CASE APPLICATION 1

The Challenge of “Healthy” Fast-Food

Non-GMO, organic, locally sourced . . . these terms are now a common part of our food vocabulary,
although not typically associated with the fast-food industry. Chipotle entered the fast-food scene in the
early 1990s with a seemingly impossible goal of creating a healthy fast-food alternative. Chipotle’s
promise of “food with integrity” includes fresh, locally sourced ingredients and naturally raised meats.
They effectively met this promise for many years, but as the popular fast-food chain has grown to more
than 1,500 locations, the restaurant’s ability to promise such quality while meeting food safety standards
has become a challenge. Attempting to deliver on this promise on a national scale has created a complex
and risky supply chain challenge for the company. Chipotle’s food contamination problems started with
an E. coli outbreak in July of 2015 in Seattle. Next was a norovirus outbreak in California, followed by
salmonella in Minnesota. Other foodborne illnesses emerged among Chipotle customers in nine more
states. Over the course of a few months, more than 500 customers were sick from contaminated food in
Chipotle stores across the country. Sales dropped 30 percent during the outbreak, and several stores
closed for an extended period of time. The company’s stock value dropped, and the company faced
several lawsuits from customers who were sickened at one of the stores. Most national fast-food
restaurant chains control food quality by using a central source for ingredients, exposing the supply chain
to fewer outside elements. Simply put, the more basic the food chain, the easier it is to control. To keep
their fresh food promise, Chipotle sought to prepare as many foods as possible at the local stores. They
also sourced ingredients locally wherever possible, creating relationships with hundreds of vendors. The
complexity of their food sourcing, coupled with in-store food preparation, is most likely what caused the
food contamination problem. There were no known specific negligent acts on the part of Chipotle; the
problems occurred because offering fresh food on such a large scale creates a situation where quality
control is difficult. In most cases Chipotle did not know which foods were contaminated, making the fix
even more challenging. In response to the crisis, they have implemented new controls to test for meat
contamination and also changed some food-handling and preparation procedures. They’ve shifted much
of their food preparation to centralized kitchens and started sourcing ingredients from fewer vendors,
much like their fast-food competitors have done for years. To kick off their new standards, Chipotle closed
all of their stores for an afternoon to train employees consistently on the new food-handling standards.
While it seems the company is moving in the right direction, critics suggest that a company that claims to
focus so much on food quality should have done a better job focusing on food safety.

Discussion Questions

1. Why is it important for Chipotle to revise the company’s food-handling standards?

2. Which controls would be more important to Chipotle: feedforward, concurrent, or feedback?
Explain.
3. How can Chipotle make sure that employees are following the new food-handling standards?
4. What are some measures of organizational performance that Chipotle management should use?
CASE APPLICATION 2

Bring Your Own Device

When Saman Rajaee resigned from his sales position at Design Tech Homes in Texas, he wasn’t prepared
for the next move the company made.89 He used his personal iPhone to conduct business on behalf of
the company, and as part of the standard separation process, the company’s IT department remotely
wiped his phone and restored it to factory settings. He lost all of his contacts, data stored, and also
irreplaceable family photos. He then sued the company under Texas privacy laws. The courts ultimately
ruled in the employer’s favor, but the story creates a cautionary tale for employers. Complicating the
typical privacy and security concerns created by technology in the workplace is the “Bring Your Own
Device” (BYOD) trend emerging in many companies. BYOD programs allow employees to use their own
personal mobile devices such as smartphones, tablets, or laptops in the workplace. While companies often
reimburse employees for expenses related to BYOD programs, the company ultimately saves money by
not purchasing the technology. The practice is also appealing to those employees who prefer to use their
own devices. Given that the boundaries between work and personal lives are becoming increasingly
blurred, many employees want to have access to both on one piece of technology. From a privacy
perspective, some employees fear BYOD programs give the company too much access to their own
personal business. A BYOD program typically has guidelines that state that the employer has the right to
access the device. When you consider control and security issues, employers should want to access any
device that contains work-related information and data. Management must be extra cautious to assure
that the technology is secure and does not make company secrets vulnerable. Also if employees are using
their device to log in to company systems, the log-in information is typically stored on the device, putting
the company at risk if it is lost or stolen. Many companies have established BYOD policies or asked
employees to sign agreements that make the security concerns clear and provide the company permission
to access the device. Policies or agreements help establish privacy expectations as well. When it comes to
wiping phones, it is best for companies to take more of a “surgical” approach and remove only work-
related information from an employee’s phone. A more cautious approach can help keep company
information secure, while reducing the risk of employees losing precious pictures of Grandma.

Discussion Questions

1. Would you want to use your personal device for work purposes?
2. Can you think of any other privacy or security concerns for companies that have a BYOD program?
3. Given the privacy and security concerns, are BYOD programs really a good idea for companies?
4. Are there any productivity concerns with allowing employees to use their personal devices at
work?