What should Frank Martinez do about the salad bar issue?
Objectives
1. To introduce the Inputs ~ Process ~ Outputs model
2. To illustrate the tension between standardisation and innovation
Case Synopsis
Roy Rogers Restaurants is a fast food franchise business owned by Marriott Corporation. Roy Rogers is pursuing a strategy of aggressive growth through the licensing of independent franchisees (ie., independent owners) to operate its restaurant outlets. The case describes the nature of the franchise industry and provides statistics on the major franchise organisations.
The decision in the case focuses on a request by a large and powerful franchisee to eliminate the salad bar in a downtown Roy Rogers location. This decision seems trivial, but, in fact, proves to have important consequences for the strategy of the business, and the relationship between the franchisor (Roy Rogers) and the franchisees.
At the heart of the case is the tension between innovation (ie.,
English: Roy Rogers in The Carson City Kid (1940)
Roy Rogers' logo after Hardee's conversion back.
English: Photo of a sign hanging in a Roy Rogers r...allowing the franchisee to tailor his products and services to the local market) and standardisation (ie., consistency in the franchise concept). This problem is particularly difficult in any franchise business since consistency in product and/or service offering defines value both in the eyes of the customer and the franchisee.
Case Background and Theory
This case provides an excellent vehicle to illustrate the power and pitfalls inherent in the design of performance measurement and control systems. For any organisational process, managers can choose to monitor either inputs (e.g., material, labor, energy), process (e.g., ongoing work that transforms inputs into outputs), or outputs (products or services that have value to recipients). Chapter 4 of Simons, Performance Measurement ~ Control Systems for Implementing Strategy lists the conditions that managers use to decide whether to monitor inputs, processes, or outputs.
Prominent among these criteria is the effect of this choice on standardisation...