Mini Case: Please read the case below and answer all questions listed below the case

The Cheesecake Factory restaurant known for its extremely generous portions has one of the most massive and varied menus in the industry. Over 300 dinner items and 20 choices of beverages line the huge menu that will take you awhile to get through. The Cheesecake Factory serves more than 100 million people every year, has over 45,000 total staff, and is listed as one of Fortune s 100 Most Admired Companies. How can the restaurant manage all these items, people, and customers so effectively? Part of that answer lies in the way in which the company is structured.

One reason the restaurant is so popular is its consistency. Chuck Wensing, a VP of performance development, says, We want someone to eat at a Cheesecake Factory in Las Vegas and another somewhere in the world and be able to have the same experience. On a periodic basis, each restaurant is evaluated by mystery guests who are trained to evaluate service, food, and experience based on a standardized format. The Cheesecake Factory has an efficient, hierarchical (high number of layers) structure that is designed to focus on its products and services. Everything that you see as a customer has likely been double and triple-checked before it ever reaches your table. Kitchen and restaurant managers are constantly giving feedback to cooks and servers anytime they see something that doesnt seem exactly right.

While you might think this sounds like employees need to be robots to thrive in such a system, Cheesecake Factory employees dont feel that way, as evidenced by its turnover rate which is 15 percent below the competition. In addition to efficiency, one thing a hierarchical organizational structure can also provide is a clear career path. Something you dont see as a diner is that many of the restaurants managers have been promoted up through the ranks. This not only provides motivation for workers at lower levels (in addition to good salaries, the company gives every manager a new BMW every three years), it also encourages managers to respect those underneath them.

The Cheesecake Factory is one of the fastest-growing restaurants in the world. Over the last 10 years, the company has more than tripled its sales to over $2.5 billion and quadrupled its restaurant locations from 41 to 175, which includes a number of international locations such as Dubai, Kwait and Saudi Arabia. As it grows so fast, a number of core issues rise to the topsuch as how does it maintain the level of service guests have come to appreciate, but yet still control costs? Chuck Wensing, VP of performance development, says, One of our biggest challenges is the notion of how to get big, but remain small. The restaurant wants to be able to take advantage of all the efficiencies of scale that come with size, but it doesnt want you to sit down and feel like you are at a McDonalds.

The Cheesecake Factory has two big costs to control and managegroceries and labor. The grocery issue is accomplished partly through what it calls call guest forecasting. Dan Gordon, the companys COO, says, We have forecasting models based on historical datathe trend of the past six weeks and also the trend of the previous year. The company can predict food needs ahead of time with staggering accuracy based on a number of factors including things like weather and sporting events. This allows the restaurant to have an average efficiency rating of 97.5 percent. What does that mean exactly? It means that its managers aim to throw away no more than 2.5 percent of the groceries they purchase without running out of the food that customers will want at any given point in time.

Labor is not that different. The Cheesecake Factory has worked out a staff-to-customer ratio that keeps everyone working efficiently, but still leaves room for unexpected large groups of customers. Although it is 15 percent below its competition when it comes to turnover, it still runs at about a 90 percent annual rate. Needless to say, this makes training new employees a huge issue. Like everything else, the restaurant tries to be as efficient as possible and is using what it considers to be the cutting edge of efficiencycreating computer games for training purposes. For instance, the restaurant has built an iPhone app that teaches employees how to make glamburgers. To compound the new employee problem, the Cheesecake Factory changes its menu every six months. One recent menu shift resulted in the addition of 13 items. That doesnt sound like a huge amount until you think how many people have to be trained to cook those items to perfection every time. The restaurant wants the new menu rollout to take no more than seven weeks start-to-finish. The company starts by bringing in regional managers and kitchen managers for training. These managers not only learn to make the new items, they also learn how to teach others to make the new items. The information is passed down with surprising efficiency.

Questions:

Part I:

1. A. Based on what youve read, would you say the Cheesecake Factory has a centralized or decentralized structure? Give at least one justification to support your choice. (5pt)

B. Explain how this made the Cheese cake factory successful? Give at least two justifications to support your explanation. (6pt)

2. What aspects of the Cheesecake Factorys business do you think are helped by becoming larger? State and discuss at least two aspects. (10pt)

3. Would a matrix structure suit Cheese cake factory employee? Explain your answer. Give at least two justifications (5pt)

Part II

4. A. Explain in which stage of the Five stages model of group formation group member can get stuck? Give one suggestion of how to avoid it. (5pt)

B. Explain situations where punctuated-equilibrium model is appropriate to use. (4pt)

C. Explain the advantages of small groups and large groups? One advantage for each group (4pt)

5. State the behavioral consequences of stress. (5pt)

6. Compare and contrast challenge stressors and hindrance stressors. (6pt)

7. There are various ways in which employees express resistance to change. Is all change resistance negative? Why (5pt)