2. Core dilemma
• executive leadership
• Unlike its competitors, all of CMG’s restaurants were
company-owned and supplied by Chipotle’s
independently owned and operated distribution centers
whose suppliers were evaluated on the quality of what
they provided and their understanding and empathy with
the company’s mission
• To maintain quality, Chipotle invested heavily in its
staff. In many cases, the company mentored future
leaders internally, fostering continuity amongst its
management team to sustain its explosive growth
• The exclusive leadership dilemma in the Chipotle case
study refers to the challenge faced by the company's
leadership in maintaining a culture of inclusivity and
diversity. Chipotle's leadership must ensure that all
employees, regardless of their background, have equal
opportunities for growth and advancement within the
organization. This dilemma arises when leaders fail to
address issues related to discrimination, bias, or
favoritism within the company.
* business ethics
• “Food with integrity” utilizing a sustainable and responsible approach to
ingredient sourcing, production, and service.
• quality assurance and food safety integral to its supply chain
• CMG’s goal was to deliver delicious fast food in a way that was
transparent, safe for the environment, and responsible to the animals
slaughtered for meat so as to build a reputation as an organization which
did not simply pay lip service to the tenets of sustainability, but lived up to
those tenets.
• combines the convenience of quick service with the food offerings of
higher check establishments.
• Redefining fast food meant that Chipotle saw itself as an alternative to
traditional fast food and its use of high-quality natural ingredients
positioned it at the highest price points in its segment.
• The business ethics dilemma in the Chipotle case study revolves around the company's
commitment to ethical practices in its operations. Chipotle must navigate various ethical
challenges, such as ensuring food safety, maintaining fair labor practices, and being
transparent with customers. This dilemma arises when Chipotle faces ethical dilemmas, such
as foodborne illness outbreaks or allegations of labor violations, and must make decisions
that align with its ethical values.
3. Core dilemma
• corporate governance
• Unlike its competitors, all of CMG’s restaurants were
company-owned and supplied by Chipotle’s
independently owned and operated distribution
centers whose suppliers were evaluated on the
quality of what they provided and their understanding
and empathy with the company’s mission
• The corporate governance dilemma in the Chipotle
case study related to to the company's system of
rules, practices, and processes by which it is directed
and controlled. Chipotle's corporate governance must
ensure accountability, transparency, and effective
decision-making. This dilemma arises when there are
issues related to board independence, executive
compensation, or conflicts of interest that may
impact the company's governance structure.
•
• social responsibility
• The social responsibility dilemma in the Chipotle case study relates to the company's obligations
and impact on society and the environment. Chipotle must balance its pursuit of profitability with
its responsibility to address social and environmental issues. This dilemma arises when Chipotle
faces challenges such as sourcing sustainable ingredients, reducing waste, or supporting local
communities.
• The use of organically grown beans, with a portion grown using conservation tillage
methods to reduce soil erosion.
• Refusing to use genetically modified corn, even though a majority of American corn
came from GM crops.
• Sourcing lettuce from local farms during the growing season.
• Using only organically grown cilantro and working towards using 10% organic avocados.
• Using dairy products only from cows that were never treated with the synthetic hormone
rBGH, and working towards sourcing 100% pasture-raised dairy products.
• Allowing farmers whose pigs were naturally raised to join the Niman Ranch network and
become suppliers to the chain.
•
4. Lessons learned
• From Chipotle's growth and relationship with McDonald's, several lessons can be learned:
1. Focus on a unique value proposition: Chipotle's success can be attributed to its focus on providing high-quality, customizable food in a fast-casual
setting. By differentiating itself from traditional fast-food chains, Chipotle was able to attract a loyal customer base.
2. Maintain control over the brand: Chipotle's decision to retain whole ownership of its locations allowed the company to have complete control over the
look, feel, and design of its restaurants. This contributed to the consistent brand experience that Chipotle aimed to create.
3. Embrace sustainability and social responsibility: Chipotle's commitment to using high-quality ingredients sourced from local suppliers and its "Food
with Integrity" mission resonated with customers who were increasingly concerned about the healthiness and sustainability of their food choices.
4. Build a strong corporate culture: Chipotle's socially responsible corporate culture and commitment to providing a positive work environment attracted
high-quality employees with low turnover. This contributed to the overall success of the company.
5. Be cautious of potential risks and competition: Chipotle's relationship with McDonald's, while initially beneficial in terms of financial support and
expertise, eventually led to a divestment. This highlights the importance of carefully considering partnerships and potential risks associated with them.
From the Chipotle case study, a key lesson learned is the importance of maintaining a strong ethical culture and prioritizing the well-being of
employees and customers. Chipotle's experience highlights the potential consequences of neglecting food safety protocols, labor practices, and
social responsibility. It underscores the need for proactive measures to prevent ethical lapses and the importance of swift and transparent action
when issues arise.
5. Recommendation for correction
To address the dilemmas identified in the Chipotle case study, the following recommendations
can be considered:
1. Strengthen diversity and inclusion initiatives to ensure equal opportunities for all employees.
2. Enhance food safety protocols and training to prevent future outbreaks and maintain
customer trust.
3. Improve labor practices by providing fair wages, benefits, and opportunities for career
growth.
4. Enhance transparency and accountability in corporate governance, including independent
board oversight and executive compensation practices.
5. Increase efforts towards sustainability, such as sourcing locally and reducing waste, to fulfill
social responsibility commitments.
• By implementing these recommendations, Chipotle can work towards resolving the identified
dilemmas and rebuilding trust with stakeholders.
•
