Lourdes Susaeta

March 2010

This case was prepared by Berónica Galàn, Associated Director Barceló Hotels, and Lourdes Susaeta, Associate Professor of the Universidad Complutense, under the supervision of Professor José R. Pin, as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. March 2010. This case was written with the support of the CELA (Center for Enterprise in Latin America), IESE. Copyright © 2010, IESE. To order copies or request permission to reproduce materials, contact IESE PUBLISHING via the website, www.iesep.com. Alternatively, call +34 932 534 200, send a fax to +34 932 534 343, or write to IESEP, Av. Pearson, 21 – 08034 Barcelona, Spain, or iesep@iesep.com. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means – electronic, mechanical, photocopying, recording, or otherwise – without the permission of IESE. Last edited: 6/15/10 2-401-026 1

 

Cross-Cultural Crash and Labor Conflict (A): Sài nóng Restaurants

With only three restaurants in Madrid, Sài nóng Restaurants was a relatively small family business. Meticulously decorated, the restaurants were very particular, serving Asian food, made by native Chinese cooks with ingredients imported from China and presented in beautiful oriental dishes.

The cooks, who were all Chinese, had created their own recipes. There were no written documents that painstakingly described how the dishes were made, instead, this know-how was transmitted orally from one cook to another. It was highly unlikely that someone of non-Chinese origin would join the kitchen staff, not only because mostly Chinese was spoken, along with some broken Spanish, but mainly because the Chinese were very protective of their recipes and did not like showing them to outsiders. Nobody was allowed in their kitchen.

The business was doing well, as costumers were very satisfied with the food, the impeccable service and the atmosphere.

They were likely to return and to recommend the Sài nóng to their friends. While the restaurants’ popularity in Madrid grew, their Asian culture-loving Madrilean owners were dreaming of expanding all over Spain.

Juan Antonio García

Juan Antonio was a responsible, hardworking man who had worked as a waiter ever since arriving from Peru two years earlier. He had started off working nights at an Irish Pub, and six months ago he had joined the Sài nóng staff during the day.

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DPO-203-E Cross-Cultural Crash and Labor Conflict (A): Sài nóng Restaurants

2 IESE Business School-University of Navarra

Juan Antonio worked from 1:30 p.m. to 5:30 p.m. as a waiter in the restaurant. His job was to take care of the costumers from the minute they set foot in the restaurant until the moment they left. In the Sài nóng, he worked with people, his workmates liked him and the costumers asked for him when he was not there.

Waiters in the Sài nóng served customers in one of three sections. Juan Antonio usually took care of section number one, which was the largest, because he was the only waiter capable of handling it alone. All the other waiters who had worked that section had needed an assistant.

Juan Antonio was well liked among his peers because he was very obliging and always willing to help: When he had completed his tasks he would be the first to help those who had not.

How the Restaurants Operated

Sài nóng restaurants were run by a manager who was in charge, but was equaled in rank by the chef (see Exhibit 1). The kitchen staff had its own independent pyramidal structure. Any petition would be addressed to the head of the kitchen (the chef) and, if he was absent, to the next in command (the sous-chef). Neither the cooks nor the chef spoke any Spanish, so the manager communicated with them either through the assistant waiters, who were required to speak both languages, or through the cook supervisor, who was always a Chinese national who spoke good Spanish.

The assistant waiters were Chinese and, in general, spoke Spanish well. Their job was to place the orders the waiters had taken and serve the prepared dishes to the customers in the dining room. They also doubled as unofficial translators between the kitchen and the dining room.

Carlos Muñoz, the manager in charge of the Sài nóng restaurant in Salamanca, little by little taught Juan Antonio other functions. He learned how to place orders, how the SAP worked, how to make annulments, and so forth. Carlos liked the way Juan Antonio worked and always set him up as an example to his co-workers.

April 4, 2006

It was 11:00 a.m. on a Monday morning when Juan Antonio came in through the restaurant door. Although it was not his usual working hour, he had come early because Carlos had asked him to meet up with him: he had something to tell him. Juan Antonio was a bit nervous, not knowing what the mysterious conversation would be about.

They started with a cup of coffee and a relaxed chat about the Champions league match the night before. At a certain moment, Carlos changed the subject:

Carlos: Look, Juan Antonio, I have something important to tell you. They are going to open a new restaurant in Génova Street and I’m going to be the manager. I want you to come with me as my floor manager but under one condition: you have to quit the Irish Pub and come to work with us full time. What do you think?

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Cross-Cultural Crash and Labor Conflict (A): Sài nóng Restaurants DPO-203-E

3 IESE Business School-University of Navarra

Juan Antonio, who could not hide his satisfaction at this news, answered without a second thought.

Juan Antonio: Look, Don Carlos, I would go with you to the end of the world, this is a very tempting offer but I need the “Irish” salary. You know I have a family in Peru and I support them with what I earn here. Besides, I am thinking about bringing my wife and children here.

Carlos: That will not be a problem, I’ll match what you make at the pub, plus what you were making here, so you will still earn the same amount but have a higher rank and better promotion prospects within the company.

Juan Antonio: Perfect, Don Carlos, I accept.

Carlos: Then get everything ready to start on the 10th. I need you right away.

April 10, Sài nóng – Génova Street

When Juan Antonio first started his new job, he was a bit uptight. He was second in command now, and if anything went wrong it would be his responsibility, unlike before, when they would just call his supervisor. Working with Don Carlos helped set him at ease, as he could always ask him anything he didn’t know. He started setting up schedules, recording earnings, placing orders, making inventories, and so forth. After a week he was on top of the business operations. Carlos was pleased with him and the waiters felt at ease at work.

However, Juan Antonio did not get along well with the kitchen staff. He said the Chinese were odd, and when a costumer wanted to change an order, it was a real ordeal. The head of the kitchen refused to redo it, and would not allow orders to be cancelled. Sometimes Juan Antonio had to stay after hours, waiting for the cooks to leave in order to cancel a dish. According to the assistant waiters, the head of the kitchen believed that when someone cancelled an order, it was because they wanted to steal the money that the dish had cost.

One of the owners, who had placed all his trust in the kitchen staff, had told the head of the kitchen to beware of order cancellations and to not serve any dish that was requested orally and did not appear on the order. When they were hired, they had been told that it was customary for managers to cheat the company by charging the customer in full, then cancelling the order and pocketing the difference.

Some Months Later

One very hot summer morning, on one of those odious Madrid days, right in the middle of serving the meals, Carlos asked Juan Antonio to leave Pablo, the floor submanager, in charge of the dining room and come to his office because he had something to tell him.

Carlos told Juan Antonio that the company was being sold to a large American restaurant chain that owned many types of restaurants throughout Spain. Some served Spanish food,

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DPO-203-E Cross-Cultural Crash and Labor Conflict (A): Sài nóng Restaurants

4 IESE Business School-University of Navarra

some were Italian or American, and it also owned coffee shops and stores. The group was interested in the Sài nóng because they lacked an Asian restaurant that was not just “any Chinese.” He said he would not be working with the new owners. With his savings and his experience, he was going to open a little vegetarian restaurant with his wife. He had suggested Juan Antonio to the new owners as manager of the Génova Street restaurant.

A New Horizon

When the Sài nóng became part of the new group, Juan Antonio was happy because he thought things would change. The new American holding had a business vision that was just what the Sài nóng needed. He thought it would cease being a typical family business, where things were getting out of hand due to the owner’s fanatical partiality for Asian culture.

Juan Antonio became manager of Restaurant no. 2227, according to the new company’s numbering system. As always, the first thing he did when arriving in the morning was to check schedules, organize the staff, record the earnings and check the orders.

As soon as the Sài nóng became part of the new chain, there were changes. Management spoke a lot about integration, which Juan Antonio did not quite understand, because to him it was clear that it was the Chinese who were not integrating, not the dining room staff. He did not know how to handle this. The American chain also changed the decoration and the chinaware. Communication systems with the head office improved and they finally had Internet installed. Above all, however, what changed was the amount of work. Juan Antonio didn’t have time to do everything the head office asked of him, there was too much paperwork to fill in and his new supervisor, Alfonso Huertas, who had worked for the holding for five years, didn’t give him a chance to breath.

Waiters began to complain. Section one used to be handled by two waiters, now it was handled by one alone. The new policy was efficiency above all, but Juan Antonio didn’t like it because he thought that the American understanding of efficiency was to let one person handle the workload formerly performed by three.

In addition, there was the issue of salary. Even though he had been promoted to manager, he was earning only 50 euros more than he had before. People were not happy because everyone’s salary – that of the cooks, waiters, assistants, etc., – had been reduced to match the salaries of the employees of the other restaurants owned by the chain. The idea was to instill a principle of internal equity, along the lines of, “We are part of a group and equal jobs deserve equal salaries,” with no room for favoritism.

Time of Expansion

The group soon applied their way of doing business to the Sài nóng. In less than two years, the four restaurants became 27 in Madrid alone, with plans to open more all over Spain.

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