Name: Vương Minh Phúc

Student ID: s3749506

Subject: Introduction to Management
Teacher: Hung Thanh Nguyen

INTRODUCTION TO MANAGEMENT
PIZZA2GO CASE STUDY
1. Introduction
Over the years, Pizza2Go has faced several challenges despite its growing success
since its start in 2005. It can be seen that these challenges fall into topics related to
stakeholder theories, power, organizational culture This essay is going to discuss the
management theories used to analyze the problems, as well as providing solutions to
tackle the problems.
2. Case Analysis
Stakeholder theory is a set of principles in organizational management and
business ethics which stress the relationships between a business, its employees, and
other stakeholders, such as customers, suppliers, and investors. One of the main
problems in Pizza2Go relating to stakeholder theory is that the employees of the
Pizza2Go had to work in difficult working conditions. They were heavily exploited to
work for extra hours with no overtime payments by the franchisees. Mr. Long, one of
the workers in a Pizza2Go’s store, claimed that he was forced to do his job in
suffocating heat coming from the 200-degree oven without air conditioning and break
time. When he quit his job, he received no back pay. Moreover, these workers were
often exposed to danger from delivering food to strangers. It has been commonly
asserted in stakeholder theory that employees should be paid and compensated fairly
and the work environment should be safe in order for the employees to work
effectively ( Fayol 1916). It is even said further that the basic needs for safety are also
a crucial factor in motivating people (Maslow 1943, p. 376). Furthermore, it is the
workers’ rights to be provided with a safe workplace under Vietnam laws (The Labor
Code 2012 ss.5). For instance, Salesforce company, which generates $8,4 million
revenues, has 97% of employees who think that the company has a great atmosphere,
and they are offered with plenty of wellbeing benefits, such as awarding 100$ a
month to be used in taking care of their health, equality advocacy, and mindfulness
meditation programs( Great Place To Work). Therefore, it is clear that the
counterproductive work environment in Pizza2Go caused the workers to be frustrated,
unsatisfied, and unproductive.
In addition, it is mentioned in the case study that employees were threatened
and shouted at by the store owners if the sales were not good. Clearly, this is a form of
coercive power. Power is a person’s ability to affect those who depend on the person
and can flow in any directions in management. There are several types of power, one
of which is coercive power created by punishments and threats( Nguyen 2018, slide 3,
4, 5, 8). Coercive power is said to avoid because ‘it creates resentment and sometimes
retaliation’ ( DuBrin 2003, p.288). Also, a manager who has bullying behaviors like
Mr. Thap would ultimately cause lower levels of job satisfaction and commitment,
increased levels of work-life conflict and stress problems in subordinates( Einarsen &
Skogstad & Glaso 2013). An example of a successful company which does not use
coercive power on employees is Starbucks. Schultz( 1986, p. 1), who used to own the
Il Giornale coffee venture before merging with Starbucks and became the CEO of one
of the world’s most popular coffee brands, explained the famous Employee First
philosophy in his letter sent to his Starbucks partner that ‘the attitudes of managers
towards their people are of primary importance. Employees should be able to trust the
motives and integrity of their supervisors. It is the responsibility of management to
create a protective environment where Il Giornale values flourish.’. In contrast to
Starbucks, the franchisees in Pizza2Go not only provided an unsafe work environment
for the workers but were also verbally abusive and hostile to them.
The problems that employees had with their franchisees stemmed from the
issues between franchisees and the company. Because of intense competition,
Pizza2Go had lowered the price of the pizzas, which lead to franchisees suffering
from making a profit and maintaining the stores. Clearly, the company adopted the
Aggressive culture, meaning that the company valued competitiveness and
outperforming competitors. An organizational culture is the system of beliefs,
principles, and values that are shared by members of a company. However, what
made the culture in Pizza2Go weak compared to other companies such as Microsoft
and Apple, which have adopted this culture successfully, was that the company did
not commit full cooperation with the franchisees. Nichols (n.d.) promoted that
different departments must work with each other in order to form a strong culture.
There seems to be a lack of communication between the company and the franchisees
which is evident when the company neglected the franchisees' needs for profit to run
the stores. It can also be said that because the company was only interested in making
a profit that the franchisees were ignored (DuBrin 2003, p.356). This left the
franchisees without any support nor budget to accomplish the ongoing demands of the
company, which put significant pressures on the franchisees, leading them to commit
fraudulent behaviors.
3. Recommendation
There are several recommendations to address the issues that Pizza2Go has,
one of which is that the company should make an effort in communicating and
compromising with their franchisees and employees. According to the Hawthorne
studies, workers would be more productive if they are given attention to by the
managers. The company could do this by setting up a timetable of staff meetings or
using emails in which they could discuss the benefits and drawbacks of their business
plans and compromising the goals of both sides. Furthermore, the company should
strive to promote wellbeing for employees and create better working conditions for
them. This includes training their franchisees to treat their staff in a more friendly
manner. An effective manager should behave politely to his/her employees to get
cooperation (DuBrin 2003, p.290). The company could also establish a set of rewards
for any workers who achieve their goal because employee engagement would increase
if their effort was appropriately awarded (Lewis & Munir & Donaldson-Feilder 2013,
p. 164)
4. Conclusion
In conclusion, the problems that Pizza2Go must deal with are unsafe working
conditions, underpaying workers, fraudulent behaviors among store owners, and a
lack of communication between the company and workers. The company should fix
the issues by establishing a better relationship with franchisees with effective
communication and improving the work environment.

Reference list:

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Peterborough, Ontario.

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Fayol, H 1916, General and Industrial Management.

Great Place To Work 2017, Salesforce, viewed 20 Aug 2018,

http://reviews.greatplacetowork.com/salesforce

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BUSM4185, RMIT University, viewed 22 Aug 2018,
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18 Aug 2018, https://smallbusiness.chron.com/characteristics-weak-company-
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Schultz, H 1986, ‘WHEN IT COMES TO “ESTABLISHING THE IL

GIORNALE DIFFERENCE…”’, viewed in 21 Aug 2018,
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The Labor Code 2012 (Cth)