Cafe De Coral
In this assignment we examine the real life case of Café De Coral and their struggle with ethical dilemmas in their operations. Our comics graphically illustrates Cafe De Coral's struggle with employee abuse, corruption, and bad public image in result of poor employee engagement practices.
Mr. Chan Yue-kwong, Michael is the Executive Chairman of fast food chain Café de Coral. He is also a member of Chief Executive’s Provisional Minimum Wage Commission (MWC) which is theoretically examining the issue of introducing a minimum wage in Hong Kong. To response the minimum wage, the company decided to on one hand increase wages between $2 and $3.5 on their hourly rage between $22 an $25 but on the other hand takeaway 45 minutes paid lunch break.
Since Café de Coral and its Executive Chairman, Mr. Chan failed to foresee the social repercussions to the fast-food restaurant chain’s recent pay, the general public launched a series of boycott activities campaign against the restaurant and called for not to eat at “Café de Cruel”. No matter how hard the chain tried to clarify that no employee would see their wages reduced as a result, it was still portrayed in the media as a pay-cut exercise. People insisted that the chain didn’t intend to actually raise worker’s pay through the exercise in the beginning, but to amend the pay structure to prepare for the new operating environment before the minimum wage becomes valid. Moreover, people doubted that whether the MWC can reflect 600,000 Hong Kong workers living on poverty wages when it put “Scrooge”- like bosses in the driving seat as he just paid workers at salary rate can’t meet end needs under the company earns high profit condition.
Nevertheless, under the strong pressure of the public and in the face of negative daily TV and newspaper reports which had an adversely impact on the company’s image, Mr. Chan had no choice but to protect his group’s corporate image and decided to abandon the restructuring move.
Before the incident, both parties seemed with a sort of fierce egoism . While the company tried to cut the cost and improve profit, workers strived to increase their paid benefit. However, at the later stage of the process, both parties seemed become more utilitarianism (Poznaklaw, 2011) . Each party started to understand with each others. Café de Coral removed the initial act and increased the wage for workers. And the general others also saw that increasing cost of operating in food chain restaurant under high inflation rate and stopped the boycott activities.
There is no doubt contradiction always exist between employers, employee since their roles play differently. But it is believable that mutual benefit can be achieved through mutual understanding and communication. Moreover, both employers and employees should set certain disciplines dealing of what is good and bad, or right and wrong, or with moral duty.
“We need managerial processes that ensure that all our employees are treated equally and with respect and that some are not given unfair advantage over others” (David A. Thomas, associate professor at Harvard Business School)
In Hong Kong, Café de Coral’s labour has been treated unfairly, as it is trying to exploit the “grey spots” when responding to the minimum wage increase proposed by the government which inevitably raised to protest, claiming that they would abandon their work if Café’ de Coral is reluctant to change its decision.
Taking other examples in the globe, similar incidents happen regularly, such as the underground strikes in Uk and the abandoning jobs protest in France. This reason behind this phenomenon is because employees are not treated equally; managerial position employees are slacking off while manipulating their staffs and taking a significant higher wage.
These continuous strikes and protests have raised the awareness of the importance of treating people/labours correctly, the managerial process in the company and how leadership should be performed.
“Leadership is, above all, getting people to change. To achieve that goal, you need to communicate the sometimes complex nature of the changes required and inspire an often sceptical organization to enthusiastically carry them out” (Stephen Denning)
One reason that leads to protest is because of the lack of leadership in the managerial level, when they are incapable to properly communicate with their colleagues. This would leads to inefficiency, procrastinate the work to be done, and prolonging the hours of work. Therefore, companies should have the awareness to monitor the managerial process and the abilities of managers to communicate to others.
Comic #1
In the picture the CEO is enjoying his prosperity, the cup of coffee, by manipulating the labours in his company, Café’ De Coral. The labours are struggling, treated like slaves trying to support the company, to fulfil the goals and greed of the CEO. This raise to the awareness of the importance of the managerial process in the company and the righteous attitude to treat the employees which David A. Thomas suggests in (A new paradigm for managing diversity); “We need managerial processes that ensure that all our employees are treated equally and with respect and that some are not given unfair advantage over others”
Comic # 2
Board of Directors – CEO the brown noser
This graphic depicts the meeting of the CEO and the board of directors and the typical stereotype of how the CEO’s goal is to always try satisfy the board of directors in any way possible. It is often seen as a way for CEO’s to increase their bonuses and compensation as well as other salary benefits. In this graphic, the CEO is holding a rag and he is just finishing shining the shoes of the board of directors. The title for the CEO is called “The Brown Noser.” Figuratively speaking, The Brown Noser means someone who flatters another obsequious manner for personal gain and benefit. The literal meaning of The Brown Noser is inappropriate content that cannot be explained here.
This behavior can be loosely classified as a form of corruption similar to maiguan maiguan as illustrated by Carnegie Endowment for International Peace (Pei, 2007). The CEO is often responsible for the appointment of most board of directors, hence in most situations the CEO may have personal ties or close relationships with most members of the board of directors. This form of collusion between directors also leads to the issue of interlocking directorates, often seen in Corporate America.
Comic #3
In the picture below, the board projects the situation where the government is proposing minimum wage where as the CEO is standing on the stage announcing his perspective on $18-20 is enough for the labours, showing his disagreement towards the government policy. The audiences who are concentrating on the CEO’s speech are the media and the labours of the company, as the CEO is the leader of the company and the policy he announces has a direct impact to them.
The CEO’s announcement is a situation similar to the leadership defined by Stephen Denning in the article of Telling Tales where the leader is trying to change people’s perspective through communicating with them to achieve his goal even though he might have to exploit others.
Comic #4
Café De Coral – Treatment of Employees from CEO
Abuse of Employees
In this graphic, the court has ruled against the CEO for abuse of employees with low pay and minimal benefits. The CEO uses loopholes in the system and immediately denies the charges while asking for an appeal. It is noted the devils horns on the CEO’s head to depict his evil immoral intentions with no regard to the well being of the employees.
Preaching the practice of CSR (Corporate Social Responsibilities is one thing, but actually voluntary taking genuine CSR action is only done by few CEOs. When actions by employees and important stakeholders result in an attempt of a court injunction, the firm can have devastating ramifications to its public image and reputation. Employee engagement must be handled properly before the situation boils over into collateral damage which often hurts everyone involved. Most often, the employee engagement must be initiated and properly handled from top tier management; especially the CEO. As noted by Ketter "Engagement is all about creating a culture where people do not feel misused, overused and underused, or abused" (Ketter, 2008). As in the situation with Cafe De Coral, something as simple as a satisfaction survey or "Hewitt Associate's Engagement Model (Ketter, 2008), could have avoided this fiasco.
Works Cited:
Denning, S. (2004). Telling tales. Harvard Business Review, 122-128.
Ketter, P. (2008, January). What's the big deal about employee engagement. Retrieved from http://www.astd.org
Pei, M. (2007). Corruption threatens china's future. Carnegie Endowment for International Peace (pp. 1-7). Washington DC: Carnegie Endowment.
Poznaklaw, J. (2011, Februrary 16). Approaches to ethical decision making. Retrieved from http://www.poznaklaw.com/articles/bizethics.htm
Thomas, D, & Ely, R. (2004). Making differences matter: a new paradigm for managing diversity. Diversity Matters, 79-90.
