American entrepreneurs with faith: a case study
The American fast-food chain Chick-fil-A has been much debated in its own country for the overt way in which it is managed according to ‘Biblical principles’. As such it provides an interesting case study in which specific management practices have been identified and made available for critical examination. The business was set up in 1946 by S. Truett Cathy, a devout member of First Baptist Church in Jonesboro, Georgia. It has 1,700 outlets and a turnover in 2011 of $4bn.
The most interesting observation is that the Biblical management principles heralded by Cathy and his son Dan Cathy seem to give the business a clear competitive advantage when it comes to employee retention. Whether or not this has any application to an ecclesiastical organisation depends on which segment of adherents is under discussion: retention of clergy and ministerial employees is generally not a problem, but retention of church members is an issue. Chick-fil-A’s approach has certainly differentiated it from competitors.
A managerial analysis of Chick-fil-A by Justin Doss at a workshop in 2011 has been posted online[11]. It says the company’s management has top-down decision making and has formalised rules and regulations that expect people to follow based on Christian principles, although the analysis doesn’t list these or give specific details. The company gives clear job descriptions and is often slow to change because it tries to stay close to the founder’s vision. Among its Christian principles are that the leader has to be a servant, and that customer service should go the second mile, both based on Jesus’ principles. Employees should try to lead by example at work and in their personal lives. The presentation recommends that the company continues to avoid making financial gain its number one priority and to remain people orientated in terms of both customers and employees.
Other news reports have discussed the fact that in 2011 the company’s tax returns showed it had increased its donations to anti-LGBT organisations to $3.6m through its WinShape foundation, despite saying that it would cease to do so. Its outlets have been targeted by protests against its opposition to gay marriage.[12].
An article published by Forbes gives a clearer insight into the management approach, which sounds in some respects closer to the paternalistic model pioneered by John Cadbury through his chocolate company[13]. The article starts by interviewing a 33 year old worker who grew up in a foster home set up by S. Truett Cathy, the founder of Chick-fil-A. The worker is very loyal to the company and plans to work there for life. This focus on human capital and employee loyalty is something the company specialises in: when people apply for jobs they are told to apply only if they want to work there for life. The article states that franchise operator turnover is markedly low, at 5 per cent, while front-line staff turnover of 60 per cent is roughly half the industry the industry average of 107 per cent.