There is a common business saying that “follow your passion and success will follow you”. Shanaka Fernando is a visionary businessman who has a passion for helping people. He decided to open a restaurant where customer would decide how much to pay for their meals and extra donations would fund another customer’s meal who normally could not afford. He opened Lentil as Anything nine years ago, which are now a chain of vegetarian restaurants across Melbourne. Lentil as Anything or Lentil for short, also believes in assisting their employees by sponsoring some of them get their Australian visa, and management have extended this culture by hiring people who are struggling to find employment. However, despite Shanaka’s and his team’s passion, they have failed to run an efficient and successful organisation. Throughout the day-to-day operation of the organisation, poor management and ‘no-structure’ culture has contributed to the struggles within Lentil’s operation. This essay will discuss the mismanagement in the organisation and suggests what managers can do to turn it into a successful firm. First discussion is regarding no quality control for their products and services. Quality plays a significant role on both products and services that meet or exceed customer's expectations. Secondly, it will discuss the issue regarding Lentil’s operation is running without any form of financial management in place. Financial management is crucial with planning, controlling and effective utilization of cash flow. Third, it will look at the lack of managing the organisation’s human resources such as no recruitment process when taking on new employees, no training program for their staff, no communication process, which have all led to poor team morale and low employee retention. This essay will critique each of these issues then provide suggestions for Lentil’s managers in order to become a more effective and successful organisation.
No Quality Checks:
Because the firm is driven by its products and services, one issue with Lentils’ operation is there are no quality checks when it comes assessing the quality of the food and the services it provides. Although Shanika passion is helping people, he has failed to channel that same passion into serving good quality food that customers will accordingly pay for. Isaksson (2005) theorised that there is a cost to the business due to poor quality. The cost of poor quality (CPQ) can have a direct economic impact to the organisation. If a firm is creating excessive internal inefficiencies that affect the sales and net profits, this creates an unsustainable performance in the long term. Furthermore, Olivia and Sterman (2001) advised that due to rising financial pressure driven by slow growth, management will then attempt to maximise the output per employee and at the same time minimising expense costs. In doing so, increasing output forces staff to work harder and eventually minimising the attention given to the final product and service provided. The effect of minimising attention to products and services can lead to rework, poor customer loyalty, high employee turnover, and reduced financial performance that creates a vicious cycle of declining service quality. According to Ugboro and Obeng (2000), one of the main reasons behind successful organisations can be directly linked to the capacity of these organisations to create goods and services that meet or exceed customer’s expectations.
The business model revolves around customers paying for what they think the food is worth, so it is advisable to implement a form of quality checks for the products and services that the organisation provides. For this reason, managers in Lentil should create policies and procedures in ways that assure quality food that meet and exceed customer’s expectations. One way to achieve this is to implement Total quality management (TQM), which is an approach that directs the...