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Individual Assignment 2: Sunshine Enterprises Case Study

Question 1

Draw a cause-and effect diagram for the possible causes of the $25 tip service upset.
Select one of the possible root cause from your diagram, and explain how would
investigate and fix it.


- Check the history of the bill - waiter

- Get the statement from the - Customer
Credit card Company
-Credit Card Provider
- Manager
$25 Tip

- Alert the entire restaurant manager -wrongly billed by waiter

About the service upset -signed sales receipt show a $2.50 tip only

- Call customer & apologise -waiter did not double check the bill

- Mail customer free coupon

-credit $22.50 to customer credit card Process


The cause-and-effect diagram consists of four main elements which are people, process,
measurements and information. In my opinion, the $25.00 tip error that has occurred has
raised some concerns. Below is a list of cause and effect situations that could be the root
cause of this mistake.

Customer mistakenly wrote in the wrong tip amount and handwriting not clear
Customer does not clearly remember the tip he left.
Credit system is out of date and caused a transaction error
Waiter accidently hit an extra zero when typing in tip amount.
Question 3
Critique the current informal quality control system. What changes and
improvements do you recommend if Sunshine expands to 20 restaurants?

From my point of view, the current quality control system is a common approach applied by
most of the entrepreneurs with a limited number of sites. They usually focus on face-to-face
interaction with customers and employees, and audit food and service quality, as well as sales
and financial results by conducting site visit to the restaurants regularly. I dont really agree
that by watching the customer facial expressions, behaviours and posture could not interpret
the whole situation or failure faced by the restaurants. The approach to quality control is more
informal and inherent in the entrepreneur hands-on approach. One advantage of Abbys
direct oversight is problems are not distorted by the chain of command in Abbys informal
QC system.

If Sunshine restaurant plans to grow their business and expands to 20 restaurants, the nature
of the quality control function changes considerably. For example, like McDonalds restaurant
define and monitor quality and customer service more formally with standardized
performance measure systems, required employee training courses on topics like
empowerment and statistical quality control, structured recognition and reward systems, and
so on. Abby informally monitors quality in her restaurants now and then compare to a more
formal McDonalds type of approach. McDonalds and others fit this general strategy using a
great deal of standardization in all their systems such as accounting, operations, training,
human resource management, marketing, equipment and facility design, and so on.

Besides, it is advisable for Sunshine restaurant to keep the number of sites roughly constant
and focus on providing superior goods and services. This is the strategy that Abby adopted.
For Sunshine Enterprises six restaurants whereby it includes high food and service quality,
clean facilities, music, and bands on many nights. Quality is the first competitive priority for
Sunshine. Quality control is quite different for an organization with hundreds or thousands of
sites. The small entrepreneurial business uses a more informal approach whereas larger
organizations must use much more formal systems such as at Burger King, McDonalds, and
Outback. Whether to franchise or not is another management growth decision. Strong
franchising agreements allow the business to grow more rapidly than they otherwise could. A
strong corporate quality control monitoring system must be in place for franchising to work
Question 4
What are your short-and long-term recommendations? Explain your rationale for these

In terms of short term actions, first of all, Abby need to resolve the $25 tip service upset.
Investigation need to be carried out by using service recovery plan. If let say the $25 tip error
was found miss-typed by the waiter, example, tip amount supposed to be $2.50 but charged
$25 instead, the restaurant manager should credits back $22.50 to the customers credit card.
Besides, the manager should call the customer and apologized for what had taken place. The
manager also can obtain the customers address and mailed him a free lunch/dinner coupon as
a token of appreciation. In this way, the customer will be happy and feel appreciated even
though inconvenience had taken place earlier. All restaurant managers should be informed on
the service upset to ensure that all the employees to double check bills and tip amounts when
possible. This is what is called as learn from the mistakes. The restaurant also may use the
essential Seven Tools and check sheets for restaurant quality control. They also need to find
ways to increase the value of a loyal customer, for example giving a free special meal as a
birthday treat to the customer and also do a short customer survey that sits on each table to
get the real feedback from the customers itself. In this way, the restaurant can improve the
strategy and quickly fix any breakdowns in the firm in order to boost the sales and get
repeating bookings from the customers. The restaurant must begin to build a data base on
types of customers per restaurant and demand patterns and type of service upset and how
resolved by store. All this data is essential to analyse the needs and demand of each customer.

For long term recommendations, Sunshine restaurant should hire a secret or external auditor
to audit restaurant performance especially in terms of food and service quality. In this way,
the firm may obtained a genuine examination result and from this they can improve or
enhance the performance to next level. Written procedure manuals and a proper job
descriptions and performance standards especially when they wanted to expand so that the
firm will be more organized and errors and job glitches can be reduce. The restaurant also
need to install an electronic billing system to avoid billing mistakes by the employees and if
any mistakes had taken place the manager can detect or track back the bills for investigation
or reference purposes.
If there any cheaper land is available, the restaurant may buy and keep it for future usage.
Sunshine restaurant also should work towards a more formal and standardized restaurant
control system in order the increase the quality and the performance of the restaurant.
Besides, the firm should start to train other managers to do Abbys job as a succession
development and planning in order to ensure the business operation can be run as usual and
constantly without any interruption.