CASE STUDY: DIRECT DEPOSIT

Alvaro Chavez was serving as an Assistant to the Controller of Sundial Restaurant Group (SRG), a large national restaurant operations company. The group had recently acquired Restaurant Colleagues (RC), a much smaller restaurant management company with locations in the northeastern United States. This acquisition was SRGs way of penetrating what it felt would be a very lucrative new market for the company. The cultures of the two companies were quite different, as Sundial was focusing on efficiency of operations, data-driven decision making, management information systems, and point-of-purchase technology, whereas RC had grown from a family business with an emphasis on food quality and informal management systems. RCs core business was catering and special events, so the majority of its employees were in culinary work, had been with the company for many years, and were highly skilled. The front-of-the-house management staff had been kept to a minimum, and it usually hired casual waitstaff for particular functions when necessary.

Alvaro was of Colombian origin and had a very strong background in finance and information technology. He was working for SRG as a summer intern between the first and second years of his graduate management program. Among the goals of Alvaros boss was to standardize all accounting systems across the restaurants. One of her greatest challenges was dealing with payroll. Restaurant Colleagues had historically provided its employees with a weekly paycheck, which was available every Friday afternoon. The payroll function had been centralized but was still a bit archaic. On several occasions checks were lost or misplaced and had to be recut. This caused a major problem for the accounting people, as they also had to cancel the missing checks, and at the same time it disrupted the numerical sequencing of checks by location for auditing purposes.

Sundial had all of its employees in a direct deposit program, as it felt it was much more convenient for everyone. After Alvaros boss observed the payroll system of RC, she decided that these employees would also be put in a direct deposit plan and the payroll function would be assumed by SRG. She assigned Alvaro the responsibility of explaining the program and getting the RC employees to sign up. To Alvaros dismay, he found that the form to establish a direct deposit account was written in English and was fairly complex. More than 80 percent of the RC culinary staff was foreign, and some spoke little English and could not read it at all. Many employees came to him explaining that they did not have bank accounts. Others did not want their checks deposited in a bank account for a variety of reasons, such as avoiding easy access to their money by zealous creditors or ex-spouses, not trusting banks with their money, and being able to cash their checks at a place other than the bank. Many of the employees threatened to quit if this policy was forced upon them; this could have serious consequences for the organization, as these were skilled employees who would be difficult to replace. Alvaro was overwhelmed with their complaints and concerns and felt that many of the employees were coming to him largely because he was Hispanic and they felt that he would be sympathetic to their concerns. He was then approached by several employees who admitted that they were illegal aliens. Alvaro questioned them about having the green cards that allowed them to be employed. They told him they had the cards but had obtained them illegally, and if the company insisted on direct deposit, they would be exposed and could be deported. They would quit instead. If Alvaro informed his boss about the employees illegal status, she would be legally required to report them to the Immigration and Naturalization Service. Alvaro had not been aware of the magnitude of the impact of direct deposit on so many employees. He was at a loss about how to communicate all of this to his boss, or what suggestions to make. Direct deposit made so much sense to him at first; now he was not so sure whether use of the technology would be good or bad.

DISCUSSION QUESTIONS

1. What are some of the challenges of blending corporate cultures?

2. Who was best served by the technology and policy in this situation?

3. What advice would you give Alvaro?