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Palio’s Pizza Café – Richardson, Texas 1
Nicholas Goudeau
Naomi Masangu
Logan Moore
Gabriel Nkoyo
Palio’s Pizza Café – Richardson, Texas 2
Palio’s Pizza Café was founded in 2001 and has been growing in the Dallas-Fort Worth
area ever since then. Between the first one being founded in 2001 and now there has been 27
Palio’s opened in the DFW metroplex. All twenty-eight of Palio’s Pizza Café’s are privately
owned and family operated. The location chosen for this case study was the Palio’s off of
Campbell and Coit, located in Richardson, Texas. This specific location opened July 7th
, 2012
and is owned by Nate Awad. There is not much company history to be found because each
Palio’s is independent of the other excluding those owned by the same owner. The Richardson
location is an example of a stand-alone Palio’s.
The structure of the organization consist of the owner, restaurant managers, and then the
lower level employees such as cooks, food runners, and cashiers. There is a small workforce that
is behind Palio’s Pizza in Richardson with a total of around 20-25 employees working there at
different times. As expected the lower level employees report to managers, who then have to
report to the owner. However, the owner seemed to give a lot of power to the managers when it
comes to the decision making process. From the information gathered from the Manager Marc
Poulain the environment fostered by management there is one that promotes positivity and tries
to carry that energy to their customers.
There is no organizational mission for Palio’s Pizza Café that is formally put in place.
According to Palio’s website the company takes “pride in pride in our restaurants and strive to
provide a quality product and exceptional service all in a uniquely warm and inviting
atmosphere” (Palio’s Website). This is the only established and written out mission of the
company that we were able to find. Which may be a result from how independent each of the
founded locations are from each other.
Palio’s Pizza Café – Richardson, Texas 3
The structure as it stands today does not have any major issues. The employees are
treated fairly, the restaurant is seeing increased sales, and customers are happy. However, there
are areas for them to improve on allowing them to reach their full potential. In this report we will
examine this particular location of Palio’s Pizza Café, establish issues in different aspects of the
restaurant, and provide suggestions to help Palio’s fix current issues, and stop future problems
from forming.
Organizational Structure
One of the most vital components of an organization is its organizational hierarchy better
known as organizational structure. According to the lecture material this is defined as “formally
dictates how jobs and tasks are divided and coordinated between individuals and groups within
the company.”(Colquitt, 504) Within Organizational structure there are five dimensions. These
five dimensions are Work Specialization, Chain of Command, Span of Control, Centralization,
and Formalization.
One of the very first actions taken by an organization is the delegation of tasks that need to
be completed in order for the company to survive. This is known as Work Specialization, the
reading material defines this as “the way in which tasks in an organization are divided into
separate jobs.”(Colquitt, 505) In this particular instance Palio’s has certain tasks that need to get
accomplished daily in a timely manner in order for the restaurant to run efficiently. Therefore,
the number of employees needed on a daily basis fluctuates. During Palio’s hours of operation on
the weekend they have a need for more employees in the evening than its lunch hours. In order to
accomplish this Palio’s employs five employees during the lunch hour on Fridays and thirteen
people during the dinner hours on Friday. On Saturday they employ the use of four people during
the lunch hour as well as twelve people during the dinner hours. On Sunday they also employ the
Palio’s Pizza Café – Richardson, Texas 4
use of five people during the lunch hour and ten people during the dinner hours. Due to the fact
that Palio’s doesn't actually implement a system that employs waiters or waitresses the
employees are assigned various other tasks. There is an employee that takes the customer’s
order, there are employees that prepare that order, as well as employees that bring the food to the
customer fulfilling the customer experience. Within this there are employees that maintain the
integrity of the restaurant as well as prep the necessary food items. Because this is a one off
restaurant and not a chain there are very limited duties to be assigned to the employees.
Another crucial aspect to an organization is its Chain of Command. According to the
required reading this is defined as “the specific flow of authority down through the levels of an
organization’s structure.”(Colquitt, 506) In Palio’s case this flow of authority does not vary
much from the average restaurant’s chain of command. Palio’s has an owner, manager, assistant
manager, as well as various employees that handle the day to day activities. Despite the fact that
there are no waiters or waitresses there are still roles that each employee plays. There is a certain
ranking in place in terms of experience within these general employees, and because there aren’t
any specific titles a high level of teamwork is experienced on behalf of the employees.
Another dimension of Organizational Structure would be Span of Control. The reading
defines this as “how many employees the manager is responsible for in an
organization.”(Colquitt, 506) The span of control for Palio’s manager is wide to a degree. This is
because its in the restaurant business thus, the management to employ ratio is very low. This is
also exacerbated by the fact that this particular Palio’s is a single storefront as opposed to a
restaurant chain. However, despite the wide span of control there seems to be a very high
performance at Palio’s. This performance is due to the high service standards that Palio’s
employs are required to relay on to their guests.
Palio’s Pizza Café – Richardson, Texas 5
A very crucial aspect as to how an organization is maintained would be Centralization. The
lecture material defines this as “where decisions are formally made in organizations.”(Colquitt,
507) Within this dimension of organizational structure there is a centralized as well as
decentralized structure. Where the first means that “only top managers within a company have
the authority to make final decisions.” (Colquitt, 507) The second means the latter. In the case of
Palio’s there is a combination of both these aspects in place. For instance many of the crucial
decisions are made by the manager. However, employees are given a certain type of freedom to
make decisions that affect them. Take for instance the hiring process of Palio’s, employees are
allowed to recommend a candidate as well as conduct an interview process and give a decision as
whether or not to hire that candidate. This is essential for Palio’s to operate in the manner it
does. It keeps the employees involved and helps them maintain a certain self awareness that their
decisions affect the organization and how it runs enabling them to perform up to the service
standards that Palio’s sets.
The final element of Organizational structure would be Formalization. The lecture
material defines this as “the degree to which rules and procedures are used to standardize
behaviors and decisions in an organization.”(Colquitt, 505) Due to the fact that this particular
Palio’s is a single store front there is a lack of formalization with the exception of the service
standards that they implement.
Being that this Palio’s is a simple structure they are a very organic organization. According
to the reading an organic organization is one that is “flexible, adaptive, outward-focused
organizations that thrive in dynamic environments.”(Colquitt, 510) This perfectly describes
Palio’s and their method of operations. Due to the lack of a waitstaff Palio’s employees have a
very broad interpretation of their tasks. Being that management gives employees unconventional
Palio’s Pizza Café – Richardson, Texas 6
freedoms such as its vetting process for hiring, as well as a decentralized work environment with
communication of information between employees and allowance of employees to develop
expertise outside of their required tasks, Palio’s is incredibly organic as an organization. The
combination of these elements is why this particular Palio’s is able to thrive and also will
continue to thrive in a restaurant filled town.
Leadership
With a small organization, it is necessary to have leaders who can influence those around
them in a positive and productive way. Palio’s Pizza Cafe is a primary example of an effective
leader. The restaurant has a high sense of leader effectiveness. According to Organizational
Behavior, leader effectiveness may be defined as the degree to which the leader’s actions result
in the achievement of the unit’s goals, the continued commitment of the unit’s employees, and
the development of mutual trust, respect, and obligation in leader-member dyads. Leader
effectiveness was closely observed during lunch time. The restaurant had spectacular leadership
efficiency. The restaurant had employees who had experience in customer service. These
employees were going the extra mile to satisfy their customers. They had high energy levels that
overcame any customers with an attitude that walked through the door. As more customers
entered the restaurant, the employees were illustrating their ability to tolerate stress. Their
experience within the organization demonstrated that they were able to cope with the overload of
customers that arrived during lunch time. All these signs are linked to the business being
effective through the employees.
The manager of Palio’s Pizza Cafe mentioned different ways that the business and its
leaders makes decisions. The restaurant has different styles of decision making. One approach is
the consultative style. Within the consultative style of leadership decision making, a leader
Palio’s Pizza Café – Richardson, Texas 7
presents a problem to the employees and asks for their opinion on how to solve the issue. This
occurred when there were smaller issues or complaints that customers brought up. An example
may be that a customer was complaining about the cup that is specifically given for those who
request to have water instead of a fountain drink. The customer may think that the cup is too
small and inconvenient because it requires him or her to get up several times to refill their cup of
water. As for the business, it is their rule to distribute smaller cups for those who want water.
This differentiates, regulates, and brings consistency of the allocation of water and fountain
drinks. An employee may talk this through with his or her peers to bend the rules for those who
are in need of a little change. For example, the rules may change if there is a mother of five with
ages that ranges from one to ten. The mother may be an exception or may lead to the manager or
employees to talk to each other and make sure that they may assist the lady with a regular cup.
As a leader, it is important to allow others to include others in the day-to-day decisions.
Palio’s understands that there’s a strong positive correlation with employees involvement and
their job performance and job satisfaction. Palio’s uses the initiating structure as a way for
employees to follow the steps of the leader in pursuit of goal attainment. Leaders who are high
on initiating structure play a more active role in directing group activities and prioritize planning,
scheduling, and trying out new ideas. Managers plan a team meeting each morning with
employees and set goals for each day. Palio’s managers have a goal that is applied to each
member which is to sell more menu items than the previous day. The manager writes the goals
up on the board, where employees take their break. This is a way to get each employee involved
in a daily basis.
The second style of decision making that Palio’s leaders practice is delegate style. The
manager at the restaurant distributes power or responsibilities for making the decision within
Palio’s Pizza Café – Richardson, Texas 8
some set of specified boundaries. Palio’s managers taught their employees how to handle certain
circumstances and have given them the power to fix issues that customers may experience. For
instance, when a customer insists that they have received the wrong order or may have forgetten
to request no tomatoes on their pizza, it is the employee’s job to make sure the customer is
satisfied. For this example, the manager has given the employee power to fix the problem. The
business has trusted the employee to represent the restaurant properly and convince the customer
to return for another visit. The manager has selective employees that are delegated powers to
achieve the company’s goal. This shows that the company and managers are willing to involve
other employees rather than just mangers and those who have higher ranks within the business.
The managers have high confidence in its employees; which is another sign that the business has
leadership effectiveness.
Mangers take big risks when distributing power, especially when it comes to hiring or
recruiting new members to join the business. The managers encourage their employees to seek
out for members who would be a great fit for the business. The managers want employees to
recruit others who may work well with the team members. Managers want the employees to do a
mini interview with the candidates. If the candidate seems like they would be a good fit for the
team, he or she is then passed up to the managers for a final interview. The final interview
determines whether or the candidate will be hired. During the last interview, it is likely that they
candidate will be hired. Managers tend to hire the candidate because they know and have trust
that the employees will aid the company in working towards the common goal. This also lets the
employees know that their voice matters.
Palio’s Pizza Café – Richardson, Texas 9
Teams
A productive team is essential to any organization. When a team is performing well it
benefits any organization, when a team is performing badly, it negatively effects any
organization. Palio’s workers work as a team on a daily basis, to get the pizza from the oven to
the buyer’s mouth. They observably run like a well oiled machine, if they did not, it would be
detrimental to the business.
The team works in sequential interdependence; the tasks are done in a prescribed order. A
customer orders a pizza with a cashier, the cashier gives the ticket to someone who makes the
pizza, this person then puts the pizza in the oven, and someone then gets the pizza out of the
oven and puts it on a tray and preps it to take it to a customer. After the pizza is prepped another
worker gets the pizza and takes the pizza to the customer. This involves a high level of task
interdependence, but the Palio’s workers are obviously trained well and work efficiently like
this. Some other task work processes include folding pizza boxes, getting the pizza dough ready,
cleaning tables and picking up customers trash. The workers get these done in their down time
when they are not busy.
On a normal weeknight shift they have four to seven works and on the weekends the team
has ten to thirteen workers at once. On the weekends when this many people are working
together it is important that the mental models aspect of the team is prevalent. The team
members demonstrate a level of understanding about what needs to be done and what are
important aspects of the team. We also see a degree of potency within the team. Some members
are performing a variety of tasks such as running food, cleaning and being a cashier, they help
out where needed.
Palio’s Pizza Café – Richardson, Texas 10
The workers at Palio’s provide excellent customer service. They have a goal interdepence
of providing this excellent customer service. They go out of their way and take the extra step to
please the customer. We see process gain with this excellent customer service, the workers don’t
make many mistakes and it helps to prevent process loss. Preventing process loss at Palio’s is
key because it is the difference between pizzas getting to the customers quickly or getting to
them in very slowly.
The workers play their roles very well. The cashiers are friendly and helpful while the
person cleaning the trash up is quick and tidy. The surface level diversity of the team is high,
since everyone on the team is visible to the customers. This diversity is even more apparent on
the weekends when they have thirteen people working. It is good we see a lot of diversity at
Palio’s because it encourages a diverse customer base and makes the organization look good on
the outside. It also encourages diverse ideas. It helps to prevent negative groupthink where
everyone is thinking the same way in a bad way.
While the Palio’s team does well there are still areas where they could improve. We do
see process loss in some places that causes deficiencies in the business. Some workers can be
seen socially loafing in the back part of the kitchen, this not only looks bad to the customers, it
makes Palio’s look bad, especially when they are busy. Some workers are obviously more skilled
than others so they do more to contribute to the group than others. They work the registers, cook
pizza and take food to customers. This is a good thing for weekdays when they are slow, as it
doesn’t require as many people to be working. These workers could experience motivational loss
due to feeling like they contribute too much to the group while others aren’t contributing enough.
Despite these issues, Palio’s still functions very well as a team and this is perhaps one of the
reasons as to why they are doing so well as a business.
Palio’s Pizza Café – Richardson, Texas 11
Decision Making
According to the organizational behavior literature, decision making is a process of
generating and choosing from a set of alternatives to solve a problem. During a regular work
day, an employee’s most common problem is regarding customer complaints. These complains
are typically related to receiving the wrong order, or not receiving it in a timely manner, whether
it be in store or during deliveries. Because these problems are common, most employees have
experience and training in dealing with them. These problems require a system one thinking.
Within the two-system view, system one thinking is based on intuition. In these cases it is
appropriate to make a programmed decision. There is no need to deeply consider the solution,
because it is one that has already been decided on. Decision making becomes more difficult
when facing a problem that has not been previously encountered. This requires a Type Two
approach. This model of decision making takes more time. You have to consciously make a
choice, rather than depending solely on your gut feeling or prior experience. Because it is more
logical, it also takes more effort. However, the advantage is that less judgment errors are likely to
occur in system two thinking as a pose to system one thinking. This model of decision making
can use some intuitive system one thinking as shortcuts. For example, when dealing with a
specific customer complaint, you have probably been in a similar situation before. By using the
past situation and how that problem was handled, you can apply what you learned to the new
unknown situation. Therefore, you can skip a few steps in non-programmed decision making
process.
To make a sound decision, the first step is to identify the problem. It does not necessarily
have to apply to customer complaints, but also to all the other areas an employee or manager
Palio’s Pizza Café – Richardson, Texas 12
holds responsibility. For example, making sure deliveries go out on time, the food gets to the
right customer, the staff is ready on time, the food is ready on time, and any other problem that
causes the workplace not to flow smoothly. When a problem arises it is important to identify it
by thoroughly examining the situation and considering all interested parties. The situation does
not get solved as properly if it gets boiled down to something that is easily understood. The later
seems like the better way, but lacking or misinterpreting information early on, can lead to
making the wrong decision. On smaller issues this might not be important, but it becomes more
relevant as the value and consequences of making the right decision increases. The next few
steps involve identifying the criteria, weighing the criteria and generating alternatives. It is
important to make a comprehensive list of alternatives and evaluate all the alternatives
simultaneously before even considering a solution. Ideally, that is how these steps should be
approached. However, usually what happens is that a few solutions that tend to be
straightforward, familiar, and similar to what is currently being done are brought up without
trying to think outside the box and coming up with perhaps new and better ways. Also, even if a
more accurate list of alternatives is formed they tend to be evaluated as soon as they are thought
up of instead of all of them being considered equally.
When dealing with customer complains, according to one of the employees, the most
common solution is to ask what the problem is and then catering to each individual customer
need. So first, they have to identify the problem. Sometimes the customer might not know what
the problem is, they just know they do not like the outcome. For example, they would like to eat
salad but it is not out yet. For them, the problem is that their needs are not met. Of course that is
also a problem for the employee, but more specifically the problem is that the food was not made
on time and they must find out why. When the employee is better able to see the depth of the
Palio’s Pizza Café – Richardson, Texas 13
problem and identify the source correctly, the solution is much more effective and efficient.
Eliminating problems related to the processes in the workplace eliminates a majority of the
customer’s problems. Every customer is different and so it is difficult to choose one generic
answer for all their problems. That is why it is important to consider all the alternative and even
more important is to use accurate information to evaluate the alternatives.
Motivation
Motivation is defined as "a set of energetic forces that originates both within and outside
an employee, initiates work-related effort, and determines its direction, intensity, and
persistence" (Colquitt,164). While our group visited and observed Palio’s Pizza Café in
Richardson we did not witness any employees exhibiting any signs of motivational loss.
However, after speaking to the manager Mark, we came to the conclusion that there was room
for improvement in the processes used to convey employee motivation from the management
level down.
Marc Poulain and the management at this location have done a great job of setting goals
for their restaurant and effectively communicating them to the lower level employees. Marc said
that there are long term and short term goals that have been put in place, and that the restaurants
goals are clearly expressed on a bulletin board in the back room for employees see. This is an
effective way to get employees to understand what outcomes are expected of the restaurant and
is used as a motivational tool to help push employees towards a common goal.
The goals that are set for Palio’s employees are known as S.M.A.R.T., "which stands for
specific, measurable, achievable, result-based, and time-sensitive goals" (Colquitt, 175) Mac
stated that they set their sales quotas based on what volume they sold the previous year, making
it achievable. They expected at least a double-digit sales increase every day, making it
Palio’s Pizza Café – Richardson, Texas 14
measurable. And the goals varied on day-to-day bases, making it time sensitive and result-based.
Having daily goals like this allows the employees to see a finish line and motivates them to strive
for the results that are expected of them.
After discussing goals with Marc Poulain and getting an understanding for what kind of
results are expected of their employees, we found that even though the employees are given
quotas to meet. They do not get compensated or rewarded for when they perform well. This can
result in a loss of employee motivation, and concern for this was expresses by Marc himself. He
said that the idea behind rewarding employees for performing well can increase employee
motivation, because without them employees can become stagnant and unmotivated. This raises
a high level of concern considering that there is very little upward lateral movement between
employees. Marc stated that the only way for someone to move up in the chain would be through
a vacancy that needs to be filled up. The combination of little reward and the low possibility to
move up in the company can result in a loss of employee motivation. We were not able to find a
current example of this, but there are changes that can be made to prevent any future problems
from happening.
Another red flag that went up when asking questions related to motivation in the
organization was that Marc said that they did not have a mission statement put in place. Before I
could comment he stated that not having a mission statement does bother him and that he wishes
for there to be one. Mission statements are key to keeping the company on track, understanding
company goals, and help guide decision-making. It was clear that Marc had some kind of
understanding of this because of his discomfort expressed with not having one.
Palio’s Pizza Café – Richardson, Texas 15
Recommendations
While Palio’s has many redeeming qualities there are still areas where improvement is
needed. In order for a company to grow, there should be constantly trying to improve themselves
and think of ways to make the customers experience better. The first recommendation is to have
dedicated workers that help the customers, similar to waiters. Customers seem to be confused
when they realize no one is going to assist them to their seat. Palio’s takes more of a fast food
approach on their dine in side. The second recommendation is for the managers and company to
enhance their way of showing appreciation to their employees. This will improve the employees
motivation as well as the job performances. Our final recommendation would be for to assist
Palio’s to expand. Due to opinions from competing Palio’s it can be very confusing for potential
customers to dine here. The business can make improvement on implementing set processes for
decision making.
Upon walking into Palio’s, one realizes they must order from the counter and go sit down
and get their own drinks, similar to a fast food restaurant. This is confusing for customers
because Palio’s presents themselves as an upscale pizza place. The price point of the pizza would
make one think they would have a waiter. Upon reading reviews online many customers are
complaining about this and the oddness. When observing customers, it was apparent that the
customers look confused when they realized that they didn't have a waiter. The workers attempt
to help the customers when they can, but it depends on how busy they are. We recommend
creating a hybrid position within the organization similar to a waiter. The customer would still
walk in and order their pizza but this person would then help the customer after that. They would
bring the pizza to the customer, get the customer drinks, and help with any questions they may
Palio’s Pizza Café – Richardson, Texas 16
have. They would bridge the service that Palio’s seemed to be missing and would ensure
customers overall happiness.
This position would take strain off of the other workers at peak times. They would make it
so the other workers don’t have to clean tables as much. Other workers wouldn’t have to answer
as many questions. This is where process gain may be seen, the other workers would be able to
focus on their tasks at hand, and not have as much to do. A process loss was observed when
other workers had to help out with customers and couldn’t focus on the tasks they were assigned.
In the end, this position would increase customer satisfaction and improve the business overall.
To increase the motivation and employees job satisfaction, rewards may come in handy
for Palio’s Pizza Cafe. The business wishes to reward employees with bonuses for their extra
work but are limited because of their budget. There are different ways to show appreciation for
an employee such as taking some time off or discounts when purposing menu items from the
business. Considering that Palio’s is a new business and is limited on the budget, it may be best
to offer free lunch as an award for those who show excellent customer service. Having little
perks like that for employees speaks volume. The employees will feel that they are appreciated,
the job performance will enhance the compay and its reputation, and customers will return
because of their experience. This chain of reaction is a win-win for all who is involved.
Although this particular Palio’s is experiencing success there are still negative stigmas
stimulated about different Palio’s around the metroplex. These stigmas can be generated in a
multitude of ways, the primary method being customer reviews. Being that the original owner of
Palio’s had no interest in franchising, new owners that wish to associate with the brand pay
solely for the name of the company. Therefore, there are numerous ways to operate this
particular restaurant. The method that this particular Palio’s chooses to operate in may be
Palio’s Pizza Café – Richardson, Texas 17
completely different from another in a different location. This can affect this particular Palio’s in
a positive or negative manner all of which depends on how the customer views a particular
restaurant.
Since the average person thinks that Palio’s is a restaurant chain, service a customer
receives in one Palio’s becomes synonymous in another. Thus, it is imperative that Palio’s look
to distinguish their brand and or attitude as a company from its direct competitors. Palio’s should
look to build a conglomerate that distinctly sets them apart from other Palio’s. This process can
start with the opening of one store or even the building of a company that poaches Palio’s around
the metroplex to ensure that each location shares the same vision. There are numerous benefits
that would accompany this shift in vision as a company the most important being the visual
perception of the company in the customer’s mind. The next step that this particular Palio’s
needs to take would be to formalize this restaurant’s standards and foster its ideas into a
multitude of Palio’s restaurants around the metroplex. The formalization of this restaurant would
in fact protect this particular restaurant’s identity without making it notorious for other Palio’s
blunders.
Recommendation
The basic assumptions in decision making are that the employees or managers perfectly
defined the problem. Then, the individual identified the criteria and all possible and relevant
alternatives. Also, that all the alternatives were accurately assessed and the alternative with the
highest value was chosen. All the mistakes in decision making that have been previously
discussed are cased because of this concept called bounded rationality. This states that because
there is a lack of information we tend to “satisfice”, or settle for the first acceptable solution.
Palio’s Pizza Café – Richardson, Texas 18
When customers have complaints, instead of answering fully on intuition, it is important to let
system one thinking and system two thinking to compliment and control each other.
Decisions should be made with reason but according to the literature, system one
thinking tends to be very accurate. There are also some decision making biases. These are related
to faulty or selective perception. Sometimes it is hard to understand what the customer actually
needs because you can only see what you want to see. To avoid making this mistake focus on
listening objectively to what the customers have to say. There are also mistakes made in
judgment when there is projection bias. Just because people tend to believe that others think, feel
and act the same way that they do. A solution to a customer problem may seem great for you but
the customer might not feel the same way. To make sure there is optimal customer satisfaction,
once you have chosen an alternative, convey your solution to the customer and make sure it fits
their needs as well. Overall, decision making has been discussed in a way to better handle
customer complaints. As I have mentioned before, it can be applied to any other decision that
needs to be made, not only in the workplace but also in all other areas of life.