Principles of Management (MGT101) Assignment 3 Assignment Workload:

This Assignment comprise of a short Case. Assignment is to be submitted by each student individually. Assignment Purposes/Learning Outcomes: After completion of Assignment-3 students will able to understand the LO 2. Recognize the functions of planning, organizing and controlling and how they interrelate (Lo2.1) LO 4. Apply knowledge and techniques of strategic planning and decision making. (Lo2.1) Assignment-3 Please read the case Chipotle needs to change on Page number 406, Chapter 10 Organizational change and innovation available in your textbook/e-textbook Management: A Practical Approach 9th edition by Kinicki, A., & Williams, B., and answer the following questions: Assignment Question(s): (Marks 5) What is the underlying problem in this case from CEO Brian Niccols perspective? (2marks) What type of change Niccol need to inspire- reactive or proactive? Explain (1 mark) Using Fig 10.1 on page 380, describe what forces for change exist both inside and outside Chipotle. (1 mark) Utilize Lewins change model (Fig 10.2 on page 384) as a blueprint and describe how Niccol can inspire change at Chipotle? (1 mark)

case Ass3. Chipotle needs to change - characteristics. (2) change-agent characteristics, and (3) the change agent-employee relationship Ten reasons employees resist change are as follows: (1) individuals' predisposition toward change, (2) surprise and fear of the unknown, (3) climate of mistrust. (4) fear of failure. (5) loss of status or job security. (6) peer pressure, (7) disruption of cultural traditions or group relationships (8) personality conflicts. (9) lack of tact or poor timing, and (10) nonreinforcing reward systems. 10.6 Career Corner: Managing Your Career Readiness There are two key methods for improving your openness to change: self-affirmation theory and self-compassion. Self-affirmation theory reveals that openness to change is enhanced by replacing negative thoughts or beliefs about yourself with positive affirmations. You can increase self-compassion by practicing self-kindness, reminding yourself that you are not alone, and practicing mindfulness. fast-food 10.4 Organizational Innovation Innovation is the creation of something new and useful that gets commercialized. Crossing the types of innovation with the focus on the innovation results in four approaches to innovation. Innovation can produce new products or new processes and can vary in focus from improvement to new directions An innovation system's seven components are (1) an innovation strategy: (2) commitment from senior leaders: (3) an innovative culture and climate; (4) required structure and processes; (5) necessary human capital; (6) appropriate resources; and (7) human resource policies, practices, and procedures. 10.5 The Threat of Change: Managing Employee Fear and Resistance Resistance to change is an emotionalbehavioral response to real or imagined threats to an established work routine. Resistance can be considered to be the interaction of three causes: (1) employee 1. What are the two principal types of change? 2. Describe the four kinds of external forces of change and two kinds of internal forces of change. 3. How does Kurt Lewin's model of change work? 4. What is the organizational development process? 5. What's the difference between a product innovation and a process innovation? Chipotle Needs to Change Chipotle Mexican Grill started in 1993 with a single restaurant and now operates in 2.400 locations, includ- ing in Canada. England, France, and Germany. The fast-food chain had approximately 60,000 employees and revenues of $4 billion in 2017.33 Steve Ells founded Chipotle and served as its CEO Ells to differentiate his brand from that of so he focused on fresh, high-quality raw ingredients free of antibiotics and pesti- cides. Meals were prepared classic cooking meth- ods and were served in choose-your-own style so could 154 I get the individual ingredients they preferred." Then the company's growth and profitability were stunted by outbreaks of foodborne illnesses. Customers were sickened by E. coli, norovirus, and salmonella at dozens of Chipotle restaurants around the United States between 2015 and 2016.155 The restaurant's stock Understanding the Chapter: What Do I Know? 6. Explain four approaches to innovation. 7. What are four steps for fostering innovation? 8. Employee resistance can be considered to be the interaction of what three causes? 9. There are 10 reasons employees resist change. What are they? 10. How can you increase the career competency of openness to change? Management in Action never recovered as shares fell nearly 60 percent between 2015 and 2018.156 Let's examine what led to the burrito maker's fall from grace. until 2018. wanted to other chains, so using AS CHIPOTLE GREW, SO DID ITS PROBLEMS Chipotle rose to greatness because customers were offered a straightforward set of options, food was prepared on site in an open kitchen, and diners felt they were eating something healthy. The company had success with this model early on, but the system started to crack as Chipotle grew. Inconsistent food preparation was the first stressor. The The open 1 kitchen proved a difficult model to scale and poor food handling most likely led to the outbreak of food- borne e illness. According to the Chicago Tribune, "Chipotle has been growing too quickly, and without a game plan." The restaurant chain was plagued by inconsistency and inefficiency.157 Foodborne illnesses continued to haunt it almost two years after the initial outbreak. In 2017. "The Organizational Change and Innovation CHAPTER 10 405 menu. 165 Steve place. *** This failure of These Times. 169 Taco Bell's reputation and sales. Niccol's change efforts mended that Chipotle Wax Prep lood in a central rate of food poisoning reports attributed to Chipotle con Bell's positive move to offer breakfast and Doritos tinues to be multiples higher than peers," said Business Locos tacos. Other analysts have concerns about the Insider.15These statistics are especially troubling for a company venturing too far from its core offerings. 166 brand that prides itself as providing "Food with Integrity." Those who are skeptical about changing the menu The restaurant's menu reflects another crack in its include Chipotle's founder and current executive chair, vision and strategies. Chipotle offers burritos, tacos, bur Ells. Ells still yields significant power and is rito bowls, and salads. This simple menu attracted custom known as a hands-on leader and perfectionist, accord- for over a decade but is now seen as "stale, according ing to The Wall Street Journal." He told The New York to an analyst with the Tribune." Ells began offering queso Times, "It's not like you can put a whole new thing up in September 2017 in an attempt to spice up Chipotle's on the menu board and-like at a menu. The results were not promising Only 15 percent of This view is supported by Ells's earlier strate orders included queso, compared to the 40 percent of gic orders that included guacamole. Business Insider reported of adding queso to the Niccol is likely to experience resistance to some of that queso-related traffic died off after peaking the first his ideas because Ells does not believe Chipotle is like week the new item was available. Taco Bell. Chipotle is more vulnerable to suppliers' problems have created opportunities for other changes in the price of items such as avocados and fast-casual restaurants such as Qdoba and Moes, which chicken. Other fast-food bran can push increased are opening locations all over the United States. According costs to franchises-something Chipotle does not have. to a UBS analyst,"... these concepts are exhibiting signifi Ells also refuses to compromise on quality as part of cant growth rates while also increasing competition for any change. "I don't think you're going to see a situa- attractive market/site selection." Chipotle's once unques tion where someone says. "To hell with food with tionable market leadership is on shaky ground. rity. We're going to buy cheap commodity meat now and really turn this thing around," he told the CHIPOTLE'S NEW CEO WAS SUCCESSFUL Chipotle's second challenge is increased competi AT TACO BELL tion, and the biggest threat here is Panera. Panera is Chipotle named Brian Niccol CEO in 2018. Niccol had outside Chipotle's cuisine niche, but it is competing been Taco Bell's chief marketing officer from 2011 to with its promise of fresh, additive-free ingredients. It 2015 before taking over as its CEO.161 He was hired at also has an exhaustive menu that rotates seasonally. Chipotle because of the successful turnaround he had customers who are tired of its "big-four" menu overseen at Taco Bell. will easily find a Panera nearby; Business Insider reports A disgruntled customer had filed a lawsuit in 2011 that 87 percent of Chipotles compete with a Panera alleging Taco Bell's taco mixture was more filler than Bread within a 10-minute drive. beef. The suit was later withdrawn, but it took a toll on Niccol will have to do more than change Chipotle's menu if he wants to compete with Panera. He needs to focused on repositioning the chain as a youthful lifestyle address his third challenge, which is stopping people brand. He did this by welcoming ideas from restaurant from getting foodborne illnesses his restaurants. The new CEO might accomplisht this by slowing the chain breakfast . These changes produced impressive results. growth and focusing on safer operations. For example, Taco Bell posted an average of 4 percent sales growth each of Chipotle's approximately 2.400 locations does during Niccol's time as CEO.163 The fast-food chain also its own prep work, such as washing lettuce and chop- beat out Pizza Hut and KFC as the most successful res ping tomatoes. Although this practice is part of taurant in the Yum Brands portfolio.14 Chipotle's operational vision, an analyst from the NICCOL'S CHALLENGE AT CHIPOTLE that "Chipotle managers have to keep to their core values...but need to find a way to be Niccol faces three challenges at Chipotle. The first is the more consistent and efficient." The analyst recom- menu and potential resistance to changing it from the wash and company's senior leadership. The second is increased location and send out to nearby stores. 12 competition taking advantage of the company's past prob- Such a food a food preparation change will signi change will significantly alter lems, and the third relates to sfood preparation Chipotle's restaurant structure. Customers may no longer practices and their contribution to foodborne illness. walk into restaurant and see employees grilling meat Niccol first needs to address Chipotle's menu prob and chopping vegetables behind the food line. This setup lem. According to a CNNMoney analyst, They need has been part of the chain's vision and heritage and repre something that gets people talking about the brand sents something Ells holds near and dear. "Niccol will again." The analyst says that Chipotle should consider likely face an uphill battle in uprooting some of that heri- adding new menu items such as nachos or frozen tage, as he's stepping into a role occupied by a founder for margaritas, Niccol may be positively disposed to this the past 25 years," said an analyst to Business Insider.173 suggestion because he was also the architect of Taco Can Niccol inspire change and save Chipotle? 406 PART 4 Organizing