IB Business Management HL 2.4 Motivation and Demotivation Questions

Kayla and Aran decided that Kayla should manage marketing and finance, and Aran manage the operations and supply chain. They chose not to create a human resource department because Accord had a small workforce. Aran already had the overseas supplier contacts but would need additional suppliers of fruit and vegetables. He would also need to find space to prepare and store the energy drinks. Aran thought that if Enrich was successful, they might need to find a small factory. This factory would use job/customized production. Aran knew the price of the Enrich range was significantly more expensive than those charged by the large MNCs, which supplied an ever-increasing range of energy drinks, fruit drinks and other beverages. Enrich’s drinks averaged $3.00 per bottle, compared with a typical price of $2.20 for similar drinks from MNCs. These MNCs, such as ABC, were large and experienced in the beverage market and had significant branding advantages, economies of scale and wider promotional reach. Enrich was restricted to below-the-line promotional methods, which Kayla thought the most cost effective. Kayla’s secondary market research indicated that many of the competing energy drinks produced by MNCs were being sold to teenagers, contrary to government policies and agreements with retailers such as supermarkets. Kayla became convinced that Enrich could create a USP as the only locally produced, caffeine-free, all-natural energy drink. Enrich would be sold only through affiliated sports and leisure clubs. The additional health benefits and cost savings experienced by their customers would strengthen their USP and brand value. Aran saw things differently. He thought that treating Enrich as a niche product would narrow the possible market segments. He favoured a mass-market approach. Aran considered Enrich a significant product innovation. If Accord waited to launch the brand as a mass-market product, they would be missing out on potentially high profits. Becoming impatient, he argued that they should borrow immediately for revenue and capital expenditures to finance increased production. They would soon need more skilled employees to manage the equipment. After three months of operation without a decision, sales of Enrich were satisfactory but below forecasts. Aran and Kayla were both working very long hours. Feedback from their friends and fellow athletes was positive, yet new customers contacting Accord through social media said they were confused about whether Enrich was a fruit juice or an energy drink. They also claimed that the health benefits of Enrich were exaggerated and the drink was too expensive. After some further investigations into suitable premises and production equipment to support the future growth of Enrich, Kayla and Aran found an affordable abandoned confectionery production plant that would increase the production capacity. Some of the older confectionery-making equipment would need to be replaced. Kayla carried out some further market research to see if the additional capacity could be used for another drink that would complement Enrich. These drinks could form part of the lifestyle brand that Aran had envisaged. Her investigations led her to discuss with Aran the idea of a drink based on green tea, called Detox, which could allow athletes to relax after a hard training day. However, Kayla argued that unless they introduced this new product, Enrich would struggle to be economically sustainable.

Problems are continuing with Enrich drinks. Aran is becoming increasingly frustrated with the lack of growth of sales. He always wants to succeed and is driven by the need to get tasks completed. The Enrich part of his life is not a success. He blames the workforce. The workforce does not share his vision. Employees are mainly part-time workers and parents who value jobs that enable them to fit work around school hours. As Aran has become more autocratic in his leadership style, labour turnover has increased. Last month, from a workforce of twelve, one retired and two left for what they called "better jobs".
There are also increasing problems with the quality of Enrich drinks, as batches of Enrich are rejected by the quality control department. Elsie, the manager of the production department, blamed suppliers, saying that Aran had damaged business relations with them due to his impatience. Elsie also blamed Aran for poor stock management. She has proposed total quality management (TQM) as a solution to these problems.
Detox
Accord decided to start the production and marketing of Detox, the green tea drink that helps athletes to relax. Detox proved to be very successful. Encouraged by the success and boosted cash inflow, Kayla is considering producing a range of snack bars based on Enrich and Detox flavours and recipes. Accord would use the Enrich brand name for the snack bars. The market for healthy snack bars is very competitive and dominated by a few large companies who spend large amounts of money on advertising. The market is growing rapidly - some market researchers estimate by 34 % per annum. There are many examples of small businesses entering the market successfully on a small scale. Kayla estimates that the proposal would involve an investment of $ 100000, with forecast net returns of $ 80000 for four years. Aran thinks that the money could be better spent on marketing Enrich drinks.

Define the term labour turnover.

Motuoro High School (MHS)


Motuoro High School (MHS) is a new residential (boarding) school for 16-18 year olds. It is a public-private partnership funded 60 % by the state and 40 % by the private sector.
The school has two managers:
- Charles Ledger, a government official, who is responsible for finance.
- Julian Santiago, a successful businessman, who manages the daily operations.
Julian was asked to help set up M H S as a new innovative and flexible school. He interviews all new students. They can choose to attend classes or telework from their rooms. MHS has an up-to-date Internet system to provide communication and educational resources. It has a flat organizational structure. Teachers and students are at the same level of hierarchy, but below Charles and Julian.
The teachers were selected by Julian and did not sign contracts. Julian and the students meet to decide together on the appraisal process for teachers. The teachers themselves are not present at these meetings.
MHS provides teachers with free accommodation, food and a generous salary. 12 months ago a television series about the opening of the school gave it enormous publicity. This lead to many applications from potential students and teachers.
However, a number of problems have now emerged. New student applications are decreasing. Government funding has been reduced. A number of students are missing classes or not submitting work. Teachers are insisting that MHS provide contracts. They are also concerned that the informal organization within the school is having too much influence on Julian's decision making. One frustrated teacher complained to Charles without Julian knowing. This caused an issue between Charles and Julian. Julian wanted to dismiss the teacher, but Charles was concerned that dismissing the teacher would have lead to strike action. This would have created unwelcome publicity at a time when student numbers were falling. Julian suggested that a no-strike agreement should be put in place and that teachers should consider working at M H S as a privilege. The meeting finished without a resolution.

Define the following terms:

appraisal

Emma, a marketing graduate at a public relations office, has always wanted to have a more creative and independent role. Falit works in the production planning department of a large multinational oil company. He likes his job but hates the bureaucracy. Ahmed is a charismatic, self-confident project manager at a construction company. The group decided that Ahmed was the right person to manage the project and the group because of his management and leadership skills. They decided to call the app "IBAT" (insect bite analysis test). Regular online meetings would take place to develop the idea. By September 2015, the group agreed that they would go ahead with the business idea in their spare time. They had all talked to friends, relatives and anyone they knew working in healthcare. All of these people liked the idea. The six friends decided to call the business Medimatters. IBAT would consist of a paid-for app that, with a smartphone, would: - take a good quality photograph of the insect bite - send the photograph to IBAT's online automated database. The automated database would then: - compare the photo with the online library of scanned images - produce a report on the findings of the comparison for the IBAT user as well as, if possible, medical professionals such as doctors. After consultation with some doctors, Carlo discovered a technical problem. The image quality of smartphones varies. To obtain the necessary detail of the insect bite, a separate magnifying lens attachment which would convert the smartphone's lens into a microscope would be required. A different design of lens for each make of smartphone would be required. The need for a lens means that IBAT would not be a conventional app that is purchased from an online app store. Customers, who could be members of the public or people in the healthcare profession, would purchase a physical product (the lens) and a password for downloading the app. IBAT would therefore be a service and a product/good that has implications for both marketing and operations management. Ahmed acted decisively. He assigned to each group member tasks to complete within three months. In January 2016, they met face to face and reported their findings and progress (Appendix 1). Emma considered who to target. She told the group during a further online meeting that the best approach to marketing was to concentrate on particular market segments. It would be easier to focus on healthcare professionals, such as doctors. Emma suggested that the best approach to contact these potential customers was through conferences and relevant medical magazines and journals. She was also investigating other potential market segments and distribution channels. Identifying these potential customers was going to be a major challenge and required market research. Could the general public be targeted through large chains of shops that sell health-related products? Ahmed thinks that they should concentrate on launching the product in Brazil before going global, but this might result in competitors copying the idea in other countries. In many areas the project was going smoothly, but frustrations were beginning to show. Bella was keen to make a lot of progress quickly. She thought that the project should be launched as soon as possible and then refined later based on customers' experiences. Didi was clear that they had to get the product absolutely right before it was launched. He also stated that Medimatters would need finance in order to start trading. Carlo was worried about where the lenses should be produced. Ahmed has a lot of work to do to sort out these frustrations. \begin{tabular}{|l|l|}
\hline Group member & Findings and progress \\
\hline Ahmed
Project manager & \begin{tabular}{l}
- Draft business plan: complete \\
- Potential investors: identified \\
- Application for copyright/patents: in progress \\
- Size of market: unclear, believes that there is huge national and global potential
\end{tabular} \\
\hline Bella
IT & \begin{tabular}{l}
- Prototype of image-taking software: written and tested \\
- Medical diagnosis software development: in progress
\end{tabular} \\
\hline Carlo
Medical expert & \begin{tabular}{l}
- Insect bite images: $75 \%$ collected and catalogued on database \\
- Communication channels with healthcare professionals: no progress \\
- Reporting format for medical diagnosis: some progress \\
- Approval for the use of the app for medical purposes: cannot be granted by health authorities until lens design finalized
\end{tabular} \\
\hline Didi
Accountant & \begin{tabular}{l}
- Production costs for app and lens: to be determined \\
- Further financial information for business plan: in progress \\
- Set-up cost: $\$ 60000$
\end{tabular} \\
\hline Emma
Marketing & \begin{tabular}{l}
- Market research: no progress, except for discovering a device/app that measures skin colour to help choose cosmetics and another that helps identify skin cancer \\
- List of potential market segments and target markets: complete \\
- Promotion strategies targeting medical profession: ongoing \\
- Marketing plan: in progress
\end{tabular} \\
\hline Falit
Production & \begin{tabular}{l}
- Lens production: investigate where to produce the lenses, possible manufacturer identified \\
- Production method: investigate batch or flow
\end{tabular} \\
\hline All of them & - Ahmed, Bella and Carlo could each invest $\$ 2000$, the others could
invest $\$ 1000$. $\$ 51000$ extra would need to be found. The list of
problems is getting longer! \\
\hline
\end{tabular} Additional terms not in the guide Copyright/patents Companies, products, or individuals named in this case study are fictitious and any similarities with actual entities are purely coincidental.

With reference to Medimatters, explain two steps in the process of recruitment to the customer services department.