UNIVERSITY OF MAURITIUS A YEARLY EXAMINATIONS MAY 2015 PROGRAMME BSc (HONS) ECONOMICS WITH MANAGEMENT — YEAR 1 | BSc (HONS)/MSc BUSINESS ECONOMICS AND INVESTMENT ANALYSIS ~ YEAR 2+ RESIT MODULE NAME —_| PRINCIPLES AND PRACTICE OF MANAGEMENT DATE wepnespay | MODULE CODE mr 1067¥(1) 20 MAY 2015 | TIME 09.30-12.30HRS_| DURATION 3 HOURS NO. OF QUESTIONS 6 | NO. OF QUESTIONS TO 3 set | BE ATTEMPTED ISTRUCTIONS TO CANDIDATES There are 2 Sections in this paper: Section A and Section B. Section A is COMPULSORY. Answer ALL Questions from Section A. Section B consists of FIVE Questions, Answer ANY TWO (2) Questions from Section B,SECTION A : Case study - COMPULSORY Starbucks Corporation Due to rapid globalisation over recent years, competition around the world has become more intense, especially for the service industry with similar products. The most critical point for businesses to achieve success is not only the quality of products they supply but the atmosphere of cooperation and the efforts yielded from teamwork in retail sales. Therefore, it turns out to be essential for companies to motivate, reward and train their employees to perform to the highest level of quality. Starbucks Corporation, the most famous chain of retail coffee shops in the world, mainly benefits from roasting and selling special coffee beans and other various kinds of coffee or tea drinks. It owns about 4000 branches around the world. Moreover, it has been one of the most rapidly growing corporations in America. The reason why Starbucks is popular worldwide is not only because of the quality of its coffee but also due to its customer service and cosy atmosphere. Starbucks establishes comfortable surroundings for customers to socialise at a fair price which attracts consumers of all ages to come into the stores. Besides, it is also noted for its employee satisfaction and relatively low staff turnover rate. As a result, Starbucks is one of the optimal business models for strategies of employee motivation, customer satisfaction, cooperation and teamwork. The history of Starbucks : Starbucks was started by three friends, Jerry Baldwin, Zev Siegl, and Gordon Bowker, who knew each other at the University of Seattle in 1971. Afterwards, Howard Schultz, a sales representative, decided to join Starbucks as director of marketing and retail sales after he realised the potential of the company. In 1985, Howard Schultz, chose to establish a new coffee shop named II Giornale, in Seattle. In the next two years, due to the successful strategy of Schultz, the original three owners of Starbucks decided to sell their corporation to Schultz. Schultz gathered other investors and changed the name of II Giornale to Starbucks. He sought to pursue his dream to make everyone taste his coffee, so he focused on the expansion of the chain. At that time, he thought that the most efficient way to grow the number of branches was to set up new stores in other places. In 1987, Starbucks opened its first overseas store in Japan. By the end of 2002, Starbucks had developed from 17 to 5,688 stores spreading over 30 countries and has grown over 300 times in these fifteen years. In Fortune magazine, Starbucks was ranked as the 11" best company to work for in 2005 in the USA. In 2007, Starbucks was also voted as one of the top ten UK workplaces by the Financial Times. Page 1 of 4Motivation Motivation is a vital factor for business. Employees are not machines and cannot always do the same task with equal passion. The Chief Executive Officer of Starbucks corporation, Howard Schultz, considers that the reason for the success of Starbucks is not just coffee but the employees. He firmly believes that the spirit of Starbucks is its employees. Starbucks offers a structure and culture that makes staff throw themselves into their job. Equal treatment The managers in Starbucks treat each employee equally and all of the staff, even the supervisors are called “partners”, In order to narrow the gap between managers and employees, they also co-work with the basic level staff in the front line. Due to this, they can maintain a democratic management system and create a much closer and more familiar atmosphere than other places. Not only do employees enjoy their jobs but customers are also positively affected by their enthusiasm. Listen to employees Starbucks has a well-organised communication channel for employees. For example, managers plan the working hours for each worker and arrange the schedule for time off, according to the workers’ needs in order to try and meet their requirements. There are interviews weekly to see what employees’ needs are. The “partners” have the right to figure out what is the best policy for them and the directors show respect for each suggestion. Starbucks even wants every employee to join in making and developing plans, then working together in achieving goals. As a result, the policies and principles are communicated among all staff and there is no limit to employees’ personal opinions being expressed. - Welfare measures All employees are offered a great deal of welfare benefits, for instance, commodities discounts, medical insurance (including health, vision and dental) and vacations. Starbucks also believes that debt financing is not the best choice, thus it chooses instead to allocate stock dividends to all employees with a free script issue. By this policy, the employees can get benefits from the profits of the company. Because of this, they have the same goal; in other words, they are motivated to increase revenue to earn more profits. Page 2 of 4PRINOPLES AND PRACTICE OF MANAGEMENT MGT 1067¥ = = = Teamwork Starbucks establishes a well-developed system to keep good relationships between managers and employees. As mentioned, they use the title “partner” regardless of the level of the worker, which narrows the gaps in hierarchy. Secondly, they co-work in the first line to eliminate the distance between different statuses. Thirdly, the size of teams is usually kept very small, and this usually helps staff get to know each other easily and deeply. Suggestions and complaints made by employees are treated with equal attention. In the same way, staff have a right to participate in the process of revising company policies. In this way, each staff member feels that they also play an important role in operating the company and they jointly work out the direction of Starbucks. All this gives employees a sense of respect and a sense of participation. A goal of public welfare Starbucks contributes part of its profits to public service. As a consequence, staff feel that what they do for Starbucks is good for society as well. - END OF CASE STUDY - Question 1 (a) Discuss two motivational theories applicable to Starbucks Corporation. [15 marks] (b) To what extent is/are the style(s) of leadership used at Starbucks appropriate for this type of business? [20 marks] ()_ Using the case study, examine the possible links between effectiveness of ‘teamwork and the success of a company. [15 marks] SECTION B: Choose 2 out of 5 Question 2 If planning is so crucial, why do some managers choose not to do it? What would you advise to overcome obstacles to planning? [25 marks] Page 3 of 4PRINCIPLES AND PRACTICE OF MANAGEMENT~MGT 1067¥ Question 3 Write short notes on the following (2) Rationality in decision making (b) Organisational Behaviour (©) Scientific Management (4) Corporate Social Responsibility (e) Business Ethics [25 marks - 5 marks each] Question 4 (a) Discuss the importance of the communication process in an organisation and its relevance for managers. [10 marks] (6) Discuss the barriers to effective communication and how these can be overcome. [15 marks] (2) Explain the main causes of conflict in an organisation. (10 marks] (6) Discuss conflict management techniques and illustrate your answer with appropriate examples. [05 marks] Question 6 Explain the concept of organisational design or structure. What are the key considerations? [25 marks] - END OF QUESTION PAPER - Page 4 of 4