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MGT 500 May 25, 2006 Observation of Management Report: Ruths Chris Steak House vs.

. Hooters In choosing a subject for our management observation, our groups interest repeatedly returned to a restaurant environment. The process of brainstorming produced many different styles of restaurant, and it soon occurred to us that a great deal of potential lay in comparing two such styles rather than focusing on one. Thus we decided to observe, compare and contrast management in action at Hooters (660 N. Wells St., Chicago) and Ruths Chris Steak House (431 N. Dearborn St., Chicago). Both are chain restaurants with well-known brands, and obviously both strive to provide their patrons with the most enjoyable dining experience possible. However, each establishment defines that experience uniquely. In one sense, Hooters and Ruths Chris share the same goal; in another sense, their goals could not be more diametrically opposed. It is this dichotomy which piqued our collective curiosity as well as shaped our methodology. Our central idea was to observe how managers at Hooters and at Ruths Chris achieve essentially the same ends in different ways. Hooters is a sports bar, the kind of place that draws mostly males age 16-45 in pursuit of beer, hot wings, multiple games on TV and (to put it mildly) other atmospheric qualities prized by that traditionally superficial demographic. Ruths Chris, on the other hand, is a tony steak house which seeks a more upscale clientele and offers a high-quality menu in a swanky setting. Surely, management cannot operate in precisely the same way at these two restaurants, even though they ostensibly aim for the same target that is, a satisfied diner who will eat there again. How do managers motivate staff, establish protocols, tend to customers and make other decisions which foster these distinct environments? To observe the operations of an average day, we attended a Saturday afternoon lunch at Hooters and a Thursday evening dinner at Ruths Chris. During both meals, we took note of the interactions between managers and employees, managers and customers, employees and customers, and employees amongst themselves. We also sought the input of our servers at each restaurant, and of the general manager of Ruths Chris (the manager on duty at Hooters declined our interview request). In addition, we noted environmental factors such as layout and ambience which, although not the direct purview of the restaurant managers on duty, nevertheless represent management decisions which contribute to their overall goals. The manager-employee dynamics were drastically different at each restaurant. This was directly evident in the frank accounts our servers gave us of their respective managers abilities. Our server at Ruths Chris had nothing but praise for his general manager, noting (without solicitation) that on the evening we were there, the GM was doing the job of three guys. In stark contrast to this, our waitress at Hooters mostly disparaged her manager, mockingly pointing out what she considered his lax oversight and grouchy temperament. As we learned, this had a great deal to do with the influence styles employed by each manager. Ruths Chriss GM wholeheartedly favored a pull style. He placed great importance on earning his staffs respect, by treating them fairly and equally. He emphasized that he never told anyone to do anything e.g., go bus table four but always made sure to ask as in, could you please go bus table four. He described the importance of active listening in tending to their concerns. His goal was to foster participation and trust to have a staff that responded to him because they wanted to. At Hooters, however, the manager relied on a push style of influence. He gave his staff their directives and they complied; if they failed to do so, they would only earn a reprimand and, if the behavior persisted, a firing. This reward and punishment system ensures a team of

employees working purely out of self-interest, taking their manager seriously only so far as is necessary to avoid grief. At first blush, it sounds like the former style is much more effective than the second in promoting overall organizational goals. Yet Hooters succeeds at its goals at least as well as Ruths Chris, so its employ of a push style manager (at least at the franchise we patronized) cant be hurting it too much. There is a simple explanation for this: each managers influence style fits with his employees motivation. That is, each manager invokes his staffs distinct followership. Here we must consider the difference between the average server at a sports bar and the average server at a steak house. Our waitress at Hooters was a college student, had held her job for about two years, and made it quite clear that she had higher aspirations than doling out wings and beer. Our waiter at Ruths Chris had been in his position for 12 years and counting, and had a palpable passion for his work. Ruths Chris GM told us turnover among the wait staff was virtually non-existent, compared to the revolving door environment described to us at Hooters. This is logical: servers at high-end restaurants earn good money and work steady hours (the GM even described them as people who are in these careers because they enjoy them), whereas the typical Hooters waitress is working a summer job, earning some extra money while in school, or simply paying the bills until something better comes along. In short, waiting tables at Ruths Chris is a career; waiting tables at Hooters is a job. Given this fact, why should the manager at Hooters attempt to channel a common vision or appeal to a sense of loyalty or collective success with his employees? A push style might assure a purely self-interested staff, but the nature of the job virtually assures that already. If we were to swap the managers we observed at Hooters and at Ruths Chris, neither would likely be as successful. Ordering people around at Ruths Chris would lead to an exodus of the sort of talented staff its patrons expect. Attempting to win the hearts and minds of the staff at Hooters would probably result in little more than a few eye rolls. The two breeds of server are motivated by very different things. Expectancy theory tells us that motivation is a function of the employees belief that effort will result in good performance, that performance will result in a particular outcome, and that said outcome is of a certain value to the employee. The Ruths Chris server exerts effort in the belief the resulting good performance will lead to repeat business, loyal customers, seniority-based pay raises, and long-term growth of the organization as a whole. The tangible reward is of high value, and thus their effort is high. An effective manager will appeal to this sense of long-term, collective sense. The Hooters server exerts effort to secure a good tip and not get fired. Long-term rewards such as raises, promotions, and organizational growth are non-factors to an employee who considers her job a temporary one. An effective manager will appeal to this by keeping tasks cut-and-dry and emphasizing immediate, individual rewards and punishments. Our observations also lead us to conclude that the responsibilities each manager handles on a typical day are quite different. At Ruths Chris, the GM maintained a constant presence on the floor, tending to staff and customers as needed. He moved quickly and with purpose; on the evening we were there, as our server had noted, he was also filling in for an absent manager. The restaurant was bustling even on a weekday evening, and it was apparent to all that the GM had a personal stake in making sure every detail went smoothly. On a relatively busy weekend afternoon at Hooters, the manager appeared largely idle. For most of the time we were there (between two and three hours), he was seated at the bar near the front, apparently going over paperwork. The only time we noticed him moving through the restaurant was to retrieve a plate of chicken wings a customer had sent back, which, our waitress informed us, he made sure did not go to waste. This illustrates the distinction between a manager and a leader. The man in charge at Hooters is a manager: he is there to handle the books, make sure employees are on time and on

task, keep the facility functioning, and tend to customers when they are dissatisfied. The man in charge at Ruths Chris is a leader: he motivates his employees with mutual respect and a conveyed desire to see everyone prosper, he devotes attention to patrons as a matter of course, and he approaches his task with a long-term view. In both cases, the attitude is congruous with the expectations of both employees and customers. Clearly, every manager must be a leader in some respects (to keep staff motivated, one way or another), and every leader must be able to manage (tending to work schedules, purchases and so forth). But which side of the continuum a particular individual should fall on depends in some part on his role and the organizational culture in which he operates. Again, we believe that neither manager we observed would be as effective in the others environment. Socialization also played a discernable role in the interactions amongst employees. In fact, at Hooters our waitress described a sort of de facto level of management operating below the formal manager-server hierarchy. Though they are ostensibly equals, the hostess wields quite a bit of influence over the waitresses. It is the hostess who decides which parties are seated at which tables a not insignificant power in a profession driven by tips. As our server explained, quite reasonably, it is wise to stay on the hostesss good side. Being in her favor can bring you larger parties, or those most likely to consume the most alcohol which can lead to larger tips through both larger bills and reduced spending restraint. Cross the hostess, though, and you could find yourself dealing with every small-child-toting family that comes in, or the lower-margin female customers, or perhaps no parties at all. This is one way the culture at Hooters is shaped at the ground level. The culture at Ruths Chris is more closely administered from the top down. The GM explained that shaping that culture begins from the hiring process, where candidates are brought in almost exclusively on a referral basis. New hires are chosen for their attitude, which must fit in with Ruth Chriss culture of passionate and personable service. Roles are clearly defined by the GM a server will never be asked to bus a table, a cook will never be asked to wash dishes, etc. Very little peripheral socialization of culture goes on, again fitting the distinction of Ruths Chris as a collectively-oriented work environment versus Hooters as an individually-oriented one. Although it might seem that this contrast embodies an example of good management (Ruths Chris) versus poor management (Hooters), it is difficult to make this claim in the face of both franchises continued success. As we have stated, someone must be doing something right in both cases. Customers ask more of Ruths Chris when they choose to dine there; proportionately more is asked of the man charged with providing that dining experience. Customers have much different expectations when dining at Hooters; and accordingly, the organization has much different expectations for its managers. Each restaurant achieves its goal of providing a specific dining experience that keeps people coming back. How each manager plays his part in that achievement, however, is very different.

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