assgn 1 final

Table of Contents

Table of Contents 1

List of Figures 2

1.0 Introduction: Company Background 3

2.0 Answer Question 1 4






List of References 10

SCM-009432 (MBA- General Management) 1

List of Figures

Figure 1: Old Town White Coffee 3Figure 2: Open System (Systems Approach) 5


1.0 Introduction

Old Town White Coffee (OTWC) is a modernized coffee shop which serves “halal” food,

home breed coffee and other beverages in a traditional looking coffee shop environment.

OTWC has the uniqueness of their nostalgic interior design whereby the mood of the

restaurant has given customers a sense of belonging for dining at a reasonable price. OTWC

is established in 1999 and currently has 183 numbers of outlets in Malaysia with international

presence in Indonesia, Hong Kong, Singapore, USA, Australia and China (OTWC 2011).

There are a total of 18 OTWC outlets in Malaysia which operates 24 hours and 7 days a

week, such as the outlets in KLIA and LCCT airport. . In addition to that, OTWC are also

selling their own instant coffee products in the market with distribution to 1350 outlets.

OTWC is currently applying for listing in main board of KLSE which will be effective in

July 2011.

Figure 1: Old Town White Coffee Source: Adapted from Oldtown (2011)


2.0 Answer Question 1

OTWC’s core business is serving “halal” food and home breed coffee in a relaxing, authentic

and comfortable environment. OWTC business is around 50% franchised and the primary

target audience is working adults in the range of age 25-40 years old. OTWC’s goal is to let

everyone enjoy every sip of authentic Malaysian Ipoh White Coffee, anytime, anywhere and

serve customers with good food, friendly smiles, authentic dishes at an affordable price.

OTWC’s motto is “Take your time, Savour every moment” which encourages people to take

it slow with one step at a time and have an enjoyable time and good experience at OTWC.

As a market leader and having the first mover advantage, OTWC vision and mission is to be

Asia Pacific’s leading white coffee producer providing high quality products to costumers

globally through continuous improvement, consistent quality, incorporate innovations and

technology that exceeds customer expectation. The most important core values of OTWC is

to uphold the OLDTOWN’s brand as a pioneer and maintain the reputation as the best local

white coffee producer by delivering consistence performance, competitive pricing and trusted

quality to ensure continuity and growth. In addition to that, OTWC’s core values is also to

conduct business with integrity by embracing good business practice, adopt international

standards and demonstrate professionalism in business.

Besides that, OTWC strives to spearhead breakthroughs in originality and creativity to cater

for customers changing needs and expectations. With halal certifications, one of OTWC aim

is to respect diversities and traditions of multiple races and cultures. In order to sustain the

quality of product to all stakeholders and customers, OTWC has achieved certifications on

international accreditations such HACCP, ISO 9001 and ISO 22000 (OTWC 2011).



In systems theory, Open System is a process that transforms inputs to outputs and interacts

with its wider external environment. Open System is influenced by the external environment

and in turn is able to influence it.

Figure 2: Open System (Systems Approach)Source: Adapted from Slocum (2009)

In the context of OTWC business, the main inputs are manpower, equipments (machinery)

and raw food (materials). The manpower in the outlets are production staffs such as chef,

waitress, dish washers, cashier and management team. The equipment used is cooking

utensils, coffee machine, oven, refrigerator, chair, tables and glasses. The raw food used for

the food is chicken, rice, spices, sugar and coffee beans. In order to ensure the inputs are

managed efficiently, there must be careful selection criteria for quality suppliers on raw foods

and constant calibration of equipment to ensure it is performing optimally.

Transformation process is a phase on how to transfer the inputs into profit, satisfied

customers and quality products and services. OTWC transformation processes includes

sufficient staffing needs, adequate staff training and number of customers per waitress ratio.

In this phase, OTWC has to ensure staffs are adequately recruited and trained to perform their

tasks efficiently, effectively and with courtesy. Staff appraisals should be conducted regularly

to reward, retain and motivate performing staff. Besides that, OTWC have to ensure food are

served fresh, clean and conform to hygiene and safety standards in the transformation stage.

As a result of transformation, OTWC will achieve higher revenue, good customer service and

satisfied customers in the outputs phase. In addition to this, OTWC will produce high quality

meals and promote recurring business in the outputs phase. In the feedback stage, the chef

and outlet managers should review and evaluate the operating procedures, food quality and

customer service satisfaction level for continuous improvement.



One of the business environmental factors that significantly influence the organization’s

operations is OTWC reputation as the market leader with largest chain stores of coffee shops

in Malaysia. Due to such, OTWC has to manage their multiple outlet operations effectively

by maintaining trained and adequate staff level at each outlet and ensuring food and

beverages quality are sustained and measured against industry practice and standards.

Besides that, OTWC faces fierce competition from local competitors such as Pappa Rich and

well known international franchise outlets such as Startbucks and Coffee Beans. Therefore,

OTWC has to maintain their product pricing competitive, outlet environment comfortable and

inviting and high quality service. Human resource management plays an important role to

support the business environment. Waitresses have to be continuously trained and monitored

to have sufficient product knowledge, courteous, proactive and highly motivated. Customer

service is crucial and customers’ requests and needs should be attended promptly with

courtesy. Besides that, outlet managers have to ensure there are enough waitresses per

customer ratio. Chef and kitchen helper should adhere to safety and hygiene policies and

ensure the food and beverages served are of high quality and conforming to industry standard

and practices.

The supplier and distribution of the raw foods must be audited of their quality, freshness and

timely delivery. The outlet’s physical environment must be managed in good order,

organized, clean and hygiene. Outlet managers have to constantly review and communicate

with their staff on performance and analyze it with customer feedback. For outlets that

operate 24 hours, outlet managers have to manage the staff shifts accordingly, ensure staff

and product availability and perform a surprise visit to check on the performance of the staff

and outlet.

In a macro overview, division or regional managers have to evaluate, review and monitor

overall outlet operations to ensure consistency of food and service quality, staffing

requirements, staff efficiency and compensation policy to reward and motivate branch with

highest performance.



Some of the major challenges to the quality of work life encountered by OTWC managers are

fulfilling the expectations set in terms of outlet performance, quality of product, service and

outlet environment, quality of food preparation and compliance to industry policies and

guidelines. In addition to that, managers are being appraised and evaluated based on their

work performance, management skill sets and communication abilities. Due to managers are

required to constantly monitor, lead and control a diversified workforce, they are required to

be tactful and skilful (human skills) in handling employee personality and behaviour. As a

result, manager roles, job descriptions, responsibilities and performance requirement must be

communicated clearly and compensated strategically aligned to market rate (Perkins & White

2009).

Employee roles and responsibilities must be clearly defined, communicated and monitored

according to their job description, personality and pay grades. For example, waitress roles are

in the front line with customers, they are therefore required to be trained in depth on product

knowledge, motivated to be courteous/ polite and responsive to customer request and needs.

Chef and kitchen helper’s role are in preparation of food and beverages, therefore skill sets

(technical skills) in preparing food quality and hygiene practices is a must. Cleaner’s role is

to upkeep the outlet in clean and organized manner with strong sense of responsibility and

discipline.

Work performance standards and requirements must be established and communicated to

each OTWC outlet and stores through Quality Manual or Work Procedures and training to

establish consistency in operation and management practise. All staff regardless of

supervisory or waitress role should be given opportunity to allow creativity in their work

methods and ideas to increase job satisfaction and self fulfilment as a form of motivation.

Staff personality and habits which contributes to work performance should be rewarded and

recognized constantly with award such as “Best Employee of the Month.” Due to stressful

working environment, employees should be compensated with extrinsic rewards such as over

time allowance and year end bonuses. In addition to that, shift rotation between staff must be

scheduled with equity and compensated accordingly based on external market rate.



OTWC consists of diverse workforce with different age group, ability, personality and

religions. For example, the cleaners are foreigners with different culture, the waiter or

waitress is from different religions and age group, the cashier is of different background and

the outlet manager is of different qualifications and experience. In general, the employees are

of different personalities, abilities and motivations.

Due to such diversity, there might be some negative implications such as employees

arguments, discipline issues and resulted in no common objectives towards team, outlet and

organization goals. In order to address this, the diversity of workforce must be recognized.

OTWC has created a working environment with compensation policies that encourages

integration between employees and management to achieve common objectives and goals.

Training activities are conducted regularly to reshape employee attitudes and behaviours.

Team rewards are given for group performance to encourage team work. Each OTWC outlet

are assessed and rewarded for outlet overall performance, food and service quality and

cleanliness. This has increased the motivation of staff for group performance and team work.

OTWC also encourages continuous product innovation and improvement, and therefore

promotes innovation of ideas among staff to learn and try new ways of improving the

business and subsequently increases job satisfaction.

On the other hand, the chef and kitchen helper are paid based on their skills and experiences

aligned to market rate to retain / attract competent and quality chef. Foreign workers are

compensated with hardship allowances, incentives and accommodation as part of human

resource management strategy.

Further to this, OTWC serves only halal food, and therefore employees are trained to prepare

the food in a halal way with compliance to regulations. Subsequently, it is of strict company

policies for all staff adhering to only consume halal food in the outlet and respect religious

practices.



In order to ensure high level of job satisfaction in the workspace, OTWC managers should

motivate employee using Motivational Job Design whereby providing staff the intrinsic

values such as job satisfaction, respect and recognition. Using the theory, each staff will have

task identity and significance and been given the autonomy to perform within their work

scope. Managers will then constantly monitor and feedback with the employee for continuous

performance.

On the other hand, according to Maslow’s Hierarchy of Needs Theory, individuals cannot

move to the next higher level until all needs at current or lower level are satisfied (Slocum

2009). Therefore, managers should ensure that employee lower level needs such as

accommodation for foreign workers and over time allowance with market rate pay been given

to employees to satisfy their safety and physiological needs. Moving up the hierarchy,

managers should encourage the employees to interact and socialize within each other by

motivational training or employee casual outing. In order to increase employee self esteem

and self actualization, award such as “Best Employee of the month” should be given to staff

who performs and exhibit good working attitudes.

In addition, managers should have Employee Involvement Program to encourage employees

to contribute ideas and promotes creativity in work place. This will provide employee certain

authority and involvement in decision making, and motivating them with intrinsic value.

Employees or teams who performs should also been given extrinsic rewards such as financial

incentives. The rewards given must be fair and equal based on the performance criteria set for

employees which are part of Expectancy Theory (Robbins 2009). This builds the confidence

of achievement for the employee.

According to Equity Theory, employee when is performing and striving their best to meet

company objectives and goals should be compensated fairly and equally regardless of

workforce diversity and must aligned with external market pay. Therefore, a set of

performance objectives and key performance should be set out clearly. It is of importance

that managers perform goal setting by setting their expectations and directions clearly to

employees to ensure they know what to do to achieve the best results required by

management.


List of References

Old Town White Coffee Website, OTWC (2011). Retrieved from

http://www.oldtown.com.my/

Perkins S.J. & White G. (2009) Employee Reward. Alternatives, Consequences and Contexts.

CIPD London.

Robbins, S. (2009) Organisational Behaviour. 10th ed., Prentice Hall (Pearson Education)

Slocum Jr., J.W. & Hellriegel, D. (2009) Principles of Organizational Behavior (12th ed.).

South-Western, Cengage Learning, Milton Q Australia.


http://www.oldtown.com.my/

assgn 1 final

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