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ICMA.

Pakistan

MODEL PAPER

ENTERPRISE MANAGEMENT (ML-302) SEMESTER- 3

Time Allowed: 02 Hours 40 Minutes Maximum Marks: 80 Roll No.:

(i) Attempt all questions. (ii) Answers must be neat, relevant and brief. (iii) In marking the question paper, the examiners take into account clarity of exposition, logic of arguments,

effective presentation, language and use of clear diagram/ chart, where appropriate. (iv) Read the instructions printed inside the top cover of answer script CAREFULLY before attempting the paper. (v) DO NOT write your Name, Reg. No. or Roll No. anywhere inside the answer script. (vi) Question No.1 Multiple Choice Question printed separately, is an integral part of this question paper. (vii) Question Paper must be returned to invigilator before leaving the examination hall.

Q.1 First question (MCQs Part) comprises 20 MCQs of one (1) mark each to be attempted in 20 minutes.

Q.2 Read the following CASE carefully and answer the questions given below: Case of Blue Bird Company (BBC)

Introduction Blue Bird Company (BBC) is a local company established in the year 1990 by Mr. Dinar. The company comprises diversified businesses: Entertainment (including both cinema houses and drive-in-cinema), Retail Stores, and Restaurants.

History and Background Initially the company got started by opening two large scale Cinema houses in the metropolitan city Carach named as City Cinema and Metro Cinema. In 1992, the BBC diversified its business by opening a chain of super stores My Mart in the same city. In the year 2000, the company further diversified its business and acquired a famous restaurant, the Cuisine Island(CI) in a posh locality and its target market was upper class and upper middle class. The new business grew well and gained significant importance among all other businesses of BBC. (See Exhibit 1)

Exhibit -1 Percentage Share in BBCs Revenue

Metro Cinema 05 % Cuisine Island 60% My Mart 35 %

Competitive Environment of CI Till 2004 Cuisine Island was enjoying a sort of free ride in the market, as there were only few competitors, targeting the same segment. The market share of other restaurants was significantly lower than CI that determined CI as market Leader. (See Exhibit 2).

Exhibit 2. Market Share of Restaurants in Carach City

Restaurants Market Share Cuisine Island 60 % Others 40% Total 100 %

CI was a unique kind of restaurant in the industry as its product offering was ranging from genuinely local Pakistani and Indian Foods to Continental Foods. It was positioned as Family Dining Restaurant for upper tiers (see Fig-1, Positioning Map).

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Fig -1

Entry of Foreign Players The first in the long chain of fast food restaurant owned by a multinational food company entered the local market in the last quarter of 2005. The entry was seen as a major change in the restaurant industry. The entry of Pizza Host was followed by other foreign fast food chains. Although it was seen as fast food but the company position itself as a dining Restaurant for upper tiers. Initially the food introduced by these chains comprised fast food and complete meals too. The entry of these new foreign entrants drastically changed the market competition and norms. The new entrants introduced high standards of product, service, and hygiene. The local restaurants lacked in this area and did not have any such high standards, so as the CI. The new entrants with superb experience and very attractive offers successfully started capturing market by snatching local restaurants customers. Many local restaurants could not resist this tsunami, and were closed down. Those which continued their businesses could only think about their survival. Like other restaurants CI was also affected badly and was facing a great deal of problems. Within two years of the advent of foreign fast food restaurants, CI had lost almost its fifty percent customers to these new entrants.

Staffing at CI CI did not have any formal HRD, and it never considered staffing as an important organizational function. The resultant, were most of the people employed, was not based on competence and merit, rather on relationships, low wages and salary basis. The employees were neither trained nor they had given any sort of formal or informal training. The salary and wage administration basis was cost reduction and no considerable focus on customer and services. The employees were not generally happy and were experiencing pay dissatisfaction. Those who were competent were planning to switch to foreign players.

Existing Structure of CI

Exhibit C people Employed by BBC Businesses of BBC Managers Employees Total Required

Staff Metro Cinema 6 44 50 30 Cuisine Island 3 22 25 25 My Mart 15 80 95 95

Fig-1 Positioning Map

Cuisine Island

All Category Family

S e g m e n t

Upper Class

Upper Middle

Lower Class

Quality and Price

Low High

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BBC Planning to Deal with CIs Crisis The changed situation became serious concern for Mr. Dinar and key managers of BBC. They started to plan to save CI from the competitors advances, and regain its market to the maximum extent. After series of meetings and planning sessions the managers at BBC made a future plan which was as follows:

1. BBC will establish a separate marketing department and HR department; 2. BBC will ensure that none of its business is over or under staffed; 3. CI will add new product lines comprising Fast Foods, Ice Creams and Fresh Juices; 4. CI will employ TQM approach to , define new improved product, customer, and overall quality

standards; 5. CI will hire new employees on merit and fire the non-performing employees, ( in connection to this

New HR polices were made formal HR department will be established who will be graduate, qualified in hotel and resultant industry, have at least 5 years relevant experience).

To regain CIs lost business the first thing needed was a real sense study of market in order to understand the customers and the market place. Second develop products according to the needs, wants and preferences of customers, and then market the restaurant and its offers professionally. Third, redo staffing: determine the human needs accurately, both existing and future needs (in terms of number of employees and required competence). Fourth, carefully( confirming with plans made ) recruit and select employees who are best available and best affordable. Fifth, train employees duly and reward them accordingly.

Implementation of Plan The BBC started HRD and marketing department immediately. The manager purchasing, Mr. Munir was repositioned as HR manager. (Mr. Munir has got double masters degrees in English Literature first class first position and another in Philosophy- Gold Medalist). To recruit employees Mr. Munir used employee referral as a source, and selected people from these referrals. He believed that qualification was not a valid criterion for selecting employees for such a restaurant. HR manager did not give importance to qualification; experience etc, rather his main selection criteria was how strongly the existing employees had referred him. Some left over positions were filled by individuals belonging to his family mainly on the basis of relationships. After inducting employees they were directly sent to their positions and work places so that restaurant time does not get wasted. The HR manager believed that training and development are logically expense to a company.

In connection to the salary and wage management, the HR manager kept the existing compensation structure unchanged because he did not have clear idea of market prevailing-wage rate. The employees which were in good books of him were benefited and were given higher wages and salaries.

The Marketing BBC established its marketing department as per the demand of plan. The marketing manger MR Salman was inducted who had 2 year experience of sales executive in a bank credit card division. The first thing he did was, he produced a 30 seconds TV advertisement which showed that many college and university students coming for lunch at CI, had a fine lunch there and left happily .

To be in the good books of MR. Dinar, he added the new lines comprising on juices and Ice-Creams, because he thought adding Juices and Ice-Cream was a decision made by Mr. Dinar.

The Result of Implemented Plan The CIs business position went down further, its customer traffic dropped by 30 percent further, its juices and ice-cream products incurred losses to CI. On the other hand many of the existing employees got dissatisfied and left CI. The TQM idea totally collapsed and could not be practiced.

Within six months of the execution of new plan, CIs the business on the whole shrunk by 50 percent. MR Dinar was again upset and thinking seriously about What had gone wrong?

Required: 1. What are the marketing factors you think would have contributed in the failure of plan? (08 Marks) 2. What are the HRM factors you think would have contributed in the failure? (08 Marks) 3. Why TQM program could not be practiced? (07 Marks) 4. What would you suggest to Mr. Dinar to do now? (07 Marks)

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MARKS

Q.3 (a) Management is defined as attainment of organizational goals in an efficient and effective manner through planning, organizing, leading and controlling, and other organizational resources. In the light of the definition we see that all organizations wants to be efficient and effective. Why? Discuss/argue.

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(b) An important aspect of quality management is how and which approach should be used to measure the quality. Balanced Scorecard is an approach to measure quality and focuses on four different perspectives. Illustrate.

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Q.4 (a) The global business environment can be analysed against a number of factors such as political, economic, social/cultural and technological. Discuss each factor.

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(b) Lean Production is a manufacturing methodology which involves identifying and eliminating all non-value-adding activities. Discuss the goal and benefits of lean production. Why it is criticized in many situations in various organizations.

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Q.5 (a) Controlling is the process of ensuring things are happening same way as were planned. In order to control work performance managers implement various types of controls, depending upon the need and the situation. What type of control a manager will exercise to control an activity as indicated below:

i. Before it begins ii. When it is going on iii. After it is completed

Briefly explain and give at least one example of each type of control.

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(b) Organizations should take into account all factors that influence employees motivation. Discuss the factors used to improve the motivation of employees by introducing changes to their work.

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Q.6 (a) Recent shifts towards targeted; one-to-one marketing is coupled with advances in information and communication technology, have led a dramatic impact on marketing communication. One of the impacts of these trends on organizations is that more companies are adopting the concept of Integrated Marketing Communication. Why? Give specific reasons.

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(b) The purchase decision is just part of a much larger buying process. In most cases the buyer decision process consists of five stages. Identify and briefly explain those stages.

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