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Pizza2go Strategy Case Study 2

By:   •  August 4, 2019  •  Case Study  •  1,612 Words (7 Pages)  •  2,783 Views

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Pizza2Go, a Vietnamese pizza company which is one of the largest in the world is a pizza chain with a community of franchises and more than 50 nationally retail stores. This company has become popular owing to the success in their shares and the high rate of sales. Pizza2Go has provided for a large consumption with over a million pizza per year and earn a great amount of profit thanks to the huge optional menu. This is an advantage helping them to attract a lot of shareholders who want to participate in their franchising network. Actually, franchise is to acquire the benefits of marketing strategy of another independent business of the franchisor (Rubin, 1978). But there is a true story behind this flashy accomplishment. Franchisees who firstly though this is a profitable company turn into stressed because of insane strategies in management. The company policy seems to be more oriented on the auction rather than their profit. To them, higher number of stores in the network results in more valuable acquisition the head office gains.


The major issue with Pizza2Go originates from the CEO. The CEO is adopted a management style based on data reminding of Frederick Taylor's scientific management theory (Taylor, 2003). Even though this method of management has convinced Pizza2Go some certain success, it still can be indicated the imbalance in this too scientific administration style accordingto Mintzberg (2004). This has a negative impact on not only employees but also stores’ productivity. Based on the case study, the CEO Mrs. Nguyen has not have a good plan and actions to drive the company passing the challenges except her general public. When the public statements for the dealing ways are so positive such as forcing up labor cost 50% over next 4-5 years which also means more loyalty with employees, more engagement between staffs, training program and rewards for motivating workers, a contrast situation happened to the employees in the behind scenes. Competition between franchisees will be high when resources are oriented, as in established industries (Lambkin and Day, 1989). Because of such harsh competitions, the franchisees were running after profits then lead to the position of running out the stores due to not being able to afford passing on the increasing high expenditures.

In addition, the shortcoming of political skills and ethics are also reasons. Ethical behavior management is one of the most common and complex issue that challenge business organization (W.Edward Stead, Dan L.Worrell, Jean Garner Stead, 1990). Complaints from worker about horrible working condition that they have to work long hours close to high-degree ovens without a break or air-conditioning. There is a shortage of employee security, more seriously is threat of physical violence when workers are reluctant of speak out their sufferings from abuse and danger when doing the delivery. As a result, those have a detrimental issue on the workers’ health and steadily push them to the limits. The ambiguity of wages also affects to employees’ unhappiness. The satisfaction level of salary is determined by the simultaneous assessment of current wages versus some comparable personal standards (Rice, R.W, Phillips, S.M, McFarlin, D.B, 1990). Many workers are depressed due to widespread underpayment and not always response staffs their full standard entitlements. The franchisee was exploiting workersby decreasing their staff working hour to deny their extra payment, therefrom hiding the store’s poor sales. Evidence is that a worker has to work about 50-60 hours a week but his pay-off is often decrease it to 40-43 hours because of the attract penalties. It means his extra work is deniedpg. 3

nonsensically. Profit-focused has forced franchisees to mistreat their employees; moreover, lowering cost of products and pressure of competition intensification drove the franchisees to take these drastic actions.


3.1. ADJUSTMENT IN MANAGEMENT STYLE AND THE CEOPizza2Go management style seems to be too scientific. They should not only focus on productivity but should be on welfare of their employees as well. It would be better to add more options such as training and incentives rather than just pretending everybody is a robot. Because of having so many franchises, monitoring all of them would be an issue. Developing a managing system where the employees can work in a happy and motivated environment with the help and great connection to the manager. This will help Pizza2Go pass on current challenges and also boost the organization’s revenue. CEO is a person holding power which is the aptitude to drive an organization, they have greatest influence on people who are in a state of dependence such as staff. Replacing to a new CEO who is more supportive and confidential to turn Pizza2Go a negative to a positive. The company needs a CEO who can take more actions rather than those public statements. Moreover, by changing CEO, the organization can easily receive new ideas and plan from employee that may be effective to the company (Kaplan, 2015).

3.2. BALANCE LEADERSHIP AND STYLE OF MANAGEMENTInstead of being too inflexible in utilising Taylorism, incorporating a balance of scientific and leadership characteristic. Consequently, manager will evolve into a transformational leader who can inspire and support their employees (Asrar-ul-Haq and Kuchinke, 2016). This not only help the employees feel understood by their boss, but also improve the relationship between all members in a company, cross out the distance between manager and workers. Additionally, this would be an advantage to Pizza2Go when workers are more close to their managers, no fear remains and worker could feel free to speak out their opinions especially problems during their work. To alter the management style means to accept changing the organizational culture of the workplace.


3.3.1. Employee policyWorking condition is one of the most important factors that directly affect to both productivity and spirit of workers. Promulgating a standard rule to every franchise store such as break and wage paying term. Paying workers their salary the correct working hour rate included overtime, manager who deny the employee’s extra hours payment should be punished. Guarantee the security of employees during their working time, especially their honor.

3.3.2. Franchise policyThe


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