This week extends the discussion of the leader’s job in the organization by showing how the leader must also create and maintain an organization’s culture and values. The culture is the glue which keeps the organization together because it makes the “people” work together within the structure.

The Saddle Creek Deli Background Information

The Saddle Creek Deli serves fresh sandwiches and hearty salads at moderate prices to skiers in the bustling ski resort town of Vail, Colorado. The deli is known for its cozy ambiance, Western décor, and two-story stone fireplace. Catering to skiers, the Saddle Creek Deli serves fresh meals in a hurry to people taking a break from the slopes and is located 10 minutes from a popular ski lift. Large windows provide a dazzling view of the nearby mountains. The deli’s major attraction, however, is a high-quality, old-fashioned soda fountain that specializes in superior ice cream sundaes and sodas. Business has grown steadily during the seven years of operation.

The deli has been so successful that Richard Purvis, owner and manager, decided to hire a manager so that he could devote more time to other business interests. After a month of quiet recruitment and interviewing, he selected Paul McCarthy, whose prior experience included the supervision of a small restaurant in a nearby resort hotel.

During the first few weeks, McCarthy seemed to perform his work efficiently. According to his agreement with Purvis, McCarthy was paid a straight salary plus a percentage of the amount he saved the business monthly, based on the previous month’s operating expenses. All other employees were paid a straight hourly rate.

After a month on the job, McCarthy single-handedly decided to initiate a cost-saving program designed to increase his earnings. He changed the wholesale meat and cheese suppliers, lowering both his cost and product quality in the process. Arbitrarily, he reduced the size and portion of everything on the menu, including the fabulous sundaes and sodas. McCarthy then focused on reducing payroll costs by cutting back on the number of employees working a shift and reducing fringe benefits. During a tense staff meeting to announce these changes, McCarthy tersely stated, “You can expect to see some changes in your hours starting next week. I see too many people sitting around with not enough to do.” Next, he announced that he was discontinuing the one-dollar meals for employees working more than five hours and eliminating the 20 percent employee discount. As he concluded his announcements, he asked if anyone had any questions. No one dared speak. McCarthy shrugged his shoulders and quickly left the meeting.

Frustrated, the employees streamed out of the meeting and quietly grumbled about the changes. “Why tell him what we really think,” some mused. Employees believed McCarthy had made up his mind, so they braced themselves for the fallout. Soon after, employees started noticing the negative consequences of McCarthy’s hasty, cost-cutting decisions. During the busy lunch hour, for example, customers would storm out after waiting 20 minutes for a sandwich. Others would grumble to servers about the smaller portions and then leave a meager tip. Many employees heard customers complain about the dirt and grime collecting in the dining area and restrooms. Employees started to burn out from listening to constant complaints and trying to do the work of two people. Tension mounted and resentment toward McCarthy grew.

Meanwhile, Purvis became aware of the overhaul McCarthy was undertaking at the deli. When questioned by the owner about the impact of his new practices, McCarthy swore up and down that there would be no negative effect on the business.

Ron Sharp, an accounting major at the nearby university, had been a short-order cook on the night shift for five months prior to McCarthy’s arrival. Conscientious and ambitious, Sharp enjoyed a fine work record, and even his new boss recognized Ron’s superiority over the other cooks. One day Purvis saw Sharp at the post office and asked how things were going. Purvis was stunned to hear about the cutbacks and employee dissatisfaction. Reluctant to undercut his new manager, Purvis said to himself, “I can’t understand what went wrong. I wonder what I should do now.”

Learning Activity #1: (Theme One: is to identify the types of cultures or models of cultures and how they work within an organization)

Using your reading material create a chart that describes the type, characteristics of the culture, associated values that would be important to keep the culture alive, and kinds of organizations structures that work best for culture. Compare and contrast them in your explanation of the chart. For instance what culture might work for Joe at the new sawmill and then which one might work at the Deli.

Learning Activitiy #2: (Theme Two: Continue the leader’s architectural experience by creating a culture for the Saddle Creek Deli)

Establish a culture that will make the structure you have created for Purvis flow and work towards the vision. Remember in creating a culture where the business is already functioning you want to make sure to start with an OCAI assessment. This will show you how and what needs to be addressed in the structure and the environment of the organization to move toward the values, culture, and environment that is best for Purvis and his company.