PD1/May 2017

Professional diploma in procurement and supply

Leadership in procurement and supply

Date Monday 15 May 2017

Time Start 09:30 End 12:30 Duration 3 hours

QUESTION PAPER
INSTRUCTIONS FOR CANDIDATES
This examination has FOUR compulsory questions worth 25 marks each.
1. Do not open this question paper until instructed by the invigilator.
2. All answers must be written in the answer booklet provided.
3. All rough work and notes should be written in the answer booklet.

QP04
You are advised to allow 20 minutes to read carefully and analyse the information in the case study
before attempting to answer the questions.

CASE STUDY – DAYLIGHT HEALTH AND FITNESS LTD

Daylight Health and Fitness Ltd is considering a major overhaul of its strategy and operations. It is currently
a leisure company that has 15 clubs throughout the UK, with plans to expand internationally. Each of the
UK clubs has a general manager and employs between 18 and 192 staff, dependent on location, client base
and size.

There are some members of the board of directors who believe that for expansion to be realistic, the
company must also undergo a change of direction. Currently, the company is known for being a budget
gym which caters for all. However, there is a view within the board, which is gaining momentum, that
Daylight should become an upmarket ‘health club’, offering gyms, bar/restaurant facilities and spa/therapy
treatments. The business case for this is that if the club offers more of an extensive and potentially ‘all day’
experience for families, rather than just a gym, it can dramatically increase membership numbers and,
therefore, revenue.

The board member who is leading this change in direction is Steve Samuel, who is the company’s head of
procurement. He believes that this change in direction is vital to ‘move with the times’ and offers a diverse
family experience for all. He also believes that, if the international expansion plans are to be realised, then
these changes must happen to maximise chances of longer term global success.

Steve is new to the board of Daylight. He is well respected in the health and fitness sector, and was brought
in by the founder and CEO to invigorate and inspire the organisational direction of Daylight, which some felt
was becoming outdated.

Steve’s major challenge is to convince the board that these changes will not alienate current customers
and that it will in fact increase Daylight’s appeal to a broader audience. Steve proposes that they use one
of their new buildings in South East England as a pilot project for the new model. This venue will have
spa facilities, a bar and restaurant and state-of-the-art gym equipment. However, this does mean that a
significantly increased budget will be required for the chosen venue, both in terms of refurbishment and
subsequent operating costs.

The time came for Steve to present his proposal to the board. One of Daylight’s directors, Madeleine Porter,
has been with the company for over 30 years. She has a lot of influence with the other board members and
raises several concerns:
• ‘The business is satisfactory as it is – if it isn’t broken, don’t fix it.’
• ‘This is a considerable and potentially high risk change in direction.’
• ‘The costs involved are too great.’
• ‘Does this change in direction also mean a staff restructure? Will we have to hire health club managers,
rather than just gym managers? This may involve a period of uncertainty and additional costs.’

Steve knows that he has a lot of work to do to convince the board that these changes are the right course
of action. He proposes that, at next month’s board meeting, he will present a full cost/benefit analysis
regarding the refurbished venue, which he believes will convince the board. Steve is certain that the
company must move with the times and that, irrespective of the greater cost, the return will more than
exceed the investment. He is also concerned that the company will be left behind in an already crowded
market if they do not adopt a new approach.

Steve will report back to the board in a month.

Page 4 of 8 PD1 Exam Questions May 2017

QUESTIONS

These questions relate to the case study and should be answered in the context of the information
provided. You are advised to spend 40 minutes on each question.

Q1 Describe the concept of a ‘transformational’ or ‘inspirational’ leadership style, and explain how using
this style might help Steve to convince the directors and other groups to accept his proposed change
in direction for Daylight Health and Fitness Ltd. (25 marks)

Q2 (a) There are a number of key stakeholder groups who are likely to be involved in the early stages
of the change, if it is approved by the board.

Other than the directors, identify THREE key stakeholder groups and discuss the factors that
might determine the power and interest position of each group. (15 marks)

(b) Describe FIVE appropriate communication methods Steve could use in relation to the
stakeholder groups identified above. (10 marks)

Q3 (a) Justify TWO appropriate influencing tactics that Steve could use to enable him to successfully
persuade Madeleine, and other sceptical board members, that his proposal for change should
be adopted. (10 marks)

(b) Steve will need to use different influencing tactics with staff members compared to those used
for the board.

Justify THREE influencing tactics that would be most appropriate for influencing the staff.
(15 marks)

Q4 (a) Explain THREE likely reasons why some staff members or groups may resist the proposed
changes, if they are implemented by Daylight Health and Fitness Ltd. (15 marks)

(b) Explain how the empowerment of staff might be utilised to provide benefits in the process
of change. (10 marks)

END OF QUESTION PAPER

Page 5 of 8 PD1 Exam Questions May 2017

 PLEASE RETURN TO:
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c/o LINNEY DIRECT, A2 GOODS IN
BELLAMY ROAD, MANSFIELD
NOTTINGHAMSHIRE NG18 4LN
UNITED KINGDOM
TEL: +44(0) 845 880 1188
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Page 8 of 8 PD1 Exam Questions May 2017