The below essay was written as a mid-term assignment for a Principles of Management class at the University of Massachusetts at Amherst. The very summarized case background involves two people, Jose and Gladys, who rose to upper management positions at Wal-Mart and J.C. Penney (respectively), yet were not content with their professional lives. The two eventually decided to quit their jobs and start their own coffee shop chain in the Amherst area. One portion of the essay was to discuss two management issues Jose and Gladys will face while managing the chain of coffee shops. The second portion of the essay required an analysis of the management methods Jose and Gladys used in their corporate jobs and how they could modify them or which approaches would serve them well. I earned a perfect score for my work on this essay. Also, as a side note, this was one of the best classes I’ve taken in my whole college career. The professor was remarkable and the course content and alternative viewpoints she discussed and engaged the class in were always interesting and immensely educational. Without further ado:
Javaprenuers: Corporate Managers Tackle Small Business Ownership
Running your own business is indeed a task, while sharing many similar traits, wholly different from being a manager at a large corporation. The information Jose and Gladys gained at their respective jobs, and the knowledge of the area and the largest entity in the area, gained from attending said entity, the University of Massachusetts at Amherst, will aid Jose and Gladys in achieving their dream of owning and successfully operating a small chain of coffee shops across the Pioneer Valley.
While it seems counter-intuitive, as Gladys and Jose are the owners of the cafe chain, control will be a crucial determinant of the success of the small cafe chain, from the opening and all the preparation involved, all the way to running multiple chains. Gladys and Jose will have to rely on external market indicators when they first open up shop to determine factors such as what price to set, what hours to operate, what items to offer, and what their target audience should be. I’ve made several trips to Amherst, as many of my high school classmates attended college there, and although I didn’t see all the coffee shops, I did see more than a few and my experience from living in one of the prototypical college towns, Chapel Hill, for 2 years can attest to college town coffee shops being quite popular and unique from the chain coffee places (Starbucks, Dunkin Donuts). What type of control Jose and Gladys wish to use really depends on what type of coffee shop they’d like to own. A safe assumption is that Jose and Gladys would like to appeal to the area’s multitude of college students and possibly gain some of the eclectic Amherst residents as customers too. Jose and Gladys must take into account that college students usually have less disposable income than working adults, are more discerning in their consumer decisions, and due to their sometimes irrational scheduling and periods of “crunch times” (e.g. Mid-terms, finals, etc.) will gravitate towards a cheap, convenient and readily-available, cup of coffee that separates itself from its competitors on more than just image.
To gain that edge over their competitors, I would urge Jose and Gladys to use clan control to establish the culture of their coffee shop and to operate it once it opens; however in the time leading up to opening Jose and Gladys should examine the market, and although they don’t have to be dictated by it to the extents covered by market control, they must be aware of their competitors and the area they are setting up shop in. Is there a place in Amherst to get a good cup of coffee 24/7? If not, perhaps Jose and Gladys should consider pursuing a 24 hour schedule, or maybe just targeting the times when other coffee shops are closed (how about the Insomniac’s Dream as a name). The point here is that Jose and Gladys have to decide how they’ll be different from their competitors, especially in a crowded market like a college town, and then they must control that difference. Although market factors will be important in developing the store, market controls will likely prove to be too restrictive to the liberal customers, employees and residents of Amherst.
Also, as the case states Jose and Gladys will be using personal savings and bank loans to fund the shop, they must be very alert of measuring, comparing and adjusting their performance. They should use all their information available to them, from praise and criticism from customers to financial reports to measure and compare the performance of their store, not only to competitors results but also to their own personal goals. I believe the experience and knowledge gained from working as regional managers for J.C. Penney and Wal-Mart will help Jose and Gladys analyze the results of their shop and implement the proper controls and make the right decisions. In my mind, I picture that Jose and Gladys gained knowledge of how to control supply, people’s expectations, budgets, and sales from their roles as regional managers. The most critical experience Jose and Gladys gained is how to manage people, both internally, for instance themselves and their employees, and externally, such as suppliers, critics, and competitors. One of the biggest changes Jose and Gladys will experience is having to manage themselves and keep their expectations realistic. They cannot let their coffee shop control them, as the Au Bon Pain article proves doing so leads to devastating results in performance of the shop and health and well-being of the manager[-owners].
I’m torn between whether the planning, ethics, or culture of Jose and Gladys’ coffee shop(s) [The Insomniac’s Dream] will be in the top two of important issues they will have to properly manage to be successful. Surely, in an opinionated environment such as a college town, ethics will play an important role in the image and sustainability of any new franchise. Or would it? Fast-food chains, notorious for poor wages and disregard for the environment, play a large role in students’ food consumption. Surely then planning, would be crucial to starting and successfully operating a new business, especially for two individuals who have never owned a business before, especially since they’ll be relying on personal savings and bank loans to aid them in the start. Then again, perhaps extensive planning is the sort of activity Jose and Gladys are attempting to avoid by leaving the corporate world, the case does mention that they were tossing around the idea of starting a business, it seems they have a very casual, care-free approach to this proposition, almost as if they’ve decided they’ll go where the wind takes them! This is a dangerous approach, but not necessarily a for sure failed one. Some of the world’s largest and most successful organizations were started on a whim (Microsoft). This process of elimination leaves culture, however I think we’ll be seeing a bit of ethics and planning play a part in Jose and Gladys’ second most important issue, the culture of ‘The Insomniac’s Dream’!
Part of the reasoning for setting up shop in Amherst, must have been determined by Jose and Gladys’ previous experience in Amherst, they must like the inherent culture of the town if they’ve decided to start their first business there. A college town certainly is a different breed of residency than a suburb, small town, or city. A college town owes a large part of its economic success to the college or colleges which reside in the town. While residents of college towns may become annoyed at the antics of college students, especially during the beginning of semesters when the townspeople are not adjusted to the college students being back in town, and the college students are fresh off their breaks, the town must realize that the college(s) is a crucial part of the town’s livelihood and is what separates it from any other small town.
Obviously, a coffee shop decorated with banners and posters of Northeastern University or the University of Connecticut, or even with Yankees paraphernalia, would quickly flounder, even if placed in heart of Amherst on Main Street. To this effect, Jose and Gladys (who I’m sure wouldn’t even think of putting up anything but UMASS and Red Sox decorations) must take into account the pre-existing culture and environment of Amherst. A huge store, taking up half a block and multiple stories for a simple coffee shop would also most likely be struck down by the town’s council and be protested by Amherst residents. Jose and Gladys must find a niche that has not yet been exploited, and use their culture to support that niche. If they choose to hire students, they must be careful to also hire Amherst residents to replace the student staff during crucial study periods, or else they risk alienating the students and residents by having insufficient staffing and unrealistic demands on their employees. Jose and Gladys could use ethics to determine part of their culture, thus appeasing the liberal style of the town and student body, perhaps make a point of using only Equal Exchange/Fair Trade coffee beans.
They should also take suggestions from employees, students, and townspeople on what type of music to place in the shop, perhaps having weekly free performances of local bands (Cold Duck Complex being the one I’m most familiar with). They could even let employees and customers brew their own mixes of coffees, further encouraging an innovative and unique culture! They should also consider an agreement with UMASS linking The Insomniac’s Dream with UMASS’s digital network, allowing students to use school resources while at the coffee shop. Jose and Gladys must be aware that they will be entering a dynamic environment, where new coffee shops will sprout frequently to meet new consumer demand. As UMASS expands and accepts more out-of-state students, new shops may appear that cater to these “foreign” tastes. Building a good reputation, with all stakeholders, such as customers, Amherst residents, local suppliers and competitors will only serve to help Jose and Gladys’ long-term plans. I imagine a very free culture taking shape at the Insomniac’s Dream, one which will allow for employee expression and modification to the shop’s culture, while also extending the educational opportunities of the local schools (perhaps sponsoring professor talks or allowing student-resident-customers to speak their mind at special ‘speak your mind’ open floor debate sessions).
Clearly, one area Jose and Gladys will have to modify their approach is in reading, analyzing, and funneling corporate goals. By this, I mean that Jose and Gladys acted as intermediaries while employed by J.C. Penney and Wal-Mart to use the corporate goals passed down from above them on the corporate ladder down to the managers in the stores in their areas who would in turn pass this information onto their individual employees. Here Jose and Gladys won’t receive instruction from above on how to act or how to fix any issues they may not be prepared to handle. Jose and Gladys ARE the top in their coffee shop. If an employee discrimination issue occurs, Jose and Gladys won’t be able to defer to the corporate lawyers, the same goes for a multitude of other issues for instance, customers complaints and government regulations, licenses, and zoning policies. They’ll be the ones who’ll decide when to expand store size and locations, switch suppliers, offer specials, increase or decrease staff size and training, limit or expand customer input, offer new products or remove poor performing products (which may then cause outrage by the few customers who did enjoy that product). Jose and Gladys will have to be more willing to listen to their employees ideas and suggestions and allow for management by their employees. If they attempt to take on all these tasks, which they might have been able to oversee from a very macro-level at their previous positions, they will become overwhelmed quickly and have less time to focus on truly crucial decisions.
Wal-Mart and J.C. Penney, (intuitively) seem to be traditional goal setting companies. Jose and Gladys had their own regions to manage and did not worry about other regions; they were expected to only focus on the performance of their region and ensure its success. Jose and Gladys are now expected to manage the entire operation, from start to finish and cannot focus on just one portion of the shop. Especially if Jose and Gladys have a particular vision for the shop, they must be aware of all aspects of the shop. Management by objectives becomes a prime method of management for Jose and Gladys, as the means-ends chain might ensure good performance, but would be too lenient on the means to achieve those goals. Joint planning by employees and the managers (Jose, Gladys, and whomever else they may assign as managers) would ensure that everyone in the shop(s) would understand Jose and Gladys’ vision and how they expect to achieve it.
Another area in which Jose and Gladys will have to adjust their approach is in organizational culture. Previously, at Wal-Mart and J.C. Penney, the culture was already established and provided to Jose and Gladys and they were expected to assimilate not only themselves, but also their employees into that culture. Once they left their jobs at the end of the day, Jose and Gladys would also not be seen in their communities as beacons of the culture of Wal-Mart and J.C. Penney; however in a small town such as Amherst, Jose and Gladys will be more immediately known as the owners of that wild, late night coffee shop, the Insomniac’s Dream, and will be representatives of their business almost on a continuous basis. If Jose or Gladys wore a t-shirt from Target, neither of their former companies nor the much community would notice; now imagine if Jose or Gladys was seen walking around town with a cup of Dunkin Donuts! Quality management comes into play here because Jose and Gladys will need to ensure their needs are met through the shop so that they will not exhibit any weaknesses by drinking a competitor’s cup of coffee.
Another area Jose and Gladys will have to adjust is expanding their roles beyond just managers, (to borrow a phrase from the textbook cover) management will only be one of the many hats Jose and Gladys will now have to wear. They’ll be recruiters, marketers, customers (as long as they make a quality product they also enjoy), financiers, employers, and a crucial part of the local community. Allowing their employees to become involved in the management of the coffee shop will be important, especially if they decided to go the 24/7 route, as Jose and Gladys cannot be present at the shop at all times. The most important skill I hope Jose and Gladys obtained from their previous positions is to trust people, not just their employees but also the Amherst residents and students and any other customers. Noting customer inputs is important, but if value is not placed on those inputs, then there really is no point in listening to customers and your other stakeholders. As long as Jose and Gladys create a specific style of culture and place the proper controls in place to allow for their employees to achieve the vision Jose and Gladys set out, they will be successful. If they do not trust their employees, they will be in for a long ride to ruin.
