Blog #5: Business Structure of the Restaurant Industry

The Restaurant industry incorporates all different employee structures due to the varying sizes of different companies, from one location, ‘mom-n-pop’ restaurants, to the large chain restaurants like McDonald’s or Olive Garden.  Most companies in the restaurant business are hierarchical (Mealey, 2012).  Smaller restaurants usually take on the functional organization structure, with each task delegated to an individual or a group and the benefits will affect the whole company (White, 2012).  Some larger restaurants will choose a divisional organization structure, this means that each division will handle all of its tasks within its division, and the benefits will only affect that division.  The divisions can be divided based on geography, brand, or market served (White, 2012).

Starting with the small restaurants, normally there is a single owner or partnership at the top.  These owners sometimes manage the company, and other times will work as a chef, waiter, or some other position and will hire someone to manage the restaurant.  Many of these types of restaurants will be split in two when it comes to management, the ‘front-of-house’ manager and the person who runs things in the kitchen.

Restaurants with more locations tend to have more layers of management.  Each restaurant will be structured relatively the same as smaller restaurants, but there will be some mix of divisional and functional organization.  Management or purchasing may be structured divisionally, while marketing may be structured functionally. 

The biggest problem that restaurants have when it comes to employees is keeping them in the company.  According to Lorri Mealey at About.com (2012), “turnover is notorious in the restaurant industry.”  This high turnover is normally due to the fact that jobs are relatively low-paying in the restaurant industry, compared to the same types of jobs in other industries.  This causes a problem because the firm needs to continually pay to have employees and managers trained to work at their position.

Cited Sources:

White, M. (2012). Types of organizational structures for businesses. Retrieved from: http://business.lovetoknow.com/wiki/Types_of_Business_Organizational_Structures  

Mealey, L. (2012). How to hire a great restaurant team. Retrieved from: http://restaurants.about.com/od/restaurantstaffing/a/Staffing.htm