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Running Head: CHILOSO ANALYSIS

Chiloso Mexican Bistro Analysis


Team Orange
Jacob Dulworth
Uzair Feroz
Abdel Kanan
Jason Trieu
Syed Zaidi
Organizational Behavior 3310.010 Lewis

Running Head: CHILOSO ANALYSIS

Table of Contents
Introduction..........................................................................................................................3
Background & History.....................................................................................................................3
Goals, Missions, and Objectives of Chiloso....................................................................................3
Organizational Structure of Chiloso Mexican Bistro...........................................................5
Stress/Stressors of Chiloso...............................................................................................6
Training Issues of Chiloso...................................................................................................7
Job Satisfaction & Chiloso...................................................................................................8
Chilosos
Motivation............................................................................................................9
Recommendations for Improvement..............................................................................................10
Conclusion.........................................................................................................................13

Running Head: CHILOSO ANALYSIS


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The following report is a brief history and analysis of the small restaurant chain, Chiloso
Mexican Bistro. Through site investigations and organizational behavior theory, we have formed
an assessment on the functionality and respective suggestions for improvement for this company.
Background & History
Chiloso Mexican Bistro was first opened on December 8, 2005 in Rockwall, Texas by coowners Joe and David Balli. Since establishment, David has also created two more Chilosos
around the DFW metropolis in Wylie and Richardson. The newest Richardson location was
opened in 2011 and plans to open more Chilosos are in the works.
David grew up with the idea that cooking is not a task, but a way to share vast amounts of
food with everyone to enjoy. He set his idea into motion by opening Chiloso with the foundation
of sharing simple yet tasty Mexican food with the community. With previous work experience
as a manager, he had an idea of how a stable organization should work. Though Chiloso was the
first restaurant David had opened, it has been so successful because of the foundation he built the
company upon. Since the beginning David wanted to introduce a simple menu with many
possible varieties that customers can enjoy in a relaxing atmosphere. Chiloso has made an
impact in the food industry due to its unique qualities compared to the other Mexican bistros
around the area.
Goals, Missions and Objectives of Chiloso
From the beginning the overall goal was to provide fresh, simple, and great tasting food.
While the menu has expanded and grown since opening day, the remaining constant is the
freshness of the ingredients prepared daily. In pursuit to grow the chain, they have added daily
specials to attract more customers. Building your own taco, burrito, or salad gives the customers
a variety of possible outcomes best suit to their individual tastes. The mission, passed down
from the owner to employees, has always been to provide great customer satisfaction daily with

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quality food. While the goal and mission are common among other restaurants, most chains do
not have the open communication like Chiloso does, this truly sets them apart
Chiloso has aimed to master several objectives since establishment. Striving to make
employees enjoy work and providing a work environment that is gratifying helps bring a positive
vibe to the workplace and in turn, a positive impact on the customers. With open communication
between employees, managers, and the owner, Chiloso can respond to conflicts or questions in a
timely manner. Another objective is to be as actively involved with the community. The
community has given Chiloso much of its success, so Chiloso tries to give back as much as
possible. Lastly, an ongoing objective at Chiloso is to help the environment by trying to use
materials that are more eco-friendly.
In order to reach the overall goal, there is a meeting between managers and the owner
every Monday morning to discuss various topics. This type of communication helps relay
information quickly to the top of command and the actions needed to be taken are almost instant.
This type of structure is only efficient because of the size of the company. David built this
structure based on honesty and trust in the fact that he has given the managers more free reign to
run the business. There is no complexity in this type of structure and everyone has their place
within the organization. Each location having three managers and roughly twenty employees
provides excellent and reasonable responsibilities everyone can handle. This type of close
communication gives the employees an opportunity to move up the ladder quickly. The
preference is to promote within the company, but no employee is forced to take on leadership
responsibility. The efficiency of the organization is based on the structure of communication
between employees, managers, and the owner.
Organizational Structure of Chiloso Mexican Bistro

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As previously stated, the company has been family owned since December of 2005 with
a traditional chain of command structure. Chiloso has recently reached their 10th year of growth
and expansion as a smaller restaurant chain compared to competitors like Chipotle Mexican
Grill. They have succeeded in setting themselves apart from competitors in the wonderful
quality of their cuisine and apparent Latin culture you receive upon entry. Their success can be
directly perceived through their unique company strategy.
Since establishment, Chiloso has continued to develop their organizational design and
function. This can be seen from the opening of 3 separate locations within a decade of
continuous popularity and positive customer feedback. The company has adapted quickly to the
increase in demand by hiring multiple employees and appointing more managers at each
location. Stated previously, up to 20 employees work under 3 managers at each of their
locations. Managers work rotationally around the clock overviewing and coordinating
employees daily tasks. As for employees, each is specialized in a functional structure such as,
there are two cooks at all times only completing orders and cooking replenishments for the bar.
There are also employees that work on constructing consistent orders directly to customers.
During rush hour, an employee is stationed at every section with different corresponding tasks,
like one may be responsible for only bagging to-go orders and side sauces with another in control
of payment at the register and another who delivers orders to the customers.
Chiloso is privately owned and operated under a formalized structure where levels of
authority are strictly understood. Having a direct chain of command creates automatic solutions
quickly. This form of structure works impressively because the organization is so small in
nature. Having a simple structure allows the company to adapt quickly if an employee is absent
or any other minor problems occur. Having a mechanistic structure of operating things is exactly
what Chiloso needs to provide for their management, employees and customers.

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As Chiloso increases in popularity, it is adapting a bureaucratic structure becoming more
efficient with higher levels of specialization. This configuration works most efficiently as they
are continuing to grow. Through more expansion, they will need to acclimate their organization
to best fit growing needs. For now this simple and functioning structure, having earned them
many accomplishments, and will continue their success.
Stress/Stressors of Chiloso
Chiloso is full of commitment, motivation and above all stress. In 2014, the food
industry accounted for $195.05 billions of dollars in economic revenue and supplied more than
3.5 million jobs to U.S. taxpayers. This company is a small contributor to this industrys
success. Day-to-day employees of Chiloso are thrown difficult situations like meal preparation,
management, and above all customer service. Customer service is the largest stressor of the
workplace in a restaurant. Think about when you and friends or family go out to a restaurant, its
rare to be completely satisfied with your experience and there seems to be constant role conflict.
Those who can handle these stressors and strains regularly are more successful at Chiloso and
often promoted.
In a personal visit to Chiloso, we asked a few employees to rate their average amount of
stress on a scale of 1-10. Most answers were conclusive to an average 6. We asked the
employees to then explain the demands and stresses of their day-to-day job. In organizational
behavior theory, it is concluded that there is role conflict issues between customers and
employees. They sometimes are not up to par with the expectations of certain
customers/management and it can reflect on their reputation. Another large work hindrance
stressor of Chiloso is an issue of role overload and time pressure. During the rush of the
workday, employees sometimes do not have the mental and physical ability to completely aid
every single customers request in the timely manner that is expected of them. Above all,

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Chilosos work complexity is their largest challenge in the workplace. Flat out, some people do
not have the skills and ability to perform at the companys expectations and it can result in a
large turnover rate.
A solution to these many stressors that can diminish strains of the workplace and create
greater job satisfaction would be to hire more able employees. During rushes, management
needs to make certain that each employee is knowledgeable about exactly what they need to do.
These solutions will create less stress on employees, boost morale, and overall increase
Chilosos reputation as an excellent restaurant.
Training Issues of Chiloso
Chiloso has the opportunity to improve upon employee training and job knowledge to
better increase company reputation. Upon speaking with the management and staff, there were
areas of employee training that were completely absent or could be better executed.
The manager on duty from a visit, explained she started with another location of the
Chiloso franchise. Her path began as a cook where she was trained for less than a week to
understand day-to-day practices and procedures. However after speaking to her employees
present at the Richardson location, there was evidence of inconsistency in training and some
team members explained of having no form of training at all. It is obvious that training is not
seen as something very crucial for all positions of this franchise.
The workplace as a whole makes up for this shortcoming to a certain degree. There
existed a strong sense of personal clarification between all employees. This is one way of action
learning that helps new members get better acquainted. In many ways this can be more
beneficial and targeted than a vague training program. The employees know exactly whats
expected because they have been in the exact position before.

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However, there is inconsistency in what one person may consider important and what is
actually useful to the organization. A standard training program would greatly remedy this and
allow for more successful business.
Job Satisfaction & Chiloso
There are several factors governing overall job satisfaction that can contribute to
employees happiness or contrarily feeling unappreciated. In order to keep the business
operating smoothly employees have to perform as a unit and overall enjoy their job. The first
and foremost importance is the payout the employees are receiving. The pay satisfaction for
employees at Chiloso is set at a lower standard than most establishments, but an upside is the
possibility of a raise once a year. Though the wage itself doesn't set the tone for the company,
its the value of work itself that brings enjoyment.
Chiloso is basically operated as two different departments, the kitchen and the line. The
cashier and employees working the line are involved directly with the customers. While the
daily activities are routine and physically laborious, employees deal with variable situations.
Most routinely are the tasks of prep work, but once customers place intricate orders and special
requests, fulfilling each order then creates more variety. Employees are responsible for the
outcomes of the food and thrive on the high identity of the task. The pressure of completing
each order is greatly important because the service and quality of food is the sole reason
customers return. There is an unspoken time pressure of performing at 100% placed on each
employee as they race to fulfill orders in a punctual manner.
There is high promotion satisfaction in the employees because of Chiloso's preference to
promote within the organization. A job enrichment given to employees are opportunities to take
on more responsibilities to be possibly be promoted. The current managers help train chosen

Running Head: CHILOSO ANALYSIS


employees and instill leadership qualities to possibly function as a manager one day. These

opportunities help increase job satisfaction at Chiloso.


Managers feel overworked at times and have a feeling of uneasiness. Though they are
satisfied with the work responsibilities, the pressure and physical labor does take a toll. Since
there are only three managers, each has to rotate shifts and work sometimes six or seven days a
week. At this location, there is a small network of management so they rely on each other for
support as opposed to larger companies that seem so separated. These attributes comply with
their overall job satisfaction.
Job satisfaction and Chiloso go hand-in hand, but there are opportunities of improvement
for overall good mood and pleasantness. If the company can develop their strengths and work on
their weaknesses, they will find better job satisfaction as a unit and in return better business.
Chilosos Motivation
Motivation for employees is an important pillar of the organization. There are various
ways employees are motivated, contingent to the type of workplace. In a restaurant style
environment, it is usually common for the waiters to rely on maximizing their tips, and that
respectively is the sole motivation for them to provide engaging customer service. At Chiloso,
there is not a noticeable amount of tips because of the structure of the restaurant. Customers wait
in line for food, and as soon after their order is prepared there is no contact with the staff. There
is however, a tip box at the checkout, which is generally ignored by most customers so the
traditional motivation for tips is slim to none. As per our observation and examination of the
workplace, there is no employee reward or incentive program currently in place. Providing
rewards for sales and exemplary service leads to higher motivation for the repeated behavior.
The employees of Chiloso are a family, and coworkers are generally socializing and
joking around, therefore their organizational culture acts as an intrinsic motivator. In addition,

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extrinsic motivation for employees is to perform their job, so that they are operating up to the
expectations of management. Chiloso does a marvelous job of promoting an intrinsic
motivational workplace, yet there are few extrinsic motivation aspects for the employees to strive
for higher profitability and outstanding creativity in the workplace.
Chiloso employees get feedback from managers following situations and events, but there
is not a proper feedback structure in place. Feedback leads to improved and encouraged
behavior, and should be done in both positive and negative situations. Employees are motivated
to improve from a negative feedback, and encouraged to perform better in the event of positive
feedback.
Motivation at the workplace is an important factor for employee turnover rate.
According to the manager, Chiloso has a turnover rate of 20% or less. This can be seen from the
event of loss of four employees last year. This is the average number for a restaurant industry as
there are dozens of competitors ready to hire staff. Chiloso does a spectacular job at motivating
employees, yet there are some motivating elements overlooked, such as rewards, recognition,
and feedback. If Chiloso can develop these weaknesses, it will lead to a better motivated staff
and in turn a more profitable organization.
Recommendations for Improvement
Through visitation and analysis we have concluded three recommendations of
improvement for Chiloso Mexican Bistro. The first proposition we recommend is to initiate a
survey to measure customer feedback for improvements and weak spots. We suggest some kind
of incentive also be given to customers for completing this survey. The incentive doesnt have to
be extravagant but large enough that customers will want to complete it (i.e. a free drink with
your next purchase).

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As seen in other successful competitor restaurant chains, like Chick-Fil-A, there is a way
to provide customers the opportunity to voice their opinions. Having customer's feedback can
only improve the restaurant and bring back repeating customers. The value of having honest
feedback will help improve various weak spots of the business. Collecting and storing this
information can help Chiloso progress and make necessary changes.
There are several ways to implement this as customers can fill out surveys online or in
store. Another possibility is to initiate some sort of punch card system so by a certain number of
purchases, they can receive a free appetizer or drink with that order. This can initiate customer
involvement directly and reward them when they return in the future. Implementing this is a
great way to build upon and improve the already successful franchise established. Creating
interactive surveys will help aid better customer satisfaction as well as involvement in restaurant
operations in developing subpar areas that the customers seek more attention to. This will offer a
direct way for Chiloso to understand their customers needs and respectively change what they
need improve upon.
The second recommendation is to implement recognition, feedback, and incentive
programs to motivate employees. Chiloso management has created a family environment, but
employees are often pushed to their physical limit with long hours of work. General hygiene of
the workplace is a huge motivator for employees working long hours. Working in a clean
environment helps maintain the employee's satisfaction which can result as a motivator to enjoy
work. Yet, the set minimum wage has always been the most critical issue in the fast food
industry. Though wages are relatively low, employees need to be recognized for their efforts so
they do not feel overlooked. Recognition is a key motivating factor, as employees want nothing
more than acknowledgement of their efforts. Though some efforts can go unrecognized, there
needs to be a way to appreciate the effort from all employees. We would suggest Chiloso to

Running Head: CHILOSO ANALYSIS


implement some kind of employee of the month program. Employees will be recognized for

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problem solving and team spirit, which will build employee dedication and promote incentives
for hard work. Showing the appreciation of employees that have problem solving skills will
provide an opportunity for promotion. Recognizing an employee's efforts leads to exceptional
work performance and general happiness at work.
Another strategic implication we recommend to motivate teamwork and collaboration is a
quarterly reward to the staff. The employees will be rewarded for team effectiveness, meeting
store sales goals, and the quality of the service provided by the management. The managers
typically work 55+ hours, this can be overwhelming at times, so rewarding them can be
beneficial to keep the restaurant running smoothly. Providing a team based incentive will
encourage management and staff to work more closely toward the organizational goal as a team.
Even if Chiloso starts employees at a lower wage, having quarterly raises or rewards can help
keep employees motivated to work hard and achieve goals. Setting specific and difficult goals
can lead to employees striving to achieve success as well as recognition from management shows
positive reinforcement. The rewards may be verbal praise, and/or public announcements for a
job well done. These recognitions could occur at the end of a working day, weekly recognition
or at the conclusion of the month. This will also create a healthy competition between
individuals or teams of employees within the organization. Having these different incentives
will also increase the chances of retaining the employees to stay at your company when rewards
can lead to a future higher salary and the opportunity to be promoted are open for hard working
and loyal employees.
The third recommendation would be to have area of improvement of creating a strong
employee-training program. There is strong evidence for the many benefits of a culture around
well-trained employees. Treating and training employees right is the hallmark of organizations

Running Head: CHILOSO ANALYSIS


with a low turnover rate and motivated workers. It is very important that employees under

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managers strive to achieve more and are driven to be promoted. Chiloso doesnt have a standard
structure on how to train and develop their newly hired employees into their high paced working
environment. We suggest that new hired employees have at least a GED or are currently
pursuing a diploma or degree. As well, new employees should work in all departments of the
restaurant to have an understanding of every position so they can be versatile in assistance during
rush hours or can easily replace call out employees to continue to operate efficiently. Having the
right training program implemented will help increase innovation in strategies and will lead to an
increase in the capacity of the organization can hold while reducing employee turnover. Having
a training program will help the employees be capable to adapt to the tough demands.
Employees understanding their job better can help decrease the stress and in turn lead to increase
of motivation and employee retention.
Chiloso has been doing a lot of things right; this is evident in their expansion and stability
as an organization. Upon further analysis we did highlight certain areas that could be improved
upon to create an even better experience for customers. There were five main managerial issues
that were focused on. Motivation of employees, job satisfaction, training, stress, and the
organizational structure were all aspects a more exhaustive analysis was completed on. If
Chiloso further develops their strengths, cuts out their weakness, and builds on the successful

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