The case at hand of Leo's Four-Plex Theater which is a simple case of a sole-proprietor business owned by Leo Antonelli and operated by his nephew Bill Reilly. As in many businesses, non-profitability of the theater is the major issue in the case. However, it is not to difficult to see the rise of management control issues throughout the case. As it is an internally focused issue, it becomes much simpler to achieve goals (compared to external factors) once the problems are made clear.
The major problem associated with the unprofitably of the theater are the types of people employed within the organization and the shared values of them. As 'behavioral emphasis' explains that people in organizations are the ones who build it or tear it down. The case shows various evidence that in Leo's Four-Plex Theater where the employees work against the system in place resulting in unprofitably.
As fact numbered two within the case explains the inability of the cash counts to match with the number of tickets sold almost every night at closing. It is mentioned that the discrepancies were usually low amounts such as $10.00 per cashier. The amount of money that is in the negative might not be substantial, however the way an employee views the seriousness of their position, the importance of the role they play and notices the unstructured process within the organization they work in is quite important. It becomes difficult to manage and control employees in an unstructured atmosphere.
The third fact in the case shows another example of lack of direction within the organization. The refreshment stand that is put in place to increase the profitability of the theater is attended by high school or college students who seem to reside within the area. In translation they are highly likely to give a free pass or free refreshments to their friends which is most likely to be the case. Once more the internal problem of how to get the employees to take the correct actions arises.
There are various methods of solving the issue in the case. First one would be to automation, putting computers in place in counting the tickets sold, keeping the cash balance and the number of tickets sold in line. However the problem with this becomes a higher monetary investment into automation and at the end of it all, there is still a risk of an employee allowing line passers or giving out free drinks at the concession stand.
Another method, which branches out into two directions is motivating employees within the organization. This is a proactive control system where the risk of problems are usually avoided in accordance. The two methods of implementing a motivational control system is either a system that penalizes employees or one that rewards them. A cashier that has short cash at the end of the day can be made responsible of their tilt and may be put into a situation of
