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Summary Unit 6 January 2022 COMPLETE NOTES (The Fachetti Group) Principles of Management
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Unit 6 January 2022 COMPLETE NOTES (The Fachetti Group) Principles of Management
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Unit 6 - The Fachetti Group Complete Notes:Key information about The Fachetti Group:
- The Fachetti Group was previously made up of two divisions; the restaurant division
and the manufacturing division
- Fabio Fachetti owns the business and he is a famous celebrity chef and TV presenter
who is well known for his innovative Italian recipes
- Katrina Szynalski was the divisional manager for the restaurant division, having 20
years of experience in Fabio’s most successful restaurant
- Sunny Elder is the divisional manager for the manufacturing division
The restaurant division: (Division was closed down after Fabio’s plan was implemented)
- Katrina Szynalski was the divisional manager
- The restaurant division was a collection of luxury restaurants in the UK’s major cities
- In 2020 when many restaurants closed down due to the pandemic, Fabio opened up his
restaurants to take home delivery orders
- Despite the good performance, Fabio was worried that some of his restaurants
wouldn’t survive the closure and discussed their permanent closure
- After Fabio read Sunny’s proposal which stated that the restaurants were no longer
viable, he laid out plans for the future of the business, which included that the
restaurants were to close with immediate effect, Katrina would become the deputy
manager of the manufacturing division, all 15 head chefs were offered positions as
quality inspectors and offer restaurant staff could apply for jobs in the factories
The manufacturing division:
- Sunny Elder is the divisional manager
- This division consists of factories that produce gourmet chilled Italian meals
- The meals are sold to many of the UK’s major supermarkets (B2B - Business to
Business)
- These meals are high quality and are sold at a premium price under the Fachetti’s
Kitchen brand, showing that they have a luxury brand image
- Under Fabio’s new plan two new factories will be opened, showing that the division is
expanding and there is more focus on being a supplier to the major supermarkets
How the workforce is currently motivated: (Learning Aim D)
- Staff are given bonuses when they hit their targets
- Bonuses are an example of a financial motivator
- In the case study, there are lots of references to a high remuneration which means that
Taylor’s Scientific Management motivational theorem is being used
- This fits in with Sunny’s beliefs and behaviour towards staff as he uses an X-Theory
where staff are only motivated through pay and should be told what to do
- Taylorism can cause other factors that motivate employees to be overlooked, leaving
the higher levels of Maslow’s Hierarchy of Needs unfulfilled
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, The strategic objectives:
The strategic objectives only apply to Fachetti’s Kitchen and are linked to figure 3.
Fabio has set the following goals for Fachetti’s Kitchen:
1. Zero defect production
2. Reduce staff turnover to January 2020 levels
3. Increase net profit by 10%
Zero defect production:
- The model aims to reduce and minimise defects in the production process
- In the Fachetti’s Kitchen division, this means to produce the maximum number of
meals, with the minimum number of defects
- An advantage of zero defects is that net profit will increase as if there are fewer
defects, fewer materials are wasted
- Zero defects also increases customer satisfaction as the meals that they buy from
Fachetti’s Kitchen will be of higher quality - builds up brand reputation and can
increase customer loyalty
- However, a criticism of this model is that there needs to be a highly skilled workforce,
therefore staff will likely have to be trained which can be very expensive
Reduce staff turnover to January 2020 levels: (Figure 3)
- Staff turnover is the percentage of employees that leave a business over a certain period
of time
- The higher the rate of staff turnover, the worse it is for the business, as it shows
that lots of staff are quitting their jobs
- High staff turnover means that there is a poor working environment which may be
caused by poor relationships, conflicts or low pay
- High staff turnover can reduce net profit as the business has to spend more money on
recruiting staff in order to fill gaps in the workforce
- In January 2020 the staff turnover rate was 12%, however, in September 2020 it is 22%
- For this goal to be achieved, staff turnover needs to be reduced by 10%
Increase net profit by 10%:
- Net profit is the final amount of money that the business makes, after deducting all
costs and expenses
- Having a sufficient level of net profit is important because it will make the business
financially stable and able to cover debts, this is even more important considering the
pandemic
- In table 3 the current net profit in September 2020 is £11.2 million, Fabio’s goal states
that this should be increased by 10%
- £11.2 million x 1.10 = £12.32 million, so net profit needs to be increased by £1.12
million in order for this goal to be achieved
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