Organizational Behavior And Dynamic Management Assessment Answer

Organizational Behavior And Dynamic Management

Case Scenario/ Task

What propelled 7-Eleven to bring about a culture of intimidation and underpayment to its employees? Propose changes which could be applied and implemented to overcome this drawback in the future.

• Introduction to 7 Eleven and is business model in Australia

(How the franchising models works for 7 Eleven, their profit for the last couple of years and what they offer franchisees to take up opening a 7 Eleven store)

• A general overview of the problem being addressed.

(How did stores across 7 Eleven start underpaying and intimidating its employees, a 24 hour operation with staff costs being significant, a rationale how this has become an organizational behavior issue within 7 Eleven franchisees)

Introduction to 7 eleven and its business model in Australia

7 eleven is a convenience store chain which operates in almost 17 countries. The company boasts of a strong international presence as it provides services and products across its 58300 stores which are operated through different business models such as licensing and franchising. The company’s formidable markets are located in the US, Japan and Australia. 7 eleven follows the franchising model in Australia. Franchising allows an ingenious perspective to business in international markets and has been considered as a low control market entry mode. The details of franchising model followed by 7 eleven have been highlighted below along with the various inclusions in terms of procedures (Walters and Rainbird, 2007).

The franchising model followed by 7 eleven has proved to be successful for individuals belonging to different backgrounds and with varying experiences. The franchising model allows franchisees to accept any one of the three models suited for franchising. The first mode of franchising offered by 7 eleven includes the single store franchise option. This type of franchising is suitable for entrepreneurs who wish to start their careers as business proprietors. The franchisees obtain a platform to understand their capabilities as a business owner and engage in a continuous learning process which results in acquaintance with the business. Single store franchisees are more likely to expand their base subsequently and expand to other locations (Bleistein.et.al, 2006). The second variant of franchising offered by 7 eleven is the multiple-store franchising. This type of franchising is suitable for individuals who are equipped with managerial and retail expertise and are eager to be involved in business ownership. Finally 7 eleven offers a business conversion program (BCP) which enables owners of existing convenience stores to integrate the brand of 7 eleven with their business. This strategy adds credibility to the image of the convenience store thus helping the business to proceed to the next level.

General overview of the existing problem:

The sustainability of an organization is dependent on the performance of employees and their dedication to the organization. One of the leading convenience store chains of the world, 7 eleven faced complaints regarding intimidation and underpayment of employees in its various outlets across Australia and other countries. The accusations were primarily concentrated in the foreign worker base. Employees have also cited incidents of intimidation through physical abuse in some cases (Stubbs and Cocklin, 2008). The superior management of 7 eleven has also been accused of deriding the values of employees in several places due to ethnic or cultural differences. 7 eleven set up a panel to evaluate the claims of around 20000 workers which included past workers also. The workers claimed that their salaries were calculated as less as 47 cents per hour. Complaints of various employees indicate that employees working full time at the franchises were accused of working for other firms and payment for employees was withheld on the pretense of training (Stubbs and Cocklin, 2008).

The intensity of the situation was analyzed by the panel and their findings suggested a formidable challenge to the organizational management. The organization has to modify its business model to address issues such as underpayment by allocating higher share of revenues to franchises.