After 35 years of leadership in the company, Antonio was retired at 2007 and named his eldest son, Frank, as CEO over his other siblings including his sister Jennifer who was more suited for the Job. Frank keeps struggles to carry out his father’s directive: double revenues within five Hears while maintaining the humanistic and emphatically pro-employee company culture. What Frank was facing now was that even after two years he gets into position as CEO, until now, he did not have any credible strategies to fulfill his father’s promise or to attain aggressive growth as his father wanted.
He could not abandon the special company culture that no debt philosophy principal they have or risk their reputation on their food quality service. Frank was left with the option of expanding their business by acquiring Great South West Dining (SD) or to enter into the hospital segment and diversify their business and at least try and come close to meeting his promise to his father. This case was focuses on issue related to corporate vision, expansion, quality and employee relations in this family-owned and operated business, communication issue, organizational structure management, services management and growth strategy.
Does Celesta’s operating approach offer a sustainable competitive advantage? Can he contend successfully with organizational and communications challenges? And other related issue will further discuss. 1 . What roles (if any) have Celesta’s value played in organization’s success to date? Calvert success was during Antonio Claret’s empire. He had Calvert Dining Services developed based on his Notation’s way to the success of the organization, which touches on the 7 significant values. These values cover from the aspects of “Quality’, ‘Service”, “Charity’, “Education”, “Respect”, “Growth”, “Education”, “Growth” and Profitability’.
Hence, those values stated above are seen as critical and important in the contribution to the $billion worth of Calvert. Following will be the discussion on how each value brings success to Calvert. ‘Quality’ is defined from the perspective of food served to their customers. With ‘Fresh” was the mantra, ingredients used in Calvert are freshly bought and served to its customers while suiting to their taste preferences. With this point, Calvert had beats most of its competitors who uses canned ingredients due to factors such as highly regulated systems and standards to serve large number of clients.
Furthermore, as the clients (older age people) in Calvert are to more health conscious, therefore not only the foods served in Calvert are delicious but also of healthy diets. This puts Calvert in a competitive advantage as they are able to cater to individual needs with the products (foods) they produced. It is no doubt that their foods are rated high of quality at almost all the time! ‘Service” provided by Calvert are customized towards their customers’ region. As Calvert have different local food service teams, thus menu offered to them are differently unique.
For example, Calvert hired cooks that are proficient in creating Hispanic dishes for one of the Senior Living Facilities which comprises mainly of Hispanic people. In addition to this, Calvert too have their service personalized to bedridden residents with the used of PDA (Personal Digital Assistance). From this point, we can see that Calvert emphasizes on the culture of people they served and to fit the lifestyle of their clients had eventually increases their customers’ satisfaction. Customers’ satisfaction is one of the significant reasons for an organization to be continually grows to its success.
This cultural and lifestyle focused again, puts Calvert in a competitive advantage against its competitors as they treated their clients like their family members. Calvert is definitely deserved to be awarded Ninth the increasing industry recognition for the pragmatic approach they are practicing when customers’ satisfaction is taken into consideration. ‘Charity’ and “Respect” are the values that are taught by Calvert to their employees so that it becomes a norm in Calvert. Charity doesn’t necessary need to be done externally but also internally among the staffs of Calvert.
They taught their staffs to e helpful towards one another even during work hours. Efficiency and effectiveness in their staffs performances too increases as wastage for example, in the context of time is dramatically reduced in figuring out the solutions to any difficulties faced. Respect on the other hand, don’t only come from internally but also towards external stakeholders such as their clients and guests. Simple quote “if you want people to respect you, you will have to respect others the way you want them to respect you” explains the importance of respect element.
As these values that are embedded into he culture of Calvert, it helps in creating good working environment. ‘Educational Programs” are provided by Calvert for the importance of their employees’ self-continuous improvement. This is a very good HER (human resource) strategy used by Calvert to recruit and retain potential employees. People will choose Calvert to start their careers because they see abundant opportunities for them to continue to advance, grow and develop.
With this Calvert are able to withhold many of the hardworking employees as the people they recruit will be for the motive of self-development and thus increases the willingness to work harder to further enhance their skills, knowledge and experiences. When the employees of Calvert are Nell-trained, they will eventually contribute to the success of the organization as they are able to perform their work with good quality. Calvert can be said to have made highly investments on their employees’ development in order to created values that distinguish themselves from competitors toward success.
This can also be proven with the retention to theirs as high as Ant to leave! Higher than the industry. Employees would no Ninth “Growth” elements in mind, Antonio desired and thirst for his staffs to reactively identified opportunities for new or enhanced markets which lead to Indexing of revenue streams. It appears that the staffs in Calvert did possesses this particular desired behavior when Jennifer, Chief Operating Officer (COO) proactively looking to have the remaining 75% of UN-contracted Senior Living facilities (SELF) to be contracted with Calvert food service.
Furthermore, Calvert too continuously looks for opportunity for it to grow by looking outside of SELF market such as towards hospital and education industries. Towards the end, we have “Profitability’ element as the values of Calvert. In order to enervate more profit cost reduction method is a definite to be implemented in most of the organization and Clave too not to be dismissed from it. And this, can only be achieved if employees actively search for it and implement the cost reduction practices. Calvert is seen to have its own cost-control model-a mix of gourmet and skinflint which distinguishes itself from the competitors.
Calvert manages its waste products effectively. For example, by having their pizza dough made from scratch, they managed to save $1. 00 per pizza shell. This is no queries on how Calvert can owns the position it has today. In conclusion, these values had turn out to be the part of the critical success factors of Calvert. It brings benefits and creates values to Calvert from inside and out of the organization. All in all, these values plays significantly important role in nurturing their employees and satisfying their customers which brings to what Calvert is today. 2.
Does Celesta’s operating approach offer a sustainable competitive advantage? Based on the case we have studied, there are some approaches that indicate Calvert have a sustainable competitive advantages. One of the approaches is by having a set f principles. These principles not only can guide the employees in achieving the company’s objective but it also gives the indication to the customers that they are the main concern and their interests are protected by Calvert, especially SELF. These set of principles were posted in Celesta’s offices and display in its annual report.
It could underpin the confident from the public regarding the quality of the service company provided. In this principle, there are five basic goals such as to provide the highest quality food and personalized service to the residents of the Self we serve, to hew to he budgets of our SELF clients and our own company, to innovate constantly, developing new service features as determinedly as new menu items, to develop every Calvert employees to his or her full potential and lastly to grow profitably, generating the funds needed to generate even greater growth in future years.
With the quality and the continuous innovation provided by Calvert to its customers, it is likely to sustain the competitive advantages among other competitors in the industry. On the other hand, the quality tot to Calvert NAS to its customers are well exceeded the quality of the competitors provided. As the Self are among the senior citizens, Calvert came out with a menu with a certain restriction on diets for health reasons with using fresh ingredients in preparing the meals to Self. While for other competitors, they tended to use canned ingredients which seem to have a lower quality than the food provided by Caltech.
This will indirectly sustain the competitive advantage to the company. Calvert also providing customized service to Self unlike those large competitors relied on highly regulated systems and standards to serve large number of clients. They served the customers based on the standard of the many rather than giving an enthusiasm behavior. Whitetails of Calvert treated guests like family, following behavioral rules that Antonio had set down. With this customized service, Calvert built its local food services team and menu offering to serve each facility uniquely.
For example, to serve an SELF whose residents were largely Hispanic, a Calvert manager hired cooks proficient at creating authentic Hispanic dishes which gave a very high satisfaction. Besides that, one of the supervisors had learned sign language to communicate more clearly with a client’s deaf residents. The following approach is that Calvert also distinguished itself from competitors through its cost-control model which is “a mix of gourmet and skinflint”. They negotiated low prices by agreeing to sign long-term contracts with the best ‘endorses.
This is how they control the operating cost of business. The demand for freshness itself could yield saving. For example, Calvert made its pizza dough from scratch, saving roughly $1. 00 per pizza shell over the pre-made product and any Nasty would likely to incorporate leftover cookies into creative desert. This will not only save cost, but it also give innovation to satisfy dynamic customers need. Celesta’s COO, Jennifer Calvert was strong on the principles of continuous innovations. It gave lot of customers a brand new strategy in operating her business.
For example, she came out with an idea where provide a more personalized service to bedridden residents which is called “At Your Service”. This is where a catering program that allowed residents to pre-order their meals for the next day. Calvert staff delivered menus each morning and returned early afternoon to collect residents ‘selection, Inch they submitted to the kitchen via personal digital assistant (PDA). The service to only made residents feel more cared for, it also helped kitchen staff to plan for appropriate ingredient quantities.
This program earned industry recognition among the competitors. 3. Why haven’t other food service providers copied Celesta’s approach? Based on the case, there are several reasons for the competitors of Calvert to not follow nor copy any of its approach. Following will be discussed on the factors such as cost, time, risks, employees and brand loyalty, social responsibility and corporate culture. First and foremost, it would be too expensive for their competitors to have followed the Notation’s mandates in their operation.
Calvert emphasizes on using high quality of ingredients and hiring talented chefs to cater for its different backgrounds of customers’ preferences which means incurring higher expenditures than anyone else n the industry. To maintain the freshness of the ingredients, Calvert will have to serve fast and if during the period low density of customers, they will face the risk of Incurring losses because to the disposal to the deteriorating quail ingredients. Therefore, for most of competitor out there, effective costing is widely emphasized and it eventually leads to the usage of canned ingredients as they (the Ingredients) don’t rot fast.
However, quality of the ingredients is badly affected. In addition to this, the highly regulated systems and standardization to serve larger portion of clients effectively, prohibits them (competitors) to cater for each individuals or groups’ needs. Unlike Calvert, they (competitors) can’t afford to do many of the customizations as it requires a lot of efforts, money and time. Furthermore, many had said staffs are the assets of an organization and therefore they are crucial to the success of the organization. Calvert is willing to spend for its staffs to continuously improve themselves through trainings and extensive education program.
Employees are nurtured and fostered accordingly to develop themselves in Clave. Again, it Mould be costly for competitors of theirs to follow the way Calvert is treating its staffs. Many are afraid of facing high gearing issue in their operation, thus preferably not to take the risk and stick to its existing style of operating. Employees and customers’ loyalties are something that the competitors have no chance to imitate at all. This is mainly due to the prominent values that Antonio had mandated in his style of operation.
Employees are provided with the chances to develop themselves and that is the main reasoning for employees to remain and retain in the company as they see opportunity to learn and to grow. Moreover, employees in Calvert are taught to be helpful among each other and thus they might be afraid of not getting the friendly working environment again if they Jump to another company. This is the unique culture of theirs where it takes years to develop such norms and is unlikely for other companies to follow in a day or two if the management and the rest of the organization do not put any effort to create one of those.
Customers’ loyalty comes from the aspect of high quality of ingredients served and good services provided by Calvert throughout all the years it operates. In fact, this is the trust that Calvert had successfully built upon its customers. Thus, it would be almost impossible for competitors to deliver such unique values toward its customers and imitate such brand loyalty. Furthermore, Calvert adopts practices towards the principle of continuous innovation had lead them to a more caring way of doing business. This can be proven when they personalized service to bedridden residents that earns hem the industry recognition.
The status and respect it gained from society are rather difficult for its competitors to adopt. This is because most of the companies out there are concern only with financial or monetary gain instead of the obligations and responsibilities toward the society. In addition, Celesta’s has created its own unique corporate cultures which enable them to be differentiated from other competitors. It is the norm of an organization and thus being very difficult to have the norm in an organization to be modified or change as it had been instill in the mind set of their employees.
If competitors decided to adopt the way Calvert operate its business, the employees will find it hard to adapt themselves in a new set of corporate culture which may leads to high resistance from the employees. When employees’ resistance is high, they will choose to leave the company, thus increasing the turnover rate. This will give rise to the risk of low productivity the company as it influences on the behavioral aspects and decision makings of the executives which detect the business when it becomes strategic risks 4. Given Celesta’s communication and internal organizational challenges, how
Important will training and development be to maintaining growth and culture? In view of the problems existed in Celesta’s communication and organizational structure, training and development is crucial in maintaining the growth and culture of Calvert. First and foremost, training and development will increase the productivity of employees. Human resource department of Calvert will determine types of training and development needed for each of the employees according to their roles and responsibilities in the organization. Through training, their skills and knowledge will be enhanced further which they can apply it in their Jobs as well.
Calvert has offered educational programs as one of the off-the-Job training methods Inch include basic literacy to advanced culinary courses. For example, management representative of Calvert could be exposed to new marketing strategies in the international market and applied accordingly while they were interacting with the clients in order to increase the probability of getting the contract. Chefs could be trained on decorating the dishes in order to attract and retain the existing customers. All these are value-added to Calvert in terms of productivity and thus refit growth.
Training will also formulate the thinking of employees and helps to expand their ideas on innovations. This is especially true from the on-the-Job training provided by Calvert whereby the employees had the chance for Job rotation. There Nas a constantly changing of working environment among the employees to different positions as well as different departments based on their potentials Judged by the supervisor and manager. Employees will have the opportunity to cover their target role via Job rotation, taking full responsibility on a temporary or limited basis.
Through rotating their Jobs, they would be able to obtain a wider view and clear picture on how Calvert operated. New Jobs challenges and experiences could provide new insights and ideas for them as they were not constrained by similar routine tasks. They would be able to think out of the box. This is consistent with the third goal of Calvert to innovate constantly and developing new menu items. As a result, it Nil increase the efficiency and productivity of the Calvert employees in doing their lobs.
Besides, when the employees gained higher skills and knowledge through raining, they will seem to handle their Jobs with less supervision. This could be illustrated through the off-the-Job training provided by Calvert. It is mostly used in developing specific new skills for individual employee in the areas of team-building, communications or organizational planning. For instance, in Calvert will have seminars like “How Calvert Works” on every month to the employees on where the managers explain the details of finance and operations of Calvert.
This again gives the employees a clearer picture on how to manage their own tasks. It reduces Job confusion and ambiguous among them. Therefore, a well-trained employee will be more conscious with their Job and shows both quantity and quality performance. It is thus require less supervision, money and resources due to their best performance. Calvert is more likely to reduce the wastage of time and efforts to supervise their employees who with fewer skills and lack of experiences. Addition, a structured training and development program assures that Calvert employees will have a consistent experience and background knowledge.
Due to the numbers of employees in each role varied widely from one account to the next according to the number of residents, the food service options and client demands, Calvert may face problems in assigning the works when there is lack of experienced Markers to service their increasing number of clients. With regular training in all aspects of dining services in Calvert, it will ensure that all employees at least have exposure to the knowledge and information. This will ease Calvert in distributing the lobs freely among the employees.
All employees will be aware of the expectations and relevant procedures in Calvert. Moreover, Calvert has adopted pay-for- performance plan to motivate their employees. A pay-for-performance plan can give the opportunity to earn a substantial income which can lead to increased motivation. Since employees are compensated based on performance, they may be more likely to Nor harder in order to achieve income goals. This situation could be enhanced if the key performance indicators for Celesta’s success are used as the performance metrics for employees’ performance evaluation.
It could align the employees’ interest Ninth Celesta’s interest whereby both of them are aiming the same thing, for our case, the profit growth. Apart from that, training and development can make employees eel they are appreciated and cared by company at all the time. Employees who feel challenged with the training opportunities will be more satisfy with their Jobs. As shown in the employee satisfaction survey results of Calvert in 2008, it has been proven that most of the employees in Calvert are satisfied with Calvert.
Training provided by Calvert has assisted its employees to get Job security and Job satisfaction. It also enables employees to foresee their futures and opportunities in Calvert. An outstanding trained employee will also be awarded and is more qualified for promotion to become an asset for Calvert. Furthermore, training can improve the morale of employees. The greater the employees’ morale is, the more they will contribute to the organizational success and the lesser will be employee absenteeism and turnover. This will also reduce the social problems in workplace.
The benefits of training mentioned above are mainly the hard aspect of Calvert. Yet, it would be so “ring to ignore the soft benefits brought by training in terms of re-enforcing Celesta’s culture among the employees. For this purpose, Calvert use coaching and mentoring method in training in the training and development process where a more experienced senior manager will act as adviser in helping the employees work through the problems and encourage them to find solution. For instances, Calvert Nil delivered manager guides, training videos and guidance on culinary standard. Hen the employees face dilemma or difficulties in their Jobs, they could refer to the guidelines provided. A better solution could be developed from the guidelines and safeguard Celesta’s reputation by providing consistent services with same level of quality. The employees would thus act in the similar ways when they face similar situations outlined in the guidelines. It could ensure that they put the food quality and good customer services ahead of any other things in accordance with the initial culture developed by Franks father, the founder of Calvert. A consistent working environment is created.
In short, employees in Calvert will be more committed in their works through training and development. They will contribute more to Celesta’s success align wit the Notation’s Way as they are developed with full potential. Despite of the limited budget may be an obstacle to the successful training and development programs, but it should not be ignored in Calvert. They can reduce the cost of training by the development of comprehensive training plan such as training the employees in- house through the experienced internal trainers where they can be trained in actual Morning environment.
Moreover, Calvert can build a weapon or portal on an Intranet, so the employees can share their expectations and discuss the information learned to others. 5. Celesta’s fifth goal is profitable growth. Goals one through four are more ethical in nature. Is goal five inconsistent with the first four? It is absolutely the fifth goal is inconsistent with the previous goals of Calvert. The en to the fourth goal of Calvert is about how a company can deliver a high quality food and good services to the customers while for the fifth goal it is about how a company can increase the profit of the company.
There is a reason why there is a fifth goal for Calvert is that when Antonio Calvert, the father of the current CEO retired told Frank Calvert, the current CEO of Calvert to double the company’s revenues within five years but it is highly unlikely for Frank and the executive team to double its revenue in five years’ time as they focused solely on Self unless it branched out beyond the SELF segment. Based on the first four goals that have been set by the company, it is not enough to double the company’s revenues.
They are more on being ethical towards the customers, especially Self being served by the company such as giving the highest quality food, better service as well as innovation. As Frank does not want to disappoint his father, he was exploring the opportunities Inch could be profitable enough. In 2006, Frank had recommended adding custodial services to Celesta’s portfolio through the potential acquisition of Facility Services Solutions (OFFS). Based on this recommendation, it generates $500 million leaning services that provided housekeeping and facilities management services to hospitals and Self.
However, this recommendation do not give an ideal revenue as he questioned whether his company could operate OFFS profitably when they noted that margins in the cleaning services industry were so low. This is clear that this profitable growth objective did not align with the four goals of the company. On the other hand, Frank had considered moving into the education sector but unsuccessful due to lack of infrastructure to support a large university demands for multiple amp’s food service locations, ready to access to national retail brands to fill “food courts” and marketing insight into the student demographic.
This goal is totally inconsistent with whatever that had in the first four goals. It is something to do with planning on to diversify the company’s segmentation rather than focus solely on serving the Self. By 2009, the hospital segment seemed to offer the best opportunity. Frank is considering of whether to go on with this acquisition. It presented a more logical fit with Celesta’s core competencies and once the economy back on track, growth in hospital budgets would surely increase.
However, Frank is worried on the financial challenges of getting this acquisition. This is because the company had Eden able to growth through prudent cash toll management and did not need to rely on debt to finance kitchen equipment and renovations. If ever this plan acquire, its no-debt philosophy would certainly need to be set aside. Again, this goal is obviously inconsistent with the first four goals. This goal is about to be more profitable instead of serving the customers ethically.
Moreover it is more likely about expanding the business which is beyond the scope of the first four goals. 5. How, if at all, should Calvert organization structure be changed to resolve communication issues, preserve the company’s culture, and support future growth? Antonio operated in a complex business structure as it served nearly 1,000 senior living facilities (SELF) at United States and employed 1 5,000 people by June 2009. As Celesta’s business operations are growing aggressively, the organizational structure IS expanding to serve its clients as well.
However, it is getting harder for the employees to adopt the core service values of Notation’s Way as it might be too busy for the senior management to train the new employees who may be the fresh radiates from college and business school that lack of the industry experience. Ninth the increasing number of new accounts in Calvert, it would be increasingly difficult for its employees to stay close especially to the front line. The employees might not get the same level of commitment and strong leadership as expected by Calvert.
It may also becoming harder for the executives to disseminate the core ‘ales of Notation’s Way among the employees as communication problems would arise. Thus, Celesta’s organization structure should be examined as to solve this communication issue faced. First, we analyze Celesta’s business structure. It was said to be two-tier in the way where it had 12 divisions serving different geographical areas reporting to one headquarter of Antonio. Its headquarter would provide corporate support functions including finance, marketing, human resources, and ‘culinary development”.
Under the division structure, there were account managers and directors, chefs, and food service workers who were responsible to serve all aspects of resident dining facilities for the clients. As it seems it was nearly impossible for Celesta’s president and CEO to meet new employees when they firstly non Calvert like they used to be as there was large number of employees enrolled each year; thus, our group would recommend that human resource management function should be concentrated at Celesta’s headquarter. It should be the headquarter who interviews and selects potential candidates for the company.
From this way, it could make sure that the candidates appointed are holding same ethical and personal principles as Celesta’s principles. They could also organize a briefing session for that batch of new employees to meet the CEO together at the same time n order to stimulate them adhering to Celesta’s values at the first place. As the CEO is emphasizing this adherence to them, they will take it seriously since the CEO is showing commitment and enthusiasm in following the core values and principles. By this, Calvert could also benefit from re-enforcing the desired culture among the new employees.
However, again as the number of new employees was nearly 1,000 people each year, it could be daunting for the concentration of whole human resource function. Our group therefore suggest for Calvert to concentrate only the recruitment and development tensions but decentralized other tensions including payroll, stats reference evaluation, performance appraisal and other relevant administrations. Irish partial decentralization to Director of Operations is important as it is almost impossible for headquarter to access and evaluate their performance due to locations problem.
Next, we realize that there are a lot of levels of management at Calvert. It started from Division President, Area Vice President, Regional Vice President, Director of Operations to Area manager and Account manager. This was one of the reasons where senior management especially those in the headquarter faced difficulty in receiving customers’ responses and feedbacks from front line employees. It would be more beneficial for Calvert to eliminate some of the less needed management levels in order to improve the information flow.
For example, Calvert could eliminate either Regional Vice President or Director of Operations level so that Area manager and Account manager can report directly to Area Vice President “hen necessary. Calvert thus need to evaluate the needs for both of the management level taking into considerations the potential benefits and costs analysis. It would be better for Calvert to eliminate the Director of Operations level if hey hold similar roles and responsibilities with Regional Vice President and Area manager or Account manager. In addition, Calvert also faced fluctuated’ organization structure.
The composition or membership of the structure was keep on changing ‘ere recently due to Celesta’s career progression program. The employees would be promoted from one account to another as Calvert regarded larger accounts as more prestigious. This promotion could be good that it stimulated the employees to work harder yet it was destructive at the same time that the newly promoted employees aced stress and difficulties in adapting to the new working environment. Time commitment was needed for them to familiar themselves with the new environment.
Customers were also complaining while even some of them withdrawn their contracts as they received inconsistent services provided by Calvert. Thus, our group Mould suggest for Calvert to promote the employees to a higher position within the same region. By this, the customers could remain with the same and familiar employees while the employees could use lesser time to familiar themselves as the situational factors within the same region are similar. For a better case, Calvert could replace the career progression program with higher salary pay, bonus and other incentives to the employees.
As according to Mascots Theory of Motivation, different people will have different needs to be achieved. Celesta’s career progression program could be equaled to self-actualization level in the Mascots hierarchy of needs and less number of people is aiming for this need. If they are promoted by this way but they are actually not looking for self-actualization satisfaction, it would generate high level of stress on them as it involves greater mount of responsibilities and accountabilities.
Accordingly, monetary rewards like higher salary pays and benefits-in-kind are of psychological level. They are suitable to motivate the employees as well. Hence, the management responsible for performance evaluation and appraisal shall identify types of satisfaction desired by the employees and arrange accordingly. It could help Calvert to overcome the fluctuated’ organization structure. If Calvert still prefer career progression program over other incentive methods, we suggest the following ways to increase the