan, they must share their experience to every colleague at Wowprime by giving a 60 minute Power Point presentation. In return the briefing will inspire others to do the same by traveling the world and learn what they see and feel. All and all, the experience of studying abroad forces their hidden potential to release and this is consider to be Wowprime’s important gain and benchmarking as well. This Theory Y management comprises both learning and traveling is the single greatest technique that Wowprime has ever conceived (王國雄，2010).

3. Wowprime training institution: SOP

The academic courses require recipients to be knowledgeable through self-improvement.

Wowprime provides academic credits for employees who desire for promotion in management.

This learning opportunity will give employees the dream to become leaders one day, running their own restaurant chain that the company provides.

There are two types of academic programs: Management program consists of 206 credits and Sociology program consists of 300 credits. Management program is divided into 6 classes: administration, catering, training, ordering, scheduling for shifts, and maintenance. Sociology

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program is divided into 3 classes: world tour, dining restaurants, and hiking (王國雄，2010).

Theory XY management

Theory Y management (managers): SOP

a) The Management Program has three orientations: operation (opening doors, filling water glasses, menu ordering, and how to interact with customers), management (inventory, efficiency, and sanitary), leadership (inspiring, encouraging and advocating team members, shopping district, analyze profit and loss statement and balance sheet) these are the basic requirements for analytical abilities. Wowprime is extremely thoughtful that it incorporates E- learning system for its students to self-learn and at the end of each module, students can take simulated mock exams to see how much they learn (王國雄，2010).

Theory X employment (employee): SOP

b) The Sociology Program takes learning to a whole new level, no longer putting students in classrooms but instead, taking them to different parts of the world. Let them learn about the local culture through experience in feeling, dining, living, playing and communicating.

These are the things that students cannot learn from textbooks. Through dining hundreds of restaurants allow students to stay ahead in the dining competition, stay informed with the current trend, and observe diners’ taste preferences. This gives students the ability to innovate as they have taste a great variety of dishes around the world. Finally, through hiking can make students shedding weight after dining hundreds of restaurants and at the same time, hone their fighting spirits to complete the enduring task. Hiking allows students to cheer and help each other to reach the common goal. The formation of a team creates power and this power is the ultimate fuel that runs Wowprime (王國雄，2010).

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Theory X management

1. Physical training (Authority, command, military fashion)

This segment largely deals with physical and mental training which is designed to hone their determination and fighting spirit. One should not easily surrender in hopeless situations and must continue to fight till the end. Through intensive exercises and rigorous training, the body will get leaner and stronger and this will show the performance by employees in the company. The so- called 3 days and 2 nights of physical training is the military type. Campers must start drilling from early in the morning till very late at night. The team that fails the drilling must drill until they get it right. The purpose of this nightmarish training is to transform these campers’ mentality of improperness and pompousness into obedient behaviour. Those must be corrected through physical training and through teamwork will regain their confidence and ignite their hidden potential (王國雄，2010).

There are three types of activities in the course of three days, which are shouting, screaming and dashing, and running. The first activity requires the participants to scream at the top of their lungs, letting out all the energy in the middle of the highway and at the height of the mountain. Accompanied by a motivational instructor will use scolding method to force these campers to release all their energy through shouting. Friends and families will come cheer for them as a form of inspiration. The second activity requires campers to sit calmly meditating and then dash quickly to the meeting place before others do and then shout out the motivational phrases: “You’re not good enough, you will do better, you will succeed, go, go, go!” This is a form of self-motivating practice which repeatedly reminding oneself that one must achieve the impossible because the impossible is nothing. With the routine practice will turn anyone into a confident competitor. The third activity requires campers to run 5,000 meters as a team and cheering for each other to complete the task. This includes helping others that cannot run and at the same time, cheering and motivating others to reach the goal. This type of Theory X

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management is simulating the practice of training campers to cooperate as a team to eliminate obstacles. This is the sort of positive energy that Dai wanted to see in their employees to becoming self-disciplined, self-motivated, and self-controlled hard working family members.

2. Participation in various competitions (Self-improvement, self-challenged)

Wowprime is a very competitive company and so it will encourage its employees to participate in contests and various competitions to test their skills and ability. It is also another way to see whether their skills can reach local or international standard and this helps boost their self-assertion. Wowprime hosted the first ever contest of holding trays competition in 2007. Each contestant was sent from their respective restaurants and hotels to compete. This requires their speed, agility and balancing the trays to hold water glasses without tripping over and falling to the ground. The fastest one reaches the finish line wins. Although the hosting party cannot participate but they can observe how their guests hold the trays and they can adapt it into their training practice. Finally, to obtain world class recognition, Wowprime actively send their skillful master chefs to compete locally and globally in cooking. This is a chance of self- improvement through competing in international cooking tournament. Traveling to the host country can self-studying cooking through observation and tasting dishes from other contestants.

The tournament was first held in Thailand in 2009, there were 16 countries, 550 teams and 800 contestants, all came for the same reason, to self-improve and to fight for their country’s honor and their restaurants’ name. It takes three long years to train rigorously before participating in one of these tournaments (王國雄，2010).

Sports and daily exercises are one of the stipulations that Wowprime require their employees to take part. This form of Theory X management is to force employees to have a healthy body and those that fail to comply will be punished with a fine. The first part of this daily exercise is by making employees to walk 10,000 steps from work to destination. Every walker

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will carry a pedometer to count the number of the steps they walk. Those that fail to walk a required number of steps must pay a thousand NT dollar fine. This stipulation that Dai set has made him shed 7 kilograms in a year and now it has become a part of the social norm in

Wowprime that every employee get accustomed to (王國雄，2010; 陳芳毓，2013).

Besides the less intensive walking exercise, there is a very rigorous and devilish training that Wowprime loves to participate; triathlon. This is a highly competitive form of sport activity consists of swimming, running, and cycling. The body must be in its absolute shape in order to endure such long hours of physical activity. The purpose of this hard gruelling exercise is to train one’s physicality, endurance, and stamina. But most of all to hone the fighting spirit of every team which Wowprime called it 1+1+1=9. This enhances their physical fitness and at the same time establishes their perseverance and confidences. Because Wowprime do not wish to see sluggish and lazy behaviours exhibited by employees and so going through intensive sports will tone up their bodies and minds (王國雄，2010).

Theory XY management

1. Reward and bonuses system (Applicable to Theory X workers in general)

This segment focuses on job appraisal and how important it is to appraise the employees that they did a terrific job and that the company is satisfied of the result. Hence, Wowprime introduces an appraisal system called the “Dolphin Appraisal Plan” which focuses on employee appraisal which is one of the highlighted characteristics in Theory X management, and the rewarding bonuses part of dolphin feeding is the characteristic of Scanlon Plan from Theory Y.

Both systems are what made working at Wowprime so attractive, despite all of the rigorous rules, constitutions, and restrictions, people are still willing to work for Wowprime.

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2. Dolphin Appraisal Plan, a gainsharing program from Theory XY management which emphasizes on employee performance appraisal. According to Douglas McGregor (1960), “in order to get people to direct their efforts toward organizational objectives, management must tell them what to do, judge how well they have done, and reward or punish accordingly.” He also noted that “appraisal programs are designed not only to provide more systemic control of the subordinates, but also to control the behaviour of superiors”. Both of his statements are validated because as the superiors set up the rules, he must also comply to them as they are the best way to set a good example of appropriate behaviour and in return the subordinates will too comply

(McGregor, 1960).

The inspirational idea of “Dolphin Appraisal Plan” came from Joseph N. Scanlon (1899-

1956) who developed the Scanlon Plan, which is a concept of “sharing economic gains from improvements in performance. This method for “sharing cost-reduction utilizes a ratio between the total manpower costs of the organization and a measure of output such as total sales or values added by manufacture.” The significance of the sharing gains at the level of the business has the effect of “promoting collaboration within an independent system. In other words, the focus is not on competing for awards but on improving the effectiveness of the enterprise (Krulee, 1954;

Lesieur, 1958).

The name “Dolphin Appraisal Plan” came from Dai as he was enjoying the spectacle of circus performance by dolphins jumping through flaming hoops in Hong Kong Sea World. He was dumbfounded at how the dolphins can be so obedient, submitting to the ringmaster’s command. The key to dolphin’s command is the timing of feeding fishes, Dai watched closely as each time the dolphin jumps through the hoop, it gets fed immediately. If the feeding time gets delayed, the dolphins will not comply with commands. In other words, rewarding bonuses to employees must not get prolonged, otherwise their performance in the company will be affected.

As a result, some employees will want to join other companies while others may headhunted by

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other companies with better wages.

Dai immediately launched the ‘monthly bonus plan’ as every employee will be rewarded with 33% bonus to their account. There are two conditions to this plan which is cost reduction that every member in the company is urged to save cost. Because every dollar saved will be accumulated to the end of each month as bonuses, and it will be shared among the employees.

The revenue report is accessible to public and so each restaurant manager will review their employees’ performance if he found out the bonus share in his restaurant was huge.

The instant rewarding program not only can it give employees a positive and competitive pressure but it also can enhance their business performance and to improve their morale behavior as well (陳芳毓，2013).

Theory X management

1. Rules and constitutions: (Coerced, controlled, and directed)

The second type of Theory X management is a series of constitution set up by Wowprime and this is a way to manage their disciplinary behaviour through self-control, self-discipline and self- restraint. As Douglas McGregor (1960) stated that in Theory Y management, people are inherently exhibiting responsible behaviour if given to. Because they are trusted by the employer and in response they are given the responsibility to comply. Thus, its purpose is to encourage integration, to create a situation in which a subordinate can achieve his own goals best by directing his efforts towards the objectives of the enterprise (McGregor, 1960).

These constitutions included no briberies, discouragement of nepotism, no owning of pricy cars and luxury brands, no extramarital affairs, no double headhunting and no declaration from company expenses. Please note there are 18 constitutions in total, so only the important ones will be mentioned.

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a) No briberies allowed

Wowprime specifies that any type of gifts coming from suppliers, manufacturers and companies that the enterprise do business with, must turn it down. The reason is simple, to distant themselves from corruption and to avoid making personal deals with the firms. Those that break the constitution will be fired! This is to train the employees’ ability from not getting greedy over money and luxury items (王國雄，2010).

b) Nepotism is strongly discouraged at Wowprime

Imagine if Dai or other high ranking executives bring their children to work for Wowprime then there would be chaos among these blue blooded employees fighting for rights. In order to avoid these political struggles, Dai set up this constitution to prohibit them from entering. Employees will be threatened and intimidated by these high ranking executives’ children because they have no power to give them orders and eventually they will become less and less motivated to work for the company because they know the company will one day be inherited to the owners’ children and they will get nothing! This is part of the reasons not to welcome relatives or families, in order to avoid unwanted speculation and most importantly to make the employees feel at ease that the company will one day be taken over by either one of them and so they must work hard to prove that they deserve it. Finally, no conducting businesses with companies owned by relatives or distant cousins. Workers at Wowprime is prohibited to do businesses with colleagues, families, and relatives. Never do personal businesses or trades with vendors as a precaution to avoid briberies and corruptions (王國雄，2010; 陳芳毓，2013).

c) Must not purchase expensive cars or to own luxury fashion goods

Dai does not want his company turns into a narcissistic environment that everyone is pursuing high quality of life, driving expensive cars and using luxury fashion apparels. Not only will it

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destroy the simple and honest culture he created but it will also corrupt their moral behaviour. So the constitution is no one is allow to purchase any car that costs over NT$1.5 million. This will bring up their humbleness because they do not pursue extravagant goods and only practical goods is suffice (王國雄，2010).

e) Prohibits extramarital affairs

Wowprime does not allow extramarital affairs to take place in the workforce. If such a thing happens, then one of either party has to resign. This is consider a taboo and is certainly an unethical relationship to take place in any workforce, because it is frowned upon by society

(王國雄，2010).

f) No double headhunting

Wowprime mandated that the head-hunter cannot headhunt more than one high ranking executive from another company and the high ranking executive himself cannot bring his crew to the new company. The reason is simple, to prevent potential retaliation from other company to headhunt one of Wowprime’s employees. Another reason is to protect Wowprime from cliquing by the new executive. Hence, Wowprime specifies that the newly headhunted high ranking executive must come in solo to manage the company’s given team (王國雄，2010).

g) No declaration from company’s expense

Wowprime firmly believes an organization that has the power can cause corruption and authoritative abuse among fellow employees and so Wowprime set up the constitution that declaration of any expense is prohibited. This means the employee must use his or her own money to cover expenses such as learning through dining restaurants, transportations, studying abroad, catering business clients, and business traveling. Wowprime will not cover any of them

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because it is the employees’ responsibility to pay the bill.

There are two great benefits to this constitution: firstly, once the head manager does not declare the expense used on the company, all the profit earned will be given back to the employees as bonuses. Secondly, when employees see their head managers are saving expenses, this positive behaviour will reinforce them to do the same (王國雄，2010).

To conclude Theory X and Theory Y managements conducted by Dai Shenyi, although his managerial methods are rigorous and demanding, but he has given joy and care to each of his fellow employee which he refers to as family. Wowprime was reported to have the lowest turnover rate because the company has given a lot of attractive welfares and benefits to their employees but there are sacrifices to make as some of the constitutions and requirements is a little hard to bear but in all fairness, these demanding constitutions have only one purpose in mind, and that is to mold each employee into a upright and righteous person.

III) Haidilao (海底撈) company is one of the largest hot pot restaurant chains, owning over 80 restaurant units across China. It has received rave reviews from customers and food critiques. Even the renowned American dining group such as Yum! Group that owns KFC, Pizza

Hut, and other brands was most interested in Haidilao’s outstanding service. Founder of the company, Zhang Yong (張勇) was asked to come and give a speech about his ravishing success of running the chain. Zhang Yong recalled the experience is like “the elephant learning from an ant.” It is quite flattering to say the least.

The immense success was due to the hardship that Zhang has endured and he brought his philosophy to his business model. The company’s motto is “Taking fate into your own hands” shared great value to all employees that all they need to do to succeed in life is to work hard in sincere attitude and honesty and happiness will come their way.

Under Zhang’s management, he is able to offer working and learning opportunities to his

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employees that mostly coming from the most impoverished villages in China, but now they work in China’s most cosmopolitan cities such as Beijing and Shanghai. Although they received minimal education, they are able to communicate a pleasant message to their customers. The management cares for the living standards of employees and helps them solve personal problems.

In return, employees work with passion, creativity, and loyalty towards the management. This is the major difference between impoverished families and wealthy families because impoverished children cherish every opportunity that they are given and they do not take life for granted.

Hence, Zhang thinks impoverished kids from rural areas are honest and sincere than well brought up children living in big cities which make employment management efficient (Zhao, 2011).

Theory Y management

1. Employee Assistance Program (welfares)

Treating everyone like family is the first step of the Theory Y management. Zhang believes human beings are all flesh and blood and so if you treat them nice, they will treat you nice as well. The goal is to make employees treating their company like family or their ‘second home’ and in return they will also take care of their customers like their extended family. In order to make employees feel like home, Haidilao takes care of their employees like one of their own.

Giving them free apartments and nannies. They also receive excellent compensation packages that give them a much higher standard of living than in villages and small towns. Finally, employees of the month and those who have worked as assistant managers or higher-level managers for more than six months can have their parents receive a parental subsidy on a monthly basis. Other benefits include a housing allowance and children’s educational allowance.

In addition, Haidilao has established a Family Care Team and set aside a 10,000-200,000 RMB annual budget to help employees with family crisis and emergency needs. As a result, many family members feel cared for and are happy to have their children working at Haidilao. For

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employee recruitment, Haidilao encourages employee referrals as well, giving 50 RMB bonus for every successful referral to a position beneath the level of assistant manager. About 60% of

Haidilao employees were originally referred by other staff. Haidilao also offers a seven day annual paid vacation for their employees where each were paid with 160 RMB. During the break, the company arranges a family vacation to Hainan for all their employees (Zhao, 2011; 黃鐵

鷹，2014).

2. Employee management (opportunity for hiring)

Every employee working at Haidilao must work from the bottom-up management hierarchy because everyone is given an equal opportunity to have their fate be taken in their own hands.

Therefore Zhang values actual related work experience more rather than education from their employees. In other words, an employee who has not received any higher education can still become a part of the restaurant manager team, or reach even higher level education position through hard work and the willingness to communicate with customers. In addition, Haidilao does not favor employing young and attractive people, but select employees according to the essential qualities laid out by Zhang, including a hardworking personality, honesty, rational thinking, and alignment with company culture. Thus, the age range is between 18 to 50 years old or older and each has their own perspective in life. For instance, older employees would focus on completing the job itself instead of career advancement opportunities. As a result, Haidilao has successfully cultivated a group of young restaurant managers around 24 or 25, who began working at Haidilao at 17 or 18 and got quickly promoted due to their outstanding performance.

3. Performance Evaluation through Management Training

Haidilao also encourages employees to take further initiatives through job rotations. Those who wish to be promoted at Haidilao must rotate through other positions and receive the certificate of

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approval from each position. For instance, it is common that restaurant managers such as kitchen chefs know how to make appetizers. In addition, an employee has to serve as the reserve staff for the target position for a certain period of time before receiving the promotion. Going through each job position allows the employee to be knowledgeable and skillful prior to becoming the new restaurant manager. According to author Huang Tie Ying, there are three ways of job promotions: managers, technicians, and logistics. For management promotion: 1st level-rookie,

2nd level-qualified employee, 3rd level-top notched employee, 4th level-outstanding employee, 5th level-leading management, 6th level-lobby manager, 7th level-store manager, 8th level-regional manager, 9th level-regional general manager, level 9th-vice general manager. For technician promotion: 1st level-rookie, 2nd level-qualified employee, 3rd level-advanced employee, 4th level- role model employee, 5th level-labor model, 6th level-meritorious employee. For logistic management: 1st level-rookie, 2nd level-qualified employee, 3rd level-advanced employee, 4th level-clerk, cashier, accountant, procurer, logistic, technician department, R and D department, and business manager.

The above are a structuralized organization that any employee is interested in the job promotion must go through each level to get to the position he or she wants (Zhao, 2011;

黃鐵鷹，2014). This is one of the common characteristics found in Theory Y as McGregor

(1960) believes the average human being learns, under proper conditions, not only to accept but to seek responsibility (McGregor, 1960).

4. Collective learning and group learning (Learning motivation)

Haidilao not only provides a working place for their employees but also a learning environment for them to stimulate and self-improve through independent learning. For instance, Haidilao allows employees to learn and be familiar with computing and driving, these are the technical assets that employees can acquire from the management. Each time they learn a new skill from

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working, they will use that newly learned skill to fulfill a required task. This enhances the overall cultural standards as these hard working employees genuinely wanted to self-improve their skills through job performance. These are the type of behaviours that Zhang wanted to see from their employees. Zhang values education because he received minimal education just like everyone else in the company.

In order to reinforce the core value of service differentiation, Zhang strongly encourages their outstanding employees to take initiative and form unofficial “study groups” as a complement to the official reforms in organizational structure. The purpose of the study groups requires assistant managers and team leaders regularly organize discussion opportunities for the employees. Half of the meetings can be relevant to work and the other part should be concerned with raising the overall quality of employees and making them well-rounded people. Hence, their duties would include helping others like brothers and sisters when they first enter the business and take care of them like family. Obviously, Zhang wants the study groups to back up his organization when it is in trouble or need the most help. Those that fail to fulfill the request will be kicked out of the study groups. This is an example of the Good Samaritan that an employee from either department is willing to help out in the kitchen when needed. For instance, when the kitchen area is running out of servers, an accountant is willing to participate in the kitchen to serve meals to customers, hence the accountant will not argue that the server’s job is not part of his or her job requirements but instead he or she is willing to take part because it is part of their responsibility to run Haidilao and does not plan to ruin it (Zhao, 2011; 黃鐵鷹，2014).

5. Haidilao University (Management training)

In order to maintain an higher standards in the organization, he decided to establish a training school called “Haidilao University”. This can carry out more systemic training for the management team, including restaurant managers, team leaders, and other employees with

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management responsibilities. The president of Haidilao is a university professor, and most teachers are experienced restaurant managers who are proud to share their expertise through teaching at “Haidilao University” (Zhao, 2011; 黃鐵鷹，2014).

6. Opening of new restaurants and training new restaurant management (Performance

Evaluation)

Those who wish to open new restaurants must be evaluated through Level A to C of performance appraisal. For instance, new restaurants grew only Level A restaurants, whose performance depends on the performance appraisals of their “babies”. If a new restaurant born out of a certain A-level management team could not get itself a higher level than C in 12 months, then the older restaurant could no longer hold its original A-level honor in the same round of performance appraisal. However a new restaurant born out of a certain management team received the honor of an A-level restaurant, then the manager of the old restaurant would receive additional bonuses.

This new policy remains committed to the direct chain model, this change greatly increased the incentives for unit expansion and heightened the restaurant managers’ motivation for opening up new restaurants (Zhao, 2011).

To sum up the business ethics set by Zhang Yong, he believes in anyone who is willing to work hard can one day be somebody. His popular slogan, “Taking fate into your own hands” can make up something which you lack in life so you do not need to be skillful or knowledgeable to work at Haidilao. In fact, Zhang does not particularly favor in candidate’s strong educational background for job hiring, but if you do, it is a bonus. Everyone at Haidilao is treated equally, and to get promoted, one must climb the ladder of job rotation and passes every test from that position. Hence, one would start from server, then moving to every position and eventually get promoted as the new restaurant manager. This rigorous training process is what makes the

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experience so rewarding for these impoverished children coming from villages and moving to the big city to work at Haidilao, they started with nothing and one day they earned everything through hardship and diligent training. The sense of achievement makes them and their parents proud so they no longer being looked down upon by society because they are willing to put fate into their own hands and had earn the respect they deserved.

7. Creativity and new ideas: (Creativity, ingenuity, and innovation)

Creativity Team: In order to enhance the creativity that Zhang Yong wishes to cultivate from his talented and gifted employees, the headquarter established a creativity team. Each restaurant compiles employees’ ideas and suggestions on a monthly basis and reports them to the company’s creativity team. The creativity team evaluates the ideas and announces the ones that have been chosen for implementation on the company’s internal website and newsletter. This practice highly motives employees to brainstorm and to propose new ideas, because they will receive bonuses paid for every chosen ideas. Zhang quoted “If the creative idea shows good results as it becomes implemented throughout the company, then more bonuses can be paid.”

Haidilao does not limit “creativity” to original ideas and accepts any employee suggestions that make sense, even if they are existing practices at other dining enterprises. As long as they are appropriate to Haidilao, the employee will receive the deserved bonus. This type of appraisal system not only inspires and motivates employees to create but it also gives them a sense of achievement when their ideas are chosen. Once their work gets the recognition, they will continue to work hard to reach that standard (Zhao, 2011).

Theory Y management

Employee empowerment: (Abdication with measures)

This type of Theory Y management as McGregor (1960) noted that abdication is a sign of trust

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between staff and managers and therefore the collaboration will work swiftly (McGregor, 1960).

Trust and responsibility are the two most important concepts in Zhang’s core values. As Huang describes the relation, trust is a type of respect, when the company believes in one’s ability and personal integrity, it will entrust important duties to the person to fulfill and that is a form of respect between man and organization. At Haidilao, trust symbolizes empowerment.

Unfortunately, not everyone in the company can be fully trusted and so Zhang must find ways to protect his company’s fortune from potential thefts and dishonesty. The idea is to combine

Theory Y with X into the concept of empowerment, the company then can wholeheartedly abdicate its power but at the same time to prevent anyone who wishes to abuse it (黃鐵鷹，

2014).

Paul Feldman, an economist who is well known for determining white collar crime with his bagel experiment. In order to test the true nature of moral and self-autonomy among white collars. He would purchase 8,400 bagels and deliver them to 140 companies on a weekly basis.

There is a price tag behind every basket of bagel and the employees are supposed to put the money in the basket before taking one. There were small and large companies in his social experiment, according to the statistical result, white collars working in small companies are honest than those working in large companies, because they are willing to pay for the bagels. The ratio is 3 to 5% of white collars who had paid for the bagels in small companies. The size has to determine the reason of low crime rate. Small number of employees working together can easily find out who did the crime as opposed to large number of employees. Those who witnessed the act will report to the head office and so no will dare to take advantage of freebies (黃鐵鷹，

2014).

Zhang was inspired by the bagel experiment and decided to make some changes in his managerial technique because there were employees at Haidilao boldly took advantage of the

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empowerment and abuse it. These common cases were waiving off cheques, returned dishes, charge for extra dishes, and give away free desserts but secretly charge them. Because there are too many loopholes for the employees to take advantage of and so Zhang demanded that all his employees must bravely report any forms of misconduct if they witness one. The witness will then be protected under anonymity and be given a reward for his or her merit and virtue.

Now the precaution is secured and all the employees in Haidilao are proven to be honest and self-autonomy. Zhang can rest assure to decentralize his authorities to his employees to make important decisions without having his consent. Haidilao’s frontline employees have more decision-making power than employees of other dining enterprises. They can draw upon company guidelines regarding situations where the cheque should be waived off for the customers and make their own decision as to whether a deduction, free appetizers and noodles should be offered, or if the cheque should be waived completely off for an unsatisfied customer.

They do not need to get permission from management before responding to unexpected situations. In order to reinforce the act of empowerment and to discourage any possible loopholes that employees can find, the company requires them to fill out a form explaining the circumstances and get a signature from the team leader. This type of management combines both theories X and Y as to closely monitoring their working activity and at the same time to give them power to make decisions. Therefore Zhang’s empowerment is not a complete abdication but rather managing his employees with discretionary measures. This practice greatly increases employee initiative and efficiency in interactions with customers. Haidilao explicitly prohibits punishing employees for inappropriate responses in customer interactions but instead requiring skills training for the employee following such instances (Zhao, 2011; 黃鐵鷹，2014).

Haidilao is famous for its high degree of decentralization which is the management style practiced throughout Haidilao restaurants and permeating through all levels of company culture.

“We treat our employees based on trust in their decision-making abilities.” This is one of the

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most important principles for managerial promotions is whether someone treats people with kindness. In order to achieve efficiency in employee empowerment, the company adopts the

“initial inquiry responsibility” and the “eight-hour response” policies. This type of practice is oriented towards Theory X management when employees are given full responsibilities to address the matter within the given period but fail to do so, he or she will take the responsibility to admit his or her wrongdoings. For example, the “initial inquiry responsibility” designates the employee who first receives a request from a customer or other company staff as the person solely responsible for addressing the request in an appropriate matter as soon as possible. As the person responsible for a certain request, the employee must follow the “eight-hour response” policy and address the matter within eight hours to the satisfaction of customers or other company staff. If the request exceeds someone’s job responsibility, then he or she should immediately notify the appropriate staff and continuously follow-up on the matter. When the request have been addressed, the original employee is responsible for providing the solution to the customer or staff who made the request. If the employee responsible for the request fails to follow-up and coordinate the issue adequately, then he or she will be held partially accountable for any problems occur (Zhao, 2011).

Another instance which involves an unsatisfactory performance made by frontline employees such as restaurant managers and high-level management staff, Zhang would invite them to have coffee and chat. The conversation topic usually pertains to finding ways to encouraging employees to take initiative and show leadership in their work. For instance, Zhang called the restaurant managers who had poor performance onto the stage by name and asked everyone in the audience if they thought these managers were intentionally trying to ruin

Haidilao. Everyone shook their heads. Then Zhang asked these managers themselves if they were trying to ruin Haidilao. They shook their heads too. Finally, Zhang asked everyone what is the likelihood that they will end up ruining their own restaurants. Zhang opts for a much

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friendlier way to discipline his “children” rather than reprimanding them. Because he does not believe punishment will correct their behaviours and mistakes, so instead he reasons with them.

Finally, Haidilao reported to have the lowest rate of staff turnover which is far below that of competitors, and staff turnover in the management level is almost zero. This is because the company continues to motivate employees by providing better living conditions and more structured pay levels than other dining enterprises, allowing more room for career growth, in a company culture based on values of fairness and taking fate into your own hands. Another reason for low turnover rate is the persistence behaviour of employees working at Haidilao, one employee describes the notion, human beings must learn to adapt to new environment for reason of survival, if one cannot adjust to new surroundings, then they will be perished. Employees who went through hardship insist to stay because they believe in independence that nothing in life can be dependable and so persistence is the only strength that they hold onto which in the end is the reason that they chose to stay (Zhao, 2011; 黃鐵鷹，2014).

Theory X management

Standard Operating Procedure (Controlled, monitored, and directed)

This type of Theory X management in which product and service delivering must be standardized, especially in chain or franchise businesses.

1. Logistics centers: For standardizing its product quality, Haidilao has established four major logistics centers across the nation and a soup base processing center in Chengdu, Sichuan

Province in 2005. From then on, the food preparation process including supply purchase, cleaning, processing, quality control and sampling, becoming more standardized, and individual restaurants received already processed food products. Haidilao’s meat products come from established suppliers and are processed in the logistics centers. In most cases, the food

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preparation staff at each restaurant only need to open the package of processed food products, rinse with water, and serve to the customers. Haidilao even rented a piece of land from local farmers near the Beijing logistics center, as a trial in farming Haidilao’s own food. Some of the employees responsible for farming were chosen from existing employees, since they had come from rural areas and were familiar with farming. Haidilao’s own farm provides 10% of the total food supply. The soup base ingredients processing center not only provides large packages for the restaurants, it also distributes retail packages for supermarkets nationwide. Now that the hot pot flavors at various restaurants are standardized, and the variety of tasks that kitchen staff are responsible for has been greatly reduced, leaving employees more time and attention to the quality of customer service (Zhao, 2011).

2. The Apprentice Model (employment training): the purpose of this model is to ensure quality control and standardization, Haidilao employs the apprentice model, where each new employee is assigned to an experienced staff as the teacher to provide on-the-job training and continued guidance. An employee who begins as an entry-level waiter and becomes a restaurant manager may have several teachers for the various positions he or she had rotated through. Not only does the teacher provide job training, he or she also helps the apprentices with their personal lives. This makes the relationship between mentors and apprentices more personal and intimate as mentors care for their students. There are three major responsibilities that a mentor must fulfill: Firstly, a mentor must play the role of leadership, that means the leader of the group must be autonomy and become everyone’s favorite role model. For example, a leader of the group should always be on time to work, and must be calm at all times to solve problems to lead the way. Secondly, a leader of the group must take care of and his or her fellow employees. For example, a leader should well be concerned of his or her fellow employees’ health and at the same time, teach them to support themselves independently in a big city and be responsible of

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their own actions. Be patient with them and help them to progress in life, never abandon them but to support them if they want to advance their career path in another company. Thirdly, a leader of the group must set up a compromising arrangement. For example, a leader must also get involved into the action during busy hours when employees appear to be exhausted and outnumbered. So arrange oneself in any situation that help is greatly needed (Zhao, 2011).

Theory Y management

Sweeping Reforms: Before introducing the new organizational structural reform, the pyramid model was the standard form of management structure, where each level was supervised by the one above, became much more horizontal. Then each restaurant manager reports to the district manager, who reports to one of the three regional managers, the regional managers then report directly to company headquarters where General Manager Zhang Yong response. The old principle was tedious, slow and bureaucratic. In order to eliminate the bureaucratic management style, Zhang launched the sweeping reforms for the company’s new organizational structure. The idea was inspired and drew from Inamori Kazuo’s Amoeba management principle. The idea behind the sweeping reforms is to eliminate the influence that individual personalities and management styles had on employees, cultivate the leadership capacity of restaurant managers, and further standardize performance evaluations. The reform aimed at creating a restaurant management model that allowed a quick duplication, while still maintaining the company’s directly operated chain restaurant model (Zhao, 2011).

There are several benefits of adopting the new reform, the headquarters established a coaching team to be responsible for assisting restaurant managers in their roles. Next, the team provides guidance and support on a conceptual level by designing performance evaluations as well as helping restaurant managers to solve unexpected situations that may occur. Lastly, it also collects and implements new ideas and suggestions from each restaurant and operates a telephone

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hotline to receive both positive and negative feedback from employees. The sweeping reforms got the willingness to accept any form of feedback or suggestion from the headquarters showed great democracy as opposed to the bureaucratic nature found in the pyramid model.

Bonuses and Appraisal

This type of Theory Y management is important, because it can enhance the overall performances by employees. This includes bonuses and the increase in overall wages.

Dowry: the term is coined by Haidilao as employees who chose to leave or quit the company will promise to receive a large sum. It symbolizes the appreciation and gratitude from the company to its employees who worked so hard for many years. It is sad to let them go, and accepting the “dowry” means the company wish nothing but the best for their endeavors in whatever they pursue. Those that worked as restaurant managers more than a year and regardless of their reasons to quit, they are immediately given $80,000 RMB as compensation. If district restaurant managers were headhunted by other companies, they will be given $200,000 RMB, and regional restaurant managers would be given $8000,000 RMB if headhunted. Zhang likes to use unconventional method in his management technique. He believes human beings are flesh and blood, so he wished to see his trusty employees would be moved by such generosity and that they would choose to stay at the end (黃鐵鷹，2014).

To conclude the Eastern management of Theory X and Theory Y approaches from the three restaurants: Din Tai Fung, Wowprime, and Haidilao. It is safe to say that all three Eastern managerial restaurants share the common ideas of family values, honesty and integrity in employees they wished to employ. In the end, the Eastern management technique is both effective and intuitive to apply. The benefit of adapting Eastern management technique would bring out the best behaviours in employees’ discipline, however this will only work if the

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people in that country share the common ideas and perspectives, otherwise it will not work. For instance, Westerners believe in human rights and freedom of speech, so they will not be easily influenced or accepted by Eastern managerial approach that heavily revolved around disciplines and many stipulations set by the company like Wowprime.

Section IV Appling Theory X, Theory Y, and Theory XY with Restaurants in North America

This section will discuss how the three world’s largest restaurant enterprises: T.G.I.

Fridays, Outback Steakhouse and McDonald’s in North America implemented their Theory X and Theory Y management into their business model. What are their strategies used for conquering a legion of fans around the globe who are willingly to support these restaurant chains.

Table 2-5 Characteristics of Theory X, Y, and XY with Restaurants from N.A Theory X Theory Y Theory XY Employment Employee Creativity, Ingenuity, Rewards, Wages, and Management Empowerment and Innovation Hiring (Recruiting, Training, Outback Outback Steakhouse Outback Steakhouse and Induction) Steakhouse T.G.I. Fridays Employee Recognitions and Employment training Engagement Rewards (applicable Outback Steakhouse (courage) to Theory Y only) McDonald’s McDonald’s Appraisals and Rewards T.G.I. Fridays Source: Table of this research was made by oneself (continue onto next page)

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Table 2- 5 Characteristics of Theory X, Y, and XY with Restaurants from N.A (continued) Theory X Theory Y Theory XY Standard Operating Communication & Procedure Decentralization Organization T.G.I. Fridays Outback Steakhouse McDonald’s McDonald’s

Management Training Trust and Relationships McDonald’s Outback Steakhouse McDonald’s Source: Table of this research was made by oneself

I) T.G.I. Fridays is an American casual dining restaurant and bar chain that specializes in hamburgers, BBQs, and steaks. For drinks at the bar, it serves alcohol and cocktails. It was established in 1965 by Alan Stillman in New York. As of today, the success of the chain restaurant business owns 992 locations in the US and over 920 restaurants in 61 countries including several major continents: Africa, Americas, Asia, Europe, and Oceania

(tgifridays.com).

The restaurant chains’ main target audience is professional and white collar occupants which they seek for better services and premium food selections. In addition to the premium label it carries, the brand offers a fun atmosphere where people can go without knowing, but hoping to meet the other guests. In many ways it performs the community meeting point which Adelman et al., (1994) suggest will become an increasing feature of services in cities where many people live an individualized existence. T.G.I. Fridays provides a service which “creates a sense of social connection to others” (Adelman et al., 1994, p. 140). Average customers would spend US$20 to

US$30 per person (NT$540 to NT$810).

The restaurant chain is critically acclaimed for its success in making a service offer to customers that can be described as “mass customization”, this means the management requires its

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employees to provide customers with both advice and counselling in the way they construct their meal experience, and a personalized service performance. Hence, in many ways, the author,

Conrad Lashley describes the organization as a typical of Schmenner’s (1995) “service shop”.

T.G.I. Fridays uses Theory X management in its service standards and production processes are highly standardized, and yet elements of the service require some form of customization to specific customer needs. To make this happen, employees are managed through a cluster of approaches which are defined as “empowerment through involvement” (Lashley, 2000).

According to the financial statement of 2013, the restaurant chain currently has more than

900 restaurants in operation worldwide in 60 countries, and reported system-wide sales of $2.7 billion. T.G.I. Fridays currently employs over 70,000 people around the world (Carlson inc,

2014).The focus of the analysis on this chain restaurant is to explore the various themes and definition called “empowerment through involvement” where T.G.I. Fridays’ employees or dub-dubs (stage name given by the company) are given the authority to make suggestions about service quality improvement, or problem detection. However in the end, managers are still the ones that can make the final decision as they see fit, hence, employees have little decision making discretion about their tasks of sequence in which they are completed (Lashley,

2000).

The following section will continue to explore the types of empowerment that dub-dubs are allow to execute, the extent to which they can do to delight customers, whilst at the same time establishing important boundaries to empowerment by providing standardized consistency required of branded services. This type of managerial technique involved Theory X, which is equivalent to the set of boundaries and limitations found in the empowerment which required of

Theory X employees to perform.

To sum up the definition of “empowerment through involvement”, service employees working at T.G.I. Fridays require more than merely “carrying plates”. Employee empowerment

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meaning a willingness to accept responsibility for the service encounter is key to the managerial inspirations for the approach. In other words, employees need to be able to interpret, and then deliver which the customer service is required (Lashley, 2000).

Theory X management

a) Employment Management:

There are two levels to this management intention. The first level aimed to generate feelings of ownership of the service encounter. This includes recruitment and selection, induction and training were aimed at encouraging employees to work toward the company’s goals. Level one employment practice emphasizes empowerment as a “motivational construct” (Conger &

Kanungo, 1988). Through this approach, employees were being encouraged to develop feelings of personal efficacy and at the same time to discourage factors that aimed to develop feelings of disempowerment. Senior executives in the company confirm that the approach intended to encourage employees to “buy into the T.G.I. Fridays’ experience, allowing them to become believable” in their service intention towards customers. This means employees at T.G.I. Fridays are being taught to make people feel comfortable and to treat customers as real guests like family.

They were also taught to show their personalities at work, giving the customers an authentic dining experience that seems genuine rather than being too robotic in some standardized dining restaurants. Please note T.G.I. Fridays is a standardized operational branded company but is able to offer each customer a customized service experience (Lashley, 2000).

Recruitment and selection process: These three phases of the management are elaborate and may involve psychometric tests and as many as three or four interviews. For instance, these sessions may require the applicants to perform or in role play situations (Lashley, 2000).

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1. Screening process: The first phase involves managers to look for applicant with “the right kind of personality, someone who is extroverted, but not too much”.

2. Induction: The second phase involves training in the various dish and drink recipes for the front of house employees.

3. Training: The third phase requires training in cooking methods for kitchen staff.

In both cases, new employees are required to pass a test on the information given prior to being allowed to work on a station. New employees that went through the immediate course and pass the testing sessions, must be trained by working alongside a more experienced member staff, then a quiet station in the restaurant. Performance is monitored by managers, and they are keen to ensure that the employees are able to meet customer service requirements, answer queries, offer advice, provide the appropriate performance, and maintain company sales target. The nature of the work requires a particular type of individual that can relate well with customers but not too well. That is, someone who allows customers to linger too long over their meal, when the table could reused, or does not push particular target sales items might well be popular with customers but may be reprimanded by management. The first three phases are strictly Theory X management where employees must comply with the demands given to them. It is a series of screening procedure that the company wishes to employ of a certain individual that well fit to the profile and image that the company seeks (Conger & Kanungo, 1988).

b) Rewards and Performance Appraisals (Applicable to Theory X workers in general)

Reward and appraisals of front of house and kitchen employees: This Theory X management involves the distributing of wages and tips to both front and back house employees. For the front of house employee, wage is largely structured around an individual commission on sales and linked to overall food produced for kitchen staff. For instance, dub-dubs and bar staff also get

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tips, and a higher rate of commission is paid to kitchen staff to compensate for their lack of tips.

It was claimed that some employees were earning US$40,000 -$50,000 per year. Many reported that tips made up at least 50% of the total take home salary. The low basic salary coupled with the individually focused performance elements of commission and tips, this creates an incentive scheme which has different impacts for front and kitchen employees, with positive and negative impact. When tips is given to a front of house employee by individual customers often exceeded the commission, and there was clearly an element of mutuality between the company and the employee. There is a dilemma for the nature of customer servicing, as they both gained from greater customer sales, through the significance of tips create a “working for two bosses effect”.

Some employees would be willing to go as far as breaking company policies, so as to create more customer satisfaction and thereby enhance the greater chance of earning a good tip

(Lashley, 2000).

For kitchen employees, the reward package was more a reflection of the collective effort because the bonus scheme paid out on the total number of meals served during one shift. Tips was shared out amongst those on duty during the shift. Kitchen employees did not normally have access to tips and so for them there was no “working for two bosses” dilemma but they did have a material interest in minimizing the employees on duty at any one time (Lashley, 2000).

In sum, the reward system could add stress to kitchen employees because of the extra work pressure it encouraged. Hence, employees had a chance to make extra money for their tremendous effort (Lashley, 2000).The final fourth phase is mostly Theory X management oriented where it is mostly focuses on devising a reward and appraisal system that could encourage and motivates employees from both sides to reach the company’s goals and objectives

(Conger & Kanungo, 1988).

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Theory X management

Standard Operating Procedure (Coerced, controlled, and monitored)

T.G.I. Fridays is a highly standardized operating restaurant chain organization, therefore its highly standardized formula in the tangible aspects of the product allows little room for innovation and discretion. Production and service process are in many ways standardized, training focuses on delivering the product such as food and drinks, in a way will be repeated in every other T.G.I. Fridays unit. This is the only section of the empowerment which has no effect in employees’ part when it comes to standardizing all products the same way. Dub-Dubs are needed to work routines which require checking back with the customers within 3 minutes of delivering the meal. The approach allows front-line employees to develop a sense of ownership of the service encounter which means interacting with the customers. Other mandates included the delivering of meal time must be exact. For instance, service target times require appetizers to be served within 7 minutes of receipt of the order. Main course items must be served within 12 minutes. A computer programme helps monitor the achievement of these service times. The security of a highly standardized layout, décor, menu and process is balanced by an extensive menu which allows the customer to select what they want within the range. This is what “mass customization” is all about, allowing customers to know what to expect, but at the same time, they can personalize the experience through the extensive menu (Lashely, 2000).

Although having to wear a standardized uniform, dub-dubs are able to customize their own appearance by personalizing their head gear and by adding badges to their braces. This gives customers an entire authentic dining experience, because they are being served by personalized rather than standardized servicing employees. For instance, this particular Theory X management would allow the serving employees to advise customers on the menu and how best to structure their meal. In some cases, “having a good laugh with the customers is needed”, and other times, they need to leave the guests some privacy, or create the necessary celebratory

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atmosphere to match with a birthday or other party occasion. At other times, they have to entertain restive children. Hence, dub-dubs must be able to provide the behaviours and the emotional displays, to match with customer wants and feelings (Lashley, 2000).

Continuing with Theory X management of standardized operation, there are team briefings to take place during each shift. Both front of house and back of house employees must meet separately for about 20 minutes prior to the start of the main service periods; at lunch time and in dinner time. The purpose of these sessions help to set the agenda for action during the coming shift. They help the organization to set priorities such as sales targets, quality issues, operational requirements, etc. The sessions also help to produce the required team spirit and enthusiasm needed to improve individuals. All and all, the using of Theory X management of team briefings help boost the positive energy in team spirits, which largely brings out the authentic and individualized atmosphere (Lashley, 2000).

Theory X management

a) Employee Empowerment (limited rights)

The second level where senior executives encourage their employees to become empowered using a more relational construct by taking on, in a limited way, some of the responsibilities which would previously have been the responsibilities of unit managers. For instance, if a customer wants a dish which normally contains chicken cooked without chicken, senior executives will encourage the Dub-Dub (employees) to accept the order. Thus, the dub-dubs were empowered by the company to provide customers with non-menu items depending on the availability of the ingredients to make the dish. In addition, the front-line employees were encouraged to deal with customer complaints without having to summon the manager, unless necessary. This is one of the hefty prices that employee empowerment comes with, that is the absolute responsibility to accept customer complaints and sometimes listening to their

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reprimands and not to react right away. As a matter of fact, employees and managers are reluctant to deal with customer complaints and several employees would see it as a manager’s role and duty, therefore they would pass it on to the manager to resolve it (Lashley, 2000).

Senior executives encourage the unit managers to accept empowerment for the sake of growth of the business, since the units were being increasingly located in local markets which needed a more responsive approach than could be generated from head office. Finally, they also suggested that the empowerment of unit managers enabled them to be more responsive to local conditions though it required managers to apply a wider range of skills than mere operational managements (Lashley, 2000).

b) Restrictions and Limitations in Employee Empowerment

T.G.I. Fridays employees may be given the empowerment from Theory X to make decisions or suggestions but still they have very little power, which is the limitations and restrictions to make the final decision and must seek for top managers’ approval to make the cut.

For instance, the ability of employees to accept customer orders for non-menu dishes and to deal with complaints further extended the responsible autonomy that staff could exercise, but there were clearly limits and managers closely monitored individual employee “give away” whether the freebies exceed the company’s budget. Power to influence matters is also restricted to employees’ own task, through team briefings do allow some form of suggestion making. The culture tends to be control oriented with some managers’ styles being a little more trust oriented, particularly where experienced employees were concerned (Lashley, 2000).

Other form of empowerment is restricted to task level issues, specifically in the intangibles. For instance, the range of issues over which employees have some involvement is limited to issues related to badges displayed on braces and the choice of headgear, and in the personalization of the performance given to customers. Their power to make decisions is limited

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by the constraints placed upon them when a member of the unit management team indicated that service employees have the freedom to wear any type of headgear but they cannot wear baseball caps because “that is not Fridays” (Lashley, 2000).

However employees can make their own decision without managers’ approval and that is arranging their own working schedules. For instance, the employees who made up the “top team” in each restaurant had greater control over the organization of their own working arrangements.

Top team members were empowered to determine their own shift patterns and decide what time and areas of the restaurants that they wanted to work at. In other words, top team members have the rights to plan work patterns that suited their needs (Lashley, 2000).

To conclude the Theory X managerial analysis of T.G.I. Fridays, which is the form of empowerment practiced by the organization are highly standardized, it does require employees to be creative in producing one of many types of customer interaction required by different guests.

Managerial intentions retain control of production process through a set of tightly defined service procedures and standards, but also empowers employees to provide the performance needed by the service recipient. In the end, “empowerment through involvement” for these employees means accepting responsibility for customer satisfaction, but also being able to apply discretion in the way they deliver the service (Lashley, 2000).

II) Outback Steakhouse is an Australian-themed American casual dining restaurant chain based in Tampa, Florida with over 1200 locations in 23 countries throughout North and South

America, Europe, Asia, and Australia. It was founded in February 1988 in Tampa by Bob

Basham, Chris T. Sullivan, Trudy Cooper and Tim Gannon, and is now owned and operated in the United States by OSI Restaurant Partners, and by other franchise and venture agreements internationally. Besides serving quality steaks, the menu also serves seafood, desserts and soft drinks. The target audience is mostly white collars and occasional families will come as well.

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Average customers would spend US$25 to US$35 (NT$675 to NT$945) per person on a set menu (Outback.com, 2015)

The casual dining restaurant chain has proven to be successful overseas, especially in

South Korea. In 1997, Outback entered the South Korean market through the franchise agreement with Aussie Chung Inc. Currently, there are 101 Outback Steakhouse locations throughout South

Korea. Thus the main focus of this case study is on transporting an American branded restaurant chain to a foreign soil and still can make it extremely popular. Outback Steakhouse of Korea is a good example of blending Western business culture into Asian society and finds its way to make it adaptable. The key among the 7 successful factors is a decentralized structure that takes advantage of the business acumen of managing partners. A flexible approach that allowed the

Korean chain to respond to the country’s cultural patterns and market preferences is balanced with a strict approach to hiring and training (Enz, 2008; Lee Khan, & Ko, 2008). Here are the following key factors that led Outback Steakhouse restaurant chains to be a huge success in

South Korea. Decentralized organization, training programs, customized operation strategies, innovative human resources, blending American business culture, competitive strategies and true hospitality, and general organizational structure. The thesis will go through each of the key factor and explains its Theory X and Theory Y management that has implemented into them.

According to its financial statement, Outback Steakhouse has earned $2.45 billion US for its system-wide sales that boasts 767 locations in the U.S. Sales per unit is estimated around

$3.19 million US (Nation’s Restaurant News, 2014).

Theory Y management

As McGregor (1960) would describe his perception of a decentralized organization which provides an environment in which the individual, through taking greater responsibility for his or

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her own behavior, obtains intrinsic rewards in the form of ego and self-actualization, satisfactions, which encourage him or her to take still more responsibility and thus to grow

(McGregor, 1960).

1. Decentralized Organization (Communication) is the pivotal organizational structure that differs from the other rivals which creates a great competitive advantage for the chain restaurants in South Korea. The company minimized the number of headquarters staff and shifted key activities and responsibilities such as site selection, contracting with suppliers, and training to the firm’s eight regional operating partners and the managing partner of each outlet. For instance, once the firm decentralized its power by distributing it evenly among the partners, each regional operating partner would have full responsibility for opening new outlets, ranging from site selection to hiring staff, while managing partners would be in charge of day-to-day activities such as employment training, customer service, and local marketing. Overall, this decentralized organizational system facilitates an accelerated decision-making process for site selection, enhances supplier relationships and procurement, minimizes the costs associated with the maintenance of headquarters, and facilitating training (Enz, 2008; Lee, Khan, & Ko, 2008).

Thus, Theory Y management helps the firm’s decentralized organization system to provide motivation for the operating and managing partners due to their considerable responsibility.

2. Customized Operation Strategies (Empowerment) specialized in menu items customization that can satisfy local taste preferences, while maintaining the essence of the original menu. The CEO of Outback Steakhouse confirmed that the company tailored between no more than 10% of its menu items to accommodate local tastes; the rest of the menu is virtually the same as that of the U.S. Outback Steakhouse restaurants. For instance, the two

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particular inventive tailored menu items are only available at Outback Steakhouse in Korea and proven to be extremely popular, they are Kakadu short rib steak and Kimchi fried rice.

Accommodating Koreans’ tastes in a U.S.-style franchise operation takes innovative thinking and experimentation to a whole new level (Lee, Khan, & Ko, 2008).

The CEO of the firm stressed that the key factor in producing the two most successful customized menu items is the collaboration with Outback Steakhouse headquarters. The two managing companies had since working closely together in developing local menu items in casual restaurants entail detailed analysis of local tastes and a distinctive blend of Asian and

Western flavors. For instance, the Kakadu short rib has become the most popular menu item, the creation was based on a combination of Kalbi steak, which is a Korean dish and mashing with the classic Outback steak recipe. Beyond creating innovative recipes, the Theory X management of the firm controls the portion sizes of typical menu items according to the Korean market’s demands. Hence, the firm does not serve steaks that are bigger than 16oz, since Koreans prefer less meat than Americans do. This is another way of adjusting cultural preferences to the local dining market. Finally, to ensure consistent quality of beef, the firm uses only imported

Australian beef (Lee et al, 2008).

3. Innovative Human Resources Management (Creativity, ingenuity, and innovation)

It helps the company developing and implementing a number of innovative human resources strategies, particularly, its policy of internal promotion and internal hiring. Clearly, human resources over at Outback Steakhouse of Korea is the most valuable asset. Unlike most of the other resource categories, they can easily be duplicated. Theory Y management found in this policy of internal promotion and hiring motivates employees, increases employee job satisfaction, and helps reduce the employee turnover rate. For instance, the strict screening and

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selection, generous benefits and flexible scheduling, all help the chain increase employee effectiveness (Enz, 2008; Lee et al, 2008).

According to the senior managing partner, the firm’s internal promotion practices give employees a sense of pride and accomplishment. This positive reinforcement prompted most of the working staff to have diversified working experiences within the company; these diverse experiences help the staff to coordinate and communicate better with employees in other areas.

4. Competitive Strategies and True Hospitality (Customer Satisfaction) is the best example of Theory Y management that help developed a series of service quality assurance programs. The firm adheres the company slogan “No Rules, Just Right”. In the spirit of the slogan suggests that customers are always right and the firm will go as far to get a customer satisfaction by giving them a full refund for any service or menu item with which they are not satisfied. Another way to gain customer loyalty and their satisfaction. The company zestfully offers free appetizers to customers in its waiting area and offers free valet parking service.

5. Blending American Business Culture (Abdication) is the way to get the best of both worlds. This occurs when Outback of Korea attempted to modify the typical business culture in its operation. For instance, there is a huge cultural business differences in Korea, it is very much a Theory X oriented management in terms of hierarchy in the company; therefore, there is a high degree of power distance between employers and employees or managers and workers (Hofstede, 1997).

On the other hand, American business culture is inclining towards a well-balanced management technique composed of Theory X and Theory Y on each scale. The result is a much harmonized managing operation. The high power distance in the Korean business culture creates a tension of intimidation and anxiety from employees to managers. For instance, employees are

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prohibited to engage in active discussions and tend to discourage communication and cooperation between either managers and employees or between either managers and executives. Therefore, the ideas or suggestions of frontline employees will be discarded or ignored by superiors.

However, in Outback Steakhouse’s managing principles, this type of Theory X management is without a doubt, impeding the progress that the company is heading and so it will reject the old culture by welcoming the American business culture that is pleasantly democratic in many ways it is. The American style of reciprocal communication that brings employees and managers into closer communication. This type of friendlier management is Theory Y. The benefits of implementing a horizontal and organizational culture helps improve teamwork and encourages free discussions between frontline staff and managing partners or between managing partners and operating partners. Working under a democracy that the American Business Culture built has given everyone the freedom to express themselves through ideas and suggestions. It does not matter a person’s position or status when it comes to sharing their ideas, while rare among Korean companies, was a notable feature of Outback Steakhouse of Korea (Enz, 2008;

Lee et al, 2008).

6. General Organizational Resources (Trust) are the key factor in Theory Y management that contribute to the firm’s success in brand, reputation, and strong shareholder relationships. The firm emphasizes the value of the brand and the importance of a cooperative relationship between the U.S. franchisor and the Korean franchisee in building that brand. That relationship has a deep meaning which is based on trust, loyalty, and ultimately strengthened

Outback’s hand in Korea. Along the way, the two organizations learned from each other, a hallmark of strong relationships. Other strong shareholder relationships, such as those with the local community through event sponsorship called “Grass Roots Marketing” program, allowed outback to enhance its reputation, a facet of the brand that is hard for competitors to imitate. The

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firm creates a positive brand image by forming and maintaining good relationships with local communities, which eventually helps attract local residents. The firm’s decentralized organization supports this marketing effort by empowering each managing partner to source food suppliers, rather than depending on central suppliers. Each managing partner has full responsibility for implementing his own “Grassroots Marketing” program. Such responsibility included sponsoring several local community activities like donating food to local charities and sport programs. For instance, one managing partner would annually sponsor and provide $5,000 worth of food to a local community marathon. By sponsoring and participating in such local activities and charities, they helped Outback Steakhouse of Korea in creating a positive brand image and connects the foreign brand to local communities (Lee et al, 2008).

7. EAP (welfares): Staff at Outback will benefit some great welfare programs

For instance, the firm’s employee benefit programs encourage employee satisfaction and retention. Part-time employees are eligible to receive health insurance benefits when they are qualified for the company’s retirement plan after serving for one year. Another advantage of the welfare system, employees are given the rights to design their own scheduling system which they can select their days off to the extent possible. The managing partner prepares weekly schedules taking into consideration of each employee’s request (Lee et al, 2008).

Theory X management

Training Programs in Outback Steakhouse of Korea are extremely intensive and rigorous for employees at all levels. This type of Theory X management is demonized in many ways. For example, the firm requires managing partners to complete fourteen months of intensive training, which includes bar operation, dishwashing, and six months of overall kitchen training (Lee et al, 2008).

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According to company policy, the firm allows no exceptions regardless whether or not the managing partners are experienced must participate the entire training program. The training program allows trainees to get a thorough knowledge of the firm’s operations and culture; in addition, it is geared to help them understand the human resources, and customer service aspects.

The sheer intensity, mandatory nature, and content of the training were emphasized by the CEO as important factors in the firm’s success. In addition, Outback Steakhouse of Korea works in close coordination with Outback Steakhouse headquarters in the U.S. to developing training programs and solicit continuous feedbacks (Lee et al, 2008).

Lastly, the firm also developed a series of service quality training programs, including a practical test designed to measure actual service performance, serving time for appetizers and main courses, and each server’s friendlessness and sanitary practices. All servers are required to pass the service tests, which are conducted periodically under the supervision of the managing partner. After the service quality test, each server discusses the results of the tests with managing partners to improve the server’s performance. All and all, these training programs are designed by the U.S. executives, are carefully assessed and customized to suit the Korean market and business culture (Lee et al, 2008).

Theory XY management

Rewards, wages, and hiring at Outback have rigid hiring policies, which require three pre- employment tests, even for the position as server. Because cultural attitudes and habits are deemed difficult to change, thus the managing partner argued that it is essential as part of the

Theory XY management, to have a strict screening and selection policy, especially in reality that the service expectations in Korea is challenging (Lee et al, 2008).

Finally, all managing partners are obligated to participate in an incentive system that plays a key role in the firm’s success (Van Warner, 1995). The incentive system required these

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managing partners in the Korean firm to invest cash up front and sign a five-year management contract. The basic salary for managing partners varies based on individual experience. This unique Theory XY management behind the incentive system is to encourage these managing partners to renew their contracts, thus continuing working for the firm. For instance, after renewing their contract renewal point after five years, these managing partners are automatically given the rights to negotiate improvements in their basic salary based on performance. Generally, the salary increases up to 30% in the second contract if the managing partner exceeds financial goals set in the first contract. From maintaining this level of high commitment and offering the managing partner the sizable 10 % stock in the restaurant’s cash flow, the company can attract and retain highly experienced and motivated restaurant managers (Lee et al, 2008).

The salary of veteran managing partners often exceeds $100,000 at the time of contract renewal, which is considered to be a competitive salary for other restaurant managers in Korea.

This is why Theory XY management works for the incentive system as the manager turnover rate at Outback Steakhouse of Korea is only 1%, which is much less than the 22% manager turnover rate for Outback Steakhouse of U.S (Lee et al, 2008).

However there are consequences to consider for the luxury of earning high salary. For instance, in exchange for the handsome compensation, managing partners must remain working hard to meet certain performance expectations, and if they do not, the contract will not be renewed (Lee et al, 2008).

To sum up the case study of Outback Steakhouse of Korea, the newly adapted Theory X and Theory Y managing approach has been so well received that the U.S. Outback Steakhouse also has adapted the practice from the Outback Steakhouse of Korea for its American chain restaurants. Hence, it clearly demonstrated the firm’s excellent service and hospitality stems from the firm’s effective human resource practices, which include careful employee hiring and generous employee benefits. By motivating employees and managers, Outback Steakhouse of

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Korea has been maintaining a low employee and management turnover rate, which is a cornerstone of customer satisfaction in Theory Y management (Lee et al, 2008).

Finally, the results of the case study demonstrate the importance of establishing a solid relationship between franchisor and franchisees. The full collaboration of Theory X and Theory

Y management between the U.S. Outback corporate headquarters and the Korean operation had led to the creation of its own operational system in many aspects such as customizing menu items, modifying site selection criteria, and smaller entree because Koreans prefer less meat than

Americans do (Lee et al, 2008).

III) McDonald’s is truly one of the most iconic and successful restaurant franchises in the world. Over the years, it continues to be adored by many customers of all ages, especially children who love the free plastic toy that comes with the Happy Meal order, and Ronald

McDonald, the lovable clown and mascot from the firm is what made McDonald’s such an iconic franchise which had invaded into our lives and making the American history of pop culture that people around the world are familiar with. The success of the “Golden Arch” brand had established an enduring legacy that lasted for almost 75 years, and it will continue to endure in many generations to come.

McDonald’s founding principles are based on the following seven dimensions: honesty and integrity, relationships, standards, leading by examples, courage, and recognition. Each principle is an interdependent variable that relies heavily on one another. Hence, it is a complete system of the Theory X and Theory Y management devised by McDonald’s Corporation.

Theory Y management

I. Honesty and integrity (Trust) is the very first principle from Theory Y management that builds off of the organization from the ground up and all indicators pointed to McDonald’s

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transparent culture, where doing the right, moral, and ethical thing was important. From the business’s perspective, honesty is absolutely essential because there are a lot of things can be fixed, but the only three that cannot be fixed is cheating, stealing, and lying. Those are the things that destroy morality and self-integrity and would be extremely difficult to re-establish trust between partners, employees and suppliers; hence, the company proposed the following six major managerial practices: Business Hand Shake, Lead of Faith, Ombudsman Program, Honoring

Commitments, Maintaining Integrity, and Trust bank that would keep the culture of honesty intact. Ray Kroc was the first CEO of the company who started the whole culture and by large, it permeated the organization down to the smallest detail.

Firstly, treating all of the shareholders as equal partners is the best way by being open-minded and honest; and this tradition begins with a Business Handshake. The handshake is the raw gesture that symbolizes agreements with vendors and it also marks the successful finalization of a business transaction between two parties.

Secondly, having a Leap of Faith is to truly make a firm commitment while establishing a business partnership between proprietors and suppliers. This does not happen overnight as it takes years upon years to form that kind of mutuality and partnership. At the end of the day, most suppliers are willing to invest hundreds and thousands of dollars in building plants with technology that caters McDonald’s purchasing patterns and ensuring the final products are in its absolute quality. From a Theory Y managerial perspective, it is rather important to conduct business with honesty and integrity with vendors, because they will put their faith in the company and might even take risks with it. These partnerships can produce beneficial results in a win-win situation as trust and faith were prevalent on the vendor side. In the end, the company looked for those qualities in the suppliers and the franchisees, and also expected the same from their employees. Those who did not mirror those expectations were fired. For instance, a franchisee dishonestly used McDonald’s product in his chicken restaurant, was indeed a direct violation of

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licensee agreement, therefore from a Theory X managerial perspective, his punishment was disenfranchisement.

Thirdly, in order to produce equal shares in the working community among employees of

McDonald’s, an Ombudsman Program was first launched in 1974 for that matter. The program was designed to allow any working position from owners to corporate employees in which they can voice their complaints and grievances towards an unbiased party. In many ways, it had set a corporate standard in business managements as companies are willing to be as open minded and just. Therefore it is often used for settling a dispute during a heated discussion that seems unfair as the organization is willing to hear employees’ opinions and accepting their feedbacks to further improve the current condition in the workplace or policies in the program. This is another way to solidify the working relationship between employees and employers. The program later included voting rights to maintain the satisfaction among employees to truly make them realize their voices and opinions matter to the company.

Fourthly, the company is known for keeping promises either in verbal or in written contract.

Thus, Honoring Commitments is one of the many ways that the company pledges to making promises into realities. For instance, if an officer made a verbal commitment to someone, even though it was not written down on paper, the company will do its best to stand by that commitment. This is to create a culture based on trust that everyone at McDonald’s believes in each other, and that was always the fabric of the company. Finally, it also can play effectively well in empowerment by giving employees the decision-making within areas of responsibility which is a way of showing reciprocation by honoring trust.

Fifthly, besides establishing work relations with workers, but it is also very important to extend that relationship outside of work with customers by Maintaining Integrity with them.

Therefore the reinforcement in SOP from Theory X management will restore food to the quality that customers enjoy for many years. This belief came from the Food Improvement Team

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which is a circle of people including operators, suppliers, and staff members who all care about the company’s integrity.

Sixthly, in order to make everyone at McDonald’s a family unit, a Trust Bank was developed in 1957 by Chairman, Al Golin. The bank was opened to any employee who experienced distress or having crisis. Philosophically speaking, it symbolizes hope, humane, and warmth. It serves admirably by supporting colleague who is hitting hard on financial term. The existence of such a bank gives reasons for workers to work for McDonald’s as they feel safe and protected. It also means to have faith and confidence by investing your trust in McDonald’s (Facella & Genn,

2009).

Theory Y management

II. Relationships (Trust) is the second fundamental principle from Theory Y management which matters in all organizations, as they are the very basis for the entire system at McDonald’s.

Relationships are absolutely important as the driving force that runs the company forward and they are all about trust. To build a network of trust, the company revolves around these five commonly used managerial practices: Three-Legged Stool, Family of Peers and Presidents,

Mentorship, 2+2+2=12: Synergy, and the Ronald McDonald’s House Charities.

Firstly, every company needs a team of people that are critical to the success and development of the company, and so McDonald’s formed the Three-Legged Stool where a group of people come together to make mutual decisions in doing what is best for their company. For instance, the entire concept deals with trust where these three groups of people follow the lead of a strategic leader without any questions asked or challenged. The system of the Three-Legged

Stool ultimately saved McDonald’s from the brink of bankruptcy in 1959 when a money pocketed incidence took place at a construction site resulting several uncompleted stores and the company was pressured by creditors to pay $50,000 in cash with given days. Fortunately, due to

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strong bonding relationships and trust established over the years around the Three-Legged Stool, there was one faithful vendor came to the rescue by pitching in $100,000 to save McDonald’s and other suppliers, including Continental Coffee, Honey Hill Dairy, Mary-Ann Baking, and

Interstate Foods. The tale explains the importance of establishing a network of trust in partnerships and friendships. They will come to your rescue during your darkest time. Therefore employees are gladly to have each other back covered during the ups and downs of the company.

So no one will feel discouraged or left alone in difficult times because there will always be people in the company to help each other out. That is what fosters trust, loyalty, and commitment in the organization which employees feel blessed and protected.

Secondly, in order to foster a long-term business relationship based on trust and honesty, hierarchy must not be a relevance in corporate structure. Therefore a network of establishing a

Family of Peers and Presidents will create a highly intimate level of respect and sincerity in the workplace. For instance, there was never a formality of addressing superiors by their last name.

Hence, their work relation is almost like close friends because only friends will tell the truth. The tradition continues to break barriers as the notion of hierarchy does not improve the future of the company but in fact it will breed countless number of yes men which is the central problem to it.

The company during the 1960s had around 3,000 people working for it, and in other words, they were also presidents in their own rights, thus making everyone responsible of making decisions and taking actions in their own hands. This ultimately would improve company’s performance while building a firm relationship with colleagues outside of work by going to lunch or participating in a volunteer workshop within the organization.

Thirdly, the bonding of relationship can be both rewarding and nourishing such as

Mentorship, which plays a critical role in Theory Y management. For instance, mentoring is a great tool for role models as most managers and supervisors served as models of excellence by following their lead. Mentorship eventually helps execute employees to work their way up in the

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ladder to corporate, where top leadership requires excellent results from future employees. The true definition of a true mentor and manager is always willing to sit down and walkthrough with their apprentices, step by step showing them the right way to get things done. Besides helping them to quickly assimilate in the workforce, the mentor also instructs and guides their apprentices to accumulate stock to become “McMillionaire”. These are the niches of what apprentices can learn from their mentors.

Fourthly, every company needs to have sparks and energy to fuel up their tank in order to achieve success in the long run. Hence, McDonald’s introduced 2+2+2=12: Synergy in which partnership revolves around two or more individuals achieving actions that each is incapable of by themselves. Partnering has various advantages such as fostering synergy to brainstorming and sharing ideas. Leveraging each other’s strengths, providing insights to a variety of diverse thoughts. The help of compensating for weaknesses which some team members may not be able to see the big picture; by partnering, they can offset each other’s weaknesses. Finally, partnering allows employees to examine the pros and cons of policies which they see from many different points of view. Indeed such practical method allows the steering of the company’s vison into a brighter horizon.

Fifthly, to establish a reputable name for itself in the community, the best way to do so is by giving back, and so the company launched a program called Ronald McDonald’s House

Charities in 2005. It shows corporate responsibility by proceeding the funds in supporting for families with seriously ill children receiving treatment at nearby hospitals and providing 6,000 beds for families worldwide every night. The company whose philanthropy had raised over $60 million for the program. The humane side of Theory Y management speaks for compassion as many of us feel right to do the moral thing in raising money for children suffering in leukemia or helping families to rebuild their homes after the destruction of hurricane or earthquake.

These are the various examples of kindness from people who has the heart to give back to the

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community from charities (Facella & Genn, 2009).

Theory X management

III. Standard Operating Procedure is the third principle from Theory X management as the attention to details set the bar really high in the dining and beverage industry. The strict principle takes care of the customer every day as the brand promises to deliver the experience to them. To get the idea of how rigorous McDonald’s is about QSC, the company sets standards for every task from crew to corporate. The operations manual clarifies job descriptions and roles, and there are any number of corresponding tools to support each individual, from training videos, to courses taken at Hamburger University, to field visits, and to coaching. These standards included core competencies for company staff employees. Among the training list are communicating effectively, continuous learning, customer focus, drives to excel, holds self and others accountable, and teamwork and collaboration. During a field visit at one of the McDonald’s stores, Kroc would taste test the quality of the products and each time the food tastes awful or just do not quite meet his standard, he would throw away the food into the waste bin. Next, he would walk to the counter and demand the store manager to take down all the prices on the menu board. This means it is time for the manager to fix the problem as Kroc cared for his customers enough to set high standards in all of his products and services. In order to enforce SOP, a series of the four Theory X managements: Hamburger University, Full Field Report, Innovation

Center, Drive-in Employees Strategy, and Strengthening the Brand were required to implement into its principle.

Firstly, to cultivate a breed of the finest excellence in managers, McDonald’s established a certified academic training institution called Hamburger University which was founded in

1961 in Oak Brook, Illinois. It is also a one of the kind in the world that was designed to instruct personnel employed by McDonald’s in the various aspects of restaurant management. The facility

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includes teaching rooms, multiple auditoriums, and special equipment rooms as well as rooms to promote team integration. It also runs labs where managers learn to improve their managerial skills. Training occurs at every restaurant in every region at all levels. More than 80,000 restaurant managers, mid-managers, and owner/operators have graduated from the facility.

Graduates will be awarded with restaurants to run as new managers towards the final completion of the degree. During the course of training, there are more than 5,000 students being taught, and they must satisfy the entire HU curriculum worth of 42 college credits, and courses are taught in

28 languages, to support a diverse culture and accommodate its global workforce where there are six other HUs around the world. HU offers an immense rigorous training that stands the pressure on Theory X management perspective. The program takes two years to complete the training in stores for as much as 20 hours a week before learning and they might even be awarded a store.

The entire curriculum covers the extensive knowledge of running a $2 million business and its culture as well.

Secondly, in order to secure and ensure product quality up to standards in every store across the nation. A Full Field Report was conducted regularly over the corporate years to maintain

QSC standards. The full operating report would demand a field representative to spend two days on an announced visit to the restaurant with the full management team as well as the operator present. The operator would then learn and develop along with the process. There are more than

950 field consultants around the world and they all take their jobs seriously as they would review and criticize every aspect of the restaurant and establish grades for quality service, and cleanliness, or QSC, to determine how well the restaurant was operating. During the inspection procedure, every franchisee are encouraged to do their ‘homework’ in order to seek for better grades as they have chances in receiving a reward for their achievement of excellence. All of the operators were motivated and prompted to receive a high store rating because they might be ended up earning a qualification for possible future store expansion. However, for those who

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receive negative store ratings would suggest a serious action by the corporation. For instance, according to QSC standards, stores that received an F rating from the field inspectors, where they find the sites to be dirty, menu items that were not prepared with the prescribed recipes and the food cooked in stale oil was served up cold and unappealingly. McDonald’s will buy out all the rights from the franchisee including the restaurants and franchise territory. That is why SOP is important to maintain great discipline and dedication to the craft of catering services. For instance, measurement can uplift a company’s performance by establishing goals, hold employees accountable, work collaboratively to achieve goals, measure the results in a timely manner, and recognize the success. The metric system can measure the accuracy in employee’ performances from hourly reading to the daily sales, and how many types of food ingredients were used.

Thirdly, innovation and creation is very important to compete in any form of industry. Hence,

McDonald’s launched an Innovation Center, which is a research kitchen facility perfecting the formula for consistent recipes and processes that are challenged in the company’s quest for excellence for more than 32 years, McDonald’s has had an executive chef on board working the recipes and exploring new products. For instance, the company was told to have spent more than

$3 million developing its renowned French fries in the mid-1950s. Evidently, the company constantly tries to keep up with the current trend in fast-food businesses.

Fourthly, to scout and to train new talents by making promises of a promotion, a technique called the Drive-in Employees Strategy that will train employees to do their jobs and possibly to get promoted as managers if they are up to tasks. This type of Theory X management through training has given every employee a chance to show off their skills and if their performance are recognized, then they will get the promotion as promised. In fact, it has trained more than 60,000 managers throughout the years when they started their job as crews and they all eventually got promoted. This is a type of promise that McDonald’s wishes to fulfill for all their workers.

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Fifthly, in order to stay recognized for so many years, commercialism and advertisement is needed. Hence, Strengthening the Brand is what keeps the company in business for 75 plus years. To build around a successful brand relies on trust. A trusted brand indicates worldwide standardization, as consumers are expected to taste the same food and to have the same service treatment wherever they go to a McDonald’s restaurant. This is rather important to a reputable organization because having one bad experience at a particular McDonald’s restaurant will compromise the rest in that region, and so all owner/operators are to commit and follow the standards by signing the licensing agreement (Facella & Genn, 2009).

Theory Y management

IV. Leading by examples (Delegation and abdication) is the fourth principle from Theory

Y, which was a trait that grew organically within the organization, ultimately becoming a clear root of the company, and the meaning behind the culture continues to inspire and touch everyone. For instance, CEO Kroc, would come every weekend on Saturday to do his maintenance job, scrubbing the restaurant clean, and picking trash up off the grounds. Later on, he would continue scrubbing the sink with a toothbrush, and then he would go around the knife, scraping the gum off the cement and tables. Finally, he will mop the floor clean and clean the toilet. The behaviour motivates everyone in the restaurant to do the same; cleaning and scrubbing along with their favorite boss. This proves to be an effective way to pass down to many generations, working side by side with future leaders. The willingness from leaders and managers to delegate and abdicate their authority is a good sign for behavior motivator as there is no longer the presence of hierarchy, everyone is treated equally as peers and colleagues, despite the differences of their ranking status. Here are a couple of managements: Strengthening the Brand, and Windshield Time Visits attached with the principle of Leading by Examples.

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Firstly, in order to make leadership and management effective. The presence of that person must be impressionable, sophisticated, and charismatic. Therefore managers and leaders are encouraged to Working Shoulder to Shoulder which requires a great amount of time to build that mutual relationship. This includes doing actual crew tasks; and at the same time directing, pushing complimenting, and communicating the entire time with crew. This is a very powerful type of Theory Y management as there is no longer a power distance along the line of hierarchy, and everyone is working together to achieve common goals. These actions by the managers are indeed powerful as they help employees to thrive from becoming a winning team. Leaders who are working alongside with employees are actually teaching them by example, demonstrating the company’s valuable standards and the benefits of doing things in a set way, and modeling problem solving. Because leaders are viewed as role models and their actions are being watched by all levels within the organization and so their activities are impactful to them.

Secondly, to find out what other branches are doing across the nation, the company will organize field trips called the Windshield Time Visits by driving crew members to conduct store visits. These are the fun experiences that leaders get to spend quality times with their crews when they receive a better insights and perspectives than on-site visits. In order to advocate field visits;

McDonald’s decided to hold an annual Founder’s Day, where everyone in the entire company goes into the stores for a day (Facella & Genn, 2009).

Theory Y management

V. Courage (employee engagement and initiation) is the fifth principle from Theory Y within the corporation that plays a risk-taker role and it was that behaviour which permeated within the system on all levels. The company encourages its employees to take risks and should not feel to be so grounded by the standards established by McDonald’s. There are at times that the manual could not or possibly cover the human side of management and so it is the

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employees’ responsibility to make the decision based on what is right and wrong. Courage also means honesty in all around the people working together as a big McFamily. For instance, both vendors and franchisees must have faith in doing business with one another. This involves with franchisees venturing out in the new neighborhood of an unknown area. This requires absolute courage in Theory Y management factor. On the other hand, vendors also need to show courage in order to finalize the transaction and therefore the business agreement is based on trust with a friendly handshake. Here are two managements: Fighting the Good Fight, and Having the

Courage to Admit one’s Mistake are affiliated with this principle.

Firstly, in order to protect the safeties of customers and staffs, it is the job of a manager to defuse the tension. Thus, Fighting the Good Fight not only helps employees to be brave, but it also makes them act and think fast in any peculiar situation. In this case, a manager had to step out to confront a couple of adolescent street thugs before they could cause harm to his employees and customers. So he broke off the fight with verbal communication by taking the control back into his hands. The speech that the manager gave was delivered beautifully, and he handled the situation with class. Finally, courage teaches the manager to think rationally in a heated situation, because his reaction is a direct consequence to his customers and crew, so never provoke a fight with gangsters, instead use smarts to diffuse disagreements for personal safety.

Secondly, to foster a team of people who are willing to speak their minds genuinely can help companies to achieve goals and meet important visions. For instance, it takes courage for superiors to admit their mistakes, especially in front of his crew. This is not about saving face of oneself but rather it is about saving the company from making terrible decisions in the meeting room. For instance, when CEO Fred Turner asked for permission to advertise 99 cent Egg

McMuffin on national television. The problem was the expense, and all operators were clearly opposed to it but did not say a word to reject the idea. But there was one courageous operator who stood up and spoke his honest opinion why he was against it. When Turner learned of the

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situation, he later apologized and admitted it he was wrong to ask operators to fund for the ad.

This made everyone in the boardroom to respect him even more because there were times a CEO could make a mistake (Facella & Genn, 2009).

Theory Y management

VI. Communications (powerful messages sent) is the sixth principle from Theory Y that is absolutely essential for any strategic leader to get his or her message of goals and objectives across. Strategic leaders must be charismatic to lead his or her subordinates. This means they ought to have beliefs and values and they also must have a mission statement. In the end, the leader must think of a way to fit his or her entire ideas into all three categories in the mission statement, which is the primarily requirement for a leadership on the top of the organization.

In order to becoming more of an effective leader in the presence of the subordinates, communication is needed, and so here are a couple of managements: Decentralization, the Power of Good Information, and Performance Appraisal could help future operators to stand out in their companies.

Firstly, restaurant expansions into multiple units is what the company needed in order to stay competitive in the franchise business. Hence, Decentralization, a powerful management that opens up empowerment in Theory Y for directing at honest employees that requires a lot of trust and faith to work with. The program initiated successfully during the period between 1967 and

1973, which was a fine era of massive expansion when Turner decentralized the system.

Decentralization works when regional offices supported the owner/operators and company stores within each geographical area as they were empowered to streamlining the communication cycle by providing immediate access to the local officers, the regional managers, who over time knew their territories more intimately than anyone else in the management. The advantage of

Decentralization helps speeding up the decision making through the streamlined

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communications. This saves huge amount of time. Within a Decentralized Organization, the regional managers would have the power to decide on real estate acquisition and development, as well as licensing decisions, and most of the time would use their own boards of operators to help facilitate resolutions. The board members consisted of marketing, public relations, and operations working together to establish a process for information flow and getting critical input. This structure greatly aided in communication at all levels, and this is a model of how an organization can grow and yet remain responsive to the local market’s needs.

In sum, Decentralization or regionalization, can be an effective organizational structure, and can play a critical role in communications within an organization.

Secondly, in order to stay informed about the business from the company, it is critical to receive the updated information. To do so, it would have to rely on the Power of Good

Information. For instance, telephoning to the people that the company wishes to do business with is great way to communicate. In order to send messages across in an effective manner, spend more time at the physical store by interacting and communicating with customers and employees in person. So do not rely just on modern convenient technology in communicating devices like emails, Twitter or Facebook. Use the old fashion way in communication as it gradually form a bonding relationship with people. Thus, this type of Theory Y management works wonderfully in a human level, engaging in real emotion with people in a non-virtual environment.

Thirdly, in order to reinvigorate employees’ spirit in working, always give a warm

Performance Appraisal. In fact such a technique is quite prevalent throughout McDonald’s over the years and such a tool does not always needed money to do the trick. For instance, a simple and direct compliment like ‘good job’ or ‘well done’ is a pat on the back from managers. This is the type of feeling can get a person to feel excited and to have the passion for doing the job.

In sum, Performance Appraisal and other similar processes are a great opportunity to communicate and encourage engagement. The end-result can be very rewarding for the

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employees to receive positive commentaries from their superiors/mentors. They will feel very good in doing their jobs as McDonald’s uses communications to help build a culture based on true values for its shareholders, and winning over customers’ confidence through products and services they received (Facella & Genn, 2009).

Theory Y management

VII. Recognition (rewards) is the seventh and final principle from Theory Y in the leadership management of McDonald’s. The company’s culture was built on the foundation of rewarding hard workers as a great gesture of appreciation. The company heavily emphasizes in rewarding that it has 23 different specific awards given to individuals such as employees, suppliers, and licensees. In addition, there are also regional awards as well as worldwide recognition programs

(Facella & Genn, 2009).

As the American psychologist named Abraham Maslow stated in A Theory of Motivation, people thrive on recognition as a form of self-value when they feel that their contributions make a difference (Maslow, 1954). As a human being, we need that affirmation. Recognition is such a costless tool to thank an employee for a job well done that it is most well certain that it can be used as an effective motivator to engage employees to do more for their company. McDonald’s has surprisingly put a lot of thoughts into rewarding for performance recognition. Reward has many forms in promotions and raises, and trip on the weekends at one of the corporate ski lodges or condos, which were available to staff, and officers. In addition, there were free dinners at wonderful restaurants. These welfares and great benefits are the best tools to retain employees in the organization, because they feel appreciated and most of all, they were treated like families.

Firstly, in order to fulfill the deserved Recognition for their great contributions in the company, awards like the President’s award, Team awards, and awarding a million dollar in stocks are the many examples that an organization show appreciation and recognition for their

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employees’ effort in performance. Secondly, employees needed Recognitions to truly feel appreciated for their role in the company. Hence, Recognitions like “Roots and Wings” plaque, the #1 club, the power of public praise, and yearbooks lay out the strong emphasis that these workers’ achievement must be mentioned in printed books or on an engraved bronze plaque

(Facella & Genn, 2009).

In sum, McDonald’s has created an intuitive system with a built-in mechanism that can recognize those who truly deliver the results. Theory X and Theory Y management strategy have served McDonald’s well, enabling it to choose from within for its top positions. Organizations that develop recognition programs to reward outstanding efforts will have a full roster of its most excellent employees, which is the company’s important resources.

To make a final conclusion on the comparison between Eastern managerial approach and the Western managerial approach. The Eastern managerial approach is more incline towards parental-style operation with various strict regulations and constitutions that employees must follow but still offer incentives and rewards for them. On the other hand, the Western managerial approach is more liberal oriented, so it does not have any strict regulations and constitutions.

Instead it uses the academic-style operation to run the organization that often uses recognitions and awards to compensate for their hard work, and this motivates workers to do their best.

The major benefit of adapting Western managerial approach over Eastern managerial approach is that both Asian and Westerners can easily accepted to such management style. Because it does not directly interfere with employees’ private life since it has no strict stipulation or regulation that Wowprime has infamously known for, so they may not be welcomed by Westerners. The

Western approach is more flexible and it does not intimidate employees to the extreme. For example, some may not be comfortable or enjoy doing sports, but Wowprime will enforce their employees to participate nevertheless if they still want to work for the company. On the other hand, McDonald’s or the other two Western restaurant chains do not coerce employees to

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participate in any form of physical activity. However McDonald’s encourages employees to participate sports in their own leisure as a way to communicate and to develop friendship with colleagues.

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Chapter Three

Methodology

The third chapter is divided into three sections: sample collection and data analysis, content analysis, and categorization of Theory X, Theory Y and Theory X and Y management of the six restaurant chains.

The purpose of this study is to determine each of the restaurant’s characteristic and its managerial approach, and then to categorize them each into its appropriate Theory X and Y orientation. There are several steps to describe the procedure of obtaining the final results.

Section I Sample Collection and Data Analysis

Secondary sources were the main method of gathering data for this study. For example, books, scholarly literature reviews, blogs, online news articles, financial annual reports, and official websites of the six major restaurants. There were four books and three literature reviews used for analyzing the content of the six major restaurant chains. Two books of Din Tai Fung, two books of Wowprime, one book of Haidilao, and one book of McDonald’s. Two literature reviews of Outback Steakhouse, and one literature review of T.G.I Fridays. All of the books and literature reviews had been read and analyzed thoroughly and methodically to determine each of the restaurant’s characteristics and its managerial strategies.

Section II Content Analysis

In order to authenticate the validity of the content analysis from categorizing each of the six restaurant’s theoretical management into their corresponding Theory X, Theory Y and Theory

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XY orientation. An in-depth and thorough analytical explanation with inferences has given to state behind the logics of reasons that led to the conclusion in Theory X, Y, and XY categorization. The purpose is to present a strong validation with evidences that can truly prove the given theoretical categorization of these restaurant managements plausible. Finally, with the collected samples from the 9 respondents would further the credibility of each given statement.

Section III Theory X, Theory Y and Theory XY Categorization

After stating the reasons and choices of defining for each of these restaurants’ theoretical management, Results obtained from the 6 restaurant managements will then be analyzed in accordance to the favors of the 9 respondents. The highest number of votes on each theoretical management determines its true orientation. The implemented method used to obtain the results was selective sampling. Hence, all 9 subjects participated in the online survey were well acquainted. They are friends, classmates, colleagues, and relatives who are familiar with working in the hospitality industry and some of them are currently majored in the graduate hospitality management program. In order to state their work experience clearly, the table below is given to present each of the subject’s work and education background briefly.

Table 3-1 Participants’ Background Information Respondents Education Work Experience Position Female Graduate degree Fluent Catering staff Female Graduate degree Rookie Hotel staff Female Graduate degree Rookie Traveling Agent Female College degree Veteran Restaurant staff Male Graduate degree Veteran Airline staff

Source: Table of this research was made by oneself (continue onto next page)

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Table 3- 1 Participants’ Background Information (continued) Respondents Education Work Experience Position Male Graduate degree Rookie Hotel staff Male Graduate degree Fluent Hotel staff Male Graduate degree Fluent Catering staff Male College degree Veteran Restaurant Staff

Source: Table of this research was made by oneself

Note: level of work experience in ranking is measured in 3 tiers: Rookie to Veteran. Rookie= lowest, Fluent= middle, and Veteran= highest

According to Table 3-1, the samples consisted of 4 female respondents and 5 male respondents who participated in filling out the survey. The majority of their age is around 24 to

31 years old. Their previous occupations had been related to tourism, and the hospitality industry particularly in catering and traveling services. Hence, they are knowledgeable due to their work experience. Among the 9 respondents, 7 of them whom are graduate students majoring in the hospitality and catering program at a graduate institution in Taiwan so they have the most updated knowledge on the subject from studying and working as interns. Finally, the last two respondents were undergraduate students whom have worked at the same restaurant together for many years as colleagues, and the job made them skillful for being experts in their respective fields in the catering industry due to their vast experience in the past.

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Section IV Research Analytical Process

Figure 3-1. explains the analytical research process that breaks into 4 stages from preparation to finalization:

Stage 1. begins searching for secondary data in books, scholarly journals, and multiple online sources for a thorough analysis of every useful content.

Stage 2. begins designing and submitting questionnaire survey online to the specific 9 respondents.

Stage 3. begins verifying choices and opinions of each theoretical management is agreeable to one’s interpretation.

Stage 4. is the finalization of placing each management in the corresponding category of

Theory X, Y and XY.

Stage 3: Thorough Stage 1: Secondary Analysis of Returned Data Analysis: books, Questionnaire Survey

scholarly journals, Stage 2: Designed & and online sources Submitted an online Questionnaire Survey to 9 selected respondents Stage 4: Final Placement of Theory X, Y, & XY

Categorization Figure 3-1. Research Analytical Flow Chart Source: Figure of this research was designed by oneself

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Chapter Four

Research Results

The fourth chapter is divided into five sections: inference behind the analytical explanations for obtaining the results, process of obtaining the results from returned questionnaire survey, terminology and original sources stated, final results from the returned questionnaire survey, and content analytical results. For this chapter, all six restaurant chains have been analyzed carefully to determine the outcome of their restaurant characteristics.

Whether they are Theory X, Theory Y or Theory XY oriented management restaurant chained company.

Section I Inference Behind the Analytical Explanations for Obtaining the Results

The following analysis of the six restaurant franchise chains are based on all of the management theories such as SOP, training in management and employment, bonus, rewards, and performance appraisals, EAP (welfares), employee empowerment with limitations, rules and constitutions, learning motivation and self- visitations, creativity, ingenuity and innovation, self- direction and self-control, communication and decentralization, employee engagement to take initiatives, trust and relationships, and abdication through delegation. There are 13 management theories in total which will be explained from a thorough inference standpoint by stating all the detailed facts and logics in how they had led to the final conclusion in Theory X, Theory Y and

Theory XY categorizations.

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1. Standard Operating Procedure is categorized in Theory X management for several reasons.

Firstly, McGregor (1960) had clearly stated that from the manager’s viewpoint in employees, they are inherently lazy and hence everything must be stated with rules and procedures for them to follow. Secondly, SOP usually takes place in factories, logistics centers or in central kitchens.

Theory X workers do not require to do a lot of thinking, all they need to do is to assemble parts in factories under heavy surveillances and close monitoring. For instance, in Din Tai Fung’s central kitchen, every worker must comply with regulation when entering from one work station to another. Their personal hygiene is constantly examined, if they failed to meet standards, they will be punished accordingly.

To make Theory X workers to do their jobs, they are constantly being threatened for punishment if they failed to comply or meet company standards. Theory X workers preferred to be led instead of leading others, they are not ambitious nor willing to climb the promotional ladder. As a matter of fact they refuse to be promoted due to responsibility and other things that come with the position. In other words, they are happy with the way they are now. Changes scare them and so they prefer working within the confined rules and procedures, they feel rather comfortable using their hands than using their intellects to create and innovate or to resolve unexpected situations from customers. Those responsibilities are greatly interested by experienced Theory Y workers. Conceivably speaking, people who are Theory Y oriented would not be interested in working under tight control and so they are most likely not interested in applying jobs to factories or central kitchens. They might feel bored and unchallenged with jobs that are routine and repetitive. But from Theory X workers’ perspective, they will not mind it at all.

2. a) Training (management) is rather interesting, because the concept behind any form of training belongs to Theory X. But in this case, it belongs to Theory Y. The reason being, the

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training is only reserved for employees who have years and years of experience working in the organization and the likeable candidate is usually the favorite worker of the employer. The employer is most likely to coach or to train the worker as an apprentice under his or her wing.

Logically speaking, managers will not train Theory X workers and neither do they want to be trained. This has to do with the inherent behavior that Theory Y workers possess, they are inclining towards the interests in adventures and so they have great ambition to climb the promotional ladder, which the management training program fits their behavior. This is part of the SOP program which eligible candidate must complete for a certain number of academic credits to pass the training and to get the certificate at the end. However it is inclining towards

Theory Y workers’ interest whom have the will to self-improve. b) Training (employment) is categorized in Theory X management. This is the standard form in any training program designed for employees. The basic training includes in performing their duties according to company standards such as carrying trays, filling water, taking orders and memorizing customer preferences, and to learn details of every dish from the menus for a server’s position. Culinary training for chefs in the kitchen, they are to learn and to memorize every dish from the menu and learn to make them. Other training besides serving and cooking, such as the employer of Wowprime, he demands all of his workers to participate in physical training. This management was absolutely perfect for Theory X employees whose laziness must be corrected. Workers who have Theory X personality will have no choice but to participate, because they do not wish to get fired. If they can avoid, they will choose to avoid at any cost. The physical fitness program is rather intensive, it includes triathlon in swimming, running and cycling. Others include rock climbing and hiking. In Dai’s mind when he set the program, he is in fact a sport enthusiast and firmly believes that health is more important than wealth. Hence, that is how the program was introduced, he wants every single worker in his company to stay healthy, fit, and energetic. The company absolutely needed energetic employees to work fiercely, that way

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the performance of the organization will build up. This is part of the SOP program that requires all candidates to participate, regardless of Theory X or Theory Y workers. However this management style is inclining towards Theory X workers as a method to rigorously forcing them to participate in order to correct their laziness and passive behaviors.

In theory, Theory Y oriented workers do not need to be forced or persuaded to participate in sporting events, they are most likely to do it on their own without the company instructing them to do so. However due to the inherent laziness of Theory X workers, this management might work for them.

3. Bonuses, rewards, performance appraisals and recognition are categorized in Theory X management. However this may also be applicable for Theory Y workers, depending on the context from the company’s decision on the type of employees they wish to present the awards to. According to McGregor (1960)’s theory in the very idea of giving away bonuses or rewards to employees is used as a type of motivation. He believes that Theory X workers are only interested in the amount of money they are being paid for. Take Haidilao’s example of dowry, it is a farewell and final bonus reward that the company pays to whom wanted to leave for their own interests or reasons. This clever tactic devised by CEO Zhang Yong is a way to determine the true nature of his employees whether they are either Theory X or Theory Y workers. Those that choose to leave will be automatically rewarded with the final bonus, those that choose to stay will get nothing. For instance, Theory X workers are most likely interested in the idea of being headhunted one day by other companies. The one company that offers the highest remuneration will successfully headhunt them. But in Theory Y workers’ viewpoint, they do not think that way. The most likely way for them to leave the company is not due to high salary offer by another company but rather they may feel their positions in the company are no longer fulfilling when they notice their potentials were greatly underused or they may feel they are not getting the

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respect they deserve from the company. Hence, Theory Y workers are much more honorable than

Theory X workers and they show true loyalty when it comes to saving their beloved company from potential bankruptcy or from economic disasters.

The only exception that Theory Y workers will accept the awards and bonuses is when they truly feel they deserve the recognition for their great performances serving for the company.

And so for the sake of ritual by organizing galas, presenting awards and offering stocks such as in

McDonald’s case. Theory Y workers believe it is important that their recognition to get noticed by the organization in order to earn a chance of getting promotions.

4. Employee Assistance Program (welfares) is categorized in Theory Y management as a type of referral service that the company provides its employees in which they can seek professional treatment for emotional problems or substance abuse. In this case, Din Tai Fung restaurant hires professional masseuses, nutritionists, and counsellors to assist its employees physically and mentally to achieve greater physique. Both Wowprime and Haidilao also provide similar program that can treat each and every employee like a family member. Outback Steakhouse’s EAP provides a complete welfare system that offers health insurance for the retirement plan. The welfare program takes care of employees’ health-related behaviours in ways to reduce health risks in the long term.

5. Employee Empowerment with Limitations and Restrictions is a great example of contradiction whether employers should wholeheartedly entrusting their employees without any doubts. But by doing do so may be too risky. It may costs the company great fortune if employees were found dishonest and so the entire notion of trust must be taken seriously under the company and shareholders’ considerations. That being say, the whole dilemma behind this contradiction was not explained by McGregor himself. But after reading and analyzing the company case studies that presented such management must have their reasons to do so. Hence,

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the whole idea of not being able to or completely abdicate and empower the authority to their employees, is simply to protect company’s fortune. This is certainly caught in between the borderline of trust and distrust. Theory Y workers are most certainly trustworthy comparing to

Theory X workers who are most certainly being distrusted by their managers for knowing their behaviours.

If Theory Y workers are considered trustful partners and colleagues, then they should not be doubted in any way, but still in some company’s viewpoint they need to set up precautionary measures just in case of an unlikely event will occur. Therefore, this type of management is termed Theory XY. For instance, Haidilao’s limited employee empowerment give workers the right amount of authorizations such as customizing dishes, waiving off cheques or giving away free desserts. All of those reasons behind the choices must be stated clearly why the service was being handled the way it was on that day. If the explanations were reasonable and acceptable, then no one will be punished or being held accountable. However in T.G.I. Fridays’ case, its employee empowerment is severely limited with little rights in dish customizations but has plenty of rights in adjusting employees’ work schedule.

If there are no limitations or restrictions attached to the word ‘employee empowerment’, then the management is definitely categorized in Theory Y management. For instance, in

Outback Steakhouse’s case, it did not mention anything about restrictions or limitations for its employee empowerment, hence it belongs to Theory Y management.

6. Rules and constitutions are definitely categorized in Theory X management, and they are the type of management found in Wowprime where other companies would consider them to be a direct violation of invading employees’ personal privacies and so they would not dare to include that in their company management, especially in Western cultures, freedom of speech and

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personal privacies are consider sacred and should not be tempered with. Otherwise the company will be risked of getting sued.

For instance, enforcing employees not to purchase extravagant items or cars over 1.5 million NT and not allowing extramarital affairs, these topics are very personal and sensitive to talk about. One personally does not think any company have the right to tell workers what they should or should not do outside of work. In Western business ethics, when a person finishes work and ready to leave, the boss has no rights to tell that person what to do, he or she only has the right to do so when he or she resumes to work the next day. The moment he or she finishes work, that time alone belongs to him or her.

7. a) Learning motivation is categorized in Theory Y management which is a type of collective learning and group learning experience. A person who has the inhere ability to self-discipline can motivate oneself to commit goals or to accomplish tasks in his or her own favor. For instance, working at Haidilao, workers can use the available resources for their own advantage to learn what is helpful for them later in life. Most of the workers at Haidilao are from rural areas and they are poor to pay for their own tuition to learn trades or skills. The available resources for them to access include computers and cars. Workers can use computers to practice their typing and they can also practice driving when they are asked to make deliveries.

Theory Y workers are very much eager to learn whenever they have the chance. Unlike

Theory X workers, they will avoid learning if possible. Because in their mind, the more they learn of new skills, the more jobs and responsibilities will be given to them from their boss. In other words, they feel they are being taken advantage of. But in Theory Y workers’ mind, they see every job opportunity as a practice for them to self-improve. Another advantage working at

Haidilao, the company asks for outstanding employees to form unofficial study groups as a way to motivate or to influence others by welcoming them to join their group discussions. Any

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discussion that is useful towards the company’s benefit can be used. Whose group discussion or plan that has chosen by the company is sincere compliment and this is a positive reinforcement for them to continue improving the quality of their ideas. b) Learning through visitations is categorized in Theory Y management, this is one great learning method devised by Dai Shengyi from Wowprime. The company organizes trips around the world where workers can have a direct contact with the things they see and experience. Those are the type of things that one cannot learn from textbooks in schools. Particularly, workers must cover their own traveling fares, therefore the company will not declare any expenses. Hence,

Theory X workers will not be voluntarily interested if they must cover their own expense and especially they are being asked to learn and share when returning to work by giving a full hour presentation for the whole company to listen. They may find the ordeal too cumbersome, and so for them to avoid traveling with the company is a smart choice. But in their positions, they have no other choices but to participate the event.

Dining numerous restaurants across the globe is how the team later develop their brand names for Wowprime. If the proposal get chosen, then the brand will be made into a restaurant. Only

Theory Y workers will be interested in traveling the world with their own expenses in learning everything they see and experience. Because they have the ambition to return to Wowprime and pitch their ideas for the brand they conceived and most of all, Theory Y workers wish to become the new managers of his or her newly established branded restaurant.

8. Creativity, ingenuity, and innovations are most certainly categorized in Theory Y management, because Theory Y workers are inherently enjoying brainstorming new ideas that can be used for the benefit of the company. Companies such as Wowprime and Haidilao wanted their workers to use their brains more often than their hands. Particularly Haidilao stated that the company hires workers for using their brains because the brain is the most valuable organ in a

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person and could be a great advantage for any organization to hire workers who are intelligent and motivated enough to create innovative products that show technical advancement. Creative teams organized in Haidilao allow each team to develop ideas or concepts for the company. The chosen idea from the winning team would be immediately implemented throughout the company.

The wining team will then be rewarded with additional bonuses for their contribution. In return,

Theory Y workers will get the sense of accomplishment and this in effect will push them even further in hopes to achieve greater perfection. This type of competition among teams is healthy because it motivates every team to work their best to win the competition, it is the honor and recognition they pursue.

9. Self-direction and self-control is categorized in Theory Y management, because the notion of the will and desire to promote through the hierarchal ladder is more inclining towards Theory

Y workers who are ambitious to continually hoping to self-improve through labor experiences.

The bottom-up system of management hierarchy is the perfect solution for Theory Y workers to go through every single position to become more familiar with the restaurant industry. Although

Theory X workers must comply with the rules after being recruited to the company, they really do not want to go through so many troubles. But if they can avoid, they will do so. Theory X workers are not the kind of people that are self-disciplined and self-directed in guiding their own future in life. Whatever they have now in the present will fulfill them regardless. In other words if a manager is to promote a Theory X worker, the chances of him or her to get a promotion is very low comparing to the self-ambitious Theory Y workers.

10. Communication and decentralization are categorized in Theory Y management and are aiming at the future of managers in a leadership role, simply because they have to deal with a great amount of trust established by managers to employees. Therefore all managers should be trustworthy in order to make a positive reinforcement to their employees. For instance, a manager

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is like the President of the country, and the workers are the citizens of the country who have high hopes for the President to do well in leading the nation. Theory X workers cannot become managers or leaders, because they are untrustworthy, inherently unambitious and lazy to work.

Decentralization is the highest empowerment given from above to regional managers, it has to deal with trust and the ability that the regional managers proven to have in their work performance serving for the mother company. Work performance can show credibility and can be used as a credential in the name of trust. That name of trust will give the managers the power of decentralization. Regional managers can speed up decision making through streamlined communications and they also can use that power to make important decisions on the purchase of real-estate or on licensing rights. Those are the types of authority that Theory X managers will never have and so Theory Y managers are often the ones to be given with such powerful authority. They are easily more entrusted than Theory X managers.

11. Employee engagement to take initiatives is categorized in Theory Y management, because it encourages all timid workers to step out of his or her comfort zone in order to deal with unexpected situations such as dealing with disgruntle customers without summoning managers for help or to speak ones’ mind in a truthful manner without the fear of being punished. In this case, Theory Y workers would not need to be enforced to comply with such a rule. Because they have the inherent ability to speak their mind and do not afraid to potentially offend superiors if he or she showed disagreement to the discussions or plans that are suggested. However Theory X workers would rather not share any suggestions because they do not want to take any form of responsibility if they made a terrible decision or they do not want to take any chances or risks if they knew the decision that the manager or the superior made was terrible, they are too afraid to speak their minds why they were against or disagree with the idea. Because they do not want to get fired for confronting the superiors since in some cultures such as South Korea, the freedom of

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speech or expression is limited. This theoretical management was developed by McDonald’s in the hope of converting all timid workers into more extroverted like Theory Y workers.

12. Trust and relationships are categorized in Theory Y management, simply because they are the type of management being used in all 6 restaurant franchises. Trust is very important for all restaurant industry as it establishes a firm foundation that is unshakeable. For instance, managers prefer to do business with suppliers, shareholders, partners and workers who show honesty and integrity. Those type of people should be inclining towards Theory Y behavior since it is their nature not to deceive, steal, or to manipulate others to do what they want. They will not take shortcuts to achieve goals. By choosing to do business with honest people will make the company look good and feel right. Also the brand name of the company means good faith of selling and providing services and products to customers. The brand gives customers the sense of assurance that the product or service they received is genuine.

To sum up the term in a few words, honesty and integrity are the most sacred moral ethics in any business conduct and Theory Y people are much more reliable and trustworthy than

Theory X people. In McDonald’s case, to make a positive example of honesty, the manager must project the role of honesty in the eyes of his or her employees. So anything that the manager says or makes promises to employees, he or she must honor that commitment. In return, the manager will gain the respect from his or her employees in the long-term working relationship.

13. Abdication and delegation are categorized in Theory Y management, because a company that adopts abdication will ignore the presence of hierarchy simply due to entrusting their employees will do the right thing and make the right decision. Within an abdicated organization, every employee in the company is entrusted, they are able to share their thoughts and opinions to address the current issue discussed in the boardroom. They can feel free to disagree or to make suggestions if necessary. There is no power distance in the abdicated business culture between

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the lowest ranking and the highest ranking employee. Because everybody is pursuing the common goal for the future of the company. Nobody will be viewed or treated as Theory X worker because the rule says it all, every worker should not be discriminated or viewed differently in the workspace. They are treated equally in the company and so everybody has the right to express their feelings if they felt being mistreated by voicing their grievances or by expressing their opinion if they think it can help the company in any way. Abdication has been practiced successfully in Outback steakhouse of South Korea, because of the introduction of

American business culture, every staff in the company can participate in the board meetings with high ranking superiors and discuss the future plans of the company with them. Theory X workers will not care less about the freedom of expression in the workplace. All they would care about if they can finish work early and get paid on time.

Section II Process of obtaining the Results from Returned Questionnaire Survey

All 6 restaurants’ theoretical orientations are based on the returning questionnaire survey from the 9 respondents’ results. The most votes from each management category would determine the restaurant’s true orientation on Table 4-1. For example, the votes on each grid would show the amount of Theory X, Y and XY chosen by the 9 respondents. The greater amount of votes from that grid determine the chosen result by the general voters. On each row. it shows a restaurant chain with its theoretical managements, and for every grid has a given name for its management. For instance, Din Tai Fung’s SOP from the first row has 7Xs, and 2Ys, and so the answer to that restaurant orientation is Theory X, because it has more Xs than Ys. And the rest shows a similar pattern for indicating the result from each management type.

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Table 4- 1 Results based on Returned Survey Theory X and Theory Y Management Categorization Chart SOP EAP LTV BRA ET Results Balanced

Set of Din Tai 2Y 1XY 2XY 1Y 2Y 1XY Fung 7X 8Y 7Y 3X 7X 2X Theory X, Y, & XY 5XY 2Y Oriented company

(X) (Y) (Y) (XY) (X)

Wow EMT EAP LTV BRA Self-Imp R&C CII PhyTr Results prime (SOP) (SOP) 2X 1Y 1XY 2XY 2X 3XY 2XY 2XY 2Y 2XY 3X 8Y 7Y 2Y 6Y 7X 7Y 2XY 4Y 5XY 5XY 5Y (XY) (Y) (Y) (XY) (Y) (X) (Y) (X) Theory Y Oriented Company SOP EAP EM LM B&A SR AM PE CII EE

1Y 3XY 1X 1X 2X 1X 1Y 3XY 9Y 3X Haidilao 2XY 6Y 3XY 2XY 2XY 3XY 2X 6Y 6Y 6X 5Y 6Y 5Y 5Y 6X

(X) (Y) (Y) (Y) (Y) (Y) (X) (Y) (Y) (Y)

SOP EM EE B&A Results Results

T.G.I. 9X 2Y 2Y 2Y 4X 2X Fridays 3XY 2XY 3XY 8Y 4X 5X 4X

(X) (X) (X) (X) Theory X Theory Y Oriented Oriented Company Company From From (T.G.I. (Haidilao) Fridays) Sources: Table of this research was made by oneself (continue onto next page)

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Table 4- 1 Results based on Returned Survey (continued) Theory X and Theory Y Management Categorization Chart Outback DO COS CII TH BABC GOR EAP ET RWH Results Steakhouse 1X 1X 3XY 9Y 9Y 1XY 3XY 3XY 1Y 1X 3XY 1XY 6Y 8Y 6Y 6X 3X 1XY 5Y 7Y 5XY 7Y

(Y) (Y) (Y) (Y) (Y) (Y) (Y) (X) (XY) Theory Y Oriented Company McDonalds T&R MT SOP LBE Engage Comm R&A Results Theory Y 3XY 1Y 3Y 3XY 2XY 2XY 1X 2X Oriented 6Y 3XY 6X 6Y 7Y 7Y 3XY 5Y Company 5X 5Y (Y) (X) (X) (Y) (Y) (Y) (Y)

Source: Table of this research was made by oneself

Section III Terminology and Original Sources Stated

All 29 terminologies below were originated from books and literature reviews that were analyzed from the 6 restaurant chains. In order to make them universally applicable to one and other, a given term must be standardized as well. However there is one terminology that was borrowed from a textbook called “Fundamentals of Human Resource Management” by (Noe,

Hollenback, Gerhart, & Wright, 2014). That is “Employee Assistance Program” from the index which was found. The description of the terminology matches the restaurant management’s given theory, and so the term was borrowed to use it universally to describe that type of management which several restaurant chains have used such as Din Tai Fung, Wowprime, Haidilao, and

Outback Steakhouse from Table 4-1.

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Note: Terminology on Table 4-2: SOP (Standard Operating Procedure), EAP (Employee

Assistance Program), LTV (Learning Through Visitations), BRA (Bonuses, rewards, and appraisals), B&A (Bonuses & Appraisals), ET (Employment Training) Self-Imp (Self-

Improving), R&C (Rules and Constitutions), CII (Creativity, Ingenuity, Innovation), PhyTra

(Physical Training), EM (Employee Management), LM (Learning Motivation), SR (Sweeping

Reform), AM (Apprentice Model), PE (Performance Evaluation), EE (Employee

Empowerment), DO (Decentralized Organization) (Decentralization), COS (Customized

Operation Strategies) (EE), TH (True Hospitality) (Delegation), BABC (Blending American

Business Culture) (Abdication), GOR (General Organizational Resources) (Trust), R&A

(Rewards & Appraisals), RWH (Rewards, Wages, and Hiring), T&R (Trust and relationship),

LBE (Leading By Examples), Engage (Courage), Comm (Communication), and MT

(Management Training), EMT (Employee & Management Training).

Table 4-2 Terminology and Original Sources Stated Terminology Authors (Years) Original Statement & Terms Interpreted Terminology 王一芝（2014） 高品質控管(中央廚房)

王 梅（2000） 品質控管

王國雄（2010） 王品大學 (Employee &

Manager Training) EMT

Zhao (2011) Logistics centers Standard SOP Operating Procedure Lashley (1999) Standardized waiting services

Facella & Genn (2009) Standards: never be satisfied

(continue onto next page)

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Table 4- 2 Terminology and Original Sources Stated (continued) Terminology Authors (Years) Original Statement & Interpreted Terms Terminology 王一芝（2014） 對員工的好：不只是薪水高

王國雄（2010） 一家人主義

黃鐵鷹（2014） 把員工當成家裡人 Employee Assistance EAP Program Lee, Khan, & Ko (2008) Health Insurance & benefits

Noe, Hollenbeck, Employee Assistance Gerhart, & Wright Program (2014) Learning LTV 王一芝（2014） 帶他們逛故宮，看花博開眼 Through 界 Visitations

Decentralization Comm Facella & Genn (2009) Communication and Communication 王國雄（2010） 王品憲法 Rules & R&C Constitutions 黃鐵鷹（2014） 員工入職培訓：管理晉升 Employee EM Zhao (2011) Performance Evaluation Management through Management Training DO Lee et al. (2008) Decentralized Organization Communication

LM 黃鐵鷹（2014） 腹有詩書氣自華 Learning Motivation SR Zhao (2011) Sweeping Reform Sweeping Reform T&R Facella & Genn (2009) Honesty and integrity, and Trust and relationships relationship LBE Facella & Genn (2009) Leading By Examples Delegation and abdication Innovative Human Resource Rewards, Wages, RWH Lee et al. (2008) Management and Hiring

(continue onto next page)

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Table 4- 2 Terminology and Original Sources Stated (continued) Terminology Authors (Years) Original Statement & Terms Interpreted Terminology B&A 黃鐵鷹（2014） 嫁妝 Bonuses & Appraisals Self-Imp 王國雄（2010） 自我提升，積極參與國際級 Self-Improving 競賽 PE Zhao (2011) Performance Evaluation Management Training 陳芳毓（2010） 舞動睡獅的『醒獅團計劃』

Zhao (2011) Creativity team Creativity, CII Ingenuity, Innovation Lee et al. (2008) Innovative Human Resources Management

魔鬼練營 PhyTr 王國雄（2010） 日行萬步，健康動起來 Physical 做個三鐵勇士 Training 登百嶽

王 梅（2000） 九十分師博 Employment ET Lee et al. (2008) Training Programs Training

MT Facella & Genn (2009) Hamburger University Management Training

COS Lee et al. (2008) Customized Operation Employee Strategies Empowerment BRA 王一芝（2014） 月年度獎金：員工評價 Bonus, Rewards, Appraisals

AM Zhao (2011) Apprentice Model Employee Training (continue onto next page)

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Table 4- 2 Terminology and Original Sources Stated (continued) Terminology Authors (Years) Original Statement & Terms Interpreted Terminology Zhao (2011) Employee Empowerment EE Employee Empowerment Lashley (1999) Limited Employee Empowerment TH Lee et al. (2008) True Hospitality Delegation

BABC Lee et al. (2008) Blending American Business Abdication Culture

GOR Lee et al. (2008) General Organizational Trust Resources Engage & Facella & Genn (2009) Courage Involvement Initiation R&A Facella & Genn (2009) Recognition and Awards Rewards & Appraisals EMT 王國雄（2010） 王品大學 (Employee & Wowprime Manager Training) EMT University Source: 王一芝 (2014) 。鼎泰豐，你學不會：台灣國際化最成功的餐飲品牌。臺北：遠見。 王 梅 (2000) 。鼎泰豐傳奇。臺北市：天下文化。 王國雄 (2010) 。敢拚．能賺。愛玩：王品，從細節中發現天使。臺北市：遠流。 黃鐵鷹 (2014) 。海底撈你學不會。臺北市：大地。 陳芳毓 (2013) 。王品：不可思議。臺北市：巨思文化。 Lashley, C. (1999). Empowerment through involvement: a case study of TGI Fridays Restaurants. MCB University Press, 29(6), 791-815. Lee, K, Khan, M.A, & Ko, J.Y. (2008). Outback Steakhouse in Korea: A Success Story. Cornell Hospitality Quarterly, 49(1), 62-72. Noe, R.A., Hollenbeck, J.R., Gerhart, B., & Wright, P.M. (2014). Fundamentals of Human Resource Management: Fifth edition. New York, NY: McGraw-Hill. Facella, P., & Genn, A. (2009). Everything I know about business I learned at McDonald’s. New York, NY: McGraw-Hill. Zhao, Z. (2011). The Haidilao Company. Tsinghua University, 11(4), 1-23.

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Section IV Final Results from the Returned Questionnaire Survey

After submitting the questionnaires to the 9 respondents who completed the survey had all returned their response. There were 43 questions in total, divided into 6 sections for each restaurant franchise. The questions were based on the 13 management theories that were commonly practiced by the 6 restaurants in general. They are SOP (Standard Operating

Procedure), training, welfares, bonuses, rewards and appraisals, employee empowerment with/without (limitations), rules and constitutions, learning motivation, learning through visitations, creativity, ingenuity, and innovation, self-direction and self-control, employee engagement to take initiatives, communications and decentralization, trust and relationships, and abdication and delegation.

Table 4-3 Final Results from Theory X and Y Restaurant Categorization Names Theory X Theory Y Theory XY

Din Tai Fung XX YY XY

Wowprime XX YYYY XY, XY

Haidilao XX YYYYYYYY NUL

T.G.I. Fridays XXXX NUL NUL

Outback Steakhouse X YYYYYYY XY

McDonald’s XX YYYYY NULL

Source: Table of this research was made by oneself

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According to Table 4-3, the final results of the 6 restaurant chains’ theoretical management orientation are based on Table 4-1, and the overall summations below are calculated in total for each theoretical management which is based on Table 4-1 as well.

1. SOP has 36Xs 12Ys and 9XYs from 5 restaurant management theories. Theory X was unanimously favored by the respondents which makes it the dominant result.

2. Training has 26Xs 16XYs, and 6Ys from all 6 restaurant management theories. Theory

X was unanimously favored by the respondents which makes it the dominant result.

3. EAP (welfare) has 28Ys, and 8XYs from Din Tai Fung, Wowprime, Haidilao, and

Outback Steakhouse. Theory Y was unanimously favored by the respondents which makes it the dominant result.

4. Bonuses, rewards and appraisals have 15Xs, 23XYs, and 16Ys from Din Tai Fung,

Wowprime, Haidilao, Outback Steakhouse, and McDonald’s. This makes Theory XY the dominant result with 8 more votes than Theory X, and 7 more votes than Theory Y.

5. Employee empowerment with or without limitations has 9Xs, 15Ys, and 3XYs from

Haidilao, T.G.I. Fridays, and Outback Steakhouse. This makes Theory Y the dominant result with 6 more votes than Theory X and 12 more votes than Theory XY.

6. Rules and constitutions have 7Xs and 2XYs is the only category from Wowprime’s management theory. This makes Theory X the dominant result with 5 more votes than Theory

XY.

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7. Learning through motivation has 1X, 6Ys and 2XYs is the only category from

Haidilao’s management theory. This makes Theory Y the dominant result with 5 more votes than Theory X and 4 more votes than Theory XY.

8. Learning through visitations has 14Ys, and 4XYs is the category from both Din

Tai Fung and Wowprime’s management theories. Theory Y was unanimously favored by the respondents which makes it the dominant result.

9. Creativity, ingenuity, and innovation have 22Ys, and 5XYs is the one category from

Wowprime, Haidilao, and Outback Steakhouse’s management theories. Theory Y was unanimously favored by the respondents which makes it the dominant result.

10. Employee management has 1X, 5Ys, and 3XYs is the only category from Haidilao’s management theory. This makes Theory Y the dominant result with 2 more votes than Theory

XY, and 4 more votes than Theory X.

11. Employee engagement to take initiatives has 7Ys, and 2XYs is the only category from

McDonald’s management theory. Theory Y was unanimously favored by the respondents.

12. Communications and decentralization have 11Ys, and 5XYs is the one category from

Outback Steakhouse, and McDonald’s. This makes Theory Y the dominant result with 6 more votes than Theory XY.

13. Trust and relationship have 6Ys, and 3XYs is the only category from McDonald’s management theory. This makes Theory Y the dominant result with 3 more votes than Theory

XY.

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14. Abdication and delegation have 6Ys, and 3XY is the only category from McDonald’s management theory. This makes Theory Y the dominant result with 3 more votes than Theory

Section V Content Analytical Results

For the first half of the three restaurants: Din Tai Fung, Wowprime, and Haidilao. It is determined that Wowprime and Haidilao has the most Ys, comparing to Din Tai Fung. The results are Wowprime has 2Xs and 4Ys, and 2XYs. Din Tai Fung has 2Xs, and 2Ys and 1XY, and Haidilao has 2Xs, and 8Ys.

Haidilao stands in first place for being the one company that has the most Ys which are based on management training, rewards, appraisals, EAP welfares, creativity, and learning motivation. This makes Haidilao company a Theory Y management oriented company that is extremely famous for its resigning bonus program (dowry) and its generous EAP welfares. This sums up that Haidilao is very interested in turning every employee into a self-disciplined and self-controlled individual working productively for the company. This is part of its business leadership and management to lead these employees as they are well mannered.

Wowprime stands in second place for having the most Ys and fewer Xs. This makes

Wowprime for being a Theory Y oriented company aiming at SOP in physical and mental training, but at the same time offering a generous lifetime of EAP welfares to their employees.

Din Tai Fung stands in third place for being the only company that has a balanced set of management. This makes Din Tai Fung for being a balanced set management oriented company that is well-known by the media with its strong emphasizes on SOP, details and perfection. It was also reported the employees are very hard working individuals, and so the owner treats them like royalties. They are offered with the best facility, and services than other companies. Most of all,

48% of the net profit has repaid to their employees. Therefore Din Tai Fung likes to use bonuses

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and rewards as a form of performance appraisal to entice or to persuade their workers to continue working hard. Only Theory XY is based on performance appraisals toward hard working Theory

Y employees and hope to motivate Theory X employees as well in EAP welfares, and learning through visitations. This sums up Din Tai Fung as a SOP oriented company that heavily emphasizes on quality of their products and services. So it will use most of its rigorous training programs to make Theory Y workers to become more perfected in their job position. And for the hard work they did for the company will be rewarded with bonuses and vacations.

For the second half of the three restaurants from North America: T.G.I. Fridays, Outback

Steakhouse, and McDonald’s. It is determined that T.G.I. Fridays has the most Xs, comparing to

McDonald’s, and Outback Steakhouse. On the other hand, Outback Steakhouse has the most Ys, comparing to McDonald’s, and T.G.I. Fridays. The results are T.G.I. Fridays has 4Xs, 0Y, and

0XY, Outback Steakhouse has 1X, 7Ys, and 1XY, and McDonald’s has 2Xs, and 5Ys.

T.G.I. Fridays stands in first place for having the most Xs with no Ys and no XYs. This makes T.G.I. Fridays for being a Theory X management oriented company. Based on the case study, the company is studied for its employee empowerment and what the limitations or restrictions are. However, the analysis of the content indicated that T.G.I. Fridays is rather a

Theory X oriented company. Most of the Xs are based on employee management, recruitment, employment training, induction, appraisals and rewards for X workers, and standard operating procedure. Clearly, the company aims at quality and service control through training and induction. Those that passed the recruitment will be managed and trained. Theory X indicates the limitation of not giving employees full access to empowerment. This is only to protect the company’s resources and assets.

Outback Steakhouse stands in second place for having just one X and having the most

Ys. This makes Outback Steakhouse a Theory Y management oriented company. Most of its Ys

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are based on employee empowerment, decentralization, creativity, ingenuity, and innovation, delegation and abdication (discarding hierarchy), trust and relationships. This sums up Outback

Steakhouse as an employee empowered driven company that heavily relies on trust and by blending American business culture into a foreign country such as in South Korea.

The main reason for its great success of the restaurant chains in South Korea is because it is largely based on Theory Y management rather than Theory X management that is commonly practiced by most business firms in South Korea. It was the freedom and empowerment that the

American business culture introduced to South Korea which given them the access to unlimited creativity and innovations in the human resource department. They are free to create dishes for menus that are suitable for its local market. But evidently, it was abdication that laid the foundation in which hierarchy is no longer relevant, because everyone in the organization plays the role of a manager in making decisions that shows benefits for the company.

McDonald’s stands in third place for having the least Xs and the most Ys. This makes

McDonald’s for being a Theory Y management oriented company. Most of the Ys are based on management training, decentralization, trust, abdication, and delegation from the leading by examples principle that as a leader, you are the central role model to your employees, so everything you do at the restaurant will set up an immediate example for them to follow. This sums up McDonald’s as a standard operating and decentralized organization based on quality service control that can be adapted from a training institution like Hamburger University where future managers will learn to lead their employees by examples through a trustworthy relationship in the workplace.

McDonald’s is quite generous when it comes to performance appraisals, outstanding and contributing employees are rewarded with stocks! For instance, Ray Kroc has given one million dollar US in stock each to his partner Fred Turner and his wife, and distributed the rest to his employees. Lastly, one of its Theory Y principles, honesty and integrity (Trust) is the important

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foundation that Ray Croc has laid for the business conduct. He believes that by working and associating with people that have the right intention to do business, will make a positive influence on employees that they also want to do their jobs in a sincere way.

To conclude all six restaurants’ business managements, each of these restaurant shares great similarities in their business conduct. For instance, McDonald’s, Din Tai Fung, and

Wowprime share the same business conduct of focusing particularly in standard operating procedure to bring out the exceptional quality in products and services to their customers. On the other hand, Outback Steakhouse, T.G.I Fridays, and Haidilao emphasize in empowerment; how much authority and delegation that the company can abdicate to their employees. However some of these restaurants such as Haidilao, Wowprime, Outback Steakhouse, and Din Tai Fung may also have been inspired by several of McDonald’s Theory X and Theory Y managements. For instance, Haidilao and Wowprime established their own university program , which is an identical training managerial practice to McDonald’s “Hamburger University” from Theory X, and as for Outback Steakhouse’s Decentralized Organization, it has almost the same set up to

McDonald’s Decentralization from Theory Y. Other similarity from Outback Steakhouse’s management included “Grass Roots Marketing” which shares a common practice towards

McDonald’s “Ronald McDonald’s House of Charities”. Both managerial practices focus on organizing activities and food donations for its local communities as a way to establish good customer relationships which eventually helped attract local residents. This is one type of marketing ploy to gain customer awareness for its products and services. Another similar practice that Haidilao got inspired from McDonald’s is called the “Apprentice Model” which is an identical management to Mentorship that McDonald’s emphasizes on nourishing mentor and apprentice’s relationship both in and off work. Besides coaching the apprentice to do his or job, the mentor may act as a guidance counsellor who provides solutions to social problems if the apprentice encounters one. Finally, Din Tai Fung strongly emphasizes SOPs locally and overseas

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like McDonald’s would do to ensure their QSCs are standardized in all its locations worldwide by conducting regular inspections.

In closing, McDonald’s is a commercially proven successful business organization that will inspire other firm to emulate or to take lessons from.

Ultimately, the end result from all of these restaurant managers hope to expect from their employees is that they can provide a customized and a unique service or product experience to customers, instead of being too rigidity and offering too “mechanical” services from most standard operating procedural restaurant chains in the foodservice industry around the world.

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Chapter Five

Conclusion and Suggestions

The fifth chapter concludes the thesis by locating the primary findings in Theory X,

Theory Y, and Theory XY from the six major restaurant chains. The purpose is to carefully analyze the appropriate theoretical managements of X and Y that are suitable of implementing into an existing independent restaurant in Canada. This particular restaurant is actually run by one’s parents. So there are strong interest and motivation in building this thesis that it can be one day fully realized in one’s part. The restaurant’s name is Takara, a Japanese cuisine that had a long history when it first opened to the public in 1992. The seating capacity of this restaurant can hold 48 tables and can be seated with 122 people including sushi bar. It offers a cozy Japanese dining experience that most customers can feel the warmth and intimacy that the atmosphere of the restaurant projects.

Chapter five is divided into three sections: primary findings in Theory X, Theory Y, and

Theory XY, the Implementation of the Ten Chosen Theory X and Theory Y Managements in

Takara Japanese Cuisine Restaurant , and the Conclusion on Takara Japanese Cuisine

Restaurant’s Theoretical Management Orientation.

Section I Primary Findings in Theory X, Theory Y and Theory XY

According to Table 5-1 below, there are 10 theoretical managements carefully chosen from the 5 restaurant chains: Din Tai Fung, Wowprime, Haidilao, Outback, and McDonald’s that can be implemented into Takara restaurant managerial setting. These selected managements are appropriate to use in a small independent restaurant such as Takara. The purpose and usage of these 9 managements will further be explained on Section III the implementation of the chosen

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Theory X and Theory Y managements in Takara Japanese cuisine restaurant.

Table 5-1 Ten Chosen Theoretical Managements for Restaurant Implementation Theory X Theory Y Theory XY Apprentice Model Employee Assistance Recognition and Bonuses and (Haidilao) Program (Din Tai awards Performance Fung) (McDonald’s) Appraisals Management Employee (Wowprime) Training Empowerment Abdication (McDonald’s HU) (Haidilao) (McDonald’s)

Physical Training Customized Operation (Wowprime) Strategies (Outback) Standard Operating Procedure (Din Tai Fung) Source: Table of this research was made by oneself

The implementation of these particular 10 selected theoretical managements in Table 5-1 is explained in further details in section II of Chapter 5. Why they are suitable and necessary to be applied in a standalone restaurant such as Takara Japanese Cuisine Restaurant in Montreal,

Canada. Besides being implemented for Takara catering managements, they can also be suitable to apply in other restaurant business as well.

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Takara Japanese Cuisine Restaurant’s Photos Inserts Images (Figure 5-1 to 5-7 ) are the Sole Property of Takara Inc. And Images (Figure 5-8 & 5-9) are the Sole Property of Le Cours Mont-Royal

Restaurant Brand name

Figure 5-1. Logo and Sign Source: Restomontreal.ca (2015). Takara images retrieved from http://www.restomontreal.ca/en/998/Takara

Restaurant Décors

Figure 5-2. Sushi bar (front) and (side) Source: Restomontreal.ca (2015). Takara images retrieved from http://www.restomontreal.ca/en/998/Takara

(continue onto next page)

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Restaurant Décors (continued)

Figure 5-3. Dining area (front) and (side) Source: Restomontreal.ca (2015). Takara digital images. retrieved from http://www.restomontreal.ca/en/998/Takara

Figure 5-4. Tatami room Source: Restomontreal.ca (2015). Takara digital images. retrieved from http://www.restomontreal.ca/en/998/Takara

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Takara Menu

Figure 5-5. Traditional Takara Sushi Platters Source: Restomontreal.ca (2015). Takara digital images. retrieved from http://www.restomontreal.ca/en/998/Takara

Figure 5-6. Rainbow and Caterpillar Maki Source: Restomontreal.ca (2015). Takara digital images. retrieved from http://www.restomontreal.ca/en/998/Takara

Figure 5-7. Sushi Champaign and Eurasian Fusion Source: Restomontreal.ca (2015). Takara digital images. retrieved from http://www.restomontreal.ca/en/998/Takara

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Exterior & Interior shot of Le Cours Mont-Royal

Figure 5-8. Interior shot of Le Cours Mont-Royal Source: Grandprixmontreal.com (2015). CMR digital image. Retrieved from http://www.grandprixmontreal.com/shopping/cmr/cmr.php

Figure 5-9. Exterior and Interior shot of Le Cours Mont-Royal Source: Tripadvisor.com (2015). LCMR digital image. Retrieved from http://www.tripadvisor.com

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Section II The Implementation of Ten Chosen Theory X and Theory Y Managements in Takara Japanese Cuisine Restaurant

Takara Inc. was officially established in 1992 by a and Taiwanese immigrant couple who love gourmet. The reason they decided to run a Japanese cuisine restaurant instead of

Chinese cuisine restaurant is because both owners knew Japanese culture very much when they attended college together in Japan. The Japanese connection had somehow drew them together and 20 years later when moving to Canada for a new life, they decided to run a restaurant like most Asian immigrants would do in those periods. In order to observe the locate market, the couple dined at every type of Asian restaurant and they found out 48% of the market was mostly

Chinese restaurants and the remaining 52% of the Asian restaurants were made up of Japanese,

Thai, or Vietnamese, Korean and etc… Since Chinese restaurants had already dominated the catering market so it would be a risky business to enter the market that is saturated and be eaten alive! So the couple decided to choose Japanese cuisine, because it was fresh, trendy and new at the time. Before opening an authentic Japanese restaurant, the couple opened a Takara Japanese

Teriyaki food stand in Plaza Côte-des-Neiges’ in 1992, the cuisine was to grill or broil meats and vegetables with and seasonings. Back in those days, not many locals had ever try or dare to try raw foods or sushi, so it would be extremely risky to start the business with that, so to test the waters by saving enough money, the couple then decided they will open when it is the right time.

From the 1970s to 2000s, the only three competitors were Katsura, Sakura, and Mikado restaurants. They offered sushi and sashimi and cooked dishes. Due to extreme competitions, many rivals that opened Japanese restaurants in downtown of St-Catherine Street during the

1990s and 2000s were forced to terminate their business including Katsura in 2007 and the recent close up was Kaizen in 2013 when the restaurant was first introduced in 1994.

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After two years of testing the waters with the local customers, many of them gradually becoming to get more familiar and comfortable with the exotic , by and by the acceptance for Japanese cuisine grew confident and became more popular in the mid-90s due to a sudden outburst of Japan-mania. The owners declared 1994 is the right year to open their first ever Japanese authentic cuisine restaurant in downtown St-Catherine Street. And so they did, with all the obstacles they faced or have to endure in their lifetime, they prevailed. Takara recently celebrated their 20th anniversary of founding the restaurant and the business is going strong than ever since with its new interior décor renovation and menu innovation. The possibility is endless.

First, by implementing the “Apprentice Model” from Theory X will secure the bonding relationship between mentors and trainees or interns. Takara really wanted to offer working opportunities for newly graduates but at the same time they needed highly skilled workers. So the best way is to train these trainees or interns is to train them one on one. So every veteran at

Takara who worked more than 5 years as servers or chefs are mandated to train their new colleagues as apprentices, so they can quickly adapt to their work surroundings. Next one is

“Hamburger University” from McDonald’s, Takara can adapt a similar management by sending their highly qualified employees to trade schools who wish to upgrade their skills in either employment or management training. Takara needed to have more than one manager just in case of an emergency like calling for sick leave or other personal reasons. The vice-manager can fill in his or her position during the absence. Such management could come in handy when something like that happens. The third management from Theory X is physical training from Wowprime, this is simply to tone up their bodies and physicality, so they can work energetic and obediently.

The last management from Theory X is SOP from Din Tai Fung, since Takara is a small independent restaurant, hence it does not need the scale and size to maintain SOP from that of

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Din Tai Fung. The restaurant only needed the idea of it, therefore it will have to update its old menu by eliminating and adding new dishes. The only way to do so is to use “Customized

Operational Strategies” from Outback in Theory Y. The idea is to fuse it with SOP, this will encourage Theory Y chefs to come up with new dishes and to eliminate the ones that are less popular. Of course with every dish created, the chef will receive monetary reward for his or her effort, which is another management from McDonald’s Recognitions and awards in Theory Y.

Second, by implementing EAP from Din Tai Fung in Theory Y, helps any newly arrived waitresses and chefs from Japan to adjust or ease their tensions off when residing in an exotic country for the first time. EAP provides services from professional masseuses, nutritionists, and counsellors whom can help them reduce depression and to combat cultural shock. Next one is

Employee Empowerment from Haidilao is extremely suitable for Takara, because the restaurant absolutely needed to abdicate or to transfer simple authorization to employees to make decisions or choices. This could help them becoming more responsible, independent, and trustful. One day one these employees could be your partners or advisors. Please note COS and Recognitions & awards have been explained previously.

Third, by implementing the last managements from Abdication from McDonald’s in

Theory Y, and Bonuses and Performance Appraisals from Wowprime in Theory XY can help workers collaborating together as teams to commit common goals when managers and leaders are willingly to work side by side at the restaurant with their hard working employees, this will earn their respect and admiration.

Theory X managements

The first primary finding from Theory X is called the Apprentice Model from Haidilao which is a type of employee training that emphasizes the experience with one on one instead of groups (Zhao, 2011). This gives both the senior and the junior a chance to develop a mutual

155 mentor and apprentice relationship. This is indeed a suitable practice for a cozy restaurant like

Takara where the number of staff working per day is between 2 to 4 people. Two waiters in dining room, one chef in kitchen, and one in sushi bar. For instance, the senior waiter is mandated to coach and to look after the junior waiter. The two then can rotate work station from dining room to cashier when needed. This way the new trainee waiter will learn about two different tasks.

This practice also applies to senior chef who is mandated to train junior chef both in kitchen and in sushi bar. The two then can rotate working station from kitchen to sushi bar when needed. The purpose is to have the newly arrived chef and waiters to get comfortable in their workspace. One on one training is believed to enable greater efficiency in learning development.

The second primary finding from Theory X is the management training from

McDonald’s “Hamburger University” (Facella & Genn, 2009). Since Takara Restaurant does not have the manpower and budget like McDonald’s, but the concept is still applicable. For instance, the owner of the restaurant can send the “employee of the year” to a trade school or to an academic institution by funding him or her the tuition to acquire the management training. The training may usually take two to three years to complete and during those time he or she will not get paid. However the company will declare his or her living expense after he or she resumes working.

The third primary finding from Theory X is physical training from Wowprime. The only difference from Takara is that the training will be less intensive than Wowprime. Employees are asked to exercise 30 minutes twice a week between 8:30AM to 9:00AM in the morning before going to work at 11:00AM. Unlike Wowprime tends to force their employees to participate triathlon and hiking (王國雄，2010). but in Takara’s case, employees can choose the ones that suit him or her. For instance, if he likes cycling, then he can sign up for that, and if she

156 likes jogging, she can sign up for that too. In the end, those sign for jogging or cycling will be in a group. The jogging and cycling will take place in downtown St. Catherine Street where Takara is located. Staffs can exercise 30 minutes around the blocks where the vicinity of the restaurant is situated. When they are done, they can take a shower in the gym at YMCA at 10:00AM, and go back to work at 11:00AM in Takara. The purpose is to invigorate their strength and stamina throughout the entire day at work. Please note; this is only a one month trial period, because not everyone likes or feels comfortable doing sports together in large groups. If there is no effect in work performance in the restaurant, then there will be a vote to decide from the employees whether such practice should continue or not. That being say, this is more of a liberal management practice which will work in most organizations favoring workplace democracy by all employees.

The primary finding from Theory X is SOP from Din Tai Fung, this management can help maintaining the taste and texture for some of the popular and demanding dishes. But before implementing it to Takara, the restaurant needs to innovate and invent more original dishes. Thus it will fuse with a management from Theory Y called Customized Operational Strategies from

Outback Steakhouse. The restaurant would be experiencing with new dishes, and discarding the ones that are not popular. When Takara have prepare a new menu, it will begin to implement

SOP to ensure the taste, look , and texture to stay the same.

Theory Y managements

The first primary finding for Theory Y management is Employee Assistance Program or aka EAP from Din Tai Fung. Unlike Din Tai Fung, Takara is really a small independent restaurant that does not have many rooms or spaces to fit the facilitation. It also does not have the budget to hire three specialists: masseuses, nutritionists, and counsellors (王一芝，2014).

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However the restaurant accommodates the existing room; tatami where employees can take a nap in there before the second shift starts at 5:30PM to 10:00PM. It also accommodates television viewing and internet wireless connection. Staff can browse the internet on their mobile devices or watch T.V. for their leisure purposes. Finally, the only thing the restaurant owners can learn from Wowprime, is when employees got sick and needed to be hospitalized. Our staff members will take care of the situation by driving him or her to the nearest hospital And if he or she needs to be hospitalized, Takara staff will take turns to pay visits until he or she can be discharged (王

國雄，2010). The concept of taking care of colleagues like family members can really helped strengthen the bonding relationship between employees and employers in the restaurant.

The second primary finding in Theory Y is “Employee Empowerment” from Haidilao or aka EE is what Takara really needed to inspire workers to create and innovate services or dishes

(黃鐵鷹，2014). This means employees will have the rights to access to creativity and ingenuity that can best serve the restaurant in terms of sales and to help improve turn table rate. However like Haidilao, Takara cannot entirely decentralize authority to employees to do whatever they want. So whenever they give away freebies like ice-cream or beverages. They must record the incident within eight hours in the report stating why the service was being handled in that way. If the empowerment was misused in some ways like giving away freebies to customers whom are personal friends or relatives of the employee, it will be immediately labelled as “work misconduct.” The server whom responsible for serving those customers will hold accountable for his or her action. The punishment will have the server suspended for a week, and in addition, he or she will have to cover the bills for those customers that were served. If this particular incident like waiving off bills or giving away freebies happen too often on the same server. That server’s employment will be terminated immediately (黃鐵鷹，2014).

The third primary finding in Theory Y is called “Customized Operation Strategies” from

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Outback Steakhouse (Lee et al., 2008). This particular practice absolutely is suitable for

Takara’s creative environment. Since Montreal is such a multi-diversified city with people of different races, it is crucial that the restaurant must create many types of “customized dishes” in order to compete with other Japanese cuisine restaurants around the area. Hence, the employees are encouraged to create new dishes for the menu. For every new dishes sold on the menu, the creator of that dish will be rewarded with monetary increase in salary. The bonus reward will further inspire more employees to create more new dishes in the future.

The fourth primary finding in Theory Y is abdication which is a management practice from McDonald’s called “Leading by Examples”. The concept behind it is to abolish the mentality of hierarchy which is every staff member should be treated equally regardless of their ranking work status. For instance, the highest position in Takara is the manager, but she also needs to scrub the toilet clean if the owners ask her to. In other words, all of the employees should have the ability to multitask when necessary. Even the owners themselves would need to do the toilet scrubbing, vacuuming, sweeping or mopping the floor if everyone is momentarily preoccupied (Facella & Genn, 2009).

The fifth primary finding in Theory Y is called Recognitions and Awards from

McDonald’s (Facella & Genn, 2009). The concept behind such practice is to motivate and to inspire employees to continue offering great performances in the restaurant. Unlike McDonald’s method of motivation by hosting an award ceremony and giving away free stock (Facella &

Genn, 2009). Budget wise, Takara does not have that kind of money to invest on employee motivation. However to serve a similar purpose, Takara can afford to take the entire staff members to a fancy restaurant every Christmas and New Year’s Eve. Staff then can order what they want on the menu, and the owners will gladly pay the bill. Other times, Takara will take their employees to K-TV, and they can sing all night if they want to.

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Theory XY management

The final primary finding in Theory XY is Bonuses and Performance Appraisals from

Wowprime called the “Dolphin Appraisal Plan” (王國雄，2010). This concept is rather different, comparing to McDonald’s “Recognitions and Awards” (Facella & Genn, 2009). The idea drew from Joseph N. Scanlon (1899-1956) who developed the so-called “Scanlon Plan” which is to encourage staff members of the company to collaborate as a team to execute the sharing of economic gains from improvements in performance (Lesieur, 1958). By doing so, it helps the organization to improve savings and reduce cost of manpower. In Wowprime’s case, to be more environmental-friendly, it encourages their staff to conserve energy usage by cutting cost in electricity or other disposables like toilet paper, and etc… The staff will each be rewarded with

33% bonus to their account. Thus every dollar saved will directly accumulated to the end of each month as bonuses, then share evenly among the entire company (陳芳毓，2013).

Takara can benefit the idea of cost-reduction from Wowprime’s “Dolphin Appraisal

Plan” by urging their staff to reduce the usage of company resources such as water, electricity, and gas (陳芳毓，2013). For bonus reward, Takara may reward 25% bonus to employees’ account if the company has indeed saved a lot of bills at the end of every month. Hence the idea is to get employees into cooperating with one another to fulfill common goals that are beneficial for the company and the environment as well.

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Section III Conclusion on Takara Japanese Cuisine Restaurant’s Theoretical Management Orientation

Section III explains the purpose and usages of the ten chosen managements that are applicable for Takara in accordance to Table 5-1: Ten Chosen Theoretical Managements for

Restaurant Implementation from Section I. The intention to implementing these particular 10 managements to Takara Japanese Cuisine Restaurant has a strong validating reason.

Based on the careful selection of 10 managements from the 5 restaurant chains: Din Tai

Fung, Wowprime, Haidilao, Outback, and McDonald’s that were suggested to be implemented into Takara Japanese Cuisine Restaurant. It has 4Xs, 5Ys, and 1XY, this means Takara Japanese

Cuisine Restaurant is oriented to Theory Y management. Over all, the suggested proposal in the theoretical management for Takara is ideal. Because Takara is still very young comparing to all these 5 legendary restaurant giants: Din Tai Fung, Wowprime, Haidilao, Outback, and

McDonald’s. In order to pursue the path of building a restaurant chain, Takara must save cost as much as possible, therefore most of the managements from all ten theories are beneficial to help

Takara improving its hospitality in waiting table services, ensuring standards in quality services control, enhancing the efficiency in creativities and innovations, and most importantly to propagating the concept of saving the environment by urging workers to cut cost in company expenses.

In the end, these practical Theory X and Theory Y managements are there to help molding staff members to becoming responsible individuals in providing the best services that customers can get from dining at Takara Japanese Cuisine Restaurant of Montreal, Canada.

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Zensen Sushi Express (2015). Zensen. Retrieved from http://sushiexpress.com.tw/about.php

Zhao, Z. (2011). The Haidilao Company. Tsinghua University, 11(4), 1-23.

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Appendix

Online Questionnaire Survey Sample

X 理論和 Y 理論的定義:

X 理論和 Y 理論的區別

這是一對完全基於兩種完全相反假設的理論，X 理論認為人們有消極的工作源動力，而 Y 理論則認為人們有積極的工作源動力。

X 理論

一般人的本性是懶惰的，工作越少越好，可能的話會逃避工作。

大部分人對集體（公司，機構，單位或組織等）的目標不關心，因此管理者需要以強迫， 威脅處罰，指導，金錢利益，獎勵等誘因激發人們的工作源動力。一般人缺少進取心，只 有在指導下才願意接受工作，因此管理者需要對他們施加壓力。X 主管對員工的信任度偏 低。工作範圍比較局限，必須服從公司定的規則而進行操作，如機械化運作。

Y 理論

人們在工作上體力和腦力的投入就跟在娛樂和休閒上的投入一樣，工作是很自然的事—— 大部分人並不抗拒工作。不須要金錢利益，獎勵等誘而激發他們的工作源動力。

即使沒有外界的壓力和處罰的威脅，他們一樣會努力工作以期達到目的——人們具有自我 調節和自我監督的能力。

人們願意為集體的目標而努力，在工作上會盡最大的努力，以發揮創造力，才智——人們 希望在工作上獲得認同感，會自覺遵守規定。

在適當的條件下，人們不僅願意接受工作上的責任，並會尋求更大的責任。

許多人具有相當高的創新能力去解決問題。

在大多數的機構裡面，人們的才智並沒有充分發揮。持 X 理論的管理者會趨向於設定嚴格 的規章制度，以減低員工對工作的消極性。

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持 Y 理論的管理者主張用人性激發的管理，使個人目標和組織目標一致，會趨向於對員工

授予更大的權力，讓員工有更大的發揮機會，以激發員工對工作的積極性。Y 主管對員工

的信任度高。工作範圍較有自由如參與討論和授權能力。分權是給分店的主管一種授權

利，當他們的業績顯出優秀時，他們的信任度會因此增高，而他們的分權利也會跟著高。

XY 理論:

這種理論也可以運用在 X 性格的員工或 Y 性格的員工。但主管給員工工作的自由範圍局 限。

應答說明：

請仔細分析每一家的餐飲連鎖店的管理理論，再以您的判斷來勾選 X 理論，Y 理論，或者 XY 理論

A. 鼎泰豐管理理論：

1. SOP （標準作業程序）例：品質控制, 進入中央廚房的每個工作區域得換上制服，套 上雨鞋，口罩及防塵帽。先通過浴塵室，吹走身上灰塵，毛髮，把手撤清洗乾淨，烘乾後 再噴上師酒精，從頭到尾消毒一遍才能被放行。進到另一個區域，這些步驟都要重來一 次。品研人員會到中央工廠突擊檢查。拿起棉花棒在工作人員手上劃一下，採樣到試驗管 裡，檢查他們手上是否乾淨。一旦手上的菌數超過（不合格）就馬上懲處！

X Y XY

2. 安定人心 (員工福利)， 例：用感動方式如當員工是孩子或一家人還細心的照顧他 們。如聘請營養師，按摩師，輔導員都是為了員工的身體健康想。

X Y XY

3. 培訓, 例: 訓練廚子包小籠包必要黃金 18 摺才合格，不然的話會被罵還把失敗的作品 扔掉！ 提高服務效率如服務生要隨時有笑容，收槕擦槕要在 2 分鐘完成，燈光下檢查餐 具有刮損或缺角，有的話必須汰。

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X Y XY

4. 自我學習， 例：帶員工去旅行，吃喝玩樂為學習目的

X Y XY

5. 獎勵與獎金，例：花紅，薪水，报酬，待遇

X Y XY

B. 王品管理理論:

1. 一家人主義 (人性化管理)， 例： 關心員工的健康，如果他病了，公司會安排他住 院。所有員工來拜訪和問候以做為關心。還有安心基金+急難救助來協助員工或他家人。 請生理假不需醫生證明，帶同仁旅遊。

X Y XY

2. 創造品牌（鼓勵員工思考和創意），例：醒獅團計劃（調離員工原本的位置，而栽培 他們來創立一個全新品牌）。

X Y XY

3. 出國考察吃透透 （為了創立品牌而出國考察，吃百家餐廳拿取經驗）。

X Y XY

4. 王品大學 (SOP) （操作+管理+領導的二 0 六學分）員工要當店長必修足店長學分才 能往上升級遷（行政，接待，訓練，訂貨，排班，維修）。加上三百個社會學分：遊百 國，吃百店，登百嶽。

X Y XY

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5. 魔鬼訓練營 ，例：大聲公（吶喊出前所未有的力量），晨跑五千公尺，日行萬步，鐵 人三項: 爬山，游泳，騎車可以練就個人的意志力。

X Y XY

6. 參與國際比賽來自我提升，例： 國際烹飪大賽，王品托盤大賽盃

X Y XY

7. 獎勵與評價，例 海豚領導學 （每月即時分紅；33%利潤）省下來的錢都 會累積成 月底的利潤，這樣會使員工主動節省成本象省水電。

X Y XY

8. 王品憲法，例：不得接受廠商一百元以上的禮物，非親條款（王品家族不能進王 品），嚴禁企業内婚外情，空降主管不可以再挖角，不能買車超過 150 萬，不許用王品的 名義申報，不應酬，不團購，不與廠商私下交易。

X Y XY

C. 海底撈管理理論:

1. 把員工當成家裡人，例：提供員工住宅，有專人打掃衛生，換洗被單，免費上網。員 工孩子可以享用免費教育在一所寄宿學校。每年公司都組織優秀員工的家長去海南旅遊。 全都是公司報銷。春節時，員工可以享用七天的薪年假。

X Y XY

2. 員工管理模式，例：海底撈不贊成聘請年輕美貌員工，它只在乎實際經驗和實力。年 齡不重要。但員工必須有概條件：誠實，勤奮，理性思考的個性。這才符合公司的文化需 求。如員工想自我升級。他們必須經通和通過各種工作職位調換才能獲得證書。

X Y XY

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3. 學習與教育 ， 例：E-learning，海底撈提供學習環境給員工練習打字，學開車。組織一 個優秀成員的學習小組來影響更多人留在海底撈努力工作。2010 年成立海底撈大學（培 訓學校）培養各種人才。

X Y XY

4. 創意小組， 例：鼓勵員工創新構思。如果創意被選中，就會在整個公司執行，而員工 會因此分到花紅。創意包括菜單或廣告。

X Y XY

5. 授權給員工但有預防措施， 例：員工必須報告公司當他們發現同仁的犯罪行為（免收 賬單，收退菜錢，吃掉小費，等等。。。）如果員工給客人免收單或給免費甜點必須寫出 理由。還有如客人有要求，員工必須在八小時內答復及滿足到客人或公司的需求。

X Y XY

6. 標準作業程序（SOP），例：成立四家物流中心和湯底加工中心。員工的職責包括供應 採購，清洗，加工，品質管制和取樣。這些工作是高度標準化的。

X Y XY

7. 全面改革. 例：消除整體層級觀念，來栽培經理的領導能力和加強規範化績效評價。 當公司消除監管制度，總部成立一個教練組來協助餐廳經理。

X Y XY

8. 學徒模式， 例：每一位新員工會被分配一位經驗的教師來指導他們工作職位。這種模 式是來確保規範化和品質管制。

X Y XY

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9. 嫁妝 ，例：拿獎金資來引誘或感動員工的辭職選擇。海底撈會辦“嫁妝給員工，如果 他們選擇離開就有分到￥80, 000。被挖角的員工也有￥20, 000 拿。這種極端方式是來感 動或影響員工的最後選擇。

X Y XY

10. 開新店給優秀經理， 例：領導他們如何獲得高評價。他們必須通過 A 到 C 層次的績 效評價。C 層次視為最高。他們必須在 12 個月內保持 C 評價才能獲得額外的花紅。這是 要維持他們良好的管理狀態。

X Y XY

D. T.G.I. Fridays 管理理論：

1. 僱傭管理， 例：過程有三個階段（I）招聘和甄選當中有心理測試以及多達三或四個 面試，（II）誘導過程會訓練外場的候選人調酒和做些簡單菜色， （III）培訓過程有訓 練內場的廚房員工烹飪。他們精彩的演出會由經理監測的，那就是監測他們能否滿足顧客 需求和解答詢問，提供建議給公司也能維持它的銷售目標。

X Y XY

2. 員工授權法，例：員工能以責任使用限的權利改客人指定的菜色（不要雞肉，多點 菜）。客人可以叫菜單沒有的菜色，但只能以當時廚房提供的材料來做客的菜。此外員工 必須能應付客人的抱怨和忍受指責而不用經理應付。而員工有限定權利，他們不能隨便送 贈品來消除客人的怨氣也不能隨便戴帽子來搭配制服。員工的唯一特權是安排個人的工作 時間表。

X Y XY

3. 標準作業程序 （SOP），例：生產和服務過程中在很多方面必須標準化以食品和飲料 為主。送餐時間必須完全標準化。如開胃菜一定要在 7 分鐘送到。而主菜必要 12 分鐘到 達。

X Y XY

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4. 酬金及業績評價 包括發工資與小費給外場和內場員工。廚房員工只能獲得佣金作為補 償，因為他們沒小費。

X Y XY

E. Outback Steakhouse 管理理論:

1. 分權組織，例：當公司被平均分配與合作夥伴之間的權力，每一個地區的運營合作夥 伴都能開新店鋪。從承擔全責任包括場地選擇到招聘員工，同時合夥人必負責日常活動如 員工培訓，客戶服務，和當地的營銷。

X Y XY

2. 定制化操作策略，例：員工可自創新菜色來適應當地的口味。

X Y XY

3. 革新性的人力資源管理，例：這部門專僱用內部員工而提拔他們成才。這麼一來可以 減少員工流失也不擔心其他競爭對手來挖角。

X Y XY

4. 誠懇接待客人，例：為了讓客人滿意。公司會盡量滿足客人的須求。如不收客人錢或 給他免費甜品和代客泊車。

X Y XY

5. 融合了美式企業文化，例: 為了拆除階層觀念，上司和員工都是合作夥伴一起討論工 事。最底的職位也可以參與討論。Outback 沒有權力的差距。大家都是同仁。所以一起工 作會很快樂。在這環境工作會令人充滿自信和力。

X Y XY

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6. 一般的組織資源 ， 例：Outback 的成功因素包括信任，信譽與忠誠。和它合作的加盟 者和供應商都認同 Outback 是個信賴的品牌。建立良好的股東關係。基層營銷 （Grassroots marketing）是種傳達形式，和社區拉近距離。主辦各種社區活動如食品捐贈 給當地慈善機構。這是一種營銷策略讓人們更認識 Outback 品牌。

X Y XY

7. 員工福利和利益，例：兼職員工有資格獲得醫療保險津貼。此外員工也能安排個人的 工作時間表。

X Y XY

8. 培訓課程，例：這是個非常魔鬼式的培訓，再有豐富經驗的管理夥伴都必須參與整個 培訓計劃。14 個月的密集訓練包括：酒吧經營，洗碗盤，和 6 個月的廚房培訓。

X Y XY

9. 報酬，工資和僱用，例：該公司具有嚴格的招聘政策，必需通過三次的入職前測試。 此外所有的管理合夥人有義務參與一項獎勵制度。這制度要求這些經營夥伴拿出現金來投 資該公司，並簽署一份為期五年的管理合同。這是為了引誘經營夥伴繼續續約。滿五年 後，經營夥伴就有資格談判如何改善他們的基本工資的權利，以業績做出決定。

X Y XY

F. McDonald’s 管理理論:

1. 信任與關係，例：與夥伴簽商業契約時以握手表示信任。信仰之躍 代表與廠商建立一 個穩固和友誼的業務關係會互相產生信任。申訴專員方案讓員工訴苦或抱怨。他們可以反 應申訴或建議到總部。表決權給同仁機會投票。兌現承諾是對員工一個尊重。所以說話算 數（君無戲言）。對客人保持誠信是公司的該有責任而維持品牌的聲望。信託銀行是個基 金方案。如員工有危機時可以用此基金求助。關係，例：三腳凳子 形容業主，供應商和 員工的合作夥伴關係是不可動搖的。他們的三角關係圍著信任。彼此是相互依賴的。如其 中有難，一個會走出來幫忙。同仁會相互照料一起幫忙達到目標。麥當勞是個大家庭，如 在公司上班，同仁是一家人，所以不必特別拘謹。沒有階層觀念，因為所有 3，000 多員

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工也能扮演總裁的角色。所以每個員工的責任相當大。 導師會教導員工如可理財和積累股 票。栽培和提拔他們升遷。友誼在公司是必要的。跟同仁做朋友，他會給你實際和誠實建 議。慈善令麥當勞變得更人性化的企業。回饋社會幫助窮人和病人。

X Y XY

2. 學習，例：漢堡大學是個培訓學院，培養出色的未來經理與領導者。要修滿 42 學分。 課程包括管理，準備食材，訂貨，入貨。須要兩年完成學業。

X Y XY

3. SOP（標準作業程序），例：QSC（品質與服務控制）必須統一，包括所有區域的分 店。經理有時會來試吃再給分店評語。實地分店報告，分店顧問會花兩天時間審查衛生， 服務與食物品質。如該分店拿到 A 評語，有機會開更多分店。如拿到 F 評語就會面臨總公 司收回營業權。提高衛生標準，店外內必每天清洗包括窗子，廁所馬桶，廚房。研發中 心，成立了 32 年，不停的研發新產品來維持口味。推動員工式策略，訓練員工把事做最 好，讓他有天成為經理。加強品牌必須用到 SOP 來強迫所有的區域分店要按照作規程。

X Y XY

4. 以身作則，例：以老板身分放下身段跟員工做事。如當老板撿垃圾，清洗馬桶，掃 地，抹地，擦槕子，窗子。員工也自然幫忙。並肩做事，一起跟員工做事可以了解他們。 還會給員工們好印象。一邊工作可以同時指導他們正確做法。開車旅行，上司會帶所有員 工到其他分店考察。讓他們觀察其他分店是怎麼做事。

X Y XY

5. 勇氣，例：鼓勵員工面對困難，不要把自己限定於局限。勉強自己站出舒適地帶。如 面對滿腹牢騷的霸客。用理性處理問題。承認自己的過錯，任何事或決策影響到公司的業 績必須坦白承認。承擔風險 ，如在會議上，你覺得長輩或上司的意見不是很好，請立刻 說出你的想法。再來，不要不好意思拒絕上司要求，如上司要停下來買杯咖啡，但聽他的 話會遲到，趕不到與客戶見面。這時要說不行！種種例子是要強迫員工處理意外的事情而 不能逃避現實。

X Y XY

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6. 溝通， 例：領導者必須有溝通能力與魅力，擁有領導的風範。分權，管理者被授權就 能簡化傳達方式，直接提供訊息給當地的職員和區域經理。它的優點是能快速把決策送往 到要的地點。以往經營者都會把問題丟給總部而不會直接丟給當地的職員或者區域經理。 分權令事情好辦多了！此外管理者也獲得權力做出決定對於房地產收購與開發。他還能做 出授權品牌的決策。因為有了信任才有分權力。績效評價是個很棒的溝通方式不用錢也能 鼓勵員工，單單聽到上司讚揚“Good Job”就足夠了。花多點時間在公司與客人和員工互 動。不要常用電腦傳達訊息。這樣不夠誠意。

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7. 獲得認同，例：獎項包括總統獎，團隊獎，Roots and Wings 雕塑，年鑑和晚會。這些 都是給員工的鼓勵和推動他們勤勞做事。分股票給員工作為紅利同時可以引誘他們熱心地 為公司效力。

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不好意思佔用了您的寶貴時間！

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