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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:
1. Organizational productivity—Managers must control for organizational productivity,
increasing the ration of sales revenue to inputs and thus increasing efficiencies. Raising
2. Organizational effectiveness—Managers must evaluate the appropriateness of current
3. Industry and company rankings—Managers should increase performance, working
towards improving their ranking within their industry and generally.
4. Deliver effective performance feedback—Managers must develop standards for
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?
What arguments do proponents use to say offshoring and outsourcing are not bad?
How does the decision to offshore and outsource affect monitoring and controlling activities?
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Continuing Case
Starbucks—Controlling
Discussion Questions with Answers: Teaching Suggestions
P6-1. What companies might be good benchmarks for Starbucks? Why? What companies might
want to benchmark Starbucks? Why?
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
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P6-4. What types of feedforward, concurrent, and feedback controls does Starbucks use? Are
there others that might be important to use? If so, describe.
P6-5. What fired 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,
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P6-8. Would you describe Starbucks’ production/operations technology in its retail stores as
unit, mass, or process? How about in its roasting plants? (Hint: you might need to review
P6-9. Can Starbucks manage the uncertainties in its value chain? If so, how? If not, why not?
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
areas?
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
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