Question 1

Home of Meals Limited (HOML) is a chain of restaurants owned and run by a team of seven former university classmates of the Bachelor of Hotel Management degree program. Although in existence for just over four years, the company has quickly established itself as a chain of restaurants providing very good quality meals in towns around the country. Over this period, the company has built a formidable brand name as a provider of high standard meals that are served by well-trained chefs, whose job roles include preparing the meals, preserving them as appropriate and serving them to the guests. The chefs are required to ensure that there is no deterioration in quality at any level of the food handling process. Following the quick simultaneous growth in HOML's customer base by extension and the level of profits, the company commenced the implementation of an expansionary strategy last year and opened up new restaurants in Fort Portal, Jinja, Mbale and Soroti towns, in addition to the original one that is located in Ntinda, Kampala. This initiative was aimed at tapping into the changing culture of "dining out of home", in line with a growing social trend in urban centres, where the working class opt to have their evening meals in restaurants, before retiring home for the night. Dining out of home also enables the patrons to save the time and fuel that would otherwise have been spent in the heavy traffic jam in and around the towns. HOML is hopeful that it can take advantage of this trend to establish itself as the leading provider of meals in the region. By the look of things, HOML's plan of opening up outlets in other towns such as Mbarara, Lira and Gulu within the next six months is on course. Although the capital required to set up a distinguished restaurant is high, the local banks that have been monitoring HOML's operations are more than willing to provide the company with the financial support required for the ongoing expansion strategy. The company's internal analysis has revealed that management clearly understands their customers' needs. This together with empowerment of staff to address the customer needs largely explains the growth in customer numbers. It has also been revealed that all the company's restaurants are designed in such a way that there is ample parking space. The interior of each restaurant has well demarcated and well designed sections that depict difference in class, with the serving tables and the lounges exquisitely designed to provide a good dining ambience. Customers who opt to have their meals in the VIP lounges are charged a premium price for the extra unique ambience provided. All over the restaurants, numerous serving points abound.

The tables are differently designed to accommodate clients who either come in small groups of two or large groups typical of those having a family meal out of home. Clients who have a limited budget also have a demarcated eating point that is quite decent, but with a basic set-up. As regards hours of operation, HOML's restaurants are often opened for long periods stretching from 5.00 a.m. to midnight. Feedback from customers shows that the long hours of service are a key benefit to the customers, especially those who work up to late, those who enjoy night life and those that are used to feed on preserved snacks bought from supermarkets. A look at the various kinds of foods prepared by HOML, shows that a large variety of meals is prepared, ranging from real traditional dishes, regional cultural delicacies to continental offerings. Despite this variety, there is a recognisable level of customisation at each of the restaurants. For example the Kampala restaurant prepares a variety of 'Luwombo' dishes in plenty yet the amount of other food like millet (Kalo) is limited. On the contrary, a lot of Kalo is prepared in the Soroti Restaurant, while "Eshabwe", ghee sauce, and salad dressing never miss in the Mbarara outlet. HOML also has a provision for specialised meals that are made on order by the client. The above arrangements enable the restaurant to meet the interests of those clients who wish to have ready prepared meals of a standard nature and those who wish to enjoy meals prepared on order. The Managing Director (MD) has also emphasised that in order to preserve quality, HOML's operations are sustained by a steady supply of quality inputs. Indeed, the company's suppliers, all of whom are certified by the Uganda National Bureau of Standards are comparably well paid. They are mandated to provide services under a one year renewable contract, which also restricts them from supplying similar products to the competitors of HOML. Employees on the contrary have complained about the long working hours which leave them too fatigued after a day's work. It has also been reported that a newly recruited accounts trainee slept-off while on duty at around 10:00 pm and at the time of reconciling the day's sales; she realized that she had made a shortage of Shs 1.5 million. Since HOML has put in place automated machines to help in securing funds, trainees who are less experienced are allowed some time to acquaint themselves with the technologically advanced collection systems. Plans are underway to recruit more staff to support the existing ones that are serving in the kitchen department and the accounts department. There is another challenge in the stores section at the Fort Portal branch where it was recently discovered that one of the staff in the section exchanged good quality groundnuts with poor quality ones with the intention of fraudulent benefit. It was not until customers complained of stomach upsets that the matter came to light. It has since then attracted a lot of negative media coverage for the restaurant. Management has investigated the issue and instituted additional measures to ensure that it does not happen again. These measures include routine inspections that are now done by the MD across all the outlets. Management has also reviewed the process through which staff at Fort Portal were recruited and found that most of them were brought in by one of the directors and that they do not have the skills required in executing their job roles. Rather than having these employees terminated, the directors have resolved to offer them the necessary training to equip them with the required skills for execution of their tasks. The MD however doesn't see the value in training someone who has already proved to be a fraudster. He has written to the other directors insisting that whereas he has no objection to the proposed training, the implicated staff ought to be fired. During one of the recently instituted routine inspections around the outlets, the MD noticed some residents picking and eating foodstuffs that had been dumped at the rubbish collection point near HOML's restaurant in Soroti. Touched by what he saw, the MD decided that HOML could make a difference to these people's lives. He therefore approached HungerVet, a Non-Governmental Organization (NGO) mandated with promoting food security in Soroti region for support. Following detailed discussions with the program manager at the NGO, a plan to help those who can't find food for themselves has been reached. HungerVet and HOML have collectively agreed to set up a program named 'free meals for the hungry'. As the lead partner, HOML, where you work as a projects advisor, has been tasked with the responsibility of developing a strategic plan that will guide the operations of the program.

Required: (a) Examine the determinants of the buying behaviour for HOML's customers. (10 marks) (b) Assess HOML's operating environment with the aid of the 5-forces model. (c) Discuss the significance of staff training to HOML. (15 marks) (10 marks) (d) Develop a strategic plan for the 'Free Meals For the Hungry' Program.

SECTION B Question 2 Kampala Plastics Limited (KPL) manufactures and distributes a series of plastic products that include among others flower vessels, packaging materials, plates, cups, chairs and basins. KPL's flower vessels are a recent innovation that was added to the company's production-line three years ago. The innovation was as a result of an international benchmarking exercise that was conducted by the MD. Following the exercise, the MD decided that the product should immediately be added to KPL's product line after realising that it was a profitable product for the organisations benchmarked. Even though KPL makes a variety of flower vessels as informed by the benchmarking exercise, only one variety is highly sought after by clients in Kampala. Large stocks of the other varieties continue to remain in the stores. Concerned by this slow moving stock, the MD has continued to blame the marketing team for not doing enough to sell off such products which seem to be highly sought after in some other markets outside Uganda. KPL's records show that since inception, the company has only been serving the Ugandan market especially the sub-urban centers. Marketing is largely done through selling the products from door to door. Asked about the effectiveness of the company's marketing efforts, the marketing manager responded that rather than blaming the marketing team for not promoting sales, the MD ought to blame the production team that has continuously produced substandard products over the past two years. He added that the marketing team had recently tabled a feedback report from the market showing that customers have for long complained about the deteriorating quality of KPL's household plastics but nothing has been done by the production department. Customers have specifically raised complaints about the inability of KPL's cups and plates to be used for serving hot drinks or foodstuffs. This is because whenever hot substances are placed into the cups or plates, they immediately emit an unpleasant smell. There are also other recent media coverage reports of customers decrying the fact that the Uganda National Bureau of Standards has allowed companies like KPL to continue dealing in substandard products there by affecting the health of many Ugandans. Following the negative publicity, KPL's board of directors immediately hired an experienced manufacturing consultant to review the company's operations. The consultant's report has raised three key concerns: First, it shows that since the departure of KPL's former productions manager two years ago, KPL has not held any 'skills enhancement training' for staff and is yet to recruit a qualified technical officer responsible for overseeing the proportions of various chemicals used for making household plastic products. Secondly, it has been discovered that the employees are working under poor conditions, authoritarian leadership and generally the attrition rate has continued to be high. Thirdly, customer complaints raised are not addressed and as a result the rate of customer retention has continued to decline. The report concluded that generally, KPL's products are finding it hard to penetrate the market that is already seemingly saturated by other established players.

Required: (a) Discuss the ideal product development process that KPL should embrace so as to enhance its products' appeal. (14 marks) (b) Evaluate the applicability of the elements of the promotional mix in addressing the challenges faced by KPL.

Question 3 For the first time in 30 years of existence, JBT Limited made changes to its human resource structures and systems last month. The restructuring exercise was motivated by the growth in JBT's operations and the consequential increase in the required number of staff. The changes included adjustments in the organisational structure, renaming of some of the positions in the reporting structure, expanding the roles of some officials and effecting corresponding changes in the salary structures. Some of the specific changes that have been undertaken include elevation of the status of the whole department of human resources into a directorate. Following an external advert for the position of Director Human Resources (DHR), Mr. Umar Kawunda was shortlisted and emerged the best candidate for the position. The appointment of Mr. Kawunda has since angered Mr. John Barasa who served at the helm of the human resource department (personnel manager) before the restructuring took place. Mr. Barasa who came second after Mr. Kawunda in the interviews, has expressed his frustration to the interview panel members arguing that they favored the eventual winner and thus did not act with honesty. It is clear that by comparison, Mr. Barasa has richer institutional memory of JBT compared to Mr. Kawunda who has merely spent a few weeks in the position of DHR. Mr. Barasa further argues that since JBT has been spending lots of money on training him, he was psychologically prepared to take-up the position of Director Human Resources. His grievances were tabled before the management at JBT by the Chief Executive Officer (CEO). In consideration of Mr. Barasa's long term service, management resolved to change his position from personnel manager to human resource manager effective 1 December, 2019. The new position came with a revised salary that is 40% higher than his previous salary, but lower than that of the DHR by 10%. A document review earlier commissioned by the CEO had also revealed that although the DHR has more competencies than the HRM, the latter is in fact destined to perform more technical duties. Mr. Barasa, who is still not satisfied with the management enhancements, has continued to use this as a way of justifying his demand for a salary higher than that of the DHR. It has also come to the attention of the CEO that majority of the employees in the human resource department are disgruntled. They argue that despite the fact that they work for more hours than the HRM, their salary was only increased by 25% yet that of the HRM was increased by 40%. They are planning to go on strike should the CEO fail to provide a convincing reason within a months' time explaining why their salary should not also be enhanced by 40%. The CEO is in the process of preparing a report to the management team at JBT clearly outlining the strategies that he hopes to use to contain the emerging challenges that seem to continue brewing at the human resource directorate. Meanwhile the newly appointed DHR has brushed off rumors that he intends to sack Mr. Barasa as a way of creating unity within the directorate. Commenting on the salary disparity, he noted that there is no way the salary of the DHR can be similar to that of the HRM yet one is subordinate to the other in the hierarchy.

Required: On behalf of the CEO, prepare report to the management at JBT; (a) analysing the management decision regarding the salary of the human resource manager. (7 marks) (b) assessing the applicability of the expectancy theory in enhancing the motivation level of the human resource manager. (9 marks) (c) examining the importance of staff training to a company like JBT.

Question 4 Kasoli Growers and Millers Limited (KGML), grows and processes maize for both the local and international market. The company produces the best maize flour on the market and this partly explains the ever increasing local and international demand for the company's products. It is anticipated that the growth in demand for processed maize will increase by 5 tons per year over the next 7 years after which it is expected that demand may decline for a while. Currently, the average demand for KGML's processed maize is 23 tons per month compared to 16 tons two years ago. By comparison, the company's processing capacity has been recorded at an average of 26 tons per month. A profile of KGML's strengths indicates that the company has a robust maize processing system that ensures quality output. The company is also known in the industry for its regular machinery servicing schedule. It also boasts of well trained staff who understand that the differentiation strategy that the company has embraced comes with the need for efficient customer care. The profile adds that the MD has also provided an enabling environment which allows free flow of communication amongst staff and that grievances are addressed through a mutually appreciated processes. It has also promoted team work, staff bonding and staff appreciation of the company's core mandate and values. A major incident arose at KGML recently, when one of the company's production lines with an average monthly production capacity of 12 tons per month abruptly broke down. This machinery was procured two years ago from a local competitor who was exiting business. According to the maintenance records, this production line was to be next serviced in six months' time. Preliminary investigations show that the breakdown was due to the excessive use of the machinery beyond the recommended usage hours per day. Similar machines on the market with a 5-year life span cost Shs 180 million, while those with a 10-year life span cost Shs 340 million. It takes a shorter time to procure and install new machinery than to repair the broken down machinery. While KGML is now under pressure to meet existing orders especially from Hunger Solutions Movement, which is KGML's biggest customer, the company is also wary of repeating the mistake it made two years ago when it hurriedly brought in a plant that could not meet the production demands of clients and often broke down when used excessively. The MD has now identified you as an external consultant and you are to advise on the comprehensive set of key capacity planning decisions that must be embraced so as to ensure that the machinery procured among other qualities, meets the ever growing production needs of KGML for the next five years.

Required: (a) Examine the key capacity planning decisions that the consultant should recommend. (10 marks) (b) With the aid of the 7-S framework, assess the extent to which KGML's internal environment is promoting competitiveness. (15 marks) (Total 25 marks)

Question 5 Sunrise General Stores Limited (SGSL) is a wholesale outlet for construction materials like cement, iron bars, iron sheets and nails among other products. The company's Managing Director (MD), Mr. Paul Sentongo has for long stuck to the use of a cash system of payment for all its products. SGSL's clients have traditionally paid cash and received a receipt written in Paul's own hand writing as a way of enhancing authenticity should a customer wish to claim any refund or make a claim against a sale made to him. The company attracts new clients mainly through referrals by existing clients and also the physical display of products at its chain of stores. SGSL's clients have identified the superior quality of its products as the company's main competitive tool. However, in an effort to further improve the company's fortunes, the sales team has on numerous occasions requested the MD to consider establishing an online selling platform to support online advertisements, ordering, invoicing and payment. The MD and a section of staff who are not literate in Information Technology have on the contrary often refuted the proposals arguing that if a customer is serious, then he or she would physically come to the stores. In addition, efforts by a section of clients to convince Paul, to embrace modern methods of receiving payments for the products have always been landing on deaf ears. The MD's argument has always been that when he gives tangible goods, he ought to be given a tangible payment. He does not believe in receiving money through the electronic platforms such as mobile money or any other online platforms available on the market. Company records show that a large section of customers have expressed dissatisfaction with the payment system that SGSL continues to use. In a turn of events, last week, while Paul was attending a burial of one of his workers, he bumped into one of his former long time customers, who had taken some time without procuring from SGSL. This client was bold enough to explain to the MD that the company's inability to embrace advanced technologically and more efficient means of doing business is the reason as to why he opted for other suppliers. The client who now makes purchases from one of the newly established firms called 'Chapchap Hardware Limited', assured Paul, that he no longer moves to look for products but rather selects required products online and then places the order and his materials arrive at his construction sites just in time to be used. He has advised Paul to consider embracing new mechanisms of easing customer convenience through establishing online selling points. Paul who now seems to realize that embracing information technology could make business sense to SGSL in future, has approached you, a consultant, for advice on how information technology could be used to embrace creativity and competitiveness at SGSL. He has chosen to view his delay to embrace some technological developments at SGSL as a necessary process through which creativity ought to be nurtured in organisations.

Required: (a) (b) Evaluate the strategic importance of Information Technology to SGSL. (8 marks) (i) Discuss the stages that constitute the creativity process in light of the events at SGSL. (i) Assess the limitations to creativity at SGSL.