The following analysis of the six restaurant franchise chains are based on all of the management theories such as SOP, training in management and employment, bonus, rewards, and performance appraisals, EAP (welfares), employee empowerment with limitations, rules and constitutions, learning motivation and visitations, creativity, ingenuity and innovation, self-direction and self-control, communication and decentralization, employee engagement to take initiatives, trust and relationships, and abdication through delegation. There are 13 management theories in total which will be explained from a thorough inference standpoint by stating all the detailed facts and logics in how they had led to the final conclusion in Theory X, Theory Y and Theory XY categorizations.
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1. Standard Operating Procedure is categorized in Theory X management for several reasons.
Firstly, McGregor (1960) had clearly stated that from the manager’s viewpoint in employees, they are inherently lazy and hence everything must be stated with rules and procedures for them to follow. Secondly, SOP usually takes place in factories, logistics centers or in central kitchens.
Theory X workers do not require to do a lot of thinking, all they need to do is to assemble parts in factories under heavy surveillances and close monitoring. For instance, in Din Tai Fung’s central kitchen, every worker must comply with regulation when entering from one work station to another. Their personal hygiene is constantly examined, if they failed to meet standards, they will be punished accordingly.
To make Theory X workers to do their jobs, they are constantly being threatened for punishment if they failed to comply or meet company standards. Theory X workers preferred to be led instead of leading others, they are not ambitious nor willing to climb the promotional ladder. As a matter of fact they refuse to be promoted due to responsibility and other things that come with the position. In other words, they are happy with the way they are now. Changes scare them and so they prefer working within the confined rules and procedures, they feel rather comfortable using their hands than using their intellects to create and innovate or to resolve unexpected situations from customers. Those responsibilities are greatly interested by
experienced Theory Y workers. Conceivably speaking, people who are Theory Y oriented would not be interested in working under tight control and so they are most likely not interested in applying jobs to factories or central kitchens. They might feel bored and unchallenged with jobs that are routine and repetitive. But from Theory X workers’ perspective, they will not mind it at all.
2. a) Training (management) is rather interesting, because the concept behind any form of training belongs to Theory X. But in this case, it belongs to Theory Y. The reason being, the
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training is only reserved for employees who have years and years of experience working in the organization and the likeable candidate is usually the favorite worker of the employer. The employer is most likely to coach or to train the worker as an apprentice under his or her wing.
Logically speaking, managers will not train Theory X workers and neither do they want to be trained. This has to do with the inherent behavior that Theory Y workers possess, they are inclining towards the interests in adventures and so they have great ambition to climb the promotional ladder, which the management training program fits their behavior. This is part of the SOP program which eligible candidate must complete for a certain number of academic credits to pass the training and to get the certificate at the end. However it is inclining towards Theory Y workers’ interest whom have the will to self-improve.
b) Training (employment) is categorized in Theory X management. This is the standard form in any training program designed for employees. The basic training includes in performing their duties according to company standards such as carrying trays, filling water, taking orders and memorizing customer preferences, and to learn details of every dish from the menus for a server’s position. Culinary training for chefs in the kitchen, they are to learn and to memorize every dish from the menu and learn to make them. Other training besides serving and cooking, such as the employer of Wowprime, he demands all of his workers to participate in physical training. This management was absolutely perfect for Theory X employees whose laziness must be corrected. Workers who have Theory X personality will have no choice but to participate, because they do not wish to get fired. If they can avoid, they will choose to avoid at any cost. The physical fitness program is rather intensive, it includes triathlon in swimming, running and
cycling. Others include rock climbing and hiking. In Dai’s mind when he set the program, he is in fact a sport enthusiast and firmly believes that health is more important than wealth. Hence, that is how the program was introduced, he wants every single worker in his company to stay healthy, fit, and energetic. The company absolutely needed energetic employees to work fiercely, that way
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the performance of the organization will build up. This is part of the SOP program that requires all candidates to participate, regardless of Theory X or Theory Y workers. However this
management style is inclining towards Theory X workers as a method to rigorously forcing them to participate in order to correct their laziness and passive behaviors.
In theory, Theory Y oriented workers do not need to be forced or persuaded to participate in sporting events, they are most likely to do it on their own without the company instructing them to do so. However due to the inherent laziness of Theory X workers, this management might work for them.
3. Bonuses, rewards, performance appraisals and recognition are categorized in Theory X management. However this may also be applicable for Theory Y workers, depending on the context from the company’s decision on the type of employees they wish to present the awards to. According to McGregor (1960)’s theory in the very idea of giving away bonuses or rewards to employees is used as a type of motivation. He believes that Theory X workers are only interested in the amount of money they are being paid for. Take Haidilao’s example of dowry, it is a
farewell and final bonus reward that the company pays to whom wanted to leave for their own interests or reasons. This clever tactic devised by CEO Zhang Yong is a way to determine the true nature of his employees whether they are either Theory X or Theory Y workers. Those that choose to leave will be automatically rewarded with the final bonus, those that choose to stay will get nothing. For instance, Theory X workers are most likely interested in the idea of being
headhunted one day by other companies. The one company that offers the highest remuneration will successfully headhunt them. But in Theory Y workers’ viewpoint, they do not think that way. The most likely way for them to leave the company is not due to high salary offer by another company but rather they may feel their positions in the company are no longer fulfilling when they notice their potentials were greatly underused or they may feel they are not getting the
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respect they deserve from the company. Hence, Theory Y workers are much more honorable than Theory X workers and they show true loyalty when it comes to saving their beloved company from potential bankruptcy or from economic disasters.
The only exception that Theory Y workers will accept the awards and bonuses is when they truly feel they deserve the recognition for their great performances serving for the company.
And so for the sake of ritual by organizing galas, presenting awards and offering stocks such as in McDonald’s case. Theory Y workers believe it is important that their recognition to get noticed by the organization in order to earn a chance of getting promotions.
4. Employee Assistance Program (welfares) is categorized in Theory Y management as a type of referral service that the company provides its employees in which they can seek professional treatment for emotional problems or substance abuse. In this case, Din Tai Fung restaurant hires professional masseuses, nutritionists, and counsellors to assist its employees physically and mentally to achieve greater physique. Both Wowprime and Haidilao also provide similar program that can treat each and every employee like a family member. Outback Steakhouse’s EAP
provides a complete welfare system that offers health insurance for the retirement plan. The welfare program takes care of employees’ health-related behaviours in ways to reduce health risks in the long term.
5. Employee Empowerment with Limitations and Restrictions is a great example of
contradiction whether employers should wholeheartedly entrusting their employees without any doubts. But by doing do so may be too risky. It may costs the company great fortune if
employees were found dishonest and so the entire notion of trust must be taken seriously under the company and shareholders’ considerations. That being say, the whole dilemma behind this contradiction was not explained by McGregor himself. But after reading and analyzing the company case studies that presented such management must have their reasons to do so. Hence,
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the whole idea of not being able to or completely abdicate and empower the authority to their employees, is simply to protect company’s fortune. This is certainly caught in between the borderline of trust and distrust. Theory Y workers are most certainly trustworthy comparing to Theory X workers who are most certainly being distrusted by their managers for knowing their behaviours.
If Theory Y workers are considered trustful partners and colleagues, then they should not be doubted in any way, but still in some company’s viewpoint they need to set up precautionary measures just in case of an unlikely event will occur. Therefore, this type of management is termed Theory XY. For instance, Haidilao’s limited employee empowerment give workers the right amount of authorizations such as customizing dishes, waiving off cheques or giving away free desserts. All of those reasons behind the choices must be stated clearly why the service was being handled the way it was on that day. If the explanations were reasonable and acceptable, then no one will be punished or being held accountable. However in T.G.I. Fridays’ case, its employee empowerment is severely limited with little rights in dish customizations but has plenty of rights in adjusting employees’ work schedule.
If there are no limitations or restrictions attached to the word ‘employee empowerment’, then the management is definitely categorized in Theory Y management. For instance, in Outback Steakhouse’s case, it did not mention anything about restrictions or limitations for its employee empowerment, hence it belongs to Theory Y management.
6. Rules and constitutions are definitely categorized in Theory X management, and they are the type of management found in Wowprime where other companies would consider them to be a direct violation of invading employees’ personal privacies and so they would not dare to include that in their company management, especially in Western cultures, freedom of speech and
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personal privacies are consider sacred and should not be tempered with. Otherwise the company will be risked of getting sued.
For instance, enforcing employees not to purchase extravagant items or cars over 1.5 million NT and not allowing extramarital affairs, these topics are very personal and sensitive to talk about. One personally does not think any company have the right to tell workers what they should or should not do outside of work. In Western business ethics, when a person finishes work and ready to leave, the boss has no rights to tell that person what to do, he or she only has the right to do so when he or she resumes to work the next day. The moment he or she finishes work, that time alone belongs to him or her.
7. a) Learning motivation is categorized in Theory Y management which is a type of collective learning and group learning experience. A person who has the inhere ability to self-discipline can motivate oneself to commit goals or to accomplish tasks in his or her own favor. For instance, working at Haidilao, workers can use the available resources for their own advantage to learn what is helpful for them later in life. Most of the workers at Haidilao are from rural areas and they are poor to pay for their own tuition to learn trades or skills. The available resources for them to access include computers and cars. Workers can use computers to practice their typing and they can also practice driving when they are asked to make deliveries.
Theory Y workers are very much eager to learn whenever they have the chance. Unlike Theory X workers, they will avoid learning if possible. Because in their mind, the more they learn of new skills, the more jobs and responsibilities will be given to them from their boss. In other words, they feel they are being taken advantage of. But in Theory Y workers’ mind, they see every job opportunity as a practice for them to self-improve. Another advantage working at Haidilao, the company asks for outstanding employees to form unofficial study groups as a way to motivate or to influence others by welcoming them to join their group discussions. Any
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discussion that is useful towards the company’s benefit can be used. Whose group discussion or plan that has chosen by the company is sincere compliment and this is a positive reinforcement for them to continue improving the quality of their ideas.
b) Learning through visitations is categorized in Theory Y management, this is one great learning method devised by Dai Shengyi from Wowprime. The company organizes trips around the world where workers can have a direct contact with the things they see and experience. Those are the type of things that one cannot learn from textbooks in schools. Particularly, workers must cover their own traveling fares, therefore the company will not declare any expenses. Hence, Theory X workers will not be voluntarily interested if they must cover their own expense and especially they are being asked to learn and share when returning to work by giving a full hour presentation for the whole company to listen. They may find the ordeal too cumbersome, and so for them to avoid traveling with the company is a smart choice. But in their positions, they have no other choices but to participate the event.
Dining numerous restaurants across the globe is how the team later develop their brand names for Wowprime. If the proposal get chosen, then the brand will be made into a restaurant. Only Theory Y workers will be interested in traveling the world with their own expenses in learning everything they see and experience. Because they have the ambition to return to Wowprime and pitch their ideas for the brand they conceived and most of all, Theory Y workers wish to become the new managers of his or her newly established branded restaurant.
8. Creativity, ingenuity, and innovations are most certainly categorized in Theory Y
management, because Theory Y workers are inherently enjoying brainstorming new ideas that can be used for the benefit of the company. Companies such as Wowprime and Haidilao wanted their workers to use their brains more often than their hands. Particularly Haidilao stated that the company hires workers for using their brains because the brain is the most valuable organ in a
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person and could be a great advantage for any organization to hire workers who are intelligent and motivated enough to create innovative products that show technical advancement. Creative teams organized in Haidilao allow each team to develop ideas or concepts for the company. The chosen idea from the winning team would be immediately implemented throughout the company.
The wining team will then be rewarded with additional bonuses for their contribution. In return, Theory Y workers will get the sense of accomplishment and this in effect will push them even further in hopes to achieve greater perfection. This type of competition among teams is healthy because it motivates every team to work their best to win the competition, it is the honor and recognition they pursue.
9. Self-direction and self-control is categorized in Theory Y management, because the notion of the will and desire to promote through the hierarchal ladder is more inclining towards Theory Y workers who are ambitious to continually hoping to self-improve through labor experiences.
The bottom-up system of management hierarchy is the perfect solution for Theory Y workers to go through every single position to become more familiar with the restaurant industry. Although Theory X workers must comply with the rules after being recruited to the company, they really do not want to go through so many troubles. But if they can avoid, they will do so. Theory X workers are not the kind of people that are self-disciplined and self-directed in guiding their own future in life. Whatever they have now in the present will fulfill them regardless. In other words if a manager is to promote a Theory X worker, the chances of him or her to get a promotion is very low comparing to the self-ambitious Theory Y workers.
10. Communication and decentralization are categorized in Theory Y management and are aiming at the future of managers in a leadership role, simply because they have to deal with a great amount of trust established by managers to employees. Therefore all managers should be trustworthy in order to make a positive reinforcement to their employees. For instance, a manager
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is like the President of the country, and the workers are the citizens of the country who have high hopes for the President to do well in leading the nation. Theory X workers cannot become
managers or leaders, because they are untrustworthy, inherently unambitious and lazy to work.
Decentralization is the highest empowerment given from above to regional managers, it has to deal with trust and the ability that the regional managers proven to have in their work performance serving for the mother company. Work performance can show credibility and can be used as a credential in the name of trust. That name of trust will give the managers the power of decentralization. Regional managers can speed up decision making through streamlined
communications and they also can use that power to make important decisions on the purchase of real-estate or on licensing rights. Those are the types of authority that Theory X managers will never have and so Theory Y managers are often the ones to be given with such powerful authority. They are easily more entrusted than Theory X managers.
11. Employee engagement to take initiatives is categorized in Theory Y management, because
11. Employee engagement to take initiatives is categorized in Theory Y management, because