This document includes mock report of The Fachetti Group. This report is distinction level and reaches the fourth band in each Assessment Objective.
This includes the challenges, proposals and recommendations and can be used as a guide or help for the actual exam.
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PEARSON (PEARSON)
Business 2016 NQF
Unit 6 - Principles of Management
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Formal report on the current management challenges faced by The Fachetti Group and
the suggested management proposals and recommendations.
This report has been prepared by —-------------- and is intended for the management of The
Fachetti Group.
Date:
Introduction:
The purpose of this report is to provide the management of The Fachetti Group with an analysis
of the current management challenges, the proposals to solve the corresponding challenges
and the recommendations for the implementation of each proposal with consideration for the
impact on each strategic objective. This report will also cover how the management and
leadership styles and key principles of The Fachetti Group affects profitability and staff turnover.
The Fachetti Group is owned by Fabio Fachetti who is a celebrity chef and TV presenter who is
well known for his innovative Italian recipes. The Fachetti Group was previously made up of two
divisions; the restaurant division and the manufacturing division. The restaurant division was
made up of a collection of restaurants in the UK’s major cities, with Katrina Szynalski as
divisional manager who has over 20 years of experience in the most successful restaurant. In
the manufacturing, gourmet chilled Italian meals are produced and are sold to large UK
supermarkets at a premium price under the brand Fachetti’s Kitchen. This is an example of a
business to business (B2B) transaction where Fachetti’s Kitchen is the supplier to the
supermarkets. Sunny Elder is the divisional manager of the manufacturing and oversees all
operations in the factories to ensure high quality products are manufactured safely and
efficiently.
The key areas that will be covered in this report are:
● The strategic objectives of Fachetti’s Kitchen
● Current management challenges faced by The Fachetti Group
● Proposals for the corresponding challenge with data analysis
● Recommendations
The strategic objectives:
With the information provided, the current strategic objectives for Fachetti’s Kitchen are;
1. Zero defect production
2. Reduce staff turnover to January 2020 levels
3. Increase net profit by 10%
Zero defect production means to produce the maximum amount of products with the minimum
amount of defects. This can be achieved through having a highly skilled workforce and has
many benefits such as increasing the level of net profit and therefore profitability because as
there are less defects, there is less wastage and expenses. To achieve the reduced staff
turnover to January 2020 levels, staff turnover has to fall from 22% (September figure) to 12%
(January figure) which is a decrease of 10%. Low staff turnover is important because by
retaining a large proportion of the workforce it can grow in efficiency and avoids high recruitment
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, costs that limit net profit caused by higher levels of staff turnover. The final objective is to
increase net profit by 10%. To achieve this objective Fachetti's Kitchen must increase the level
of net profit to £12,320,000. A high level of net profit is important for a business like The Fachetti
Group because they can use the retained profit to ensure financial stability or reinvest and
expand product lines in their gourmet meals to gain a competitive advantage. The impacts of
the current management challenges and proposals on these three strategic objectives are
analysed later in the report.
Current management challenges faced by The Fachetti Group:
Conflicts between managers:
There is a management clash between Katrina Szynalski and Sunny Elder. Katrina Szynalski
uses a democratic management style where she regularly consults with employees, cares for
them and encourages their input. Under this style employees feel engaged and valued as their
needs and opinions are discussed and considered in the decision making process. On the
leadership continuum developed by Tannenbaum and Smidcht to explain the behaviours of
managers, she is further right as she 'consults' with employees which would put her behaviour
as high supportive, low directive. Her management style is linked to McGregor's Y-Theory where
the belief of management is that employees like working and enjoy challenges. On the other
hand, Sunny Elder uses an autocratic management style with a strict set of rules that he
expects his employees to fully adhere to and very rarely asks for their input. The autocratic
management style can be beneficial in some instances such as a period of rapid change in the
market because the manager is able to make quick decision that fully correspond with the
business's goals, however the long term use of this style leads to a higher level of staff turnover
because employees opinions is overlooked in the decision making process. On the leadership
continuum his views on management are far left as he 'tells' his employees what to do which
means his behaviour is low supportive, high directive. This links to McGregor's X-Theory where
managers believe that their employees do not like working, are only motivated by a high
remuneration or other financial incentives and should follow a strict set of rules.
As Sunny and Katrina have different views on how employees should be managed, this will
obviously lead to a lot of conflicts. Katrina believes that Sunny's autocratic style limits his
creativity and that he lacks compassion for his staff and Sunny believes that Katrina's
democratic style means that she cares too much about the opinions and needs for staff at the
expense of profit and cash flow. This will become a significantly larger problem in the future
because they both have to work closely as divisional manager (Sunny) and deputy divisional
manager (Katrina) for the manufacturing division. If there are further conflicts then it will create a
poor working environment which can increase the level of staff turnover, negatively impacting
the strategic objectives. In the management of The Fachetti Group there is a lack of team
building, valuing and supporting others and building positive interpersonal relationships which
are key basic management and leadership skills. The lack of these skills will lead to high
inefficiency and lower levels of profitability.
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