Denny's Restaurant: an Organizational Behavior View

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Denny's Restaurant Organizational Behavior: An Introduction
Denny's Restaurant Corporation is one of the largest full-service family restaurant chains in the United States. And it operates over 2,500 restaurants around the world. Denny's is known for its 24 hours a day, 7 days a week, and 365 days a year operations, serving breakfast, lunch, dinner, and dessert around the clock.

During the early 1990s, Denny's was involved in a series of discrimination lawsuits involving several cases of servers denying or providing inferior service to minorities, especially African American customers (Adamson, 2000). According to newspaper reports the following are some of the most notable incidents involving racial discrimination at Denny's:

1. In San Jose, California, several black teenagers were refused service unless they agreed to pay in advance. This was the first recorded incident of such events (Labaton, 1994).

2. Then, Six Asian-American students of Syracuse University visited a local Denny’s restaurant late at night. They waited over 30 minutes as their white patrons were regularly served, seated, and offered more helpings. They began to complain to management and to their server regarding the situation. They were then forced to leave the establishment by two security guards (called upon by Denny’s management). Then, according to the students, a group of white men came out of Denny's and attacked the group, shouting racial epithets. Several of the students were beaten. (“Denny's Franchise Faces Suit Over Discriminatory Action,” 1997) 3. Six African-American Secret Service agents visited a Denny’s restaurant in Annapolis, Maryland. They were forced to wait an hour for service while their white companions were seated immediately upon entering (Guillermo, 1997).

4. One African-American Denny’s customer was told that he and his friends had to pay up front at the counter upon ordering their meals. When he questioned the waitress about it and she said some black guys had been in earlier who made a scene and walked out without paying their bill. So the manager now wanted all blacks to pay up front (Ferraro, 1995).

In 1994, Denny's settled a class action lawsuit filed by thousands of black customers who had been refused service, forced to wait longer, or pay more than white customers. The $54.4 million settlement was the largest and broadest under Federal public-accommodations laws established to end segregation in restaurants and public spaces. After the $54.4 million settlement, Denny's rolled out a racial sensitivity training program for all of its employees (Adamson, 2000).

Discrimination: A Crises
The failures in managing discrimination and the lawsuits that follow reflect failures in learning by firms. Discrimination management can be defined as the prevention of discrimination and by extension the prevention of discrimination lawsuits. Discrimination is an extraordinarily complex issue, as evidenced by the theoretical attempts to explain why a diverse workforce poses a challenge for organizational managers and employees. For example, discrimination has been examined at the individual level of analysis, focusing on such factors as stereotypes (Sartore & Cunningham, 2006) and prejudice (James, Brief, Dietz, & Cohen, 2001).

By referencing institutional procedures during an image-threatening event, firms attempt to decouple the organization from the situation (Elsbach, 1994; Oliver, 1991), however by doing so the organization fails to look inward and critically reflect on the work environment that inadvertently contributed to the discrimination problem.

A Communication Dilemma
Communication serves four major functions within a group or organization: control, motivation, emotional expression, and information (Robbins, 2007). Arguably, one of the most difficult situations a company can find itself in involves crisis and reputation management. "In the best situations, crises can be averted through a...
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