Please write a 2-3-page paper to respond to case study questions 1 and 2. Write the paper in APA format with the APA Manual (Publication Manual of the American Psychological Association (6th ed.) and/
Case Four
Eastern Internat ional
Food Service
Corporation
Stanley Strayhorn , general manager of Eastern International Food Service Corporation's
Ocean Point Division, has a problem. For the past week , labor turnover has been increas
ing , employee morale has been dropping, and food cost percentage is climbing , while profit
margins on sales are declining . Mr. Strayhorn is deeply concerned, for there are still two
weeks left in the summer season. Not only is it too late to train new workers , but it is diffi
cult even to find replacements. A shortage of labor will drastically affect potential sales for
the next two weeks, a period noted for heavy sales .
BACKGROUND INFORMATION
Eastern International Food Service Corporation (EI) was a food service corporation in the
eastern area of the Uni ted States. Its services were offered in many amusement parks. Ocean
Point Amusement Park was one of its biggest branches, in sales as well as in number of
employees-300. Eas tern International had a contract with Ocean Point to operate all its
food service concessions on the park's premises . Fifteen EI co ncession stands were distrib
uted throughout the 500-acre park. Food sales includ ed hotdogs, ham burgers , French fries ,
popcorn, ice cream , beverages, and so on. Each concession stan d had a manager and an
assistant manager, as well as between 5 and 20 workers, depending on the size of the stand.
Jobs ranged from cleaning grills and fryers to waiting on the customers over the counter.
In addition to the concession stands, the company also operated six different restaurants
on the premises , including fast-food services, cafeterias , and a sit-down dining room. Each
had its own manager and two or three assistant managers , as well as a full complement of
line servers, dishwashers, kitchen helpers , cooks, waiters , and waitresses.
Since the park was open only in the summer , student employees fit perfectly into the
schedule . With room and board provided, and a work season that coincided with summer
vacation , high school and college students found employment with EI both convenient and
well-paying. Besides , there were hundreds of other students of the same age with whom to
This case was adapted from materials prepared by David Hau under the supervi sion of Theodore T. Herbert.
The case is not intended to reflect either effective or ineffecti ve administrative or technical practices , but was
prepared as a basis for class discu ssion. © Theodore T. Herbert , Crummer Graduate School of Busines s, Rollins
College, Winter Park , FL 32789 .
459 460 Part Eight Case Problems
associate, both on and off the job . Almost all the positions - managers and workers - wer e
held by student employees .
All stand and restaurant managers reported to one of several supervisors , each of whom
was a full-time , nonstudent Eastern International employee . The functions of the supe rvi
sors were to check on all stands and restaurants to ma~e sure _everything was running prop .
erly, no employee was loafing , and food cost and profit margm targets were met. Above the
supervisors was the general manager of this division - Mr . Strayhorn himself - and the
assistant manager , Mr . Edwards .
Summer employment was regarded as part-time employment , so there was no union
established. In other words , there was nothing to guarantee full-term employment. Never
theless , EI tried to keep its employees as long as possible . Most employees hired were in
experienced, fresh out of high school. They often needed a few days to be trained ; sev eral
weeks on the job were needed to become a fast worker . The secret behind working in a con
cession stand was that the faster a person worked, the more sales he or she could make , an
important consideration for being reemployed by EI the next season. Usually a ret urni ng
employee would get a 20 to 25 percent increase in pay or perhaps a promotion , if initiati ve
and managerial abilities were demonstrated. In essence , the company tried to ma intain reg
ular and well-experienced employees , a difficult task considering the long work hours and
the nature of its student labor force .
PROBLEM SITUATION
Everyone who worked at Ocean Point knew that Eastern International Food Service wa s a
lessee . The contract was to terminate on Labor Day . Only two weeks remained in the con
tract period and the season, but the question of whether Ocean Point would choose to renew
the contract for next year remained unanswered .
Complicating the issue was the fact that, starting three years ago , Ocean Point had estab
lished specialty -food concession stands of its own. Such was its contractual right , to set up
and administer food concessions not directly competitive with the foods offered by EI.
Ocean Point now had four stands in operation serving pizza, tacos, and frozen bananas.
Ocean Point used its own employees, currently employed in the park, to run the stands. The
amusement park manager had found he could relieve sweepers in the morning hours
(before litter had a chance to accumulate) and put them on the early shift in the concession
stan ds. Sweepers would be relieved, in turn, by ticket sellers in the afternoon hours when
few tickets were sold and when litter cleaning was a full-time proposition. Such a clever
arrang eme nt allowed the addition of selling functions with no increase in labor costs.
Rumors flew, fueled by the concession operations of the park. Some said that the stands
were set up to allow the park to develop the skills needed to administer concessions . Once
the skiJls wer e developed, the contract with EI would be allowed to lapse , and park employ
ees would run the former EI stands next season . An elaborate seniority and promotion sys
tem used by the park would effectively preclude EI employees from transferring to park
employment.
lfthe contract wa s renewed, then everything would remain unchanged ; nobody would be
disturbed . If, howev er, the contract was not renewed, Eastern International would have no
operation in Oce an Point next year and between 200 and 300 college students would not be
returnin g to summ er jobs.
Rumor s sprea d among the EI employees. Some said EI would be back next year , and
others said it wou ld not. Neither rumor was verified by EI management. Even when con
fronted with the question point-blank, all the supervisors could, or would, say was that El
might not be back. (Several Ocean Point stand managers were spotted wandering around in
j Case 4 Eastern International Food Service Corporation 461
front of El stands . They were believed to be spying .) The season was approaching its end,
and the management had maintained silence . By now , the accepted rumors were that
Eastern International would not return next summer and that Ocean Point did not wish to
hire any person who had worked for El.
The attitude of the EI employees had gotten steadily worse . Morale had declined. Man
agers of stands had become irrespon sible and were losing control of their subordinates .
Food costs were rising as a result of the amount of theft and waste. Workers slowed their
pace and thereby failed to serve numerous customers , who were quite vocal in their dis
pleasure . Some students had quit, "kn owing" they would not be rehired anyhow . While the
potentia l sales of the season were reac hing their peak, actual sales and profits had declined.
Never in the history of the company was the re such a tremendous decline in sales and profit
during this time of the season .
Study Guides 1. Assess Strayhom's comm unication effectivene ss. What impact has his approach had
on morale and productiv ity?
2. Comment on the impact of anxiety , stress, and crises on employee use of informal
communications (the grapevine) in this case .
