Organizational Behaviour in Tim Hortons

 

3 – History of conflict in the organization

In 2018, Tim Hortons had a strong rift with its Canadian franchise. The franchise features 19 restaurant owners that are elected every four years by other franchises in Canada. Although the representatives regularly liaise with the company’s management, they remained publicly silent in the midst of a mounting outcry from the Great White North Franchise Association, which was a dissident franchise group formed the previous year under the belief that the elected board were actually rubber-stamping the directives of the new management instead of addressing the issues related to the practices of the company’s head office (Shaw, 2018). This conflict further escalated into the US market, where the company was accused of price gouging (Maze, 2020).

In all cases, the conflict was cross-functional (the management of Tim Hortons against their franchise). The company used a dominating conflict-handling style, which is why the issue wasn’t settled easily and it still lingers in some restaurants till date. As the President of Tim Hortons said, "the coffee chain did not plan the strategy together with its franchise and it did not do a good job of communicating it with them" (Gibillini, 2018), implying a push to force the franchises into agreeing to the company’s terms irrespective of whether or not it is favorable to them. Inevitably, the company is still (to some extent) involved in a long and painful negotiation with some of its franchises.

7 – Organizational culture

Tim Hortons® was founded in Canada in 1964, and its first restaurant opened the following year in Hamilton, Ontario. Since then, it has opened its doors to customers that have been ordering the brand’s iconic Double-Double coffees, Original Blend coffee, Timbits, and donuts. In the course of its existence, the company has been able to capture the heart and taste of its markets. It is now the largest restaurant chain in Canada, serving over 5 million cups of coffee daily, with 80% of Canadians stating that they visit one of its restaurants at least once per month. The company has transformed itself into part of the Canadian fabric and is now the symbol of the country’s culture and values (Tim Hortons, 2022).

Its corporate culture extends to the fact that it has always had a deep connection with its communities and guests. Over 1,500 owners of its franchise are Canadians that live in different communities across the country, and they employ over 100,000 people. The company prides itself on the fact that its local owners and teams are deeply concerned about servicing these communities, which is why it provides $60 million annually for community services for companies and communities across the country. Some of its investments in community initiatives and projects (big and small) include the Tim Hortons Foundation Camps and the Timbits Sports (Tim Hortons, 2022).

9 – Organizational structure and design

At Tim Hortons, departmentalization is functional and it reflects the overall structure of the company. The organizational structure is basically divided into administrative levels (tiers 1-4) and the store level (tier 5), which is mainly dominated by horizontal, and this makes it a flat organizational structure. To put it into perspective, over the years, the company has developed a very tall structure based on hierarchal systems with each of the employees having varying degrees of authority, all of which they are expected to display a certain degree of leadership. It is also stated on the company’s website that even those at the bottom of the hierarch, the restaurant team members, are expected to utilize leadership in their daily activities to assist those that are learning or to make certain decisions. The company’s structure features three main elements: global centralization, functional groups, and geographic divisions. That is to say, there are core management teams that make major decisions for the company’s global operations; the decisions are executed through function groups spanning across all of its global operations; and finally, the operations are divided based on the geographic locations of their franchises (Tim Hortons, 2022).

References

Tim Hortons (2022). “About Us”. https://www.timhortons.ca/about-us

Shaw, H. (2018, April 13). “'Business suicide': Civil war erupts between Tim Hortons franchisee factions”. https://financialpost.com/news/retail-marketing/business-suicide-civil-war-erupts-between-tim-hortons-franchisee-factions

Gibillini, N. (2018, June 22). “Tim Hortons president on what went wrong with franchisees”. https://www.bnnbloomberg.ca/tim-hortons-president-on-what-went-wrong-with-franchisees-1.1097420

Maze, J. (2020, February 28). “U.S. Franchisees Accuse Tim Hortons Of 'Price Gouging'”. https://www.restaurantbusinessonline.com/financing/us-franchisees-accused-tim-hortons-price-gouging#