RBI Corporation Case - Social Media Risks and Rewards & Balanced Scorecard Metrix (focus chs3,7,11,15)

PART 1)

You work for a large restaurant chain (RBI Corporation) that is controlled tightly by the corporate headquarters. The restaurant chain started with one restaurant which focused only on high-quality hamburgers and fresh French fries. The first restaurant opened in 1948 and has expanded to 281 locations. The original owner and CEO decided not to franchise. Over the years, the company has been true to that strategy. The organization has stayed within the family and much of the management team is over 60 years old and doesn't really know much about technology. The chief information officer (CIO) is a family member who has focused on developing applications that provide for efficient operations and financial reporting. The opinion of the CIO has been that technology is in place to run the business and not a focus of the front office or customers. The company has a strong brand recognition for quality products, great price, and consistency from restaurant to restaurant. You are the chief audit executive (CAE) of the organization with a small audit group.

The company has only a limited internet presence and uses its website only for marketing. There are no online purchasing functions available. Management decided a number of years ago that the internet was not a key part of the business. They also chose to ignore the ramp up of social media sites along with the rapid expansion of smartphones. The plan was to keep technology simple, use it as long as it works, and keep costs down. The company is very profitable.

You and your auditors have noticed that a lot is being said at various social media sites about the company.

A number of complaints have surfaced about the quality at certain restaurants and the lack of customer focus. Social media sites are blocked from access through the company's intranet site, which makes it difficult for much research to be done while at work. Since social media is rapidly expanding, applications such as Facebook, LinkedIn, Google +, Yelp, and Twitter, along with many others, are changing the speed at which information about the company gets out.

You have noticed that a number of individual restaurants have taken it upon themselves to create their own Facebook accounts. All of these accounts have a different look, feel, and message. You also noticed the company's name coming up in many of the different social media applications and you are concerned about the brand reputation.

The CEO decided not to have an overall corporate Facebook account and was furious to learn that individuals at individual restaurants had established their own. He immediately called you in to recommend what immediate and long-term actions to take related to the corporate stance on social media.

A) Describe for the CEO what immediate steps management should take regarding social media policies and practices.

B) What risks does the expansion in use of social media create for the organization?

C) How would you explain to management some of the rewards that can be reaped from the use of social media for the business?

PART 2)

Further to the information above from Part 1, note that RBI Corporation is a major investor in a number of Superstores in the United States with operating regions in North, South, East and West. RBI Corporation has asked you to help it develop some metrics to evaluate the performance across different dimensions of its business, including finance, customers, process and employee growth (as with a Balanced Scorecard). Each region has a regional sales representative who interacts with the customers to take orders and deal with returns. The attached xls data includes sales data for a 4-year period, including demographics data about customers as well as main categories/subcategories of products.

A) Which product categories provide the highest amount of profit (use Profit Ratio = Total Profit/Total Sales)?

B) How long does it take to ship RBI Corporation product to each state on average (the goal is 4 days or less; use Delivery Time In Days = Ship Date - Order Date)

C) Which regions have the highest return rates (the goal is no more than 10% of sales orders should be returned; use Return Rate = Number of Returned/Number of Orders)?

D) Who are the top-performing RBI Corporation by sales each month (Rank the total number of sales by employee)?