Higher chances of attaining goals and will obtain desired market penetration Increases Calveta’s geographic coverage and market share GSD is presently in a good position, when the revenue generation is taken into consideration. Calveta would attain a great deal of customer potential as it was maintained by GSD. The organization hierarchy could be restructured so that it could accommodate significant growth while preserving the company’s core values.
The disadvantages of choosing this option are:
Plagued with labor issues and management turnover
Quality of service may suffer.
Higher debt load
Does not have a strong balance sheet but has great income potential.
Jennifer Calveta COO of firm:
Could have been CEO instead of her brother
Very detail oriented and concerned about preserving the company’s culture Is concerned about the acquisition of business for growth expansion Is
concerned with the organizations structural modification
1. What role (if any) have Calveta’s values played in the organization’s success? Calveta has clearly defined values to guide the staff’s behavior. The immense growth of the organization confirms that Calveta’s is doing an excellent in embedding their values in their employees’ actions and management decisions. The values necessitate the inclusion of everyone and the exclusion of none. The organization’s values enabled all levels of management to usher the employees toward a continuous growth.
2. Does Calveta’s operating approach offer a sustainable competitive advantage? Calveta’s operating approach offered a unique competitive edge over many of its competitors. While their competitors focused on highly regularized systems and standards, Calveta chose to build local food service teams and menu offers to serve each facility distinctively. Additionally, Calveta’s wait staff treated the residents like family following their behavioral standards. This type of customer service garnered rave written reviews from the facility’s residents. Finally, implementing programs that increase efficiency while satisfying the needs of bed ridden or immobile residents confirm a very innovative operating approach that resulted in a sustainable competitive advantage.
3. Why haven’t other food service providers copied Calveta’s approach? Calveta’s competitors were not focused on conducting a profitable business without straying away from its core values. Passion, customer service and efficiency remained at the forefront of every decision. On the other hand, their competitors were focused on growth, meeting financial goals and increasing market share. Rarely do we find companies who keep both service and profit as a priority.
4. Given Calveta’s communication and internal organizational challenges, how important will training and development be to maintaining growth and culture? The internal challenges within Calveta confirm that the organization must continue to rely on training and development to ensure success. However, training and development should not be done in a manner that reduces quality or at the expense of the residents’ positive experiences. Upper management must create systems that focuses on the development of new managers and establishes a solid means of communication between staff and management. Growing pains is inevitable but it cannot become a deterrent to taking the company to the next level.
5. Calveta’s fifth goal is profitable growth. Goals one through four is more ethical in nature. Is goal five inconsistent with the first four? Establishing growth as a goal is consistent with Calevta’s other goals. However growth, whether by acquisition or market penetration, should not mean that “Antonio’s Way” is watered down in any way or removed from the way Calveta conducts business. Calveta’s unique approach to business cannot be lost while increasing revenues and market share. As long as Calveta’s values remain the guiding force to management decisions and employees’ actions, having growth as a priority should be expected.
6. How, if at all, should Calveta’s organizational structure be changed to resolve communication issues, preserve the company’s culture, and support future growth? Calveta’s uses the top-down management structure. This structure contains layers of managers (rank structure) which all communications must pass through. With each layer there is a risk of distorted information being sent to the next level. Each level adds to the communication becoming more confused and out of context. Therefore more layers mean a greater risk of distortion and confusion among the staff.
Such distortions cause a lack of productivity, frustration, confusion, and inept management. Conversely, management is receiving feedback from the field that is invalid since the original plans, orders, and ideas were not acted on; the same risk of distortion exists with the return flow. The end result of this is that customer service suffers. The image and prestige of Calveta is damaged. Calveta should simplify its management structure, implement an information network, combine some positions and eliminate others. The implementation of a more flat management structure will reduce the chances of distorting communication.
7. Should Frank Calveta move forward with an expansion into the hospital sector? With the proposed acquisition? Calveta should focus on making serious internal improvements before piling on debt, increasing the chances of management turnovers, and getting into business with an organization known to not have the best reputation. Calveta has a great reputation and its ability to function and grow with little debt confirms that their balance sheet is in excellent condition as well. An internal restructure and a recommitment to its values and goals should be the number one priority. Calveta should not move forward with the expansion into the hospital sector at this time. On the other hand the acquisition of GSD may be an excellent move for Celveta. This acquisition will increase Celveta’s geographical presence and increase its assets without increasing its debt load. With some management restructuring done within GSD, Frank should be able to meet his father’s financial goal to double profit in 5 years.