Outback

Rajeet Guha
1. The values at Outback are a casual, relaxed atmosphere for dining. It focuses on people as the most valuable resource. It believes that it should take care of its “employees, customers, suppliers, neighbors and partners.” Employees are also known as Outbackers. They are treated with respect, provided with better working conditions, given importance, allowed to participate in decision-making, are well paid and given opportunities for promotion. They are also given stock options. There is also considerable importance given to high quality food and service. The atmosphere is very hospitable. A common culture is woven through Outback’s several constituent restaurant chains like Outback, Carrabba’s Italian Grill, Roy’s, Bonefish Grill, Fleming’s, Lee Roy Selmon’s, Cheeseburger Paradise and blue coral. Despite this, each of these restaurants have a unique culture of their own. Outback Steakhouse has an Australian theme. The theme at Roy’s is food and wine while Lee Roy Selmon is a Southern-style restaurant with a football theme. In spite of different themes and different brands of food espoused by different restaurants there is the common culture of fun, casual dining, giving importance to people and the core value of customer satisfaction. They serve customers with generous portions of food at moderate prices. These values came into being when Outback’s founders had the belief of putting people first and creating value for them rooted in themselves and later put that into operation. Firms with similar philosophies later were incorporated into the Outback corporate umbrella.
2. The culture of the organization Outback is to put people first and create value for them. Employees, customers, partners, suppliers and neighbors are cared well for. A fun, hospitable, casual dining atmosphere is created where high quality food is served at moderate prices. Each of the restaurant chains have a separate culture and it is a challenge for Outback managers to maintain their own organization culture while not destroying the unique culture of these chains as there might be a tendency for one restaurant chain that is doing very well and better than others to impose its culture on another restaurant chain and destroy the unique culture of that chain. If one restaurant chain is growing much faster than others it may try to homogenize culture across the other restaurants. Managers have to remember that Outback derives its strength through the unique culture of each of these chains. They also must keep in mind that a culture that works for one restaurant chain might not work for another. Despite such diversity a common thread runs through all these chains namely that of fun, casual dining, putting people first and creating value for customers. Outback’s challenge is to maintain unity in diversity.
The diversity is in terms of different brands and different cultural traits in the restaurant chains; for example in Le Roy Selmon the theme is hard playing, good Southern food, good fun and sharing; in Fleming’s there is high quality steak, high quality wine and a relaxed atmosphere; in Roy’s it is fusion food and wine, etc. What managers however will have to propagate is a core set of values on top of these brand and cultural particularities through a process of consensus building and common understanding across the restaurant chains. In keeping with the core values of individualized customer attention, high quality products and services, respect and care of employees as important stakeholders and partners, the process of achieving this outcome of a common value system will also have to be achieved not through a top-down chain of command but by thinking together, understanding together and agreeing together. It is such attention to the process of consensus building, which holds the key to the success of a common value system across this diverse organization. As the owners have themselves said however, the challenge may not be as daunting as it seems because most of these restaurant chains were either created by Outback with the same value system or incorporated into Outback because their owners shared the same values. As the organization becomes larger and new managers and staff join, the management will have to find ways of constantly reinforcing the value system by holding staff retreats or by maintaining some mobility between managers across different restaurant chains and by involving the employees more and more into decision-making.
3. Environmental change and complexity represent the greatest source of uncertainty and unpredictability of organizations. An organization’s effectiveness is measured by its capacity to respond to the uncertainty of the environment and that includes the general environment and task environment as well as internal environment. There are four models of organizational effectiveness. We will examine Outback’s performance with respect to each of these models.
The systems resource approach to organizational effectiveness focuses on the extent to which the organization can acquire the resources it needs. Outback is successful from this perspective as it is said in the case study that when higher food and gas prices drove restaurant prices up, managers countered with some less expensive ingredients. Outback’s resourcefulness in dealing with shortages is also facilitated by its policy of making every manager a part owner of every outlet. According to Outback system every manager contributes 25,000 to the company and gets a share of equity and has a 10 % share of the revenue of that outlet. Because of such high stakes in the outlet managers make every effort to obtain resources even in times of shortages. The internal processes approach deals with the internal mechanisms of the organization and focuses on minimizing strain, integrating individuals and the organization, and conducting smooth and efficient operations . Outback is successful from this perspective as its employees are happy with their working conditions, being treated with respect and being given good salaries. It is also delivering high quality food and services and is doing extremely well. This goes into the very soul of Outback. This is its greatest strength. The goal approach focuses on the degree to which an organization reaches its goals. Outback is successful from this perspective as at the previous year’s end it met its stated goals for the number of new locations, both domestic and international. Once again the combination of policies of ensuring customer satisfaction and employee satisfaction as well as employee ownership. The strategic constituencies approach focuses on the groups that have a stake in the organization. Stockholders and employees have a stake in the organization. Stockholders are happy as stock values are rising and employees are happy with their working conditions, being treated with respect and being given good salaries. Employees are constantly being recruited. Thus, Outback is successful from this perspective as well.