Instructions:Please, read the case below and respond to the situation/question using concepts from...

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Instructions:Please, read the case below and respond to the situation/question using concepts from Chapter 11 (See screenshots below). This assignment should be around 500 words including only the answers. I have added Chapter 11 to use for text citation and concepts. Please, one or two citations from chapter 11.Professor’s instructions: Prior to your analysis, you should provide a ief summary of the case, a paragraph or so in your own words with in text citations. You then can choose to answer the questions in paragraph form or type the question and then answer it. Either way is fine, but I do require that your answers have in text citations to support what you are saying. Some of the questions are your opinion, but you should also support that with concepts from the text. Format should be APA.Citation will be:Brickley, J., Smith, C., & Zimmerman, J. (2016). Managerial economics and organizational architecture (6th ed.). New York: McGraw-Hill Education.ANALYZING MANAGERIAL DECISIONS: Tipping in Restaurants In most restaurants, waiters receive a large portion of their compensation through tips from customers. Generally, the size of the tip is decided by the customer. However, many restaurants require a 15 percent tip for parties of eight or more. Using the concepts from this chapter, discuss:a. why the practice of tipping has emerged as a major method of compensating the wait staff, . why the customer typically decides on the amount of the tip, and c. why restaurants require tips from large parties.Chapter 11:

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Case Description
The given case talks about the method of compensation adopted by many hotel and restaurant owners. Typically, “Tipping” is a practice that is adopted by the customers at salons and restaurants if they are happy with the services of the restaurant. The tip is for the person who has attended the customer and does not form part of the compensatory policies of the restaurant. Also, in many countries restaurant levy service charges which imply the customers need not tip the waiters who are serving them. Despite this fact, many restaurant owners rely on the Tip amount for the compensation of their wait staff. They often consider this amount as part of their compensation. On the contrary, it has been seen as a rising trend among waiters to work for the restaurants where the culture of tipping is high. The tips received by them are in cash and are not accounted for while calculating their income tax returns. The given case is a clear case of the influence of the business environment in which the business is operating. It emphasizes the fact that how the external environment affects the firm’s architecture and operation. (Brickley. Et al 2016).
Tipping is a way to compensate the staff
The primary objective of any firm is to provide services and products to the customers are the lowest possible price. For this, they need to produce the product at the lowest possible cost (Brickley Et.Al 2016). In such a set up the biggest challenge is to find out what customer wants and at what price. Also, there is an incentive problem related to the operational aspect of every firm and hence it is difficult to work on the right amount of incentives to be offered. In such a scenario the price system helps to resolve the information and incentive problem. (Brickley. Et Al 2016)
The restaurant provides a compensation package to all the employees and leaves a part of the incentive to be decided by the market system of price determination. In this way the incentive package is divided into two parts, one fixed what they receive as salary and the other that is decided by the market culture and business environment.
Customer Typically decided the amount of Tip
This system of compensation is known as Benchmarking. The compensation package of the wait staff that is paid by the customer is based on the business environment in which the restaurant is operating. For example, in the case of luxury and fine dining restaurants, the tipping percentage is higher than the tipping culture in cafes and casual restaurants. 
Restaurants require tips from the large parties
There exist the problem of information and incentive decision. Under such circumstances, the market provides an architecture that promotes efficient resource use. (Birkley, Et. Al, 2016). When restaurants rely on tipping while hosting large parties it is a clear case of indecisiveness on the part of lack of information regarding how to compensate the wait staff for the extra burden of work. Therefore, they on the market mechanism under which the customer decides the compensation. This helps to resolve the problem of resource allocation and also solves the problem of rewarding the performance of the resource owners.
References:
Brickley, J., Smith, C., & Zimmerman, J. (2016). Managerial economics and organizational architecture (6th ed.). New York: McGraw-Hill Education.

Instructions: Please, read the case below and respond to the situation/question using concepts from Chapter 11 (See screenshots below). This assignment should be around 500 words including only the...

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