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7/30/2019 Case Denny's

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Flagstar is the parent company of Dennys which faces problems dealing with diversity in

our concerned case study. As multiculturalism isnt to be ignored; to deal with diversity is the

best aspect of the culture of an organization. Diversity means co existence of people of

multiculturalism or of different backgrounds.

Dennys found numerous allegations of racism by both customers & employeesspecifically on march 24, 1993:

Black customers are forced to wait for food longer than the white.

Black customers are denied service entirely.

They are to pay cover charges & pre-payment.

Dennys is engaged in black outs.

It has discriminatory hiring practice.

It prevents the minorities from reaching management & franchise positions

It means the company has Earnings gap which is one of the 3 racial & ethnic minority

issues.

To response to these Flagstar took the steps below:

At first apologized sincerely admitting unawareness of cover charges & pre-payment.

Dropped cover charges & pre-payment & also gave explanation.

It explained that their target was to prevent late night dine & dash theft. This

dropping indicates Taylor Coxs System Flexibility Argument for managing cultural

diversity which means that the system is to be less determinant, less standardized &

therefore more fluid. The increased fluidity should create greater flexibility to react to

environmental change. Here we also find practice of the Workforce 2000report which

says to maintain adaptability & flexibility of aging work force.

Talks with civil rights groups such as National Association for the Advancement of

Colored People (NAACP).

Allows spot testing of Dennys restaurants.

Starts anti-discrimination training program for all Dennys staffs.


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Integrates diversity by supporting the employees, service the franchisees, serve guests, give

back to communities, and generate returns for the shareholders.

Constantly strives to identify minority and women-owned businesses to support the needs of

the company.

Encourages the employees to give back to their local communities.

Strives to create franchise partnerships that will contribute to the growth and success of thebrand.

Its intentional efforts toward greater diversity have resulted into transformation of their internal

culture.

Progress of diversity initiatives at Flagstar/Denny's:

Reciprocal Trade Partnerships

-- A comprehensive Fair Share agreement between Flagstar Companies, Inc. and the NAACP

provides African-Americans and other minorities with greater opportunities in the company's

restaurant operations. Flagstar has a similar five-year agreement, specifically targeted to U.S.

Hispanics, with the Hispanic Association on Corporate Responsibility.

-- Board of Directors

Vera King Farris (African-American), president of Richard Stockton College in Pomona, N.J.,

was named to the Flagstar board of directors in 1993. Michael Chu (Hispanic and Asian-

American) has been a board member since 1992. Elizabeth A. Sanders, principal of The Sanders

Partnership in Sutter Creek, Calif., joined the board in November 1995.

The 13 members of Flagstar senior leadership are a diverse group that includes one Hispanic

male and three women, one of whom is African-American.

-- Purchasing Contracts

New annualized minority purchasing contracts now exceed $50 million -- a fivefold increase

since 1993. This represents 12 percent of total annual food and paper purchases, achieving a goal

originally set for the year 2000.


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--Management Positions

One out of four of Flagstar's restaurant and multi-restaurant supervisory positions are held by

minorities. Forty-two percent of its 94,000 employees are minorities; 25 percent are African-

Americans.

Minorities represent 27 percent of Flagstar's management, up from 22 percent in 1993; African-

Americans account for 17 percent of Flagstar's management, up from 13 percent in 1993.

Minorities represent 24 percent of Denny's management, with African-Americans representing

11 percent of Denny's management.

Franchising

-- Seventy-eight minority franchisees, collectively, own 154 Denny's restaurants, whichrepresents 28 percent of all Denny's franchise restaurants.

African-Americans own 26 Denny's restaurants. Plans call for this number to reach 65 by the end

of 1997. In 1993, there was one African-American franchisee.

In September 1995, 14 first-time franchise candidates were selected to participate in the Denny's

Fast Track program designed to give eligible minority candidates an opportunity to own Denny's

restaurants.

Evaluations:

-- An independent, third party civil rights monitor investigates any Denny's customer

discrimination complaint. In addition, under the supervision of the civil rights monitor, Denny's

restaurants are randomly visited to ensure all customers are treated fairly.

Philanthropic Contributions

-- Youth & Education and Equity & Empowerment are the two principal areas of interest.


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Other Initiatives

-- Over 90% of Denny's management has already participated in diversity training workshops.

All remaining managers will complete training by early 1996. In addition, all hourly employees

will receive diversity training by the first half of 1996. Flagstar's other restaurant subsidiaries

will begin a comprehensive diversity training program in 1996 for senior officers and restaurant

support leaders.

Denny's improving slowly on minority relations:

September 20, 1994 Sun staff writer Ivan Penn contributed to this article.

A year after a much-touted agreement between the corporate owners of Denny's and the

NAACP, both sides agree that there has been slow but steady progress toward its goal of creating

millions of dollars in business and job opportunities for blacks and other minorities.(abridged)

But both groups cited the following improvements in Flagstar's minority picture:

* Of 124 new minority hires in management and executive positions, 103 are blacks, according

to the company. Of those, 34 are single-store managers. The NAACP says the black management

hires represent a 56 percent increase in the past year. Flagstar also named its first black to its

board of directors last year, a female college president.

* New contracts with 19 minority suppliers represent $21.3 million worth of business a year --

about 3.5 percent of corporate purchasing, according to Flagstar. The 14 black-owned firms

include a crouton maker from Chicago, a paper cup manufacturer from South Carolina and a wax

paper producer in Pennsylvania.

* Beginning this fall, the Denny's chain is helping fund a management-training program for

unemployed workers at a Seattle community college. Students will work at selected Denny's in

the hopes of landing a job after graduation.

Complaints: There are complaints too. For example:

"What they are doing is spending money giving it to black consultants. But in terms of Denny's

economic commitment to black people . . . that's a fake and a fraud," said Ron McPherson,

president of the Santa Clara County Black Chamber of Commerce.


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Annapolis Councilman Carl O. Snowden said Flagstar's pledge to find a minority owner for the

Denny's where Secret Service agents allegedly were mistreated in 1993 didn't materialize.

"The bottom line is, it was a great public relations campaign but it didn't really produce

anything," said Mr. Snowden. "With Denny's, [there's been] absolutely zero outreach in the

Annapolis community. It just hasn't happened." etc.(abridged)

Claims of broken promises:

In San Jose, Calif., the site of the first discrimination complaint against Denny's, the president of

a black businessmen's group said the association was rebuffed in efforts to get work with

Flagstar.

Media complaint:

Robert W. Bogle, publisher of the Philadelphia Tribune and president of a national black

newspapers association, said Flagstar reneged on a June 1993 commitment to spend $1 million

with his group, the National Newspaper Publishers Association. Mr. Bogle said he believes the

commitment was a hollow promise intended to ward off criticism from the publishers' group as

discrimination complaints against Denny's mounted.

Thats all about how FLAGSTAR deals with diversity.

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