GSBS6484 Corporate Social Responsibility Case Study of Benihana Restaurant

Benihana a Japanese steakhouse restaurant with hibachi idea initiated in 1964 in West Side,

New York. This restaurant was established by Hiroaki (Rocky) Aoki, an opportunity seeker,

who recognized the undiscovered needs in the American restaurant industry.

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Abstract

Benihana Teppanyake restaurants have been in the steakhouse segment in the Japanese

cuisine and eating out the industry for more than 40 years and offer more than a 100 stores

worldwide. The major problems with the chain are that its operations are too stretched out

globally with no centralized system of supply chain management, leading to lopsided and

maladjusted pricing in different parts of the world. For example, the same portion size of a food

item costs differently in the US, UK, and in Thailand. In the globalized world where customer

reviews and feedback are commonly accessible to all, this creates problems of customer

dissatisfaction (Mahadevan, 2010).

Another factor severely affecting the company's OR management is the integration of

different layers of functional management within the same unit. A Gap Analysis may be

conducted to pinpoint specific issues and problems with Benihana. The GAP analysis has

identified for the management the CBP which are the factors of success that the management

has defined for the business which can be improved, namely, product, service, process design,

and quality standards (Hill & Jones, 2013). The gaps in these factors identified in the GAP

analysis and CBP are discussed in detail below -

Product Gap: The gap in the product may be understood as the shortcomings between the

company's and the customers' expectations, and what the company actually produces. Product

consistency and uniformity may be defined as one of the major requirements and as per the

customer reviews many restaurants especially the branch in New York…

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Table of Contents

Introduction: ........................................................................................................................................... 3

Identify and evaluate issues/problems with Benihana’s Teppanyake restaurants current operations

using theory/ies : .................................................................................................................................... 3

Provide a critical discussion of the key Corporate Social Responsibility issues facing Benihana

restaurants. ............................................................................................................................................. 7

Based on your research and analysis, prepare recommendations (3 or 4) on how Benihana can

improve the effectiveness and efficiency of the operations systems that produce its products and

services. ................................................................................................................................................. 10

Report: .................................................................................................................................................. 11

Bibliography .......................................................................................................................................... 13

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Introduction:

Benihana a Japanese steakhouse restaurant with hibachi idea initiated in 1964 in West

Side, New York. This restaurant was established by Hiroaki (Rocky) Aoki, an opportunity

seeker, who recognized the undiscovered needs in the American restaurant industry in the

wake of having done an intensive investigation of the business. His idea serves the unfulfilled

needs of the business sector particularly the center salary specialists by giving colorful

surroundings, the legitimate Japanese atmosphere, and offering new experience by having

culinary experts cooked before clients. The thought immediately picked up the prevalence;

brought about high benefits and quick extension. (Benihana, 2015)

Identify and evaluate issues/problems with Benihana’s Teppanyake

restaurant's current operations using theory/ies :

Benihana Teppanyake restaurants have been in the steakhouse segment in the

Japanese cuisine and eating out the industry for more than 40 years and offer more than a 100

stores worldwide. The major problems with the chain are that its operations are too stretched

out globally with no centralized system of supply chain management, leading to lopsided and

maladjusted pricing in different parts of the world. For example, the same portion size of a

food item costs differently in the US, UK, and in Thailand. In the globalized world where

customer reviews and feedback are commonly accessible to all, this creates problems of

customer dissatisfaction (Mahadevan, 2010).

Another factor severely affecting the company's OR management is the integration of

different layers of functional management within the same unit. A Gap Analysis may be

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conducted to pinpoint specific issues and problems with Benihana. The GAP analysis has

identified for the management the CBP which are the factors of success that the management

has defined for the business which can be improved, namely, product, service, process

design, and quality standards (Hill & Jones, 2013). The gaps in these factors identified in the

GAP analysis and CBP are discussed in detail below -

Product Gap: The gap in the product may be understood as the shortcomings between the

company's and the customers' expectations, and what the company actually produces. Product

consistency and uniformity may be defined as one of the major requirements and as per the

customer reviews many restaurants especially the branch in New York has been unable to

maintain that. The lack of consistency has been mainly identified as an operations

management problem, as most of the times, the product had some crucial ingredient missing,

such as avocados in the salad, etc. This may be traced to a lack of proper coordination and

integration in the chain's management, as the company needs to be aware of the deficiencies

in stocks and inventories across all the different branches. Failure to do so may result in a

lack of customer satisfaction (Russell & Taylor, 2009).

Service Gap: Several gaps in service have also been identified from the customer reviews, as

the service by the waiting staff as well as chefs was far from satisfactory. This may be

improved by an enhanced training program combined with a stricter monitoring and

evaluation system.

Operations/Process Gap: This mainly relates to the lack of inventory control leading to

unnecessary wastage which adds to the cost of the company and the non-planned expenditure.

Conducting efficient operations would result in minimizing cost and wastage which is a huge

boost in profitability and cost effectiveness for a restaurant business like Benihana. The chain

has been unable to meet its targets regarding stopping leakages and wastage in the stocks as

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the stock control system is yet to be fully computerized and centralized. This has caused a

gap between Benihana's expected performance and the resultant outcome. There have also

been problems with revenue allocation as well as adequate sharing of the central budget

between the different branches. Again, this is mainly because of Benihana's lack of updated

software for operations management which makes it difficult for the corporate management

to realize the amount of output from each branch and how the funds are being utilised. This

creates problems of transparency and accountability as well (Wentz, 2007).

The gap identified through CBP regarding the operations management can be

analyzed and remedied by applying the Deming Wheels model. This model deals with a four-

step action to identify and correct the gaps.

Figure 1: Deming wheel model

Source: Self

The Deming wheel model as illustrated above is also known as the PDCA model as it

involves four steps – Plan, Do, Check, and Act, in the identification and redressal of the gaps

Plan

Do

Check

Act

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in a business process or operations process. Plan stage involves setting out the objectives of

the operations management of the organization, in this case, attaining a high profitability for

Benihana. Do stage would involve actual implementation or carrying out the steps envisioned

in the planning phase. Check involves inspecting the process at regular intervals to see

whether the changes are yielding the required results, in this case, whether the leakages and

wastages are being plugged and costs to the company are being reduced. Act stage would

involve checking back on the system to ensure that whatever gaps still persist are promptly

addressed (Pedersen & Schultz, 2012).

The other problems that can be assessed and identified through the gap analysis are

that there is a shortage of skilled labor in terms of trained Japanese cooks and chefs. The

chefs that Benihana’s USP requires have to be highly skilled not only in Japanese cuisine but

also inappropriate presentation skills, cutlery skills, as well as the usual hospitality

management skills. This leads to high workload pressure on the current workforce as well as

high cost of labor to the company as such chefs are not available in sufficient numbers in

North America and Europe which are the main fields of operation for the Benihana

Tappanyake chain (Mendoza, 2014).

Another ORM gap is that the total space taken by the layout of the restaurants has

been unable to meet the company’s targets regarding reducing the floor usage to cut real

estate and rent costs. The target for the company regarding the floor space for furniture,

tables, chairs, etc. is 22% of total branch floor area. However, at present in most branches, the

furniture and fixtures take up a total of 30% of the floor area on average. This led to the

company’s inability to cut real estate and rent costs by at least 25% in the 2013-2014 fiscal

year. Benihana restaurants also do not have accurate techniques and strategies for site

selection when opening newer branches. There is a discrepancy or ambiguity regarding the

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selection of the locations for sites because some branches such as those in Chicago are based

more in nondescript neighborhoods rather than on high streets and commercial areas as they

are in other cities such as New York or Washington D.C (Benihana, 2015).

Finally, most of the restaurant branches do not have a simple management structure

which might allow all the branch managers to report to the central operations manager for

each city or province. Rather, each branch manager must separately report to all the corporate

managers such as the CFO, COO, CEO as well as individual board members. This might

have been the fallout of the family disputes and legal feuds that Benihana has been embroiled

in since the death of its founder, but it does not help to simplify the organizational structure

and creates overwork for the Operations Management department (Benihana, 2015).

Provide a critical discussion of the key Corporate Social

Responsibility issues facing Benihana restaurants.

Numerous organizations have begun to participate in CSR as a methodology keeping

in mind the end goal to pick up profits that can issue them an included preference over their

rivals. There have been expanding quantities of organizations occupied with CSR to maintain

their organizations. These days corporate social obligation (CSR) can drive organizations to

succeed in business by expanding deals volume and brand mindfulness. Benihana restaurants

have a decent notoriety as far as a social obligation. Therefore, we might want to examine

how Benihana restaurants triumphs in the business world are connected to CSR system. We

might want to know how the organization incorporates CSR and what components have

influenced the organization's prosperity through the years with unique reference to CSR.

(Socialresearchmethods, 2010)

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Organizations have a critical part in the improvement of a general public and

environment in light of the fact that there is an appeal in the promoting of items that

organizations offer item and administration quality to their clients. The impacts of CSR can't

be overemphasized; they run from organizations running the business well to natural changes.

CSR can likewise go far to enhance item quality and administration to clients. We think about

how organizations run organizations with CSR in an unfavorable focused business world.

Today, contenders of a few organizations are officially rehearsing CSR and starting to grasp

this new reasoning of business. (Socialresearchmethods, 2010).

According to Carroll (1983), “corporate social responsibility involves the conduct of a

business so that it is economically profitable, law abiding, ethical and socially supportive. To

be socially responsible then means that profitability and obedience to the law are foremost

conditions when discussing the firm’s ethics and the extent to which it supports the society in

which it exists with contributions of money, time and talent” (p.608). (Carroll, 1983)

From the above definition, CSR involves that organizations ought to give back the

profits to the customers and different partners. This implies that organizations ought to be

concerned with their benefit as well as they have to help socially and earth. In the event that

the organization does‟t have an obligation to the general public, the individuals or non-

government associations (NGOs) will censure the organization. In this manner, organizations

must be capable with different partners and the social environment. (Enquist. and

Edvardsson, 2009)

Then again, these days it is troublesome on occasion for a few organizations to

receive a decent feeling of CSR in light of the fact that they regularly need to draw in just

indirect beneficial endeavors. As indicated by Michael E. Watchman and Mark R. Kramer

(2003), the Strategic Philanthropist, organizations can advantage by captivating in CSR

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exercises. It will concentrate on the bunch and enhance the capacity of the business yet CSR

ought to make the benefit in the meantime. In this way, organizations discover the best

method for verifying that organizations have an obligation with respect to social issues and

make benefit in the meantime. (Enquist. and Edvardsson, 2009)

Benihana restaurants have been unable to capitalize fully on the increased popularity

of CSR among western consumers. Though CSR is not a very popular business strategy in

Japan, it is in Western countries and as most of Benihana's operations are based in the West,

it will have to adapt to incorporate more CSR. Benihana started off as a small company with

only one branch with 4 tables, such a small business cannot be expected to have a huge CSR

program. But over time it has increased to 116 restaurants, thus it now has adequate resources

for CSR. Although Benihana runs some small community-level CSR programs in some

poorer neighborhoods in the US, these are mostly concerned with giving away excess food to

the poor. This is more under the charity category and does not constitute a clear-cut CSR

program or strategy. Giving away free food does not constitute increased investment in CSR

on the part of the company. The CSR issue facing Benihana is more one of credibility than

one of effort. As opined by Carroll (1983), credibility in CSR is gained through investment in

terms of finances and time, rather than a lackadaisical or half-hearted effort as is perceived by

Benihana's existing CSR programs such as feeding the poor from its excess food stocks

during the Christmas holidays. (Gulati Huffman and Neilson, 2002)

At the restaurant, there is a little sign that said when you requested Fuji Water with your

meal; an implicit gift would be made to Best Buddies. This message seems to be absent on

the restaurant’s online website, despite the fact that Benihana has bolstered Best Buddies in

the past with a change round-up exertion. Thus, the restaurant has a tie-up with Fuji Waters,

through which they make a contribution to Best Buddies if a customer orders Fuji water with

their meal. This is an example of how corporate use CSR to promote their products or

Commented [A5]: The details picked are minute but very much appropriate to bring out the solution

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complimentary products by channel partners. The question that arises here is that is this a true

form of Corporate Social Responsibility, or, a cheap marketing gimmick, used to boost sales

at the restaurant. (Enquist. and Edvardsson, 2009)

Based on your research and analysis, prepare recommendations (3 or

4) on how Benihana can improve the effectiveness and efficiency of

the operations systems that produce its products and services.

1. Benihana can use advanced software such as ABC Analysis and Pareto distribution to

better distribute the revenue and the budget among the different branches to ensure that all

the branches get an equal share of the finances. This will ensure that stock and inventory

control problems are not suffered by some specific branches of the restaurant.

2. There have been problems with lack of quality control and consistency. This can be

improved by incorporating Total Quality Management that will evaluate the quality factors

on all the dimensions. Under the TQM the company may have to appoint specific quality

managers and inspectors.

3. An integrated and unified CSR strategy will have to be developed that will allocate specific

resources and budgets for CSR activities. This will enhance the company's reputation and

brand image among the customers. CSR strategy will have to advertise by the company and

also mentioned in the annual reports in order to adequately remind or communicate the same

to the customers and the wider public.

4. Benihana can implement more rigorous training for the staff, especially the waiters, cooks,

and cash counter staff, so as to make their tasks more time-efficient which will reduce the

service times for customers. Not only will this induce customer satisfaction, it will also

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reduce the time customers spend in the restaurant, thereby enabling the management to serve

more customers at the same unit time. This will hugely boost the number of transactions at

the restaurant per unit time, leading to a boost in revenue growth and profitability.

Report:

Benihana may implement a simple model of operations management that can lead to

enhanced efficiency and resource utilization. This is important if it aims to consistently

reduce non-planned expenditures and the overall cost to the company.

Benihana must aim to recruit more highly skilled staff for both chefs and waiters and

this may be achieved through a more rigorous recruitment and selection policy that will test

the applicants across multiple dimensions and competencies.

Benihana may look to implement some policies to reduce the number of franchisees

and increase the number of own stores as it can reduce the faulty budget allocation as well as

make the individual store and branch managers responsible and accountable for making their

own units profitable.

Benihana has to incorporate a more extensive outlook to CSR by incorporating the

Corporate Social Responsibility as part of its corporate objectives or corporate strategy. Thus

CSR should become an item of discussion at the annual general meetings as well as other

corporate-level strategic discussions and meetings. For this end, Benihana may include

concluding tie-ups or strategic partnerships with several non-profit organizations such as the

International Red Cross, Doctors without Borders, etc.

Commented [A6]: the points synthesized are good

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The company may plan and implement newer models of restaurant

layouts for reducing the overall floor size and better utilization of the space resource. This

will both reduce the costs as well as create a more ergonomic and “cosier” layout. The floor

and ceiling material may be changed from concrete in order to ensure a better sound/noise

ambiance inside the restaurant. This may be implemented by hiring professional architects

and interior decorators to conduct a study and audit across all the 116 chains and then suggest

changes to the layout that will be uniformly implemented. Other Operations Management

related strategies it might implement include selecting only high-traffic locations for setting

up new branches, which can be implemented by a study of the footfall and traffic patterns in

the locality, bring in highly trained chefs and staff from Japan, create a solid incentive system

so as to motivate these staff to constantly upgrade their skills, and implement a centralized

and computerized accounting and management system for keeping track of profits, revenues,

budget allocations and inventory control.

Commented [A7]: an added reference here would have been appreciated.

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Bibliography

Benihana. (2015). About Us. Retrieved April 9, 2015, from http://www.benihana.com/

Carroll, A. B. (1983). Corporate social responsibility: Will industry respond to cut-backs in

social program funding? Vital Speeches of the Day, .

Enquist. and Edvardsson. (2009). Values-based Service for Sustainable business. ,Rutledge,

UK.

Gulati Huffman and Neilson. (2002). CSR. John Wiley & Sons.

Mahadevan, B. (2010). Operations Management: Theory and Practice. London: Pearson.

Mendoza, R. (2014). Restaurant Business Success: A Guide. New York: Barb Gates.

Russell, R., & Taylor, B. (2009). Operations Management Along the Supply Chain. Hoboken:

John Wiley & Sons.

Socialresearchmethods. (2010). Theory of Reliability.

Wentz, B. (2007). Food Service Management. Ocala: Atlantic Publishing Group Inc.

Tutor Comments: The work is quite elaborately done and well matches the requirement. In

some sections very minute details too have been considered adding value to the work done. In

most aspects the appropriateness of work is being appreciated but please refer to the

comments in specific for avoiding the minor errors later.