Why Chipotle Would use Internal Governance Mechanisms to Monitor and Control Managers' Decisions?

Chipotle Case Study
Business and Marketing
Masters Level
Name of Student:
Date:
Steve Ells had a vision of starting a business. He became interested with the Restaurant Business. In the year 1993, Steve Ells started a fast casual Mexican restaurant dealing with Tacos and burritos. He named it Chipotle Mexican Grill. The location of the restaurant was in Denver, Colorado, United States of America. While coming up with the Business idea, Steve’s focus was to come up with ways of utilizing the locally available products. In this study, Chipotle is the center of concentration. Besides, Business management strategies of the fast moving restaurant Company will be analyzed.
Being hardworking, Steve Ells was able to make the restaurant grow at a faster rate. For instance, just two years after starting the restaurant, he used the profits to open a branch of the Chipotle. After that, it took just awhile before expanding to open up the third branch. However, the third restaurant was started by the small business administration loan that the Company got. The business, therefore, was seen to attract market at a higher rate within short time.
McDonald carefully watched the success rate of the Business. Having identified the opportunities and potentials of Chipotle Restaurant, he joined the business as a minor investor. McDonald partnered with Chipotle in 1998. A year later, the Company made great achievements. It expanded its branches outside Colorado. McDonald continued to be part of the Business as an investor. He became the largest investor of the Business in the year 2001 (Thompson, Peteraf & Gamble, et al., 2013).  Due to this, Chipotle Restaurant experienced rapid growth.
When Chipotle was experiencing this rapid expansion, the Company’s income grew proportionally. Consequently, the market target was hit. The scope of marketing was expanded as new strategies kept flowing in. However, the Business got a setback in 2006. In this year, the Business’ leading investor then, McDonald publicly disgraced the Business. This situation was experienced when he spun off his non-core assets followed by divesting the Business as a whole. The act in itself struck Chipotle adversely as New York Stock Exchange publicized it.
Chipotle Restaurant is led by the philosophical principle of producing food with integrity. Currently, the restaurant has expanded its stores to above 1,500. In the United States of America alone, it is ranked as the leading casual dining segment concerning growth and expansion. (Griffin, Phillips & Gully, 2016). In spite of this ranking and growth, the business faces some environmental factors. The demands of consumers v...