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 which begin on page 529. Using this approach, managers at Lululemon might
implement the following controls:
1. Organizational productivity – Managers must control for organizational productivity,
2. Organizational effectiveness – Managers must evaluate the appropriateness of current
4. Deliver effective performance feedback – Managers must develop standards for
5. Using disciplinary actions – Quality problems like those reported in the case cannot
Global Sense
Discuss the following questions in light of what you learned in Part 3.
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
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
What arguments do proponents use to say offshoring and outsourcing are not bad?
Outsourcing and offshoring are critical considerations if an organization is to remain competitive
competencies and focus on design, engineering, marketing, and other functions.
How does the decision to offshore and outsource affect monitoring and controlling activities?
Is it just manufacturers that deal with these decisions/issues? Discuss.
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.
Students will need time to consider their answers to these questions. After your presentation
P6-3. What control criteria might be useful to a retail store manager? To a barista at one of
Starbucks’ walk-in-only retail stores? How about for a store that has a drive-through?
As your students have learned in their study of control from the text, what is chosen for
measurement by an organization is probably more critical than how the company measures.
When relating objective and subjective control criteria relevant to a barista at one of
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?
Your students should recall that only after careful analysis of deviations should managers on
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,
and return on investment. What do these ratios tell managers?
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?
You may want to divide your class into seven small groups for the purpose of assigning this
activity, with students conducting research individually. Students can access the following
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
attainment or pursuit of these?
Your students can review the mission and the six Guiding Principles of Starbucks in Part 1 of
The company’s mission—fiTo inspire and nurture the human spirit—one person, one cup,
and one neighborhood at a time”—indicates its commitment both to providing a product of the
finest quality and to the fulfillment of this commitment in an ethical, principled manner as a
responsible, caring corporate citizen.
As the engine that drives everything done by the company, Starbucks’ mission, along with
by luck.”