Memorial University Faculty/Staff Club

The financial statements of the Memorial University Faculty/Staff Club for the fiscal year ended August 31, 1988 indicated a deficit of $1,368 (Exhibit 1). In April 1989, the Board of Directors was considering what, if any, steps should be taken to avoid any future deficit. Although the current deficit was small, the Board was concerned that future deficits would erode the funds that had been earmarked for a new facility Also, the Board was considering what steps, if any, should be taken in response to the results of a recent survey (Exhibits 2 & 3).

Background

The Memorial University Faculty/Staff Club was established in July 1975 to provide services for members of the Club. Services included providing eating and drinking facilities, evening entertainment, and an annual Lobster Dinner The Club used University property for its functions but was an independent entity and not an adjunct of the University.


This case was prepared by Professor Shu Lun Wong of Memorial University of Newfoundland for the Atlantic Entrepreneurial Institute as a basis for classroom discussion, and is not meant to illustrate either effective or ineffective management.

Copyright © 1993, the Atlantic Entrepreneurial Institute. Reproduction of this am is allowed without permission for educational purposes, but all such reproductions must acknowledge the copyright. This permission does not include publication.


Membership in the Club was open to all full-time, part-time, permanent or temporary employees of Memorial University of Newfoundland. The fee structure was 0.002 percent of each member's gross salary. In January 1989, the University employed 937 faculty (approximately 90 percent on the St John's campus and 10 percent on the Comer Brook campus) and 1,517 staff (approximately 94 percent on the St John's Campus and 6 percent on the Comer Brook Campus).

The Board of Directors was elected from amongst the members of the Club at the annual general meeting each year. The management of the Club's business was vested in the Directors who met once a month to discuss any issues.

The University

Memorial University College was established in 1925 as a memorial to those who lost their lives in the great wars and as an institution to provide higher education to the young people of Newfoundland and Labrador.

Memorial University of Newfoundland was established by an act of the Provincial Legislature of Newfoundland in 1949. The main campus was located in St John's, the capital city of the province of Newfoundland and Labrador. In 1975, the University established a campus in Comer Brook, named Sir Wilfred Grenfell College. Comer Brook is on the west coast of the province, 687 kilometres from St John's.

The total student enrolment in 1987/88 was:

Full-time 11,322
Part-time 4,462
Total 15,784
Luncheon Facilities

Luncheons, the principal service of the Club, were provided in the Dining Hall (see Exhibit 4) from noon until two p.m., Monday to Friday during academic terms. A self-serve buffet was the standard type of service provided. It was the principal activity the Club provided for its members. The Club employed one manager (part-time basis) and two waitresses (one full-time, one part-time). Hot food was provided by NOVA Services Limited, a food services contractor. Cold food, such as salad, was prepared by the waitresses.

The Survey

In response to the loss in the previous year and at the suggestion of one of the Directors, the Board had undertaken a survey of all faculty and staff during the winter of 1989 (Exhibit 2). The survey was intended to obtain input in the areas of usage, services and fees, as well as to determine the level of satisfaction with, and prospects for increasing membership in the Club. While the Board had not yet had the opportunity to consider the survey results in detail, board members hoped that this information, combined with an analysis of the operating results, would provide the basis for any decisions about future directions for the Club.

Questions

(1) What actions, if any, would you recommend as a means of avoiding any future deficit?

(2) What actions, if any, would you recommend in response to the results of the recent survey?


Exhibit 1

MEMORIAL UNIVERSITY FACULTY/STAFF CLUB, INC
STATEMENT OF RECEIPTS AND DISBURSEMENTS
FOR THE YEAR ENDED AUGUST 31.1988

1986 1987
Receipts from catering and bar services $71,587 $72,424
Disbursements for catering and bar services (Note 5) 86,335 85,549
Excess of disbursements over receipts
from catering and bar services 14,748 13,125
Catering and bar supplies 5,269 2,541
Christmas bonuses 650 680
General expenses (Note 6) 3,919 4,842
Upgrade food service area 8,000
17,838 8,063
Operating deficit 32,586 21,188
Membership fees (membership 310,1988) 25,139 22,259
Interest received 6,079 1,862
31,218 24,121
Excess of receipts over disbursements
(disbursements over receipts) for the year $ (1,368) $2,933
Used for equipment purchases $ 560 $ 504
Increase (decrease) to bank account (2,078) 2,743
Increase (decrease) in accounts
receivable and inventory 400 (1,456)
Decrease (increase) in accounts payable (250) 1,142
$ (1,368) $ 2,933
Opening balance in bank $ 73,079 $70,336
Increase (decrease) in bank account (2,078) 2,743
Closing balance in bank $71,001 $73,079
Represented by:
Cash float $ 300 $300
Cash in bank (bank overdraft) (4,899) 2,779
Guaranteed investment certificate (Note 7) 75,600 70,000
$71,001 $73,079
Source: Touche Ross, Chartered Accountants

NOTES TO FINANCIAL STATEMENT

1. Accounts receivable outstanding at year end amounted to $249 (1997 $158).

2. The value of the inventory of liquor, beer and wine on hand at year end, as determined by the Secretary Treasurer amounted to $719 (1997 $382).

3. Fixed assets are recorded at cost, however, no provision for depredation is recorded in the accounts. Fixed assets consist of

1988 1989
Chairs and Tables $7,779 $7,779
Refrigerator counter 4,152 4,152
Hot food station 4,117 4,117
Scale 2,676 2,676
Coffee grinder 1,092 1,092
Stereo cassette player 940 940
Table cloths 666 666
Hot water heater 251 251
Wine rack 127 127
Miscellaneous 155 155
Angle rack 560
$22,515 $21,955
4. Accounts payable amounted to $902 at August 31, 1988 (1987 - $652) of which $600 relates to audit fees (1987 - $550).

5. Disbursements for catering and bar services

1988 1989
Food and liquor $44,559 $52,840
Salaries and wages 41,776 32,709
$86,335 $85,549
6. General expenses
1988 1989
Dry cleaning $1,339 $1,415
Printing and stationery 312 511
Bookkeeping and auditing 600 640
Music scholarship 150 150
Friday evening entertainment 510 1,875
Miscellaneous 798 190
Bank charges 210 51
Bad debts    10
$3,919 $4,842
7. Guaranteed investment certificate

This certificate was purchased on December 22,1987, matures on December 22, 1988, and bears interest at 9% per annum. Interest is recorded at date of maturity.

Source: Touche Ross, Chartered Accountants

Exhibit 2

Survey

Please answer the following questions. An open-ended question is found at the end of the survey for your general comments.

1. At the present time, I am

Member

Non-Member

Faculty

staff

(Please indicate whether Member or Non-Member and whether Faculty or Staff.)

2. 1 eat at the Club:

(a) Weekly

(b) Occasionally

(c) Never

(d) Blank

3. 1 attend social functions at the Club:

(a) Whenever possible

(b) Occasionally

(c) Never

(d) Blank

4. (a) I consider the present membership fee (.0020 of salary) to be:

Too high

Too low

Just right

Blank

(b) I would prefer a set fee, rather than a percentage of salary.

(a) Yes

(b) No

(c) Blank

5. The purpose of the Faculty/Staff Club should be to:

(a) Bring faculty/staff together from across the campus

(b) Provide an opportunity for faculty/staff to meet in an informal environment

(c) Provide wholesome meals at a reasonable cost

(d) Provide social activities that Club members can attend

(e) Provide a comfortable, relaxing environment to socialize with colleagues

6. (a) Are you satisfied with the present facilities and service provided by the Faculty/Staff Club?

(a) Yes

(b) No

(c) Blank

(b) If the answer to 6 (a) is "No", why not?

7. If facilities were available, I would be interested in:

(a) Entertainment on weekends

(b) Darts

(c) Billiards

(d) None

(e) Blank

8. If the following facilities were available, I would make use of them:

(a) Private dining room for special occasions/groups, i.e., formal dining

(b) Lounge with bar

(c) Small group meeting rooms

9. If the above facilities were made available in a new Club, I would be willing.

(a) To pay an increased membership fee

(b) Not willing to pay an increased membership fee

(c) To join the Club

(d) To pay and join

(e) No increase but join

(f) Blank

Comments: I would like to recommend the following considerations be taken into account when planning any future changes to the present Faculty/staff Club:

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

___________________________________________________________________________

Exhibit 3

Survey Results

Non-Member Member
Faculty Staff Faculty staff Totals
Questions
1.

 

114

 

106

 

89

 

25

 

334

 

2.(a) 1 0 52 9 62
(b) 58 30 31 15 134
(c) 52 75 1 1 129
(d) 3 1 5 0 9
 

 

3. (a) 0 0 11 1 12
(b) 25 10 40 12 87
(c) 85 95 38 11 229
(d) 4 1 0 1 6
 

 

4.
(a) (a) 49 31 12 5 97
(b) 1 2 3 1 7
(c) 28 40 62 17 147
(d) 36 33 12 1 82
(e) - - - 1 1
 

 

(b) (a) 78 56 41 9 184
(b) 18 28 36 13 95
(c) 18 22 12 3 55
 

 

5.* (a) 78 49 64 13 204
(b) 82 64 78 18 242
(c) 89 64 84 21 258
(d) 57 38 47 11 153
(e) 102 71 82 18 273
 

 

6.
(a) (a) 25 29 34 11 99
(b) 57 31 46 13 147
(c) 32 46 9 1 88
 

 

(b) - - - - -
 

 

7.(a) 37 49 28 8 122
(b) 15 is 11 1 42
(c) 24 22 23 5 74
(d) 21 - - 21
(e) 17 20 27 11 75
 

 

8.* (a) 58 53 46 10 167
(b) 69 60 56 12 197
(c) 40 25 36 10 111
 

 

9.(a) 5 10 57 12 84
(b) 12 13 17 10 52
(c) 50 73 7 2 132
(d) 17 - - - 17
(e) 6 - - - 6
(f) 24 10 8 1 43
* Some respondents provided more than one answer.

The following is a summary of the comments made in response to the two open ended questions on the surveys.

Question 6 (b): Are you satisfied with the present facilities and services provided by the Faculty/Staff Club?

Non-Member Faculty

  • Too small and too much like a student dining room. It does not provide an attractive atmosphere which is required to attract people to attend and spend time and money there.
  • Such a club should normally include a lounge with comfortable chairs, copies of leading world newspapers, a bar, a dining room and a game room, Crucial for any university is a place with adequate space for faculty and staff to meet. Without such space divisions between faculty and staff will increase, and any hope for salvaging what university spirit exists will atrophy.

Member Faculty

  • For a faculty dub, it is a very low class facility
  • it would be better if the Faculty Club were open some evenings for drinks.
  • need place to sit and talk apart from tables
  • when special events are on, are not notified early enough sometimes only one or two days ahead of time.
  • Many universities I have visited have facilities which make their dubs more than a place to have lunch - with facilities which you are contemplating for a new dub.
  • Since many people teach evenings, the Club should be open 5 - 7 PM, even if only bar and snack service.

Non-Member Staff

Entertainment and special events should encourage a mixing of all members. A membership drive, with an incentive to join should be undertaken and promoted.

I did not even know that staff were allowed to be members and I've been here for 4 years! This should be better publicized.

Needs a much improved setting to entertain University guests.

Member Staff

  • Main course usually not available at I o'clock-all out. Not near enough variety. Soup and salad bar usually cleaned out by 1 o'clock.
  • The club is too small and therefore too crowded most of the time. The noise level is very high.

Comments: I would like to recommend the following considerations be taken into account when planning any future changes to the present Faculty/Staff Club.

Non-Member Faculty

  • There needs to be a ceiling on the percentage of salary membership fee. At present, membership would cost me over $100 per year. I cannot justify my paying that amount in order to eat in the Junior Common Room once or twice a week during my teaching semesters. How about a $60 ceiling or several types of membership (meals, social, shareholder, etc) or open up some of the services (e.g., bar) to non-members? Thanks for asking! Good luck!
  • I would suggest some kind of encouragement/incentive circular be provided to faculty early in the fall.
  • Sony for my ignorance, but I've never been sure the purpose of a membership fee of any substance. Does the dining room not pay for itself. Prices don't seem to be subsidized. Surely a bar/lounge should pay for itself. If a new building is envisaged, then some fee is certainly reasonable.

Member Faculty

  • I would like to see a place on campus where Faculty could socialize during the evenings - it would be excellent to have a lounge with bar, open in. the evenings.
  • - more space for lounge/bar
    - better publicity
    - make faculty dub more part of MUN faculty life
  • My current use of the dub often involves university guests. I think the dub (if it had the facilities) could do well with a serviced area, more extensive menu, table reservations, etc, so that I could entertain guests better (i.e. more style). For my own lunch, etc, it is not bad now. I think it would be better to automatically make all Faculty and Staff members of the Club so that Instead of membership fees, charge more for various services etc - this would attract more users.
  • Need for increased publicity, more space and improved meals with greater variety appeared to be common concerns. A lounge with a bar would appeal to a number of individuals.
  • Some concern expressed over:
  • cost;
  • not centrally located;
  • high noise level;
  • minimum dress regulations;
  • drab surroundings.
  • Suggestion made to examine other Canadian Universities and simulate desirable features.

Non-Member Staff

  • My reason for not joining the Faculty/Staff Club is simple. I work in an administrative office and when I attend such places, discussion seems to finally move toward whether or not certain administrative decisions were fair. Therefore, I do not get an opportunity to relax while I'm there.
  • It has been a long time since I had heard anything about the Faculty/Staff Club. I had thought that it had folded. There wasn't anything in the MUN newspaper about the FS Club. I hope to join the Club - how do you join?
  • None of these will work if you don't do a bit of promotion!! Why don't you get some of the marketing students at the Business School to make some creative suggestions! The staff do not (I think) represent very much of your membership. If you want them to join, you have to provide a Faculty/Staff relationship that sets people from all areas at ease with each other. My experience has been that Faculty who are members tend to use it as a private club. I, as a Secretary, have never been invited to visit! If I was made comfortable there, I might visit. What are you doing for secretary's week - next week!!
  • Glaring need for additional publicity (promotion) apparent. Monthly newsletter or information in communicator suggested.
  • Dissatisfaction re: variety and quality of meals. Also "Specials" being "all gone" by 1:00 p.m. mentioned.
  • Lack of space (crowded conditions also sews to be a concern).
  • Suggestions to improve the dub include:
  • lounge and bar should be available for informal gatherings;
  • club should be more centrally located;
  • club should be kept open longer and on some nights.

Member Staff

Since I do not take part in dub activities I do not feel qualified to answer. I joined the dub in the hopes of having a nice, quiet place to lunch at a reasonable cost. The surroundings are nice and the staff extremely friendly, however, I did think the prices were a little high.

Exhibit 4

Memorial University Campus