Case Study - Katie's Kitchen

Tom Sampson had always wanted to own a restaurant.He studied business at the University of Toronto and then worked as a stockbroker in a highly competitive corporation in downtown Toronto.After ten years he decided that he did not like the competitive, high stress environment and needed a change.He also wanted to spend more time with his family.He enrolled in Stratford, Ontario's world-famous cooking school.

Tom thought that he had found the perfect business to purchase.Katie's Kitchen was a very successful moderate sized restaurant in Stratford.It specialized in a variety of home cooked meals.The restaurant had been in existence for over 45 years.The owner, Katie, was an extremely likeable woman and was highly respected by both her workers and the community.Katie had been able to make a good living off of the business.Last year her take-home profits were $78 000.However, at the age of 72, Katie wanted to retire.

The restaurant has 40 employees most of whom have worked for over five years in the business.Many of Katie's family worked there which has caused a comfortable family atmosphere in the business.The employees are well paid by industry standards and well rewarded with profit sharing, incentives and quarterly bonuses.The assistant manager, Lisa Little was respected and admired by the staff.She had implemented many of the new incentive programs after consultation with the employees.In fact, Katie had left much of the management and major decisions up to Lisa in the final three years before she sold the business.

The first major hurdle after the sale of the business was to hire a new chef.The old one had retired along with Katie.Tom hired a fellow classmate from the cooking school.For a few weeks things seemed to be going fine.However, there were a few changes that Tom and Samantha, the new cook, implemented.The first was the scheduling of the employees.Samantha insisted that the employees in the kitchen work the same hours every week.Previously, the employees could request the shifts each one wanted on a weekly basis to accommodate family responsibilities.This change was made without consulting Lisa and the employees.

Quickly, the atmosphere in the restaurant was changing.Sam did not have great people skills.She frequently yelled at the employees, often getting their names wrong and referring to them publicly as stupid and moronic.At these times, Tom usually agreed with her.One of these arguments occurred in front of customers.The customers left the restaurant immediately.

Another problem was that Tom was nowhere to be found on many occasions.He had purchased the restaurant to spend more time with his family.He insisted on being home at dinnertime and his children's bedtime.This was the busiest time at the restaurant.This would not be a problem except that he was adamant that many decisions not be made without his approval.For example, when a group of frequent customers were kept waiting for over an hour even though they had a reservation, Lisa wanted to provide free dessert.She was not allowed to do this without Tom's permission.She tried to reach him at home, but his wife said he was busy and could not be disturbed.

Six months after Tom had purchased the restaurant things did not look good.Profits were down 25%.Three of the best waiters and two assistant cooks had left and gone to work for the competition.Tom thought the problem was so severe that he and Sam had a meeting to decide what should be done.They cancelled the profit sharing program until business profits were back to the previous levels.Tom also heard from an outside source that the competition had approached Lisa to come and work for them.

Here is your task. Briefly describe the restaurant by highlighting the type of food served, the suppliers, the employees, and the customers. Explain one management theory you would use to make the business successful. You must refer to at least one of the management theories you learned about in this activity. Use the proper business vocabulary in your answer.