BACHELOR OF COMMERCE/NZ DIPLOMA
MGMT 530 PRINCIPLES OF MANAGEMENT
Semester 1 2015
ASSIGNMENT 2: Case Study
Date Due:Monday 25th May at 23:55 hours.
Weighting:25%
Total Marks:75 Marks
Purpose:The objective of this assessment is for students to apply the principles of planning and organisation to a case study situation.
Required:Answer ALL questions
Guidelines:
- All assignments are to be submitted electronically through Turnitin on Moodle.
- Essays should be written in font Arial, Times New Roman or Calibri size 12.
- Please ensure your name and student number are clearly written at the top of your assignment.
- When uploading your assignment onto Moodle please use the following format:
ASmith_13478233_MGT530_Ass2
CASE STUDY – EXPLOSION PLUMBING LTD
Background:
Ben and Bill formed a plumbing business in 2007. They had known each other for years and had often worked together as qualified plumbers on large building projects, although both worked for different businesses. These jobs were so big that more than one firm was required to complete different tasks. The contracts for government work often included severe penalties for delayed completion and if the weather was unkind to the initial builders, the project got behind and extra hands were required to help make up the lost time.
At a morning tea break on a large school building project Ben and Bill started talking. Both were disillusioned with their current circumstances, were well qualified and reckoned that they could make more money running their own business; ‘the seed was planted’ and Explosion Plumbing 2007 Ltd was born.
Business was good for Ben and Bill and Explosion Plumbing had grown strongly. The partners had a good work ethic, lead well and their staff seemed genuinely happy to work for them. Explosion Plumbing’s reputation in the region was good and they had built solid relationships with building companies, suppliers and architects. In short Explosion Plumbing was in a reasonably enviable position. However the environment was changing both internally and externally.
Ben and Bill worked well together and the family nature of the business was reinforced as Bill’s wife Paris become heavily involved in the business, especially doing crucial functions of tracking workflows, finances and compliance.
Ben’s wife Nicole is now in the position to return to the workforce. She previously had a very successful career in sales.
Basic Environmental Analysis:
- New Housing development in the region has remained slow now for 4years.
- Explosion Plumbers do the work for two of the larger building operations (Presented Homes and Germiam Homes)
- Some commercial work is undertaken, particularly government sector work although it is although highly competitive and tenders are very difficult to win often with minimal profit margins
- NZ dollar is strong so there are opportunities to import products direct.
- Reserve bank OCR interest rateas are at their lowest ever
- Local Government departments very nervous after the ‘leaky homes’ liability which means meaning the possibility of compliance costs rising.
- The Central Government administration wanting to lower compliance costs with a simplified Resource Management Act which could lead to an interesting dynamic between local and central governments.
- Changing labour market, skilled staff has been easy to find but now much now with the opportunities in the Christchurch rebuild .
- Strong environmental movement, New Zealanders are looking to be more environmentally friendly. Burning firewood even in approved units is being frowned upon in some areas. The cost of firewood is increasing.
- Electricity and other energy prices are expected to continue to rise above the rate of inflation.
- Current Staffing: Ben and Bill Managing Partners, Paris in charge of office, plus three charge hands (forepersons), nine qualified tradespeople, four apprentices and eight labourers. The forepersons are in charge of teams which are made up as follows::
- Team Abel: Charge Hand plus 3 tradespeople and 1 apprentice and 2 labourers.
- Team Tasman: Charge Hand plus 3 tradespeople and 2 apprentices and 2 labourers.
- Team Wairau: Charge Hand plus 3 tradespeople and 1 apprentice and 4 labourers.
Recent Events:
On the return trip from the annual Plumbers and Gasfitters National Conference Ben and Bill got caught at Wellington Airport, the weather was appalling and all flights were cancelled for 24hours. They managed to get accommodation at the Bentwood Hotel near the airport.
That evening they had had a meal in the hotel restaurant and had adjourned to the house bar to discuss the conference and the day’s events. The hotel was very busy, not only with the regular tourists but also those waiting for flights.
Ben and Bill got a seat at a table that was also being used by two Asian men. The plumbers began discussing the recent events, particularly those discussed at the conference regarding compliance and energy efficiency issues that the NZ Government was going to focus upon. The leaky homes issues in recent NZ history had certainly made conferences interesting. During their discussion they were interrupted by one of the other gentlemen sitting at the table.
“Excuse I could not help but overhear your conversation regarding your conference and the increasing focus on energy issues in New Zealand. My partner and I are also interested in these issues. The English name I use is Joe and this is my partner Jack.”
As the evening continued it was discovered that the two men were from Shanghai and were the owners of a large operation manufacturing inverter heat pumps, solar water heating systems and solar energy collection units amongst other products. They had been in Wellington trying to sell to another NZ company however due to an unexpected change in circumstances with the NZ company the possible deal was not completed.
Ben and Bill listened intently to their new Chinese associates, and questioned them thoroughly about their product range, prices, expected importation issues…all manner of business was discussed. At one point in the evening Jack went to his room and returned with a laptop to show the plumbers the full range of products.
Ben and Bill were so impressed that they exchanged contact details, and were keen on taking up the deal that had fallen through in Wellington.
They told Joe and Jack that they would be back in touch within one week with a decision.
Reflecting on the events on the plane home the next day the plumbers were even more convinced that they had, by pure chance, found a business opportunity that they had to at least attempt to put together.
Ben and Bill are very competent plumbers and had some natural gifts as entrepreneurs however they were also well aware that they did not know everything about business.
Explosion Plumbers managing partners have decided to use the expertise of a management consultant to help them through this potential expansion phase of their business.
At the initial meeting Ben and Bill discussed with you as the consultant where they see the future of Explosion Plumbers after the chance meeting with Joe and Jack
Explosion Plumbers will continue on with their core business and retain their current number of plumbers and staff although they are aware that some changes may be required to the structure of the business.
The big change is going to come in the form of the new products that the chance meeting with the Chinese businessmen now offers. Heat pumps, Solar Water Heating and Solar Power Collection systems all show the potential for a big future for Explosion Plumbing.
These new products will also have to be installed by qualified people; therefore there will be a requirement for a team of people trained in the installation.
The new products will also require someone to manage the growth, sell the products and ensure customer satisfaction. It is likely that this will be an interesting time and managed well should have a serious chance of success, especially as the market place already has some large competitors.
The partners see the new shape of Explosion Plumbing as having the following personnel:
Ben: Mainly in charge of the new products
Bill: Mainly in charge of the existing plumbing business
Both still have equal say in what occurs within the company and therefore are both informed of activities occurring.
Paris: In charge of finances and the office etc. Tracks work sheets and generally controls inwards and outwards goods.
Nicole: Will be in charge of sales of the new products (solar and heating). An additional part-time person will be employed to assist Nicole in sales and also, when required help Paris in the office.
Sam: One of the charge hands trades on the staff (Team Wairau) will take over the installation of the new products a. He will have a team of four other staff (two tradesmen as well as two labourers or apprentices).
Two existing staff members will move to the installation team - a tradesperson from Team Abel and an apprentice from Team Tasman.
Two of additional installation staff will need to be employed. They will comprise one tradesman and one labourer
NB: When not installing new systems these people will help with general plumbing services.
The rest of the staff will continue on as is under the direction of Bill although it is envisaged that ALL staff will get installation training in the attempt to develop multi skilled teams.
NB: This is a FICTITIOUS CASE STUDY!
You do not have permission to contact any businesses in the local area with regard to this case study; all the information to complete this case is provided.
This case study could equally apply to all trade businesses e.g. building, engineering or electrical.
PART A: Principles of Management 32 marks
Ben and Bill have asked you to provide specific background information about the theory and practice of management. Answer the following questions either in report format or simply as answered questions.
- Explain to Bill and Ben the purpose of planning in an organisation.
[Eight marks]
- Explain the difference between strategic and operational planning and explain how these relate to each other.
[Three marks]
- Explain the link between planning and controlling, and how these two areas relate to organisational effectiveness.
[Three marks]
- Explain the different types of control methods and outline the steps in the control process
[Six marks]
- Explain to Bill and Ben how they may gain the information to make their decisions including an explanation of management information systems.
[Four Marks]
- Explain how the organising process could be completed and why it is important to Explosion Plumbers Ltd
[Four marks]
- Explain to Bill and Ben the difference between formal and informal organisational structures
[Four Marks]
PART B: APPLICATION 43 marks
- Develop the elements that we can build strategic direction on. by writingfor Explosion Plumbers Ltd;
A viable Mission Statement [Two Marks]
Anda set of Values [Two Marks]
- Write a set of goals for Explosions Plumbers Ltd. Note: these goals need to meet the criteria for effective objectives. [Six marks]
- Draw an Organisational Chart for the current organisation structure
[Three Marks]
The proposed new organisational structure [Five Marks]
And then explain the differences between functional, divisional and matrix
structures. [Six Marks]
- With reference to the new organisational chart for Explosion Plumbers explain the concept of span of control and how this will likely affect managerial effectiveness and organisational coordination.
[Four marks]
- Discuss the delegation process:
- What are the potential advantages?
- What are the potential disadvantages?
- What are possible barriers to effective delegation?
- Explain the difference between empowerment and delegation?
[Two marks for each: Total Eight marks]
- Discuss the possible problems with effective planning and controlling in this scenario and discuss how these barriers may be overcome?
[Seven marks]
Principles of ManagementPage 13/11/2018