Exam (elaborations)
MNN3701 EXAM PACK 2023
- Institution
- University Of South Africa (Unisa)
QUESTIONS WITH ANSWERS
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MNN3701EXAM
PACK 2023
QUESTIONS WITH ANSWERS
,MNN3701/101
10 ANNEXURE A: CASE SCENARIO (BOTH SEMESTERS)
Please read the following case scenario before attempting the assignments. This case
scenario applies to the assignments in both Semesters 1 and 2 of 2018.
Case Scenario: GoldMart Holdings – growing forward sustainably
GoldMart Holdings (GMH) Limited was established as a food grocer in Bloemfontein, South Africa
in 2005. Over the years, GMH has expanded to include a clothing department and beauty
department. GMH was born with sustainability as a key part of the GMH business strategy and
“way of life” for the organisation and its stakeholders.
GMH has made sustainability a key part of its business strategy and a “way of life” by integrating
sustainability into all business and decision-making processes. The corporate is committed to
sustainability and does its best to play its role in adhering to and achieving the goals and principles
set out by the United Nations. The broad strategy identified by GMH is labelled the GoldMart
Awaken 2030 Project, which aims to harness business and retail capabilities, to help meet the
societal needs of South Africa going forward. With sustainability at the centre of the GMH strategy,
the corporate is working towards becoming a carbon-neutral organisation. It aims to do this through
new product development and innovations that drive growth and through the continuous
improvement in quality and service for consumers, using environmentally friendly supply chain and
procurement principles, as well as through the creation of new jobs.
Corporate strategy
The strategic steering committee is responsible for the decisions and activities required to make
the GoldMart Awaken 2030 Project strategy a reality; this includes the integration and application
of various drivers necessary to ensure the success of the strategies and the effective performance
of GMH.
The GMH operations management department is directed by their corporate strategy. The aims
of their operations management include: continually striving to find methods to minimise their
impact on the environment; assuring the manufacturing of quality products to reduce returns and
avoidable additional processes; minimising any scrap or waste; and continually looking for and
finding innovative ways for responsibly disposing of any by-products and waste.
Performance objectives
At GMH, the executive directors ensure that they and their managers mobilise people, and lead
their teams across the business to achieve performance objectives that are derived from the
strategic objectives of the organisation; they ensure working conditions are safe, humane, healthy
and non-discriminatory, and that work-life balance, amongst other needs, are addressed. This is
well illustrated by looking at the example set by Harold, the business manager responsible for
GMH’s main warehouse, who portrays a high concern for people and production. Harold believes
achievement is attained by employees who are motivated and who happily pursue the goals of the
corporation. He considers all employees to be individuals who can think for themselves and will do
the right thing. He believes that commitment, trust and respect are key elements that will result in
high employee satisfaction and production. He also believes that if this type of environment is in
place, GMH will be in a better position to administer citizenship rights.
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The executive directors believe in promoting inclusive and sustainable economic growth,
employment and decent work for all. One way of showing its care for society is by investing in the
project Alive Creations, which organises a mobile clinic to visit each of its stores annually –
providing specific vaccinations and healthcare to its employees, their families and the entire
community in which it operates. GMH further fosters contributions to society in the form of
philanthropy and active engagement in the well-being of their communities. They endeavour to
train and develop their staff to better understand the responsibilities of their organisations in
society. To ensure fair remuneration, a 15% salary increase was awarded to all non-managerial
operational staff, with the added opportunity of receiving a yearly performance rewards.
The natural environment
GMH is sensitive to the world in which they operate, therefore they assess the impact their
organisation’s decisions and actions will have on the natural environment. GMH aims to achieve
production processes that are environmentally friendly, using “green” technology wherever
possible, and recycling material and saving energy. To ensure this, GMH regularly assesses,
throughout all their business activities, the amount of land that is required to provide the natural
resources consumed by the populations concerned, and the amount of land that is required to
absorb the waste they generate.
GMH ensures that its products and services meet the needs of their customers; that their
products are safe and that any potential risks are openly and transparently communicated. GMH
is fully aware of the new type of consumer who is more informed, aware and demanding of
responsibly sourced and environmentally friendly products, and who prefers to buy products from
corporates who are committed to minimising their negative impact on society and the environment.
Because GMH is sensitive to customer needs, their products are sold at a relatively high price
as they are new and unique products using environmentally friendly material and “green”
technology. Due to the higher than normal profit margin, GMH is able to recover the research and
development costs of manufacturing the product. GMH has identified a market that is willing to pay
the higher price, partly because new inventions such as environmentally friendly products offer a
message as well as prestige. The price is high enough, allowing competitors the opportunity to
enter the market. Once there are competitors in the market, GMH will gradually reduce the price.
GMH ensures that their suppliers adhere to environmental, social and governance (ESG)
standards; they also ensure that they are treated fairly and ethically. Recognising the need to
operate sustainably, within the confines of environmental limits, GMH has an ESG rating and
continuous assessment system for prospective and current suppliers. GMH integrates
environmental thinking into supply chain management, including product design, material sourcing
and selection, production processes, delivery of the final product to the consumer, as well as end-
of-life management of the product after its useful life.
The company expects suppliers to apply certain standards to manage their impact on the
environment regarding the materials they use, production processes, waste, scrap, packaging,
disposal of the end product and anything that might have an impact on the environment, as well as
being compliant to relevant industry standards.
GreenCoastal Project
GMH provides support and financial assistance to 20 small suppliers in the rural, under-served
north coast of KwaZulu-Natal, with their GreenCoastal Project. These suppliers receive training
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that covers best practices in technical and management skills. In addition, GMH helps to identify
other opportunities for these suppliers to grow their small businesses.
In 2016, GMH was searching for the right supplier to come on board with their biggest beauty
range. To help them choose the right supplier during the selection process, GMH used their ESG
rating system for suppliers and short-listed those suppliers who were B-BBEE certified and
compliant. AJH Beauts was selected as the new supplier, based on the outstanding results they
obtained in the assessments. In February 2017, upon evaluating AJH Beauts’ performance, GMH
became aware that the supplier had deceitfully used people to pretend that they had a higher B-
BBEE rating than they actually had. The Board of Directors called for an urgent meeting to discuss
this unfortunate and important issue.
Conducting profitable business
GMH protects the investment capital of their shareholders and ensures an adequate return on
their investment. They respect the rights of shareholders, and provide them with timely information
on the performance of the organisation. GMH strives to prevent any moral wrongdoing, acts
responsibly and ensures good governance at all times. With this transparency, Johan, from the
finance department was not able to “get away” with his unethical practices at GMH. Johan was
suspected of wrongdoing, and despite him denying the allegations, Steven and his internal auditing
team were asked to conduct a thorough investigation. The results of the audit left the GMH Board
of Directors no choice but to dismiss Johan on account of lying and fraud.
GMH acts responsibly, building and maintaining the trust of their stakeholders, thus ensuring that
the organisation delivers on the social, environmental and financial dimensions of the organisation.
GMH sees its relationship with stakeholders as an imperative to its success as a retailer. The
corporate therefore illustrates morally sound ways of conducting profitable business where there
is interdependency between social responsibility and all departments of the corporate. To reach
such an ideal position, corporates need to involve their stakeholders in the manner in which they
operate their business. GMH even sees the natural environment as a stakeholder, advocating for
the welfare and protection of wildlife and habitation, where required, in their business practices.
The company abides by laws and regulations as determined by government; they pay taxes; they
provide inputs to government in terms of the technical, economic, financial or political importance
for framing appropriate policies; they take up governmental projects and contracts; offer their
leaders to assist government and work on different governmental committees. Furthermore, GMH
acknowledges the changing roles of corporates and governments as well as between corporates
and governments. The corporate does its best to administer citizenship rights for all its stakeholders
where possible. GMH stays abreast of any recent shifts in business-society relations, where it takes
over many of the roles and actions which may have previously been associated with government.
Industry Sustainability Forum
GMH fosters a culture of debate. Each year, GMH hosts an Industry Sustainability Forum. In
2017 the theme was “2030: Growing forward sustainably”, serving as a platform to discuss and
brainstorm the role of the industry in achieving certain sustainable development goals by 2030. A
number of views regarding sustainability were raised in a forum debate. Two broad views emerged.
Refilwe, the Human Resources Director at GMH, believes that human capital cannot be
substitutable to the multitude of processes applicable to natural capital, which is vital to human
existence. While Samantha from a competing firm, JK Chambers, considers natural and human
capital as substitutable with each other. Most executives at JK Chambers believe that corporate
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