Part 6: Management Practice
A Manager’s Dilemma
Pretend you’re part of the management team. Using what you’ve learned in this Part on
monitoring and controlling, what five things would you suggest the team focus on? Think
carefully about your suggestions to the team.
This situation is a good way to apply the concepts of controlling for organizational and employee
performance. Using this approach, managers at Lululemon might implement the following
controls:
5. Using disciplinary actions—Quality problems like those reported in the case cannot
continue. Employees whose performance falls short of standards must face disciplinary
actions, including off-boarding.
Global Sense
Discuss the following questions in light of what you learned in Part 6.
How are offshoring and outsourcing similar? How are they different?
Offshoring and outsourcing are similar in that they both employ moving parts of the production
process apart from the company’s normal operations. Outsourcing is always done by an outside
vendor. Often these vendors may be in another part of the world from the host company.
Companies may use offshoring as part of a direct investment strategy.
What arguments do critics use to say offshoring and outsourcing are bad?
Some of the criticisms of both outsourcing and offshoring are that they eliminate jobs within an
organization. Offshoring often eliminates jobs locally, replacing their work with lower paying
jobs overseas. These practices can have negative impacts on local communities through plant
closings and layoffs. Others criticize that such practices remove vital production standards from
company control and may lead to quality problems.
As key processes move outside the organization to be performed by partners, monitoring and
P6-1. What companies might be good benchmarks for Starbucks? Why? What companies might
P6-2. Describe how the following Starbucks managers might use forecasting, budgeting, and
scheduling (be specific): (a) a retail store manager; (b) a regional marketing manager; (c) the
manager for global development; and (d) the CEO.
P6-3. What control criteria might be useful to a retail store manager? To a barista at one of
effectiveness, service delivery times, accuracy rates for service delivery, product quality,
P6-4. What types of feedforward, concurrent, and feedback controls does Starbucks use? Are
P6-5. What “red flags” might indicate significant deviations from standard for (a) an hourly
partner; (b) a store manager; (c) a district manager; (d) the executive vice president of finance;
and (e) the CEO? Are there any similarities? Why or why not?
P6-6. Evaluate the control measures Starbucks is using with its gift cards from the standpoint of
the three steps in the control process.
Students should see that the three steps of control can be applied to the gift cards: feedforward,
P6-7. Using the company’s most current financial statements, calculate the following financial
ratios: current, debt to assets, inventory turnover, total asset turnover, profit margin on sales,
P6-8. Would you describe Starbucks’ production/operations technology in its retail stores as
P6-10. Go to the company’s Web site [www.starbucks. com]. Find the information on the
company’s environmental activities from bean to cup. Select one of the steps in the chain (or
your professor may assign you one). Describe and evaluate what environmental actions it’s
taking. How might these affect the planning, organizing, and controlling taking place in these
P6-11. Look at the company’s mission and guiding principles on its Web site. How might these
affect the way Starbucks controls? How do the ways Starbucks controls contribute to the
finest quality and to the fulfillment of this commitment in an ethical, principled manner as a