## Human Aspects of Budgeting in a Service Firm

Vidal Sanson owns three upscale hair salons: Bristles I, II, and III. Each salon has a manager and 10 stylists who rent space in the salons as independent contractors, paying a fee of 10% of each week's revenue as rent. They use the facility and utilities but must bring their own equipment.

Each manager schedules customer appointments to last an hour, with 10 minutes between appointments for the stylist to clean up, rest, and prepare for the next appointment. The salons are open from 10:00 a.m. to 6:00 p.m., allowing each stylist to serve seven customers per day. Stylists work 5 days a week on a staggered schedule, so the salon is open 7 days a week. Everyone works on Saturdays, but some stylists have Sunday and Monday off, some have Tuesday and Wednesday off, and some have Thursday and Friday off.

Vidal Sanson knows that utility costs are rising and wants to increase revenues to cover some of these costs. Vidal instructs each manager to find a way to increase productivity so that the stylists will pay more to the salons without increasing the rental fee above 10% of revenue. Each salon has only 10 stations, so hiring more than 10 full-time stylists is not an option.

### Managers' Approaches

- **Bristles I:** The manager tells the stylists that customer appointments will now be scheduled for 40 minutes, with 5-minute breaks, allowing each stylist to add one more customer per day.

- **Bristles II:** The manager asks the stylists to voluntarily work one extra hour per day, from 10:00 a.m. to 7:00 p.m., to add an additional customer per stylist per day.

- **Bristles III:** The manager sits down with the stylists to discuss the issue. After considering shortening appointment and break times or lengthening hours of operation, one stylist suggests sharing stations. This would allow hiring another stylist to work at vacant stations during days off. Most stylists agree to this solution as long as they can securely store their equipment.

### Questions

1. Which manager's style do you think is most effective? Why?
2. How do you think the stylists will react to the managers of Bristles I and II? If the stylists are displeased, how can they indicate their displeasure?
3. In Bristles III, if the stylists did not want to share their stations with another party, how else could they find a way to increase revenues?