According to Douglas McGregor (1960), his interpretation of Theory X management is that people are generally lazy, unintelligent, irresponsible and lack little ambition to climb the corporate ladder. So they must be coerced, persuaded, rewarded, threatened or punished to do the work. In other words, these are the type of people preferred to be directed or told how to do their job (McGregor, 1960). This explanation is a great example of a carrot and a stick approach to entice the unambitious employees to reach goals, only in their minds they just wanted to bite the carrot, which is the symbolism of rewards. So in order to induce them from moving forward,
carrot and a stick approach or rewards can do the trick, but only temporary.
On the other hand, Theory Y, which McGregor (1960) explained is that people are not born lazy, and in fact they are willing to accept responsibility and to take every challenge to self- develop and learn. Mangers particularly view them as valuable employees, and that they have a lot to offer by unlocking their hidden potentials. In this case, managers are willingly to invest
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time, energy, and money on these employees, hoping they could make a huge difference in the company performance (McGregor, 1960).
As Zhang Yong, the owner of Haidilao, described his business ethics, he does not hire workers for the use of their hands but rather he hires them for the use of their brains in any unexpected situation (黃鐵鷹，2014).
According to the learning institutions established by these restaurant chains, there are two major types of training: physical (employment) and mental (management) that can be either belong to Theory X or Theory Y management. For instance, physical training such as trade and sports are designed to train employees’ culinary skills and to hone their bodies healthy, they belong to Theory X management. On the one hand, managerial training were to prepare current managers of becoming future leaders in any successful organization, belonged to Theory Y management such as Hamburger University of McDonald’s, Haidilao University of Haildilao, and managerial training programs of Wowprime.
Lastly, Theory XY is a more democratic management that combines both theories that are used in a given situation where employee are authorized with empowerment, but with limitations or restrictions. The situation applied to both Haidilao, and T.G.I. Fridays whose managements limited employees from giving freebies like desserts or waiving off of cheques must indicate valid reasons for doing so. For instance, in situations that employees are giving freebies or waiving off of cheques is due to the avoidance of potential conflict with rude and unreasonable customers. Instead of bravely resolving the situation accordingly, most employees’ instinct would choose freebies or waiving off of cheques to avoid a direct confrontation with them. That is a violation of company policy for exploiting the use of empowerment. That is the reason why most restaurant organizations would not foolishly enough to give employees the key to fully access to
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empowerment. Since T.G.I. Fridays’ has a severe limitation of employee empowerment,
therefore it is categorized in Theory X management. As for Haidilao’s employee empowerment, it is definitely more liberal than T.G.I. Fridays, hence it is categorized in Theory Y management.
Another situation involves where both theories can be applicable to Theory X and Theory Y workers is bonuses, rewards, and wages but with different intentions behind the practice.
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Chapter Two Literature Review
The second chapter is divided into four sections: the first section briefly introduces the various types of restaurant operations and their characteristics (Chain or independent, franchise, quick service, fast casual, family, casual, fine dining, steakhouses, seafood, ethnic, and chef owned restaurant). The second and third sections introduce Theory X and Theory Y management in Cross-strait and North American restaurants. The final and fourth section will conclude chapter two by describing the operation of leadership within the restaurant setting.
Section I Types of Restaurant and their Characteristics
Chain or independent, franchise, quick service, fast casual, family, casual, fine dining, steakhouses, seafood, ethnic restaurants, and chef-owned restaurant. Each has its own advantages and disadvantages, and finally it is up to the owner’s decision over which is more suitable for his or her business venture. This section is divided into two parts: current restaurant industry of Cross-strait and current restaurant industry of North America.
Part I introduces the current restaurant industry of Cross-strait that represents the most
successful restaurant chains and franchises which already have established a cult following among frequent dining enthusiasts. Here are the current list of six prevalent brands that have truly dominated the foodservice for patrons to dine: Wowprime (王品集團), Din Tai Fung (鼎泰 豐) (Thai Town Cuisine (瓦城泰統), Kanpai Group (乾杯食集團), Zensen Sushi Express (爭鮮壽 司), Mitsui (三井) and Haidilao (海底撈) from China.16
According to Wowprime’s total revenue of 2014, the company earned 17 billion NT dollar (林潔玲，2014). Din Tai Fung did not reveal too much of its revenue of 2013, but it was reported to have earned the highest turnover rate of 48%. Now Yang, the owner of the franchise wished to lower the turn table rate by making servers to wear leather shoes instead of sneakers.
Because he does not want his precious employees to overwork themselves (王一芝，2014).
Thai Town Cuisine, the Thai cuisine restaurant empire has earned $19 billion NT in 2013 for its total revenue (王一芝，2013a). Finally, Kanpai Group was reported annually of earning over $7 million NT (張翔一，2013).
For other two successful Japanese chain restaurants in Taiwan: Zensen and Mitsui. Both restaurant chains were reported to be quite successful in their business. Zensen was reportedly to has earned $2.5 billion NT in 2007(陳建豪，2007), and Mitsui has earned $2 billion NT in 2013 (TVBS新聞，2014). All seven restaurants have great revenue results in the past and present, which make these restaurants a great study for the dissertation.
Table 2-1
Restaurant Chains and Franchises in Cross-strait
Source: Wowprime (2015). Wowprime. TW: www.wowprime.com.tw (continue onto page)
Names Restaurant Types Characteristics
Wowprime (Taiwan)It has 300 branches in Taiwan, China, and Thailand
Average price: NT$600-NT$1300 (CDN$22-CDN48)
Financially earned NT$15-17 billion in 2013 to 2014
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Table 2-1
Restaurant Chains and Franchises in Cross-strait (continued)
Names Restaurant Types Characteristics
Din Tai Fung (Taiwan)
Din Tai Fung logo is the trademark property of Din Tai Fung Inc.
Chains, Franchise,
Michelin One star rated restaurant Specializes in Xiaolongbao, and
Thai Town Cuisine logo is the trademark property of Thai Town
Chains, Thai cuisine, Casual
Currently has 30 branches in Taiwan, and 6 branches in China Specializes in hot spicy curry and other traditional Thai dishes
Sushi Express logo is the trademark property of Zensen
Specializes in sushi platters on the conveyor belt (all priced at $30 NT)
Average price: NT$300-NT$600 (CDN$11-CDN$22) or more Earned NT$2.5 billion in 2007
(continue onto next page)
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Table 2-1
Restaurant Chains and Franchises in Cross-strait (continued)
Names Restaurant Types Characteristics
Kanpai Group (Taiwan)Currently owns 7 brands: Kanpai （乾杯）, Old Kanpai （老乾杯）, Red Wine Kanpai
（紅酒乾杯）, Kanpai Bar, TAN （微風）, 黑毛屋，季月乾杯, and 八兵衛
It has 20 branches in Taiwan
Specializes in meat and seafood assortments:
beef, pork, chicken, shrimps, clams, and Korean appetizers (kimchi)
Drinks: Beer and soft drinks
Average price: NT$800-NT$2000 (CDN$30-CDN$74) (a la carte and drinks)
Financially earned NT $700 million in 2013 Mitsui (Taiwan)
It has 10 branches in Taiwan
Serve the finest and freshest ingredients around the world
Source: Din Tai Fung (2015). Din Tai Fung. TW: www.dintaifung.com.tw (above)
Thai Town Cuisine (2015). Thai Town Cuisine. TW: www.thaitown.com.tw (above) Zensen Sushi Express (2015). Zensen. TW: www.sushiexpress.com.tw/about.phh (above) Kanpai (2015). Kanpai TW: www.kanpai.com.tw/index.html (above)
Mitsui (2015). Mitsui. TW: www.mitsuitaipei.com.tw/zhi/index.html (above)
(continue onto next page)
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Table 2-1
Restaurant Chains and Franchises in Cross-strait (continued)
Names Restaurant Types Characteristics
Haidilao (China)
Haidilao logo is the trademark property of Haidilao Inc.
Currently has 80+ branches in China, and one in the US and in Singapore.
Specializes in hot spicy soup packs sold in grocery stores, and in restaurants.
Impeccable services like nail polishing, shoe shining, and board games at the waiting lounge.
Average price: $88 RMB per person (NT$434) or (CDN$16)
Annually earned $312.7 million RMB
Source: Haidilao (2015). Haidilao. CN: www.haidilao.com/index.html
I. 王品集團 (Wowprime) was established in 1993 by Dai Shenyi; it is highly regarded as one of the most successful restaurant chains in Taiwan that created fifteen brand names within two decades, each has created its own unique service, food, mission philosophy and target market. Ranging from Japanese fusion, Japanese BBQ, French, Italian cuisine, hot pots,
teppanyaki, tonkatsu, coffee shops to fruits and vegetarian cuisine. Each brand has launched its own marketing campaign, collaborating with media and credit card companies. It currently has 300 branches opened in Taiwan, China, and Thailand. The restaurants mainly specialize in the casual dining segment and only Wang Steak restaurant categorizes in the Western fine family dining segment (Chen, 2013).
Profitability wise in the first quarter of 2012, consolidated as a group, Wowprime achieved 55% gross margin, 13% operating margin, and 11% after tax net margin. None of the operating activities include interest revenue, licensing revenue from Tokiya Taoban Thailand operation, and minor loss from change in fixed asset. The company does not own any land of the restaurants, and hence, depreciation is minor and only around 4.2% of total cost of goods sold
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and selling, general and administrative expenses (Chen, 2013). In 2013, when the group is not consolidated, Wowprime achieved similar results of 53% gross margin, 11.6% operating margin, and 13% net margin (康和証劵投資顧問股公司，2013a). According to its financial statement from 2013 to 2014, Wowprime has earned $14.89 to $16.92 billion NT, and it is planning for an unit expansion up to 131 units from its existing 359 locations in 2014. In 2015, the enterprise hoped to expand another 10 units which give a total units of 500 locations (林潔玲，2014，
2015).
II. 鼎泰豐(Din Tai Fung) is an award winning restaurant chain originated from Taiwan, and it is the only restaurant brand from Taiwan to receive a Michelin star restaurant rating. It is touted as the most prestigious honor to receive such an acceptance. The restaurant specializes in xiaolongbao, a pastry filling that stuffed with pork and vegetables containing soup. It is a bite size delicacy adored by many tourists who are willing to pay a pilgrimage visit to the restaurant during their stay in Taiwan. It is suffice to say that Din Tai Fung is a landmark restaurant that represents the food and beverage industry in Taiwan. The establishment was once a cooking oil retailer founded by Yang Bingyi (楊秉彝) who was born in Shanxi China but moved to Taiwan in 1948 as a result of the Chinese Civil War. Earlier in his life, he worked at Heng Tai Fung (恆 泰豐油行) for 10 years but soon found himself unemployed due to the store’s closing. Thus he and his wife Lai Penmai established Din Tai Fung, a cooking oil retailer in 1958. How did the establishment convert itself into one the most recognizable chain- restaurants in the world is rather legendary. In 1980, a veteran solider who specialized in making xialongbao asked Yang Bingyi whether he can set up a food stand in front of the store to sell xialongbao. The food stand business became an overnight sensational hit and Mr. Yang immediately saw it as a business opportunity, he then decided to learn making the delicious bite size delicacy, later, Mr. Yang ended the cooking oil business, and start focusing on making and selling xialongbao as his main business, it later became a full-fledge restaurant in the 1980s. His son, Yang Jihua (楊紀華) the
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current operator and CEO took over the business and turned the brand into a multi- billion dollar empire across the globe.
Currently Din Tai Fung has 9 branches in Taiwan, 3 branches in Hong Kong, 1 in Macau, 24 branches in China, 13 branches in Japan, 6 branches in Korea, 18 branches in Singapore, 4 branches in Malaysia, 12 branches in Indonesia, 1 branch in Thailand, 5 branches in the United States, and 2 branches in Austria (Din Tai Fung.com.tw, 2015). 98 locations worldwide.
Profitability wise, the restaurant founder refuses to go public with the company’s success but rather he chooses to give back everything that the company has earned to his trustworthy employees. He sees them as the most valuable asset and has a lot of potential to grow. Although no profit data available for public access but the company reported to have earned the annual revenue over NT$1.2 billion in Taiwan and over NT$3 billion worldwide for its overseas
‘franchise business (江睿智，2010). This remarkable feat has to deal with its successful managerial technique that the owner claimed to inspire from McDonald’s!
III. 瓦城泰統 (Thai Town Cuisine) was founded by Xu Chengyi (徐義) in 1990 and begins its restaurant operation in serving casual family style Thai food. In 1993, 瓦城 started standardizing its kitchen and utilizing the Point of sale system. The company placed most of its restaurants within shopping malls to ensure foot traffic that help intensifies shopping crowds.
Overtime, this gradually built itself a name for serving consistent Thai cuisines. The tremendous success of the first family style Thai restaurant 瓦城, led TTC to grow confidently by striking the iron while it is hot when it decided to roll out its second more trendy and contemporary brand Very Thai (非常泰) which also served Thai food but targets at adolescents and younger adults.
To expand its food and beverage empire across Taiwan, TTC then launched its Chinese Hunan food brand 1010 in 2006. TTC currently has thirty branches in Taiwan and only six brands
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belong to the 1010 Chinese restaurant. The company offers the most authentic Thai food
experience to diners and enthusiasts alike in Taiwan. TTC went public in 2011and is planning to open one hundred restaurant locations in Greater China in 2013. The first Thai Town (瓦城) restaurant is slated to open in Shanghai in 2014 (Chen, 2013).
Probability wise in 2013 the full year consolidated statement, TTC achieved 54% gross margin, and 14.2% operating margin, and 26% net margin. 2014 the full year was consistent at 54% gross margin, 14% operating margin and 29% net margin (康和証劵投資顧問股公司，
2013b). Then in 2012, the company reported to have earn $2 billion NT with an annual growth of 25% (王一芝，2013a).
IV. 乾杯食集團 (Kanpai Group) is a quick casual service restaurant chain founded in 1999 by a half Japanese and half Taiwanese owner named Hirade Shoji (平出莊司); the restaurant serves Japanese style BBQ called yakiniku and brings the kanpai toasting culture to Taiwan. During his college years, the founder ran his first restaurant and later target at teenagers and young adults in his current restaurants. The young and feisty founder is vivacious and fun, he even created some drinking games such as kiss for free dish of pork, bottoms up at 8pm and get a free refill, this gaming activity instantly gains popularity among young adult patrons. The small restaurants generally situated in the alleys and you can hear echo of excitement coming from it.
The experience was quite memorable when going for the first time. Besides the current
restaurants, Kanpai has expanded and introduced more premium brands such as Old Kanpai and Red Wine Kanpai, all of which serve Japanese yakiniku but in a much higher end dining
environment and more pricy dishes. The founder decided to open another product line called Kanpai Ippudo, which offers Japanese ramen, the first location was opened in May 2012 and with the second location opened in 2013. In total locations, Kanpai currently has twenty restaurant units in Taiwan (Kanpai.com, 2015).
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Profitability wise, Kanpai has not yet made public, so there are no data available for public access. It was reported in 2013 that with twenty restaurants, Kanapi group earned NT$700 million (CDN$25 million) of revenue, or almost NT$30 million (CDN$1.5 million) per
restaurant. Kanpai restaurants have smaller seating capacities and could not sit more than forty people each round which made the dining atmosphere cozy and fun (Chen, 2013).
V. 爭鮮壽司 (Zensen Sushi Express) is a quick causal revolving sushi restaurant chain founded in 1978 by Mr. Chin-Chiou Stanley Chen (陳津秋原本) in Taiwan. The company was originally started as a clothing export business but later divert it into a food and beverage business. In 1996, Chen set up his first sushi take out business and later that year he founded a revolving sushi restaurant. The concept was indeed a success, he quickly expanded the operation into a wholesome food business. As of 2012, it opened 200 locations in Taiwan, 70 in Mainland China, 20 in Hong Kong, 1 in Singapore. It plans to stretch its restaurant chains in the U.S sometime in 2013. The name Zensen is a play on words that sounds alike but has a dual meaning to it. The word literally means to compete with freshness but it sounds like ‘truly fresh’ in Mandarin. Besides the catchy and memorable name, the company truly aims for freshness and this reflects the persistence and dedication of providing quality food at an affordable price. The emphasis on quality is serious business at Zensen as the ingredients to prepare for each dish, are sourced from numerous places of origin, some from points around the world, and where practical, locally. The mix of food ingredients may include tuna from Norway or Canada, shrimp from Thailand, scallop from Japan, and rice from California. Such procurement scheme will provide the company with careful selection allowing the restaurant to offer quality sushi at great affordable prices (Sushi Express.com.tw, 2015).
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Probability wise, it is not a listed company, and so it did not disclose any financial data to the public for reference. However it is reported to have earned an annual revenue of $2.5 billion NT (陳建豪，2007).
VI. 三井(Mitsui) is a fine dining Japanese chef-owned cuisine restaurant chain originated from Taiwan and it currently has ten branches. The company was founded by a very dedicated chef named 黃奕瑞 in 1992. His insistence for freshness goes on the traditional way as Japanese sushi chef would get up early in the morning at 6am to the fish market to pick up the freshest procurements. He is a well-trained sushi chef that demands perfection at its greatest, so going to the fish market allows him to hand pick the best quality product. Mitsui takes sanitation seriously because it is something that cannot be seen which makes it valuable. Because sanitation can offer the freshest sushi, and this is what helped builds the foundation of the company. It is also setting a firm commitment to the customers that ‘you will get absolutely nothing but the best we can get for you.’ To maintain and preserve its absolute freshness of food ingredients; the founder
improves their weekly turnover rate. In order to provide the freshest ingredients; he invented a
‘modifying menu’ in his business model which is unlike other conventional Japanese cuisine restaurants; it does not have a fixed menu. It solely relies on whatever ingredients available at the time being to prepare the dishes to customers. The end result will give customers huge surprises every day as they do not know what the menu will offer today or tomorrow! Mitsui imports seafood from all over the world to get the highest quality but in return selling to their beloved customers at a very reasonable price. It is like treasure hunting when eating at Mitsui, a customer would describe (張志誠，2007). The company currently owns seven brands: Mitsui (三井), Mitsui Cuisine (三井料理美術館), Mitsui Japanese Cuisine, Mitsui Cuisine (明水三井), Kyoku Sushi (極壽司), Mitsui Style (三井選品), and 三井 Cuisine M. Each brand has its own ranking
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quality, so customers will have several options to choose from when they consider dining at one of the Mitsui restaurants (Mitsui Taipei.com.tw, 2013).
Profitability wise, it is not a listed company that goes public, so there are no financial statements made available for public to access. However, it is reported to have annually earned
$2 billion NT (TVBS 新聞，2014).
VII. Haidilao (海底撈) company is one of the most successful quick service hot pot
VII. Haidilao (海底撈) company is one of the most successful quick service hot pot