Reference no: EM133153440

SEMINAR IN MANAGEMENT ACCOUNTING

The Case:

D'Sintok is a restaurant based in Sintok. It was formed in 1994 by Mr and Mrs Ramli. The growing development of Sintok due to the existence of a University in the area is one of the catalyst for D'Sintok success. It offers various Thai based recipe such as tomyam, pattaya fried rice and thai soups. Over the years, D'Sintok has successfully grow. In year 2020, D'Sintok has 15 branches around Malaysia consist of approximately 230 employees.

As it grows bigger, D'Sintok has to sustain its brand name in the industry. In its operation, D'Sintok pays great attention to customers' feedback as they believe that D'Sintok is nothing without customers. They have also identified varieties of menu, fast delivery of order, hygiene and cleanliness of the restaurant and frontline services are the critical success factors of a restaurant. D'Sintok was well-known for its tasty foods and excellent services for many years.

D'Sintok used functional based organizational structure. Every branches were managed by trusted branch managers who the majority were from the family members. The branch managers hold the most power in making operational decision at the branch level which sometimes create dissatisfaction among the lower level line staffs. Basically, all D'Sintok branches follow the same standard operating procedures outlined by the main branch that become the headquarters for other branches. In the larger branches, the branch managers were assisted by an assistant branch manager and a few administrative staffs depending on the size of operation in that particular branch. Other than that, D'Sintok line of staff consist of the chefs and the waiters and waitress.

In D'Sintok, the branch managers, the assistance and chefs were given basic salary plus medical benefit in a form of medical insurance of RM150 per month. They were also entitled for annual salary increment of RM120 per year. Compared to other restaurants, this pay system provide a better sense of security among employees in similar level in the industry. The waiter/waitress were also being given a basic daily salary plus a piece-rate pay - i.e bringing a plate of food to customers. 5% of each plate of food serve will be allocated to an account. At the end of a month, the amount collected will be distributed equally among the waiter/waitress. This practice has boost the motivation among the employees. However, being evaluated and rewarded based on team performance provide a loop hole for some employees to take advantage on others. Employees who work harder feel it is unfair to share the extra pay with those who are not performing.

Compared to in the initial stage of D'Sintok development, the waiter/ waitress that they hired previously were normally youngsters who have just finished schooling and were searching for income. They were normally worked on part-time basis. Therefore, many of them do not have the right skills to serve the customers. In addition, they were only using D'Sintok as a platform to gain some money and experience. Majority do not plan to work for long as they have different goals and priorities while working in D'Sintok. They have very little concern towards D'Sintok performance. Besides these, D'Sintok practices a monthly recognition performance award among the branches. Branches that contribute the highest sales will be award with certificates of "Top Performer of the Month" that motivate competition among branches.

Managing D'Sintok as a small restaurant is much easier previously. Mr and Mrs Ramli have given an autonomy to their branch managers and treated them like their business partners. They will only interfere when necessary. They let the branch managers to decide on how they manage daily and personnel issue in their branches. As the restaurant grow and expand, maintaining excellent performance of its employees is challenging. D'Sintok critical success factors were highly dependent on its employees. After many years, Mr and Mrs Ramli received a lot of complaints and frustrations among the administrative staffs and chefs regarding their monetary benefits as they saw that the waiters and waitress were receiving more income from the piecerate pay system. The relationship between the managers and the waiters/waitress also loose.

1. Explain THREE motivational factors that has been used by D'Sintok to motivate its employees.

2. Explain THREE sources of conflict in D'Sintok.

3. Determine the type of leadership style practiced by Mr and Mrs Ramli.