Organizational Structure: Building a Successful Business Model

Organizational Study of Chick Fil A

Chick-Fil-A is a restaurant chain that found its beginnings in a small suburb of Georgia. The growth of the business lies heavily on the organizational culture, structure, and business practices that have propelled the business forward and made it a success throughout the United States. The following analysis will help describe the business and how the organization is built in order to create a successful business model for the restaurant chain.

Description of the organization

Chick-Fil-A originally opened its doors in 1946 in Atlanta, then known as the Dwarf Grill.

“[Truett] Cathy started the business in 1946, when he and his brother, Ben, opened an Atlanta diner known as The Dwarf Grill (later renamed The Dwarf House®)”. The business began as a small dinner within a small suburb and has grown beyond its humble start. Chick-Fil-A expanded and became a staple of shopping malls throughout the United States and eventually opened its first stand-alone restaurant in 1986. “Chick-fil-A reported more than $9 billion in revenue in 2017 and has enjoyed 51 years of positive growth.” (Chick-Fil-A, 2018).

Throughout the expansion of Chick-Fil-A, the restaurant chain has used franchises owned by local small businesses to expand. As of 2016, “…Chick-fil-A has more than 1,000 locations across the United States, including a few drive-thru only units.” (Franchise Times, 2016) Chick-Fil-A continues to grow despite limited hours placed on their restaurant, Monday through Saturday. These hours are a representation of the company’s deep-rooted Baptist beliefs, and all restaurants are closed on Sundays. The company has now expanded to sell its products in local grocery stores. This will allow individuals to purchase their favorite meals no matter the day of the week. New ventures such as these have helped the restaurant chain become successful and create new growth for the future.

Organizational Structure

As the restaurant chain has grown since its inception in 1946, creating a stable management team has been at the core of the business organization structure. The restaurant remains a family-owned business, although it has expanded its operations. The company is composed of a board of directors, a management team, and corporate staff. These individuals have worked within the Chick-Fil-A business for many years. For example, Dan Cathy serves on the board of directors and has continued the growth and leadership of his family-owned business following his father. The board of directors is followed by management, such as the Chief Financial Officer, Human Resources, and Legal.

Other Management offices that deal with running Chick-Fil-A exist in this area of the business. Thirdly, management departments deal with the inner workings of Chick-Fil-A, such as Accounting, Design, and Marketing. These areas are responsible for managing the image of the company along with the strategy and design of new products. Franchises throughout the United States are run by small business owners that invest a small percentage into opening their own stores. These small business owners manage their own stores and employees. Although the organization structure exists, to run a successful business, this model depends mostly on customer loyalty. Chick-Fil-A strives to place its customers above all else and give back to the communities they serve.

Organizational Culture

Chick-fil-a Truett Cathy prides herself in creating an organizational culture that values people above else. The company falls under the team culture, with an emphasis on teamwork, support, and building trust within the company and its customers. Truett Cathy states in “How Chick-Fil-A created A culture that Lasts” that operating with servant leadership and being a positive influence on all who come in contact with the company is the main purpose of Chick-Fil-A.

The company seeks out employees that can identify with the company’s culture through their behavior, values, and qualities. It is important for the company to find people that fit and share these values in order to create a culture that will last. Chick-Fil-A shares the common belief that every single person who walks through the doors can expect to be treated with honor, dignity, and respect. As a guest of a restaurant, one might observe the culture through the employee’s behavior and positive attitude. Phrases such as “It’s my pleasure.” are heard at every Chick-fil-A when customers interact with the employees.

Organizational spirituality can be seen through the organization’s investment in its current team members by building a trust-filled workplace. This can be done by “…conveying the truth in a respectful way when it comes to performance, expectations, and more…” (Kruse, 2015).

Chick-Fil-A’s commitment not only to their beliefs but also to their community can be seen in their deep involvement in the communities they serve. “Personal connections are important at Chick-fil-A, as Operators engage with and support local communities through fundraisers, charitable donations, and getting involved with causes that matter to their communities and guests.” (Chick Fil A, 2018) Charity work and a commitment to supporting education in the community and among Chick-Fil-A staff have been an example of the culture they have strived to establish. For example, team members and non-team members can be eligible for scholarship money for higher education.

New employees entering the Chick-Fil-A culture will now experience a new business model. As Chick-Fil-A re-designed its office buildings, it implemented a new open design to encourage collaboration among the employees. “All Chick-fil-A employees must wear nametags every day, no matter how long they have been employed. This is to encourage everyone to get to know one another.”. This type of environment can help establish an open and team-oriented culture that current team members strive to maintain, and new employees can be drawn to while. Not only are the new employees greeted with a warm meeting, but Chick-Fil-A invests in the future development of the team members through an annual meeting. During this meeting, team members are encouraged to grow and learn in order to become inspired for the year ahead.

Planning

Chick-Fil-A their mission is similar to that of other fast-food chains when it comes to service and food. This mission is to be the best quick-service restaurant in America. However, the values of the chain can be seen in its corporate focus.
“To glorify God by being a faithful steward of all that is entrusted to us. To have a positive influence on all who come in contact with Chick-fil-A.” (Farfan, 2018)

From the beginning, the creator of Chick-Fil-A, Truett Cathy, had a focus and vision to be more than just food. It was important for the business to focus on the needs of its customers while providing an experience that they would not forget. It is easy to see the mission statement take on life when visiting Chick-Fil-A. Customers are greeted with a warm welcome and are taken care of from the moment that they step foot in the door. Cathy had a strong commitment to his religious values, which he tied into the company and used as a core value of the company.

Strategic Plan

For Chick-Fil-A, it is of high importance to provide not only a great product but a great experience. As stated in their mission statement, it is their goal to make a difference in each person that visits them. Since the company began, it has grown due to the quality of the food it provides. “Chick-fil-A has long topped rankings of food quality and customer service. It is one of the most profitable chains in the US, with average sales per restaurant reaching $4.4 million in 2016, QSR magazine reported.” (Taylor 2018).

New franchises have also helped keep the food chain alive and growing. Chick-Fil-A takes responsibility for most of the starting cost of opening a new restaurant, only asking the owner for a small investment. Although the company is incredibly particular in whom they grant a franchise to, the company is incredibly supportive in helping those selectees become successful. “Chick-fil-A is one of the most particular franchises out there, as the company only accepts 0.4 percent of applicants every year.

However, it only costs $10,000 to open up a Chick-fil-A franchise with no threshold for net worth or liquid assets. Chick-fil-A pays for startup costs, including restaurant costs, real estate, and equipment.” (Franchise Times 2016). These new stores hold something that not every franchise does, a friendly face that is local to that community. By opening stores in communities where the management and staff are known, Chick-Fil-A creates an atmosphere where individuals feel welcomed. The customer either gets to know the manager or already knows the manager, making it a place where one may feel at home.

Competitive Strategy

Throughout Chick-Fil-A’s corporate strategy, it is easy to see that there is a unique aspect to the strategy. The restaurant chain strives to provide an experience that is difficult to find elsewhere. The company’s strategy could fall under the differentiation strategy for its willingness to be unique and stick to its personal set of values and beliefs in order to run a successful business. Maintaining a strong customer service aspect is what keeps Chick-Fil-A as a competitor in the fast food industry.

“Chick-fil-A says its service is so consistent because it invests more than other companies in training its employees and helping them advance their careers — regardless of whether those careers are in fast food.” (Peterson 2017). Their customer focus is a great competitive advantage, as many other restaurant chains do not emphasize it. It is what helps Chick-Fil-A stand out amongst its competition.
Controlling

Goals/ Objectives

As stated in their vision statement, Chick-Fil-A strives to be faithful stewards and provide a positive influence on everyone who visits their stores. This is evident in their customer service and in their social relationships within their communities. Whether it is through the support of their employees or charitable giving, Chick-Fil-A is motivated to be an example of its mission statement. Everything that is done throughout the restaurant chains and at every individual franchise is for the people.

Controls

Chick-Fil-A prides itself not only on customer service but also providing a clean and safe environment for the customers that visit their stores every day. Employees are instructed to maintain the areas of the restaurant clean as well as their workspace. This ensures a quality environment for those that visit. With strict guidelines on how to handle food and proper rundown every day that all expectations have been met.

“Steritech is an independent third-party company whom Chick-fil-A employs in order to check in on individual stores on a more intimate one-on-one basis.” (Neth, 2017) The consultant visits stores, sometimes unannounced, in order to check in on a franchise to monitor consistency among all the franchises. Issues such as the cleanliness of the store and the appearance of employees are monitored. This one-on-one session provides the stores with personalized feedback in order to keep them successful and focusing on what is most important, the people.

Leadership Styles

Transformational leadership can be seen throughout the Chick-Fil-A franchise. Management leads not only through delegation but by providing an example to the employees within the company. Starting at the top of the organizational structure, the desire to stay close to the vision statement and be stewards to others is evident. The CEO, Tim Tassopoulos, “…[is] Passionate about your and education; Tassopoulos is a member of several guiding academic and your development boards.”. Management in individual franchises can also inspire not only employees but those who visit the stores.

An example is Kevin Moss, Chick-Fil-A manager, who has supported his employees through difficult times. “[This] has meant funding an employee’s marketing degree and paying for another worker to take photography classes.” (Peterson, 2016) Moss states that it is easier to have your employees trust and follow you if they know they are cared for. Management is always encouraged to be visible and interact with their team members and the people that come into the restaurant. Seeing management engaging customers and providing excellent service demonstrates through example the core values and mission of Chick-Fil-A.

Workforce Motivation

Employees at Chick-Fil-A are not only encouraged to further their development through the company but fulfill their dreams, whether this involves furthering their education or professional development at Chick-Fil-A. “Since 1973, Chick-fil-A has helped nearly 46,700 Team Members achieve their remarkable futures through a total investment of $61 million in scholarships.”. These individuals can attend schools and degree programs that do not necessarily bind them to a future with Chick-Fil-A.

Employees receive perks from their employers, such as free food during their work day. Employees are encouraged throughout their workday to solve and work on different aspects of the business. Through mentoring from management or senior team member, employees can expand their experience and knowledge. This can help individuals pursue management careers not necessarily related to Chick-Fil-A. However, it would make a great opportunity to move within the company. Investing in their employees can have a great impact on the workforce and encourages them to fulfill the company’s expectations.

Application of the Four Management Functions

Beginning with the board of directors to the team members in the franchise, Chick-Fil applies the four management functions throughout the company, from planning new strategies, such as the mobile app that encourages customers to order without entering the restaurant. Through the execution by the individual franchise to personnel with total “Their Pleasure,” they deliver the food to the vehicle of the individual that ordered it. The four functions are seen in leadership as managers lead and motivate their employees to be successful in their jobs.

Providing training and mentorship to the employees to create a learning environment that will provide them with the tools needed to fulfill the company’s mission and standards. Management not only participates in training the employees but leads through example by placing themselves on the floor with the people they work with and the people they serve. The restaurant ensures that the franchises are performing at their best by providing individualized feedback on performance and their ability to stay true to providing a safe environment for their customers. Chick-Fil-A successfully displays the four management functions throughout their daily operations.

Conclusion

Chick-Fil-A is a leader in their industry not only because it provides delicious food but because they strive to live out its mission. To be great stewards and provide a positive experience to all those they come in contact with. This is done from top to bottom, from CEO to team member, and it can be seen when a customer walks into the restaurant. From the moment the food is ordered to the point of delivery, the business model is not only to be the best but to give the best to those that they serve. This has helped make the business a success and unique throughout the fast food industry.

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