Panera Bread Company

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Managers and assistant managers receive competitive salaries and benefits and have the potential of a quarterly bonus. Job requirements vary by location but include outstanding interpersonal skills, formal education, and work experience in the food service industry. Under these full-time employees work many associates who perform counter service and food preparation duties. These workers, who are the customers’ primary contact with Panera Bread, are usually paid slightly above the minimum wage, receive no tips, and preferably have some restaurant or fast food experience. Unless they are full-time employees, they do not receive benefits.

Profits Rise along with the Dough

Panera’s attention to the monitoring of trends has paid off handsomely. The company’s stock has grown to create more than $1 billion in shareholder value. Since its founding, Business Week recognized Panera as one of its “100 Hot Growth Companies.” The organization’s future will depend on the company’s ability to meet the needs of its stakeholders by continuing to create a satisfying customers diverse work-force.

- What do you describe as Panera’s purpose, mission, and strategy? Use the firm’s Web site for further information and assistance.

- How well has Ron Shaich utilized the open systems model of organizations in moving Panera Bread Company forward in its competitive environment?

- What are the challenges to the management process posed by Panera’s fast-paced growth? What problems do you see Shaich having to resolve to continue his record of success with the firm?

- Visit a Panera store near you, or a competitor. Based on your customer experience, what are the strengths and weaknesses of this business going forward?

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Course Code : Management and Organizational Behavior

Case Title : Management Training Dilemma

Case number : Case 1 A

Developed by John R. Schermerhorn, Jr., Ohio University

Shane Alexander is the personnel director of the Central State Medical Center. One of her responsibilities is to oversee the hospital’s supervisory training programs. Recently Shane attended a professional conference where a special “packaged” training program was advertised for sale. The package includes a set of videotaped lectures by a distinguished management consultant plus a workbook containing readings, exercises, cases, tests, and other instructional aids. The subjects covered in the program include motivation, group dynamics, communication skills, leadership effectiveness, performance appraisal, and the management of planned change.

In the past Shane felt that the hospital had not lived up to its supervisory training goals. One of the reasons for this was the high cost of hiring external consultants to do the actual instruction. This packaged program was designed, presumably, so that persons from within the hospital could act as session coordinators. The structure of the program provided through the videotapes and workbook agenda was supposed to substitute for a consultant’s expertise. Because of this, Shane felt that use of the packaged program could substantially improve supervisory training in the hospital.

The cost of the program was $3, 500 for an initial purchase of the videotapes plus 50 workbooks. Additional workbooks were then available at $8 per copy. Before purchasing the program, Shane needed the approval of the senior administrative staff.

At the next staff meeting Shane proposed purchasing the training program. She was surprised at the response. The hospital president was noncommittal; the vice-president was openly hostile; and the three associate administrators were varied in their enthusiasm. It was the vice-president’s opinion that dominated the discussion. He argued that to invest in such a program on the assumption that it would lead to improved supervisory practices was unwise. “This is especially true in respect to the proposed program,” he said. “How could such a package possibly substitute for the training skills of an expert consultant?”

Shane argued her case and was left with the following challenge. The administrators would allow $1,000 to be spent to rent the program with 30 workbooks. It would be up to Shane to demonstrate through a trial program that an eventual purchase would be worth-while.

There were 160 supervisors in the hospital. The program was designed to be delivered in eight 2 ½ hour session per week, with no more than 15 participants per session.

Shane knew that she would have to present very strong evidence to gain administrative support for the continued use of the program. Given the opportunity, she decided to implement a trial program in such a way that conclusive evidence on the value of the packaged training would be forthcoming.

Review Questions

- If you were Shane, what type of research design would you use to test this program? Why?

- How would the design actually be implemented in this hospital setting?

- What would be your research hypothesis? What variables would you need to measure to provide data that could test this hypothesis? How would you gather these data?

- Do you think the administrator’s request for “proof before purchase” was reasonable? Why or why not?