In the case “Tipping Point at Union Square Hospitality Group (USHG),” what was the primary reason the company reversed its no-tipping policy?

Question

BlackTom AI · Accepted Answer

Question restatement: In the case “Tipping Point at Union Square Hospitality Group (USHG),” what was the primary reason the company reversed its no-tipping policy?

Option 1: "to better satisfy the needs of all USHG stakeholders". This reasoning aligns with a stakeholder-oriented view: reversing a policy can be aimed at balancing the interests of guests, employees, owners, and the brand. If the primary goal is to address broader stakeholder needs rather than focusing on a single group, this option captures a holistic motive.

Option 2: "to reward back-of-house workers who earned lower base pay". While concerns about fair compensation for hourly workers may motivate policy changes, the wording here implies a targeted reward mechanism tied specifically to base pay levels. The primary driver in many cases is broader stakeholder balance and customer experience, not solely back-of-house pay rebalancing, making this a narrower justification.

Option 3: "to avoid penalties from state tip regulation offenses". This option frames the reversal as a legal or regulatory risk mitigation tactic. Although regulatory considerations can influence tipping policies, the phrasing here suggests a compliance motive as the primary driver. In practice, decisions of this nature are typically framed around broader stakeholder impact and service implications, not just avoiding penalties.

Option 4: "because the majority of customers \"hated\" the policy". Relying on customer dislike as the main motivator would imply the decision is mainly a reaction to customer sentiment. While customer feedback matters, framing the reversal around a majority dislike oversimplifies the strategic rationale, which usually also weighs employee welfare, service quality, and business outcomes.

Additional analysis across options: The central idea in many corporate reversals of tipping policies is to harmonize multiple interests and ensure sustainable operations, staff morale, and consistent guest experiences. If you consider the broader context of USHG and similar hospitality groups, a primary aim would often be to satisfy diverse stakeholders (guests, employees, the organization, and the brand) rather than focusing on a single dimension like back-of-house pay, regulatory avoidance, or customer opinion alone.

In summary, Option 1 presents a comprehensive, multi-stakeholder rationale that captures the typical strategic motive for reversing a tipping policy, while the other options describe narrower or less central motivations that may accompany the decision but are not usually framed as the primary reason.

MGS352001.2025FA Exam I

In the case “Tipping Point at Union Square Hospitality Group (USHG),” what was the primary reason the company reversed its no-tipping policy?

View Explanation

Log in for full answers

Similar Questions

When deciding on differences in pay, which employee is most likely to receive more pay for doing the same job?

Profit sharing involves awarding pay:

The increase in compensation had the biggest impact on

Which of the following statements about the number of hours worked by employees are true? (Select all the apply.)

Employees in the same job may have different pay rates based on performance, seniority, and training.

Most firms base compensation decision on five factors. One of the factors is:

The Bonus plans, Profit-sharing plans, Stock-option plans, offered to employees is part of a company's ____________ .

Salaries are remuneration paid to employees based on:

More Practical Tools for International Students

Homework AI Solver

Stylized Writing Assistant

Plagiarism Checker Assistant

Citation Assistant

In-Class Translation Assistant

Class Notes Assistant

Quiz Search Assistant

Past Exam Questions by School

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler

MGS*3520*01.2025FA Exam I

In the case “Tipping Point at Union Square Hospitality Group (USHG),” what was the primary reason the company reversed its no-tipping policy?

View Explanation

Log in for full answers

Similar Questions

When deciding on differences in pay, which employee is most likely to receive more pay for doing the same job?

Profit sharing involves awarding pay:

The increase in compensation had the biggest impact on

Which of the following statements about the number of hours worked by employees are true? (Select all the apply.)

Employees in the same job may have different pay rates based on performance, seniority, and training.

Most firms base compensation decision on five factors. One of the factors is:

The Bonus plans, Profit-sharing plans, Stock-option plans, offered to employees is part of a company's ____________ .

Salaries are remuneration paid to employees based on:

More Practical Tools for International Students

Homework AI Solver

Stylized Writing Assistant

Plagiarism Checker Assistant

Citation Assistant

In-Class Translation Assistant

Class Notes Assistant

Quiz Search Assistant

Past Exam Questions by School

Smart Practice Assistant

Adaptive Practice

Making Your Study Simpler

MGS352001.2025FA Exam I