1|Page

RMIT UNIVERSITY VIETNAM

2019

Course code BUSM4185

Course name Introduction to Management

Campus Saigon South Campus

Semester 3/2019

Assignment Case Study Report

Topic Case Study: Coffee X

Lecturer Nguyen Thi Minh Thu

Student Huynh Nhat Dang
Number of ID s3817974
Email [email protected]
Class time Friday 3pm-6pm

Class group Individual

Word count 1618

2|Page

Table of Contents
A. Company Background...........................................................................................................3

B. Issues Analysis........................................................................................................................3

I. Ineffective Human Resource Management......................................................................3

Poor Employee Assessment......................................................................................................3
Insufficient Training.................................................................................................................4
Lack of motivation to keep employees.....................................................................................4
II. Weak Organizational Culture...........................................................................................4
C. Proposed Solutions.................................................................................................................4

I. Changes in HRM Practices................................................................................................4

Recruitment Theory..................................................................................................................5
Training and Development Theory...........................................................................................5
Motivation Theory....................................................................................................................5
II. Building Strong Company Culture...................................................................................5
D. Recommendations..................................................................................................................6

Organized recruitment process:................................................................................................6

Training sessions specialized in customer service:..................................................................6
Adopt rewards and recognition policy:.....................................................................................6
Manager’s self-evaluation........................................................................................................6
Task division rearrangement.....................................................................................................7
E. References...............................................................................................................................7
3|Page

A. Company Background
Coffee X is a Vietnamese local coffee chain established by Ms. Nguyen, owning a nationwide
network including one franchise and 28 branches in three municipalities. Despite having been
operated well since 2006, Coffee X in recent years has witnessed a dramatic loss of return profit
and store closings. Under the pressures of operation and finance, Ms. Nguyen and the manager of
closed branch, Mr. Tran, had to resume the entire operation and realized that low customer
service quality is the root of the deficiency. The purpose of this report is to analyze key issues
related to its customer service, propose viable solutions as well as implement specific strategies
to overcome these challenges.

B. Issues Analysis

I. Ineffective Human Resource Management

In all existing service industries and today’s organizations, given that the nature of service and
manufacturing work involves an interactive environment between employees and customers,
Human Resource Management (HRM) plays a crucial role in creating and keeping the high
customer satisfaction level (Lin et al. 2016),which can be argued that issues within staff
management is likely to be the cause of poor customer experience that Coffee X currently faces.
Human Resource Management is the management process consisting of four major areas:
recruiting, choosing, training and maintaining qualified employees (Robbins et al 2014 pp.270).
Regarding the case Coffee X, there is an ongoing problem associated with all four parts in this
staffing process.

a) Poor Employee Assessment Recruitment is a starting-point step to select staff with required
behavioral and attitudinal characteristics (Beaumont 1992). However, as reported in the case,
the company had shown an inadequate selectivity in staffing, indicated by the considerable
number of underprepared worker as well as regular misconduct among employees. Excessive
unskilled labors have resulted in the understaffing situation dealt by the manager and laid
burden on the manager’s task of training.
 4|Page

b) Insufficient Training As mentioned in the case, the manager found it impossible to conduct
employee training, consequently, training approach offered by Coffee X would be less
conducted, thus putting a great strain on the recruit in which they would adapt to a new
working environment by themselves. Due to an absence of systematic approach to
knowledge and skill acquisitions (Khawaja & Nadeem 2013), the company suffered from
lack of essential skills to deal with certain situations without relying on managers.
c) Lack of motivation to keep employees Evidently, confession of an ex-employee strongly
suggests that motivational rewards have been neglected in Coffee X. Every employee has a
need of being recognized and commended so its drawback is not to give an incentive for
employees to perform jobs at their best. Rather, regardless of quality of employee’s
performance, there are no bonus reward and recognition for outstanding employees, which
maliciously makes an assumption in their mind that all employees are paid the same as the
manager does not measure their work performance. Without career ladder promotion and
extra benefits given, employees became lazy, demotivated and then came into an agreement
of quitting jobs.

II. Weak Organizational Culture

A notable characteristic of organizational culture is that connections among working employees
and managers are based on shared values and beliefs that bind people together, which guides
them through a company’s overall mission (Groysberg et al 2018). In Coffee X, all employees
are totally independent worker having no bonds and communication with each other, as stated by
an ex-employee. The negative consequence is that employees could not share information, goals
and wishes to others and manager, at which no support is shared, and employees are discouraged
to contribute to a decision-making process. This process proves to be unproductive in Coffee X
as the manager had to handle all tasks himself, leading to a disruption in workplace. Therefore, it
is also the fault of manger’s leadership style involving concentrated power and lack of
communication and sharing between him and subordinates.

C. Proposed Solutions
I. Changes in HRM Practices
Redman & Matthews (1998) stated that the nature of employees is boosting their productivity in
work on condition that in return a company supplies a great incentive to their improvement by
 5|Page

providing development opportunities including training sessions, appropriate tools and

supportive managerial environment. The effective change in HRM practices, therefore, can be a
determined key to exert influence on employee’s outcomes, and on a broader scope, to the entire
company’s performance. According to Delaney, J. & Huselid, M. (1996), enhancement of
employee’s skills could be achieved through adopting various practices throughout a managerial
process:
Recruitment Theory Recruitment Employee’s skill standard is needed to be set in an initial stage
of a recruiting process. In this stage, sophisticated selection procedures are designed to suit best
to employer’s expectations with an intention that only capable and well-prepared employees are
chosen.
Training and Development Theory In the method, the manager provides staff with extensive and
comprehensive training and development activities. However, the ideal type of training program
is striking a balance between soft and hard skills (Rowland et al 2017).
Motivation Theory The employee’s motivation levels are taken into consideration by many
methods and criteria. Equity or Social Comparison Theories (Festinger 1954) brings up a
concept of motivation by competitiveness among employees; Expectancy Theory workers
(Vroom 1964) will be motivated by goals and objectives while Hezberg’s theory (Hezberg 1964)
involves salary, benefits, working conditions, bonus as hygiene factor and recognition,
accomplishment, achievement as motivator factor.
Starbucks Corporation, an American coffee company and coffeehouse chain, used to undergo
similar problems with Coffee X but now positions as one of companies having the lowest
turnover rate in the industry (70%). Its success lies in every part of HRM process: previous
experience and proven success in baristas and managers are strictly required before assuming
their positions; two practical training types focusing on hard skill like cash register usage and
soft skill like problem-solving. Also, Starbucks put forth an innovative idea of ‘’Always Say
Yes’’ Policy and provide additional benefit package for even entry-level partners such as tuition
reimbursement, health insurance and paid time-off (Moon & Quelch 2003).

II. Building Strong Company Culture

With strong company culture considered as a driven force to commitment, high esteem, reduced
stress and absenteeism among employees (Saffold 1998), the challenge of low employee
retention rate can be addressed if the organization attempts to convert its weak organizational
culture intro constructive, solid working culture. The bottom line is that managers hold
responsibilities for defining a common set of values, languages, ethical standards that employees
should perceive as exemplary ‘’role model’’. Mars Inc, a manufacturing company of snacks,
candy in food and beverage industry, is a perfect example of this cultural transformation
approach. Its commitment to five Mars principles “Quality, Responsibility, Mutuality,
Efficiency, and Freedom” conveyed by a leader has successfully kept employees on the
job(Harkness 2018).Additionally, it is inferred that embracing employee empowerment theory
(Wilkinson 1998) in a workplace facilitates a flow of decision-making process since the
6|Page

approach allows control, resources and authority distribution to employees to account for
specific tasks.

D. Recommendations
With all theories and analysis applied into the case, it is recommended that Coffee X should
follow a step-by-step process mentioned below:
1) Organized recruitment process: The company’s recruiting aim is to identify appropriate
candidates with sufficient skills and passion into coffee service from their CV portfolios and
offline interview. In the phase, providing candidates a broad insight into company’s
functions, core values or orientation goal also helps lay a strong foundation for greater
understanding of operation culture and good initial impression. By doing so, the manager can
guarantee an overall standard of the recruits, hence construct a long-term approach for all
employees effectively.
2) Training sessions specialized in customer service: With respect to Coffee X as a beverage
service industry, customers have higher expectations from staff more than just a single drink
– it includes a drinking experience that builds strong customer equity. In addition to hard
techniques, employees should be taught with interpersonal skills such as establishing eye
contact, smiling, remembering customer name and actively interacting with them. High-
impact employee training and development benefits current employees in regard to
performance level, addressing weakness and consistency.
3) Adopt rewards and recognition policy: To integrate employee’s involvement into company’s
operation, it is required that employees are aware of the development and revision of rewards
programs. Participation of employee in the reward program constructing process is also of
significant importance to guarantee that they regard them as worth the effort. Similar to
Starbucks, Coffee X opt to utilize Hezberg’s strategy including paid insurance, recognition
and extra pay for best performance. The drawback of HRM strategy implementation like
Starbucks is labor training and bonus reward make up the largest expense, given an economic
downturn as Coffee X stores are all located in urban areas with already high wage rates. To
address it, Coffee X can simplify the beverage production process and remove irrelevant
tasks in order to hire fewer and maximize efficiency in each employee.
4) Manager’s self-evaluation It is essential that manager regularly go through all processes such
as organizational structure, staff bonding and leadership style to realize what currently goes
7|Page

in wrong way.To support manager’s self-reviews, feedback of management practices from

colleagues are collected weekly or monthly. By this way, Coffee X can create an open, two-
way working culture and the leader can be well-informed about need for instant changes.
5) Task division rearrangement Once employees are accustomed to the entire process and
highly capable of dealing with pressure, the manager can pull off a burden of overload and
divide it into small parts for his employees to undertake certain problems. This comes as a
win-win situation since managers and staff can contact on a daily basis and a decision-
making process runs smoothly after eliminating concentrated power.

E. References

Beaumont, P 1992, “The US human resource management literature: a review”, in Salaman, G.

(Ed.), Human Resource Strategies, Sage, London.
Buunk, A and Gibbon, EX. 2007, ’Social comparison: the end of a theory and the emergence of a
field’, Organizational Behaviour and Human Decision Processes, vol.102 no.1, pp.3-21.
Debusscher, J, Hofmans, Jand DeFruyt, F 2017, ‘The multiple face(t)s of state
conscientiousness: Predicting task performance and organizational citizenship behavior’. Journal
of Research in Personality, vol 69, pp. 78-85.
Delaney, J & Huselid, M A 1996, ’The impact of human resource management practices on
perceptions of organizational performance’. Academy of Management journal, vol.39, no.4, pp.
949-969.
Festinger L 1954, ‘A theory of social comparison processes’, Human Relations, Vol.7 no.2,
pp.117-140.
Groysberg, B Lee, J., Price, J & Cheng, J. 2018, The leader’s guide to corporate
culture. Harvard Business Review, vol.96 no.1, pp. 44-52.
Gupta, A & Kurian, S., 2006‘Empowerment at work: The dyadic approach’. Vision, Vol.10 no.1,
pp.29-39.
Harkness, J 2018, ‘Four global food & beverage companies that have cracked the code on
employee retention’, ForceBrands, viewed 1 December 2019
<https://www.forcebrands.com/blog/2018/10/03/global-food-beverage-companies-employee-retention/>

Herzberg, F 1964, ‘The Motivation-Hygiene Concept and Problems of Manpower’, Personnel

Administration, vol.27 pp. 3-7.
8|Page

Khawaja & Nadeem 2013, ‘Training and Development Program and its Benefits to Employee
and Organization: A Conceptual Study’. European Journal of Business and Management, ISSN
2222-1905 (Paper) ISSN 2222-2839 (Online), Vol.5 no.2.
Lin, C, Sanders, K, Sun, J, Shipton, H, & Mooi, E 2016, ‘From customer ‐oriented strategy to
organizational financial performance: The role of human resource management and customer‐
linking capability’. British Journal of Management, vol. 27, no.1, pp. 21-37.
Moon, Y., & Quelch, J. A. 2003, ‘Starbucks: delivering customer service’’. Harvard Business
School.
Redman, T & Mathews, B 1998, ‘Service quality and human resource management: A review
and research agenda’, Personnel Review, vol.27, no.1, pp.57-77.
Robbins, S., DeCenzo, D, Coulter, M, & Woods, M 2014, ‘Management: the essentials’, 2nd
edn, Pearson Australia, Frenchs Frest, N. S. W.
Rowland, C, Hall, R, Altarawneh, I 2017 Training and Development.’,EuroMed Journal of
Business, vol.12 no.1, pp.36-51.
Saffold, G 1998, ‘Culture Traits, Strength, and Organizational Performance: Moving beyond
Strong Culture’, The Academy of Management Review, vol 13, pp. 546-558.
Wilkinson, A .1998, ‘Empowerment: theory and practice’, Personnel Review, Vol. 27 No. 1, pp.
40-56.