1) Did Taco Bell's success result from a top down or bottom-up approach to change? What situations drove this change, and what leadership approach did John Martin use? What was the old (previous) leadership style and what was its limitation?

President-General Manager (3)Vice President-Operations (3)Zone Director-Operations (13)Area Managers (60)District Managers (320)Restaurant Managers (1,800)Assistant Restaurant Managers (3,500)•     After the changes made by John Martin the organizational table looked like this:National Vice President-OperationsZone Vice President-OperationsMarket ManagerRestaurant General ManagerAssistant Restaurant General Manager3) Did TB raise or lower food costs as part of its “customer value” strategy as a percentage of sales? What store operational changes were made to improve sales volume as a result of these increases?•     Taco Bell’s food cost rose from 27% to 30%. •     In order to improve sales volume, TB followed the wants of the customer, which were FACT (Fast, Accurate, Clean, and Temperature). •     Taco Bell changed the look of their facility. They gave the store a modernized look and added playgrounds and larger facilities. Expensive marketing campaigns were also used to bring customers into the restaurants. •     In order to make the food faster, they cut back on a lot of time by having ingredients ready when they were needed. This would make the customers happier, and would bring in more sales. •     To bring people into the restaurants, they added new items to the menu including Nachos, Nachos del Grande, Taco Salad, and Mexican Pizza, Double Beef Burrito Supreme, Seafood Salad and Soft-Shell Tacos.4)     Identify at least 5 key strategies mentioned in the case, which contributed to TB’s success using a framework of Structure, Technology, and People for your response.•     Structure- •     The structure of the company changed when TB eliminated several middle management layers within the organization. The District Manager position was eliminated. The position of Restaurant General Manager is similar to the District Manager but was now a coach as well as being a business leader. This position would allow the managers to be broader with their management. •     The span of control for Market Managers changed while the major changes were happening. In 1990, it doubled from six to twelve restaurants for one Market Manager. Then in 1991, the span of control rose to 20. Those managers who could not handle the heavy load decided to either leave or become Restaurant General Managers. •     Technology- •     Before the change in technology, Plexiglas boards were used. The cashier would make tally marks on the appropriate item and erase the board after every order. Taco Bell then got an electronic point-of-sales system (cash-registers), which allowed communication between the ordering employees and the cooking employees. It also kept track of the sales through the day. •     Another technology change was the use of a management information system called TACO (Total Automation of Company Operations). Before this was implemented, the managers spent much of their time doing paperwork. With this system, they could now print reports with the information already in the system. This saved the managers a lot of time. This system allowed Managers from other Taco Bell’s to communicate with one another. •     People- •     Before the change in people, there was a large rate of employee turnover. In order to change this, Taco Bell offered training for Assistant Restaurant Managers and Restaurant Managers to decrease employee turnover. They later had a training program for ARGM, RGM and Market Managers. They received technical and management training.5)     Who are TB’s competitors mentioned in the case and can they “copy” TB’s strategies?•     The competitors mentioned in the case are other fast-food restaurants. Specific restaurants mentioned are Burger King, McDonald’s, Wendy’s, and KFC•     These competitors can “copy” some of TB’s strategies, but not all of them. Most of these competitors cannot prepare some of their food in advance. Taco Bell can have their food prepared before it is ordered, but they do have regulations as to how fresh it has to be. Taco Bell has the advantage of this strategy over its competitors.•     “Taco Bell was the first fast-food chain to focus on value for the customer.” The other restaurants followed nearly ten years later. They copied this strategy.The competitors could also “copy” the strategy of the information systems, and the change of the organizational structure.6) Suggest 3 actions GEO John Martin should take to sustain sales volume increases in the future?•     There are several possibilities that CEO John Martin could take to sustain sales volume increases for the future of Taco Bell. To motivate employees in today’s diverse workforce, management needs to be flexible with how they are willing to motivate. Each and every employee has different personal needs and goals that they are hoping to satisfy through their job. By offering different types of rewards to meet the many diverse needs of employees can be highly motivating. •     Studies have shown that many people, before they will do anything, look for the payoff or reward for them in a situation. Even though there are many different rewards offered by organizations, most people are concerned with earning the amount of money that will satisfy their needs and wants. Pay plays a huge role in motivating. •     John Martin should implement some Pay-for-performance programs to help ensure sales volume increases, through motivated employees. Pay-for-performance is basically paying employees on the basis of some performance measure. Martin should institute such programs for Taco Bell as Piece-rate plans, gain sharing, wage-incentive plans, profit sharing, and lump-sum bonuses. This way Taco Bell could not only pay their employees for time on the job but also adjust his or her pay to reflect performance measures. By implementing such policies employees can perceive a strong relationship between their performance and the rewards they receive if motivation is to be maximized. If Martin only rewards on seniority, job title, or maybe across-the-board cost of living raises, then employees may be much more likely to reduce their efforts. •     Another possibility would be a competency-based compensation program. Competency-based compensation programs pay and reward employees on the basis of the skills, knowledge, or behaviors they possess. These skills may include such things as leadership, problem solving, decision-making, or strategic planning. And then of course, pay levels are established on the basis of the degree to which these competencies exist. The great thing about this reward package is that pay increases are awarded for growth in personal competencies as well as for the contributions one makes to the overall organization. In this case the employees rewards would be directly related to how capable the employee is on contributing to the achievement of the organizations goals and objectives. •     The basic idea that CEO John Martin should be remembering is that an individual tends to act in a certain way in the expectation that the act will be followed by a given outcome and according to the attractiveness of that outcome. I believe that Martin should ensure that Taco Bell makes it very clear to employees how hard they have to work to achieve a certain level of performance, and how can they achieve that level, and what reward will performing at that level get him or her. Basically, how attractive is the reward for the employee and how does it help achieve his or her goals? Performance-reward linkage is the degree to which the employee believes that performing at a particular level will lead to the attainment of a desired outcome. It is extremely important that Taco Bell employees know what individual effort to put forth that will equal good individual performance, that will in turn equal organizational rewards and individual goals and rewards. It would be in Martin’s best interests to create an environment where employees perceive outcomes for good work to be positive. Therefore good work would equal good pay, security, companionship, trust, employee benefits, and a chance for the individual to use his or her talents or skills. There is definitely room for promotion when creating an environment of growth like this one for employees. These ideas would be in and of them selves a new direction for the future of John Martin and Taco bell. 7) Given the speed which the changes in the latter part of the case (1989-1991) took part, why didn’t TB all but fall apart?•     Even though Taco Bell underwent massive changes in structure, it stayed together because it stayed close to its foundation. Their concepts were states to be elegant in simplicity. One executive suggested that: o     “The reason this has worked is because of a convergence of a business philosophy with an employee philosophy with all of the cultural and operational changes pointing in the same direction all happening simultaneously.” (John Martin, CEO)•     Taco Bell survived with a direct and straightforward approach of focusing on value, defined as lower prices and improved service, by placing resources in the hands of those managers closest to the customer and eliminating several middle management layers with the organization. •     Before the changes in 1989-1991 took place, Taco Bell was operating under a somewhat complex ladder of management beginning with the crew. From the bottom up, Taco Bell consisted of the Crew, Assistant Restaurant manager, Restaurant manager, to District Manager, and on up to Top management.•     Restaurant managers and District managers were the employees that produced indicators that change was needed in the management structure of Taco Bell. District managers were basically acting as policemen rather than acting as coaches. Even to the point of helping some Restaurant managers by working for them during busy hours of the day. This kind of activity is totally not what the District managers should have been doing with their time to be the most efficient and productive. Also, some restaurant managers filed complaints that district managers were hard to work with and caused more problems than gave help. This system was obviously inefficient. •     After the new system was implemented, some of the District managers left because they could not handle watching over 20 Restaurant managers. For the most part most Restaurant managers stayed through the new management era with John Martin. o     “There is a two- to three-year timeframe in which we significantly raise the bench of RGM skill. We went through an analysis of the caliber of the original RGM’s, the starting bench. We determined that about one-third of our RGM’s could grab the spirit of what we were trying to do at the restaurant level. Another third, with development and coaching, could achieve the stated standard of performance. We thought that one–third could not make the mark.” (Bill Bensyl, senior vice president of Human Resources)•     I do believe that MBTI would be effective in this case but it would have to be specialized. Specialized in that it is viewed as an aid and not absolute. The MBTI would be helpful but, Taco Bell management should leave room for potential growth if MBTI does not indicated for the most part what the employee believes to be true. The more Mr. Martin will empower the people the more he must equip them to communicate by bettering their interpersonal skills. Taco Bell has excellent potential in the years to come with Martin’s innovative ideas at work achieving excellence. 8) How does Total Automation of Company Operations (TACO) allow a greater Span of Control between RGM to MM and how do “pods” make this ratio work? What is this new ratio?•     TACO allows all records to be stored at one central computer (location.) All financial information could be stored there as well. •     In the old way, the RGM had a very difficult time communicating with their superior management. Memo’s and such were sent via mail and phone calls were often not realistic because the RGM was busy doing restaurant tasks.•     The restaurant manager “has the tools to take care of problems without someone saying, “You’ve got a problem.”•     It reduced “in-restaurant RM paperwork approximately 10 to 16 hours per week and by providing support and communications functions uncommon in the fast-food industry.”•     RM had “reports on food cost, labor cost, inventory, perishable items and period to date costs, all with variances” due to the ATCO system.•     “Pods were part of the company’s strategy for reaching a ‘point of distribution’ to Market Manager span of 60 to 1. Executives believed that 30 to 1 (restaurants to MM) was within reach. If each restaurant added a pod, 60 to 1 would be achieved.” 9/10) Visit a Taco Bell virtual and/or electronic-provide an up to date outlook based on Structure, Technology, and People as a framework for your response.•     The structure of the store has changed since the “old-ways.” It used to be the food-preparers had their backs to the customer. Now the food-preparation station is perpendicular to the customers•     Customers can now see how the workers are making their items. •     The cooking of the food is behind that preparation station. •     The cash registers are now computers. They are touch-screen monitors for the employee to enter in the order. The order is then sent to the preparation station where it is placed in queue. The restaurant manager is visible. The RM is doing something, either making food or taking orders.