Table of Content
1. Introduction

2. Background information
2.1 Social Service Reform

3. Establishment of Teabox
3.1 Team of Teabox

4. Why Teabox Failed

5. Recommendations

6. Risk

Introduction
The aim of this report of the “Teabox – running tuck shops in Hong Kong Schools” case study (Kevin Au/Mingles Tsoi 2009) is to summarise the key elements that caused the deficit of Teabox and give possible solutions on how to improve the performance of Teabox in future. Although “Teabox” is an actual company, the authors may have disguised certain names and other identifying information to protect confidentiality.
This report looks at difficulties that Teabox had while implementing their “Life Education” proposal into action, which was caused by Steward Ltd. participating in “Enhancing Employment of People with Disabilities through Small Enterprise Project”. As well as, how the idea of the project is being worked out and what impact it had on business strategy.
The main idea of “Life Education” was to advocate a healthful diet, as well as provide work and training opportunities for disabled, former mental patients, and women. In order to support this, organization needed seed money from the program set by the Social Welfare Department.
However, when working in a non-profit organization, good intentions are not the only thing necessary, lack of financial and management experience will have its toll on organization, as it did with Teabox.
This report is based only on the case study and will include only the information given, so that, when analyzed we could make a conclusion and correspond with appropriate way of dealing with the problem.
Background Information
Teabox started as a small food retailer in Hong Kong secondary school in 2005 and is currently situated in Pooi Kei College (PKC) and Ma Ko Pan Memorial College (MKP). It was established by non-government organization Stewards Ltd. as social venture.
Stewards Limited originated from the Christian Brethren movement. In the 1950s, started to work independently and were self-supporting. Funding in those days came from churches in United States, United Kingdom, Australia and New Zealand. By 2006, Stewards was registered as a social welfare, educational and health care organization.

Social Service Reform
In the late 1990’s , the Hong Kong government changed the funding scheme for social services agencies, so that it could control social welfare expenses while encouraging reform in the social welfare sector. So in 2002, Stewards established ARM Services Co. Ltd. to compete for “Enhancing Employment of People with Disabilities through Small Enterprise Project.” It provided seed money for non-profit organizations which would provide services that would help needy in society.
However, candidates for the seed money were subject to market competition and have to be conscious about efficiency and profit. So Stewards Limited, who were not familiar with those traits, had to seek the advice of the consultant, Helen Tang, who eventually was hired by Stewards into the team.
Establishment of Teabox
With the help of Helen Tang, it was discovered that from the various markets, catering service would be the best solution, as it was manageable by disabled persons and suited Stewards’ other services. However, the ideas of café/coffee shop , restaurant and snack shop failed, nevertheless, two volunteers who wrote the proposal of snack shop, called it Teabox and Helen Tang kept it for future use.
Soon after, a new school, called Pooi Kei College opened, so Teabox tried to recruit itself to work for the school. And after a selection, Teabox was chosen, due to its special proposal of “Life Education” which suited the selection committee well.
Team of Teabox
Apart from normal workers, it would be wise to outline key people in managing of Teabox. First to be mention is Superintendent Alfred Ku, who was running shelter workshops for disabled persons and for that he was promoted to work as superintendent.
Second would be Helen Tang, who, how it was mentioned before, was business consultant who was hired later or to work for Stewards Limited.
The last one would be Susan Lee, who helped establish Teabox and was an instructor at the workshop at that time.
Why Teabox failed
After a year of operation, it appears that Teabox performance was highly criticized not only by teachers and parents, but employees as well. The turnover of disabled workers was high. That leads to assumption, that management part of the organization is lacking expertise. Alfred Ku, who was in charge of Shelter workshop and so was experienced social worker did not qualify as a proper manager. Employee survey also showed that Susan Lee, a workshop instructor, who did a very nice job setting up the Teabox, was very rude to the employees and treated them as servants. This ultimately led to the high turnover of the disabled people in organization. Training new staff requires time, and time is money. Speaking of the financial side of Teabox, one would refer to their financial summary, which is briefly displayed in Graph 1.
Financial summary clearly shows that Teabox would be in deficit if it were not for the seed money grant they receive. Another pressing factor is that in both schools finance is different, considering that the service is the same. However, it is possible that in MKP School is bigger than PKC, so it requires more resources to operate. In PKC one can see that it has spend 1,080.00 on staff training, which proves the fact that with high turnaround of disabled people, this number will continue to rise, affecting the entire financial summary.
Yet, the question is why there is a deficit in the Teabox, as mentioned before, Alfred Ku is more a social worker, not a business manager, so Teabox do not have coherent business strategy as it is more focused on “The enhancing of Employment of People with Disabilities through Small Enterprise Project”, regarding the fact that they must also be focused on being able to be market competitive and worry about profit as well, or they will lose grant money which will lead to closing of Teabox.
With the tension between workers, due to lack of management, their communication skills will be poor, leading the customers, children, to be unhappy about it. This means that children will talk to their parents, who are “shareholders” of Teabox in a negative way.
Recommendations
In order to save Teabox from deficit, a few changes must be made. Alfred Ku should focus on three problematic areas: Management, Finance and Marketing.
• Management. The main weak point in Teabox is its poor management. As if employees are dissatisfied it will lead to poor performance, which means low results and ultimately – deficit. So reallocation of Teabox staff is probably the best solution available. It will show shareholders that Teabox is available for change, thus can run successful business. This means, that current manager, Susan Lee, is not suitable for the job as a manager, so Alfred Ku should either appoint a new manager himself or create a group of people, who would find the best candidate.
• Finance. Even with solved Management problem, it does not necessarily mean that financial statement would turn positive. Alfred Ku should consider hiring someone with financial experience, who can help with managing the budget more efficiently, so that expenditures would not be so high.
• Marketing. Alfred Ku made a mistake when he told “…there is no need to consider complicated issues, like Marketing.” Marketing and Innovation is what drives good business to success. So, even by doing a noble thing, as creating opportunities for disabled people, organization still needs to take into the account possibilities of expansion and innovation. As it could be profitable in the long-run, not to mention that customers might like new food, thus creating a positive statement about Teabox.
By following those recommendations, Alfred Ku will address the core problems of Teabox: high turnover of disabled staff and lack of financial expertise.
Risk
However, this course of action is not without a risk. Reallocation of staff will only work if it is done thoroughly. If not, there is a risk of even more employee conflicts, which will lead to closing of Teabox, as well as retraining of staff will take time and money to adjust to new changes and it does not necessarily mean that employees will like it. Not to mention that hiring someone to manage financial part of the organization means more pressure on salary, since Teabox is already in deficit; it is hard to find money to pay him and is not necessary that financial expert will deffinetely help with managing budget. Marketing should be only considered if Management and Finance are getting better, so that company can spend resources on future expansion and innovation, however, expansion does not necessary mean profit, as for Teabox, working in 2 schools did not work very well.
Taking everything into consideration, one thing is for certain: Teabox must make some changes or it will just close. Above Recommendations are considered to be the best possible solutions to solve Teabox’ dilemma.
[Word Count: 1472]

References:
Au, K. (2009), Tsoi, M. (2009) “Teabox – Running Tuck Shops in Hong Kong Schools (A)” in Cauwood , S. (2012) Management in Practice, Harlow: Pearson Education Limited.