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IB Business Management May 2016 Case Study - Todos os Mercados

M16 3 BUSMT BP1 ENG TZ0 XX CS Business management Case study Todos os Mercados For use in May 2016 Instructions to candidates Case study booklet required for higher level paper 1 and standard level paper 1 business management examinations 4 pages 2216 5001 International Baccalaureate Organization 2016
M16 3 BUSMT BP1 ENG TZ0 XX CS  Business management Case study  Todos os Mercados For use in May 2016  Instructions to cand...
2 M16 3 BUSMT BP1 ENG TZ0 XX CS Todos os Mercados TM and a day in the life of Henri Trouv Tuesday 26 January 2016 06 32 Henri Trouv is driving to work He is already tired Last night he studied late at an MBA class He hoped the quali cation would lead to a better job or promotion He is miserable and re ects on why this is 5 10 15 20 25 30 35 40 In 1965 his father set up a small hardware business in St Laurent near Tillon in southern France The business was set up as a sole trader His father made personal customer service especially free delivery to customers homes and workplaces the unique selling point USP of the business As a child Henri helped his parents at the store and worked there when he nished school At 32 when his parents retired he became the owner and manager of the business for what he thought would be the rest of his working life However two years later that all changed Todos os Mercados TM a South American multinational company MNC opened a TM hypermarket just outside St Laurent TM is a public limited company TM s hypermarket had a huge impact on the Trouv business as it could not compete with it The Trouv business went into liquidation when Henri failed to attract any external sources of nance Desperate and with no income Henri applied to work at TM He was appointed manager of the hardware section The job title was more impressive than the job itself he was little more than a salesperson with minimal management responsibility TM s stated main aim based on its mission statement and expressed in all of its promotional material is to have the lowest prices in the market TM uses lean production methods including just in time JIT and outsourcing to cut the cost of sales TM also keeps wages to a minimum and strictly controls all aspects of employee performance These approaches enable TM to sell goods at much lower prices than its competitors The rest of TM s marketing mix supports its low price strategy As TM grew it was able to impose more favourable purchasing terms from suppliers which allowed TM to lower its prices even further High market share and market leadership are important for TM Historically TM has used internal growth TM s attempts at external growth through franchising were unsuccessful TM opened new stores both in France and in many other regions around the world It expanded the range of goods it sold and eventually entered the services market Now every TM store sells hardware home appliances electronics furniture automotive parts and of ce supplies TM has recently started offering banking facilities insurance pharmacies opticians and mobile phone services TM is truly a one stop shopping destination and is successful in many regions of the world It is actively investigating development of new markets in Asia TM has a regimented autocratic and centralized approach to human resource management Employees are not empowered and have to follow detailed work instructions and procedures produced at headquarters in South America Strict practices prevent employees talking to each other while at work and unscheduled breaks are not allowed Employees who complain nd themselves in trouble TM has an in exible organizational structure In 2013 labour turnover at the hypermarket in St Laurent was much lower than expected This was due to the economic recession which meant that there were few employment opportunities in the local area
   2     M16 3 BUSMT BP1 ENG TZ0 XX CS  Todos os Mercados  TM     and a day in the life of Henri Trouv  , Tuesday 26 Janua...
3 45 50 M16 3 BUSMT BP1 ENG TZ0 XX CS The impact of TM on communities including St Laurent is mixed On the one hand the hypermarkets provide much needed employment It also allows customers to buy many kinds of goods at very low prices analysts estimate that families could typically save between 2000 and 5000 a year by shopping at TM On the other hand when TM opens a hypermarket in a town many small shops in that town go out of business just like Henri s TM has a poor record of corporate social responsibility CSR and many pressure groups are urging TM to adopt ethical behaviour 06 45 Henri arrives at work He reports to Delphine Jacques his line manager and superior in the chain of command who checks his arrival time Although Henri resents this process he knows Delphine is only following company policy He likes Delphine she has a warm personality and encourages him in his work She too is grateful for the work because she is a single mother with two children She is hard working and ef cient and never complains She is one of the few employees to have been promoted internally 06 50 Henri is at his work station ready to check arrival times of the employees in his team 55 60 65 70 07 00 the hypermarket opens Henri is ready for the tedious day ahead 11 30 Henri goes to the managers staffroom for his of cial lunch break He is tired TM insists that managers eat separately from non managerial employees Even managers are discouraged from eating together TM does not want them expressing collective opinions about TM Henri thinks that TM s workers are beginning to talk more about worker s rights and protests Henri sits there alone He thinks about this week s reading material for his MBA Daniel Pink s Drive The surprising truth about what motivates us it gets him wondering why TM uses motivational strategies that are so completely different from Pink s ideas 12 00 noon when Henri returns to the stockroom he sees two young employees writing graf ti protesting the wages and management style He is angry but unsure what to do He is a paternalistic leader so his instinct is to talk to the two young employees and get them to remove the offensive words However according to TM policy he must report them to a senior manager who would immediately dismiss them Henri thinks this is too harsh as they would have no chance of getting another job He feels the need for worker solidarity He knows that he himself might be disciplined for not reporting this behaviour but he pretends not to see anything 14 07 Henri has to deal with an extremely rude customer 75 15 02 Henri is exhausted he wishes it were the end of the day His mind wanders to tonight s MBA class At least he d be allowed to think aloud there He stole time from TM by checking his homework on his smartphone He is shocked the next case study is about TM This is another blow now he has to think about TM all the time 16 00 Henri records the nishing time of his team and reports his own nishing time to Delphine Turn over
   3     45  50  M16 3 BUSMT BP1 ENG TZ0 XX CS  The impact of TM on communities, including St Laurent, is mixed. On the on...
4 80 85 M16 3 BUSMT BP1 ENG TZ0 XX CS 16 10 Henri arrives at the public library He reads the TM case study carefully The case study mentions various external factors the lack of jobs in France has increased demand for university places as young people delay starting their careers and middle aged people like Henri try to strengthen their quali cations Data in the case study shows very weak economic conditions in France and demographic trends that are hindering economic recovery The case study also states two signi cant threats to TM s position in the market the increasing use of e commerce by global competitors and customized production and one signi cant weakness a workforce that is treated badly The case study contains nancial information for TM which Henri uses to calculate nancial ratios He is shocked 90 18 15 he phones his wife She too is exhausted As well as managing the household and looking after the children she has a full time job as a dental assistant She feels overwhelmed Henri reassures her that he will help her and that once he gets his MBA things will be better Even with an MBA she worries that he would struggle to get a better job 18 30 class begins His tutor Dr Lomin will spend the rst hour looking at human resource management then an hour on marketing then another hour on nance and accounts 95 100 Dr Lomin begins by asking whether TM s employment practices regarding wages and working conditions are ethical The students recognize the need for TM s pro t driven objectives but they are far less enthusiastic about how TM treats its workers Henri keeps quiet If I criticize TM in public I could be dismissed he thinks Dr Lomin makes it clear that there will be major pieces of assessed work for the MBA that examine human resource management issues in particular how effective TM is at managing its employees Henri had heard rumours in the workplace that employment practices and contracts were likely to change soon as TM attempts to cut even more costs 21 40 Henri sets off for home He can hardly keep his eyes open At least I don t have class tomorrow so I can spend the evening with my family 105 22 20 Henri arrives home He is furious Every light in the house is on His children ignore him as he comes in they are sending text messages and playing video games 00 00 midnight Henri goes to bed Elise is already asleep He says good night thinking that with luck he will get six hours sleep Companies products or individuals named in this case study are ctitious and any similarities with actual entities are purely coincidental
   4     80  85  M16 3 BUSMT BP1 ENG TZ0 XX CS  16 10, Henri arrives at the public library. He reads the TM case study car...