interpreting part A

Question 1

introduction

Answer 1

• analysing current issues of
• evaluating business goals
• providing recommendations on how to improve their
• which can be used to achieve their goals of
• the key areas that will be covered int his report are:
  ~ goals
  ~ issues
  ~ data analysis
  ~ recommnedations
  ~ managing change

Question 2

industry

Answer 2

• Fabio Fachetti
• sells meals to uk major supermarkets= an example of a business to business (B2B) transaction where the Fachetti kitchen is the supplier to the supermarkets
• two divisions
• different management and leadership styles and skills so approach to solving problems in the workplace is different
• when meetings and discussing solutions to solve the problems, it brings in disagreements
• leads to confusion, conflict and other issues rising in the workplace
• biggest factor that has impacted the industry and the company as a whole is external influences
• during 2020 restaurants were faced with business disruption and forced to close
• caused major losses, majority beginning of the year as they didn’t have a plan in place for such circumstances
• in the coming months the company found another revenue stream which in turn decreased the amount of loss they made

Question 3

what is management and leadership styles and skills?

Answer 3

• the process through which company resources are used and decisions made in order to meet the objectives of the business
• managers set out objectives and decide how to go about achieving them
• management involves controlling a set of entities to accomplish goals
• leadership refers to an individuals ability to influence, motivate and enable others contribution towards success
• management = planning, organising, co-ordinating, monitoring, controlling, delegating
• leaders = inspiring, energising, influencing stakeholders, envisioning, determining best path route to success

Question 4

what is Human Resources, training and development?

Answer 4

• the division of a business that is charges with finding, screening, recruiting and training job applicants and administering employee benefit programs
• T&D key HR functions
• training improves or develops additional skills in an employee to increase performance/productivity
• development implies opportunities created to help employees grow

Question 5

the strategic goals

zero defect production

Answer 5

zero-defect production:

• model aims to reduce and minimise defects in the production process
• means to produce the maximum amount of products with the minimum amount of defects
• can be achieved through having a highly-skilled workforce
• benefits such as increasing the level of net profit because as there are less defects, there is less wastage and expenses
• also increases customer satisfaction as the meals that they buy from fachetti’s kitchen will be of higher quality
• leads to building up the brands reputation which can increase customer loyalty
• a drawback from this model is that there needs to be a highly skills workforce, therefore staff will likely have to be trained which can be very expensive.

Question 6

reduce staff turnover to January 2020 levels

Answer 6

• must decrease of 10%
• is the percentage of employees that leave the business over a period of time
• high means there is a poor working environment, caused by poor relationships, conflict, low pay
• can reduce net profit as the business has to spend more money on recruiting staff to fill gaps in the workforce
• low is important because retaining a large proportion of the workforce can grow in efficiency
• and avoid high recruitment costs that limit net profit caused by higher levels of staff turnover.

Question 7

increase net profit by 10%

Answer 7

• must increase the level of net profit to £12,320,00
• high is important as they can use the retained profit to ensure financial stability and able to cover debts, considering the impact that external influences has had
• can also reinvest and expand product lines in their gourmet meals to gain a competitive advantage
• current net profit in September is £11.2 million, Fabio’s goal is stated that it should be increased by 10%
• £11.2 million x 1.10 = £12.32 million, so net profit needs to be increased by £1.12 million in order for this goal to be achieved.

Question 8

current management issues

Answer 8

• conflict between managers
• issues with motivation
• The redeployment of restaurant staff/ quality assurance system targets was not met, and wastage increases
• Staff turnover is increasing
• Net profit is decreasing
• Unprofessionalism within the management team caused the restaurants to close

Question 9

conflict between managers

Answer 9

• management clash between katrina and sunny
• autocratic management = beneficial in some instances such as a period of rapid change in the market the manager is able to make decisions that fully correspond with the business’s goals
• however, long term leads to higher staff turnover as employees opinions are overlooked in the decision-making process
• different views on how employees should be managed, leads to conflict
• huge problem as decision making can be affected
• e.g restaurant division was closed as the two managers could not work on a rescue plan
• impact on the potential of raising the company’s net profit by closing the whole restaurant division that was profitable and growing prior to covid
• can become a significantly larger problem in the future because they both have to work closely
• create a poor working environment which can increase the level of staff turnover, negatively impacting the goals
• lacks team building, valuing and supporting others and building positive interpersonal relationships which are key basic management and leadership skills
• Having lacked these skills, it will lead to high inefficiency and lower levels of profitability

Question 10

issues with motivation

Answer 10

• currently using Taylors management
• Taylor believed that all workers were motivated by money
• when the restaurants were operating pre-pandemic, Katrina was characterised for paying employees an above-average salary
• staff were offered a higher wage rate to work in the factories as well as a bonus scheme for hitting targets which is a financial motivator
• Fabio lost 60% of the staff and all the head chefs which indicates a motivational factor other than good pay is being lacked
• due to Taylorism since it can cause other factors that motivate employees to be overlooked, leaving the higher levels of Maslow’s hierarchy of needs unfulfilled
• fulfilled the first few levels of the model such as the physiological needs and the safety and security needs
• This is due to a good level of pay, job security and safe equipment
• lacks the top end of the model which is the social tier and self-actualisation. - These areas of Maslow’s hierarchy of needs are neglected in the fachetti group because Taylor’s theory assumes that staff are only motivated by pay but in reality, good working relationship, recognition for hard work and social activities are a few of the many other factors that influence employee motivation
• higher levels of Maslow’s hierarchy of needs are not met, it could potentially be one of the reasons why 60% of the restaurant staff did not apply to the new roles
• motivated workforce is important for low staff turnover and high net profit because employees are more willing to go above and beyond for the benefit of the business, resulting in increased productivity and efficiency

Question 11

redeployment of staff/ quality assurance targets not met/ increase wastage

Answer 11

• Quality assurance is a way of preventing mistakes and defects in manufactured products and avoiding problems when delivering to customers
• process of checking the quality of a product at every stage to identify any defects before the process is completed, allowing any mistakes to be identified and resolved early
• When redeployed, it was like that the new staff had no training or knowledge on how to use quality assurance, this led to ‘some teams realising that they are failing to meet their targets because other teams have not met theirs’ and that the dispatch team failed to meet their targets because the packaging team were late, which included a lot of redeployed staff
• July 2020 staff hitting targets and earning bonuses fell to 60%
• cause behind this was that the redeployed restaurant staff were not meeting their targets which caused other teams to not meet theirs
• means that some employees are unable to earn bonuses because of other teams poor performance which is unfair
• causes resentment and conflict between employees and ultimately lead to the peak in staff turnover of 24%
• stock wastage caused by defects /late deliveries increased
• high percentage of stock is becoming faulty and late which can be associated to the unskilled redeployed restaurant staff
• stock wastage is increasing, the cost of production will also increase because more stock must be purchased in order to produce the same quantity of goods as more is being disposed of
• negative effect on the goal of increasing net profit by 10% as it reduces the profitability
• higher amount of defects can decrease customer satisfaction as customers will not be satisfied with a defective product

Question 12

staff trunover is increasing

Answer 12

• staff turnover in 2020 increased
• rapid increase in the number of staff leaving the business indicates that there is a poor working environment or there is another factor making staff want to quit their jobs
• some staff are unable to receive their financial rewards for working hard due to other teams not doing their job properly, then this can cause conflict and eventually the staff will exit the business
• Another factor that could have been the cause of this is Sunny’s autocratic management style because there is often a poor relationship between management and staff as their needs, wants and opinions are not considered
• directly negatively affects the goal to reduce staff turnover to January 2020 levels because it is increasing instead of decreasing
• meet this goal, staff turnover must decrease by 10%
• goal to increase net profit is also affected because as there is a higher level of staff turnover, the fachetti group will have to spend more money recruiting new employees that meet the level of skills to fill the gaps in the workforce
• this reduces the level of net profit as recruitment costs increase

Question 13

net profit decreasing

Answer 13

• from January-June 2020 the net profit was £76 million, giving an average of £12.7 million in net profit per month
• This fell to £10.5 million in august 2020 and increased to £11.2 million in September 2020, +£700,000
• can be interpreted that there is a negative impact on the goal of increasing net profit by 10%
• To achieve this goal, net profit must increase to £12,320,000 however in September it is only £1,120,000 less, giving at just £11.2 million
• Net profit is the final level of profit that the business makes, after deducting expenses from gross profit
• It is important that net profit is high so that the business is financially stable and can invest profit back into the business

Question 14

Unprofessionalism within the management team caused the restaurants to close

Answer 14

• because Katrina did not invite sunny into the meeting to discuss a rescue plan, which indicates that Katrina didn’t follow the overall leader
• Sunny reacted by deciding to close all restaurants for Fabio stating that the restaurants were no longer viable
• negatively impacted the company’s profitability in the long-term because they have lost one of their income streams with the restaurant division and the company could have continued with home deliveries during the pandemic and re-opened the restaurant when the lockdown restrictions are lifted
• ata suggests that the restaurant section was profitable and growing before lockdown and that in the first three months home delivery did grow but the loss reduced by £1.5 million in the first three months.

Question 15

recommendations

conflict between managers

Answer 15

• Fabio needs to involve all employees in the process and perform a skills audit of leadership and management skills he also needs to train the leadership team to develop their areas of shortage of skills
• He needs to deploy the managers to roles that fit their skills base like Katrina is better to be used for dealing with people management, organisation and communication
• This means that by focusing on the leadership and culture that the company requires involving all staff, Fabio stands to make the best possible type of change and also becomes a more transformational leader
• will in turn reduce the staff turnover as staff will feel motivated and more loyal to the company
• They will be trained and able to perform their job roles more effectively, thus reducing the incidence of late delivery and stock wastage, all this contributing to the costs to decrease and increase net profit
• By auditing the skills of his leaders, he will be able to use the staff to their best of ability in the correct role and ability in the correct role that builds on their strengths and can be used to train other staff in specific skills areas
• would further support the company achieving their goals
• leads to the building of a leadership and culture that will be stronger
• because staff will be engaged, motivated and loyal
• will increase productivity allowing the company to meet all three goals
• a cohesive and strong management team will set an example for the employees which will result in an improvement in employee motivation which will boost their performance, as a result, enhancing the business profitability
• However, training can be costly which could restrict the business profitability in the short term
• however, this will be essential if you could reduce staff turnover and increase net profit.

Question 16

issues with motivation

Answer 16

• currently using financial motivators which causes other factors of motivation to be overlooked
• does not consider employees esteem, the community and belongings of employees and their input
• go unnoticed and employees can feel unwanted and not valued within the workforce which cause them to be demotivated and not productive
• This can lead to staff turnover and therefore lower net profit
• non-financial motivators such as job enrichment, job enlargement, empowering, and flexible working
• can all help boost workers’ self-confidence, help them find self-actualisation, and make them feel more secure in their jobs
• can help attract, motivate and retain talented people
• Therefore, this allows them to reach the goal of reducing staff turnover to 2020 levels as motivated staff are more likely to stay and be loyal to the business

Question 17

redeployment of staff: upskilling

Answer 17

• Upskilling is the process of enhancing an employee’s skills or developing new skills
• This proposal will resolve the management challenge that has been caused by the redeployment of restaurant staff
• Before the restaurant staff were redeployed, they should have been reskilled, as they are going from working in restaurants to producing gourmet meals in factories, which have a completely different skill set

However, as these employees did not have any training, they are unable to complete the duties of their job roles successfully
- Upskilling the redeployed staff through mentoring will resolve this challenge

• Other competent factory workers in Fachetti’s Kitchen are responsible for mentoring the redeployed restaurant staff which will enhance and build up their skills, enabling them to be able to complete their jobs efficiently
• will lower the number of defects and lateness because through upskilling the redeployed staff will become more efficient
• will have a positive impact on the net profit objective because as defects and lateness decreases, the cost of production will decrease which results in a higher level of profit

Question 18

staff turnover increasing

Answer 18

• ensure that HR is implementing an effective workforce planning to include training/induction of employees
• use financial and non-financial motivators to motivate and satisfy employees to increase engagement and loyalty to the company
• maintaining low staff turnover, it means that the company will not have to spend money in recruitment and selection to fulfil the workforce plan and the net profit will improve
• Happy and satisfied employees are more productive, and this will impact costs and lead to better product
• low staff turnover can also lead to no opportunities of development or promotions for employees, and this will further increase staff loyalty to the company, thus achieving the lowering of staff turnover
• This will require a change in leadership style and the creation of a business culture that will ensure that workforce is motivated, developed and effective.

Question 19

net profit decreasing

Answer 19

• ecommended that the fachetti group reviews the quality assurance process and move to total quality management to improve employee’s participation and engagement and to aim at reducing stock wastage caused by defects/late deliveries
• engagement will raise motivation and loyalty which will, in turn, minimise staff turnover
• targets will be met which will allow the company to reduce stock wastage, also it will reduce the associated costs
• Staff will be involved and engaged in the quality assurance processes
• by minimising staff turnover, it will reduce the recruitment and selection cost, therefore net profit will increase
• leads to the zero defects production goal being achieved
• Staff will be more motivated, productive and loyal as there will be less staff turnover and more productivity, leading to an increase in net profit
• requires leadership participation at all levels, starting with the top creating the correct culture for this change to happen
• So, to achieve this effective planning and implementation is required.
• However, there might be costs short term vs long term benefits of greater growth and profit.

Question 20

zero defect production

Answer 20

• a model that aims to reduce, minimise and eliminate defects in the production process
• this means to produce the maximum number of meals, with the minimum number of defects
• An advantage of zero defects is that net profit will increase because as there are less defects, less materials are wasted.
• also increase customer satisfaction as the meals that they buy from Fachetti’s Kitchen will be of higher quality
• can build up brand reputation and can increase customer loyalty
• However a criticism of this model is that there needs to be a highly skilled workforce and therefore staff will likely have to be trained which can be very expensive.

Question 21

six sigma

Answer 21

• a method that allows businesses to identify and resolve errors and greatly decrease the probability of the error occurring again
• Six Sigma can be used to achieve zero defect production which is one of the goals of The Fachetti Group

Six Sigma has 5 key components:
Define - identifying the error
Measure - determining the size and severity of the error
Analyse - identifying the short- and long-term impacts of the error and creating solutions Improve - implementing solutions
Control - monitor and make further improvements if necessary

• increases net profit because the probability of costly errors greatly reduces. - However, the success of implementing the Six Sigma model to achieve zero defect production requires clear communication from management and a highly skilled workforce

Question 22

managing change

Answer 22

• Major changes such as the closure of the restaurants and the opening of two new factories have been implemented by Fabio
• Sunny had a very strong influence on the changes as when he found out that Katrina held a meeting without him, he then drew up the proposal for Fabio
• Although Fabio is the owner of The Fachetti Group and has full control over the directions of the business, decisions made are heavily influenced by stakeholders like Sunny
• This is an issue because Sunny can influence the decisions of the business to suit his own personal interests and self-benefit rather than for the benefit of the business which will negatively affect the strategic objectives
• It is clear that Katrina and all 15 of the head chefs were not on board with the closure of the restaurants as they held a meeting to discuss a ‘rescue plan’
• demonstrates that there is poor change management in The Fachetti Group because management (Katrina VS Sunny) and key stakeholders are in disagreement about what should be done
• As Katrina and other employees are not on board with the decision, it will create an unmotivated workforce and the change will not be implemented effectively
• After the proposal had been implemented, Fabio lost over 60% of the restaurant staff and all of the head chefs
• demonstrates that a massive amount of the workforce did not agree nor want the restaurants to close and when the decision was made without consideration for their views they left the business
• To solve this problem, the management of The Fachetti Group needs to consult with employees before implementing any changes, so that their opinions can be gathered and to make sure that they are on board with the changes