Organizational Behavior: A Case Study of Tony’s Place

This case study highlights the organizational and communication issues faced by Tony’s restaurant. The report suggests recommendations to improve communication, goal setting, leadership style, employee retention, and motivation.

Organizational Behavior
Case Study: Tony’s Place

Introduction
This case highlights upon various issues that Tony’s restaurant is battling with. The restaurant
initially belonged to Jack Smith who later sold it off to Tony. However, since that day onwards,
there are various problems being faced by restaurant customers as well as staff. This report
throws light on fundamental issues faced by the firm and certain theories that can be applied to
the ongoing situation at the restaurant. Along with that, a few recommendations have been made
to resolve respective issues faced.
Fundamental issues
It is clear from the case study that there are various fundamental problems faced by the
restaurant. These issues include:
Increased staff turnover: Employee retention is extremely important for the success of any
business (Das & Baruah, 2013). Tony’s restaurant is currently battling with high turnover among
staff. When staff turnover is high then employers’ cost of recruitment and training increases and
the organization’s overall culture gets disrupted. This may even lead to a negative working
environment.
Ineffective communication: It has been noticed that the communication process at Tony’s
restaurant is highly ineffective. For organizational growth, leaders must open doors to
transparent communication within the organization. In this case, Tony is often unavailable and is
completely ignorant to the plight of his staff members. Tony gave verbal warnings to his
employees and felt disconnected with his employees. Communication forms the backbone of a
business. It is important that organizational employees communicate effectively with each other
and create a positive working environment for everyone.
Centralized decision making: Another major issue faced by the restaurant is centralized decision
making. This signifies that a single person is responsible for making all the decisions (Pettigrew,
2014). In this case, that person is Tony. Tony has been known to make organizational decisions
and manage employees. This form of decision making can make employees feel demotivated and
disrespected. On the other hand, including employees in the decision making process enhances a

sense of ownership. This not only motivates employees but also assists the firm in retaining
them.
Demotivated employees: The last issue faced by the restaurant is that the employees are
extremely demotivated. Demotivated employees cannot perform to the best of their abilities.
Tony’s employees reach to work late or do not show up at all. Their goals are often unrealistic
and there is an excessive pressure in them to perform extra work. All this leads to employee
demotivation. Employee motivation assists businesses in retaining employees, enhancing
performance and creating a positive work place environment.
Theories
Maslow’s hierarchy of needs theory suggests that an individual has five levels of needs in order
to stay motivated (Block, 2011). In the case of Tony’s restaurant, employees were getting their
basic salary which may satisfy their physiological and safety needs but the restaurant was
completely unable to fulfill any other needs beyond that.
Similarly, Herzberg’s two factor theory of motivation suggests that there are various factors
whose presence can motivate employees and there are some factors whose presence may not
motivate employees but their absence can surely demotivate employees (Alshmemri et. al.,
2017). In this case, employees were getting their basic salaries and job security. But not getting
status and proper working conditions is a major demotivation for employees at Tony’s place.
Communication issues
There are various communication issues that are faced by employees at Tony’s place. The
channels of communication are highly unclear. Tony does not communicate well with any of his
employees. Moreover, there is no way for employees to reach out to Tony or provide any kind of
feedback. Employees have no outlet to address any grievances that they might be facing.
Moreover, since there is no clear line of communication, everyone behaves independently.
The case also mentioned that Tony did not think it was necessary to listen to his staff. Because
the communication between the employee and the employer was highly ineffective, clear goals
were not established for the organization. This lack of communication also reduced employee

creativity. Tony also communicated verbally and hence if he had to give someone a warning,
there was no documentation of the same. Employees felt that he was moody and often either
overreacted to problems or he responded ineffectively.
These communication issues were creating a dull working environment at the restaurant and
were adversely impacting overall performance of the restaurant. Lack of communication in any
organization leads to a negative working environment and often causes conflicts. Therefore it is
important that clear lines of communication are established in every business to ensure that
employees as well as employers are able to create and maintain transparency in their
relationship.
Recommendations
Since the restaurant was a major hit under the leadership of Jack Smith, it is clear that the
restaurant has a good ambience and a strong brand value. Before the poor service quality and
staff issues at the restaurant take a toll on restaurant’s public image and customer positioning, it
is wiser to take some strong steps in the direction of improvement. The following
recommendations have been made to assist the restaurant to improve its service:
Improved communication: The foremost problem faced by the restaurant is that of ineffective
communication. Therefore the first strategy recommended to the restaurant is to create an
atmosphere of open communication. Tony must improve his communication with his employees.
It is important that employees feel they are trusted in the business. Employee feedback is also
essential for the growth of the firm and that is possible with the help of open communication.
Improved communication will also help the restaurant in increasing collaboration and
coordination among employees. When employees work in collaboration like a team, their overall
performance would improve. This would further lead to an increasing number of satisfied
customers. Communication forms the backbone of every organization and it is imperative that
employees are able to conduct transparent and honest communication with one another (Cooren
et. al., 2011).
Clear goal setting: At present, employees are forced to do tasks that Tony asks them to do.
However, employees are not comfortable with it. For improved employee performances, it is

important the clear goals are set for employees (Pinard, 2014). These goals must be decided
strategically after discussing the same with the employees. This is important as effective goals
can lead to improved employee performance while ineffective goals can cause employee
demotivation.
Tony must conduct weekly or monthly meetings with each employee and together they must set
goals and targets for the upcoming week/month.
Change in leadership style: Tony’s leadership style is highly authoritative. In this leadership
style, the leader tends to make all the decisions and expects everyone to follow (Voon et. al.,
2011). This leaves little or no power with the employees. This can be a major source of
demotivation among employees. In order to effectively run a restaurant, Tony must adopt a
democratic leadership style wherein leader involves followers in the decision making process.
This leads to employee motivation and an increased sense of ownership.
Employee retention: Employee retention is highly important especially in the service industry.
The restaurant might have various regular customers and these customers would have built a
connection with the restaurant staff. Therefore it is highly important the Tony puts efforts in
retaining its staff members. This would save cost of training and recruiting new employees
(Sandhya & Kumar, 2011). In order to retain employees, the work culture and environment of
the restaurant must be improved and employee issues must be addressed in an effective manner.
Employee motivation: Lastly, ensuring employee motivation is highly essential for the success
of the organization (Laddha et. al., 2012). The case states that employees reach to work late and
often do not show up. This is a clear sign of employee demotivation. Tony must create an
environment at work which is collaborative, empowering and performing. Employees must also
be given incentives and bonuses for improved performance. This will motivate them to work
hard and ensure their longevity with the restaurant.
Conclusion
This case highlights various organizational and communication issues faced by Tony’s
restaurant. The employees in the restaurant are highly frustrated under Tony’s leadership. The
communication between employees and employers is highly ineffective. Clear goal setting

theories have not been adopted yet. This is leading to ineffective service and reduced
coordination among employees.
In order to address the same, it has been recommended that Tony changes his leadership style
from autocratic to democratic and works towards retaining and motivating employees. The
overall communication within the organization must also be improved. This is important to
create transparency and improve coordination among employees.
The restaurant’s communication and leadership issues are severe and it is important that they are
addressed immediately. The restaurant held a great brand positioning and if efforts are put in the
right direction and at the right time, the same can be achieved again.

References
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