MNG3702 Assignment 2 (COMPLETE ANSWERS) Semester 2 2024

MNG3702 Assignment 2 (COMPLETE ANSWERS) Semester 2 2024 - DUE September 2024 ; 100% TRUSTED Complete, trusted solutions and explanations. For assistance, Whats-App 0.6.7-1.7.1-1.7.3.9. Ensure your success with us . Michelin is a leading French brand and manufacturer of tires and rubber products.The company was founded in 1888 by two Michelin brothers and grew to one of the largest tyre manufacturers in the world, with a market share of 14.8% in 2023. Oddly enough, the company also sells popular travel guides and road maps. They can make or break chefs by the number of Michelin stars they award to their restaurants. Michelin stars are a rating system used by the red Michelin Guide to grade restaurants on their quality and excellence. Restaurants can be awarded one, two or three stars, based on various criteria, such as quality of their ingredients used, the harmony of flavours in their dishes, the mastery of various techniques, the personality of the chef, and the consistency of the menu. The Michelin Man (Bibendum) is known word wide. The history of the Michelin Guide The Michelin Guide is considered by many to be the hallmark of global fine dining and quality cuisine. It has immense power over chefs, restaurateurs, and foodies world wide. It may divide opinions across the food service industry, but its influence is undeniable. French chef Paul Bocuse, a pioneer of nouvelle cuisine (a modern French style of preparing dishes that avoids rich, heavy foods, rather emphasizing the freshness of the ingriedients used in prepring the dishes and the presentation thereof), once said, “Michelin is the only guide that counts.” The birth of the famous little red book is a very interesting story. When the Michelin tire company was established in 1888 by brothers André and Édouard Michelin, it was a time when driving was perceived as a novelty to most. There were less than 3 000 cars in France at the time. However, the brothers were quick to recognize driving and mobility as a lasting trend. To encourage more road travel, and hence boost tire sales, they decided to create a comprehensive guidebook for motorists which catalogued hotels, restaurants, mechanics, and gas stations. In 1900, the very first edition of the Michelin Guide was published, and 35 000 copies were given out for free. 3 MNG3702 Assignment 2, semester 2 As the tire company grew, so did the Michelin Guide. Country-specific editions were published throughout Europe, starting with Belgium in 1904. A charge was introduced for the first time in 1920 when André Michelin walked into a garage and saw copies of the guidebook being used to support a workbench. Realising that “Man only truly respects what he pays for,” the company started charging 7 francs for the guides. By that time, the restaurant section of the Michelin Guide had become so popular that the company started to recruit anonymous inspectors to visit and review restaurants. Six years later in 1926, the Michelin star system was born. There were other notable changes as well, namely listing restaurants by specific categories, the debut of hotel listings and the abandonment of paid-for advertisements. The single-star restaurant review system also expanded to the present a three-star system in 1931: “A very good restaurant in its category.” “Excellent cooking, worth a detour.” “Exceptional cuisine, worth a special journey.” In 1957, the Michelin Guide began awarding accolades to restaurants that provided “good meals at moderate prices,” a feature now called Bib Gourmand. The Bib Gourmand symbol—the image of Bibendum or the Michelin Man licking his lips—debuted in the Michelin Guide in 1997. What began as a promotional device for the Michelin brothers’ tire business at the turn of the 20th century has grown into an authority on global fine dining. Since its first publication in 1900, more than 30 million copies of the Michelin Guide have been sold across the globe. It presently rates over 40,000 establishments in over 25 countries across four continents. Performance, strategy, and structure Michelin has a rich history of a company that started by manufacturing tires for bicycles and horse-drawn carriages. Then, they introduced pneumatic tires (rubber tires inflated with air) for automobiles in the 1980s. Michelin was reorganised as a holding company in 1951, with interests in tires, other rubber products and synthetic rubber. Over the years, Michelin's worldwide revenue increased, despite frequent fluctuations in the market. The lowest point for the company occurred in 2009, which coud be attributed to workers and managers in the tyre factories having different points of view regarding better use of technology with new projects which was not going according to plan. The world was changing, but Michelin was stuck with a pyramidal management structure better suited for a company operating during the first industrial revolution than operating in the digital age. It was imperative for the company to create a new organisational structure. In May 2012, Michelin appointed Jean-Dominique Senard, a French industrialist in the automobile industry as chief executive officer. Senard was the first non-family member ever in this position. In 2015, 4 MNG3702 Assignment 2, semester 2 he embarked on a restructuring process and transformed the company's culture by focusing on empowerment, responsibility and accountability. The focus was to create more autonomy for employees, allowing them to perform managerial responsibilities without waiting for managers to tell them what to do. Before this initiative, employees viewed themselves as order takers from the bureaucrats above them, who made all the decisions. In this environment, managers were expected to know everything, and they had complete control over operations and performance. Communication was often seen as the start of disciplinary action. This led to lower productivity, declining safety records, more wasted time and wasted materials. The changes CEO Senard affected to the organisational culture made a huge difference to how work was scheduled and performed at the company. Workers could plan production schedules a week in advance, decide on the targets they had to meet, divide responsibilities for jobs among themselves, and manage employee absenteeism more effectively. Some of the immediate benefits of this change in culture were improved safety records and reduced waste. Employees were now responsible for meeting their own targets. With managers and employees striving to attain the same targets, the image of managers changed subtly from being bosses to coaches. Shop floor managers were seen as guiding their teams through unpredictable order cycles, qualifying the decisions the teams took and developing the potential of each team member. Employees with stronger potential than others to become team leaders were identified in this new environment. Eventually, teams were given the freedom to make their own decisions. The structure of the company changed from a bureaucracy and pyramidal structure to a flat and lean company. The company's old model of command and control was abandoned and replaced by a collaborative model based on trust and confidence. Michelin's annual gross profit increased with approximately 38% from 2009 to 2021, demonstrating the company's financial growth and stability in the tire industry. Corporate governance The Michelin Group’s parent company, Compagnie Générale des Établissements Michelin (CGEM), has been organised as a partnership limited by shares (SCA). Within this legal framework, Michelin has armed itself with a governance structure that is robust, flexible, and balanced. The Michelin partnership limited by shares therefore deploys a long-term strategy that is fully aligned with shareholder interests. The establishment of a direct relationship with each shareholder is promoted by the fact that only registered shares are held. It is also focused on driving continuous improvement in the Group’s governance system and practices, in compliance with the recommendations of the Afep-MEDEF Code, which is the corporate governance code of reference for publicly trade companies. Michelin’s governance comprises three bodies that guarantee a clear separation between the supervisory and management powers: the Managers, the Supervisory Board and the Société Auxiliaire de Gestion (SAGES = Auxiliary Management Company). The supervisory board is responsible for assessing the quality of the Group’s management and presents a report on its findings to shareholders at each Annual Meeting. It also issues opinions on the Group’s strategy, capital expenditure, acquisitions and disposals, Michelin’s social responsibility policies, and the election or dismissal of Managers and their compensation. The future Through its strategic plan for 2030, “Michelin in Motion”, the Group will continue its targeted growth in tires, while also relying on its distinctive capabilities by setting ambitious goals in the fields of connected 5 MNG3702 Assignment 2, semester 2 solutions and high-tech materials. These developments should represent between 20% and 30% of Michelin’s turnover in 2030. With its strategic plan for 2030 “Michelin in Motion”, Michelin is confirming its belief that any sustainable growth depends on considering the limits of the planet and acting responsibly towards employees and society. The Group also firmly believes that creation of value is the essential lever for any transformation. It is these beliefs that now form the foundations of Michelin’s strategic plan, the growth ambitions of which come under an “All-sustainable” approach; an approach that seeks the best balance between the development and fulfillment of every employee, economic and financial performance, and the planet. The indicators are grouped in three categories: people, planet and profit. • People. The company aims to be world-class in employee engagement, employee safety, a reference in diversity and inclusion, and best-in class in value created for customers. By way of example, Michelin is aiming at an employee engagement rate more than 85%, and a goal of 35% women within its management teams. • Profit: Michelin aims to developer sustainable growth, deliver continuous financial value creation, maintain Michelin brand power, maintain best-in-class innovation pace in products and services (with engagement with business partners) • Planet. Reach net-zero CO2 emissions, contribute to reaching net-zero emissions in use, have best-in-class environmental footprint of industrial sites, reach full circularity (in other words a full circular economy) of tires by 2050. By way of example, they will rely on a very advanced technological maturity in the field of high-tech materials and intends to integrate 40% renewable or recycled materials into all its products by 2030. To reduce the impact of its main negative externalities, by 2030 Michelin is counting on reducing its water extraction by 33% compared to 2019 and halving the CO₂ emissions from its industrial sites compared to 2010, and thus achieving net zero emissions by 2050. Sources: Daft, R.L.; Benson, A. & Henry, B. 2020. Management. 2nd ed. Hampshire:Cengage. Michelin statistics [2023]: Figures and charts. Available online. Michelin. Britannica. Available online Michelin. People, Profit, Planet. Available 6 MNG3702 Assignment 2, semester 2 QUESTIONS Question 1 “Organisations will not survive over the long term without the ability to learn and adapt to changing environments.” There are various mechanisms that organisations can use, in combination, to become a learning organisation. Apply any FIVE of these mechanisms to the Michelin company throughout its history of publishing the Michelin guide. In your answer, you need to identify the mechanism and then apply it to the company. (10 marks, of which one mark is awarded for correctly identifying the mechanism, and one mark is awarded for the correct application of the mechanism to the company) [10 marks] Question 2 “Resource allocation is an important aspect in strategy implementation.” Explain the strategic project management framework as a resource allocation framework that can assist a company to align its projects and programmes with its formulated strategies. In your answer, you need to discuss the framework and the apply it to the Michelin company during the period when Jean-Dominique Senard was appointed as CEO and the changes he made to the company. (16 marks, of which 2 marks will be awarded to phase 1 of the framework; 2 marks to phase 2, 10 marks to phase 3, and 2 marks to phase 4) [16 marks] 7 MNG3702 Assignment 2, semester 2 Question 3 “Every organisation has its own unique culture.” Apply the various layers of organisational culture developed by Edward Hall to Michelin. In your answer, you need to identify each layer and then apply it to the company. (9 marks, of which one mark is awarded to each identified layer of culture, and two marks to the correct application thereof to the case). [9 marks] Question 4 “Today’s leaders act in a global stakeholder society, in which organisations are expected to be responsible and accountable.” Make a judgment regarding the responsible strategic leadership of Michelin. In your answer you should: 3.1 Address the THREE phases of leadership for sustainability and apply each phase to Michelin; 3.2 Identify FIVE of Michelin’s stakeholders and explain the company’s commitment to each of them in their “Michelin in Motion” strategic plan for 2030; 3.3 Make a judgment regarding the responsible strategic leadership of Michelin. Your answer needs to be substantiated (only a yes or no answer will not suffice). (18 marks, of which 6 marks are awarded to the phases of leadership for sustainability, 10 marks are awarded to the stakeholders and the company’s commitment to them, and 2 marks are awarded to your final judgment) [18 marks] Question 5 “Designing an organisational structure is one of the most important functions of strategic managers.” 4.1 Explain the most important components of organisational structure. (3 marks) 4.2 Explain the advantages of a flat organisational structure for the Michelin company compared with a pyramidal structure as indicated in the case. (3 marks) [6 marks] 8 MNG3702 Assignment 2, semester 2 Question 6 “Strategic control enables management to monitor strategic outcomes against its planned strategic goals to ensure that all activities remain on track and correspond with the set course.” 5.1 Identify the type of strategic control evident in the Michelin company when they changed from a pyramidal to a flat organisational structure. Substantiate your answer. (4 marks, of which 1 mark is awarded for the identification of the correct type of strategic control, and 3 marks is awarded for the substantiation) 5.2 Explain the concept ‘corporate governance’ and identify the way in which Michelin ensures effective governance. (4 marks, of which 2 marks is awarded for the correct explanation of corporate governance, and 2 marks are awarded for the application to Michelin) 5.3 Apply the strategic management risk process to Michelin during the time when Jean-Dominique Senard took over as CEO. In your answer, you need to identify each phase in the strategic risk management process and apply it to the case. (3 marks, of which 1 mark is awarded to each phase in the process)