The paper "Individual Performance Evaluation, Corporate Governance, and Vertical Integration" is a worthy example of an assignment on business. In order to ensure that the new restaurants maintain the level of quality that Ruth expected, Ruth undertook a few steps apart from her personal involvement in the training of the staffers and the chefs. These steps are as follows: Ruth only gave franchises to friends and old customers: She did this to ensure that her franchisees knew what the spirit of the Ruth Chris restaurant was and that they would do everything necessary to safeguard it.
Apart from this it also ensured that she enjoyed a cordial relationship with her franchisees. (Kupetz and Alon)Multiple franchises to the same franchisee: Ruth awarded multiple franchises to the same franchisee and in this way ensured that the franchises stayed with people who knew all about her quality standards and who had applied these standards already in one of their restaurants. According to Ruth Chris’ s Steak House files, in 2004 Ruth’ s Chris’ s 51 franchisee-owned restaurants were owned by just 17 franchisees. (Kupetz and Alon)Contractual obligations: Ruth built in certain obligations into the franchising contracts for her franchisees to fulfill that would help her maintain the standard of her restaurants and ensure the same great taste everywhere for e. g.
her contracts stressed that her franchisees buy their meet from her California supplier. (Kupetz and Alon)Extension and termination clauses: Ruth’ s franchise contracts contained extension and termination options for Ruth to exercise in the event of excellent or below-par performance by the franchisees (Kupetz and Alon) The Greg Norman Company could face hold-up the situation in the following cases: If the Black Diamond Company requires an amount of coal to be processed daily that does not lie in the profitability region for the Greg Norman Company.
Both companies would want to maximize their own profit and such a situation would lead to a hold-up of the situation. If the Black Diamond Company’ s miners ever go on strike and Black Diamond is unable to keep up the supply, Greg Norman would have to suffer the consequences. A deadlock situation would develop because on one hand Black Diamond would have to deal with its miners and on the other hand, it would have to deal with Greg Norman and the daily losses it would be suffering because of Black Diamond’ s situation.
Such a situation would also put Black Diamond Company in a sticky situation in any negotiation with the miners as the miners would know about the fact that Black Diamond is already under huge pressure from the Greg Norman Company. Another hold-up situation might develop long term tariffs. Since long term tariffs are based on estimations and projections, The Black Diamond Company would want to set tariffs projecting that no mishap or any such event would happen that would impact the tariff whereas the Greg Norman Company would want to make sure it accounts for every possible event while setting long term tariffs.