Case study

Fraser Foods (FF)

Fraser Foods is a family firm based in Bishopton and was set up by David Fraser in 1994 to tap
into the growing demand for ready meals. The factory is located just off the M8 near the Erskine
Bridge and close to the Fraser family home on the banks of Loch Lomond. Fraser Foods is a
Private Limited Company and the ownership of the company is in the hands of the Fraser family.
Several members of the family are involved in the business and it is hoped David’s son Robin
will take control when his father retires. As a Private Limited Company, all shareholders must
agree any share transactions but it can conduct its business as it believes to be correct rather than
having to tailor its operations and financial results to please ‘The City’. The company has grown
by developing ‘greenfield’ production facilities purpose built for a specific area of the chilled
food market in Scotland.

The UK market for ready meals is around £1.35 billion and growing, as people adjust to the
demands of busy lifestyles. With many families having both parents working the availability of
well-prepared and tasty ready meals services an important sector of the market. Over the years
Fraser Foods has reduced production of its own brand products and now mainly produces meals
for other clients, with 85% of output currently allocated to a contract with one major supermarket
— Perkins. Perkins has retail outlets in most major towns and cities across Scotland.

Fraser Food’s Mission statement is

‘We aim to provide our customers with a range of finest quality ready meals, through our
commitment to innovation, service and value, in a mutually profitable relationship. We aim to
achieve this within a business culture of dignity and respect and by developing long term
partnerships with our suppliers. Developing our staff is critical to our success and every
opportunity will be taken to maximise each individual’s potential within our business’.

The business operates in the fast moving food products market and managers have a key role in
the planning of the process and ensuring resources are available. These resources include
machinery, materials, money and human resources. The Fraser Family believe that its people are
at the heart of the business’s success, which is exemplified by Fraser Food’s mantra of PQP —
People, Quality, Profit.

The market tends to change quickly. All manner of problems can arise which need to be
addressed. The outbreak of foot and mouth, the BSE crisis, health issues relating to obesity, fat,
sugars and salt in products, food labelling regulations and so on all mean that the business has to
be flexible and able to cope with change and deal with problems as they arise. The management
team has worked hard in planning and evaluating their products to ensure that customer focus
and quality are the main drivers of business success.

Environmental impact

Fraser Foods are aware of their carbon footprint and try to minimise their use of nonrenewable
resources but they have to balance this with the need to provide its customers with a high quality
product. The number of deliveries to and from the factory and the amount of fuel used will
impact on the environment through pollution. Fraser Foods use plastic trays, plastic film and
cardboard for packaging. They ensure all packaging products are sourced from suppliers that
demonstrate efficiency and maximise recycling techniques. Government legislation places a levy
on packaging that is difficult to dispose of and has a higher impact on the environment.

Management team

Fraser Foods has three Directors, Managing Director (David Fraser), Finance Director (Laura
Bolton), Operations Director (Robin Fraser). The business has four Senior Managers — Human
Resources, Production, Product Development and Purchasing. Each manager has a team(s) under
them and Administrative Support.

David as MD, has overall responsibility for the company but over the years has spent less time in
the factory and more time liaising with customers and suppliers often on the golf course. Janice
Turner has been David’s Personal Assistant since the beginning which has helped to promote
consistency and continuity. There is little she doesn’t know about the business and Janice is
highly regarded within the company and has a good relationship with Perkins and suppliers.
Janice is regarded as reliable, well organised, competent and efficient. She has also been
attending evening classes at the local college and hopes to complete her SQA Advanced
Certificate in Business by the summer.

A key driver of the success of Fraser Foods lies in management’s focus on quality and its ability
to manage the relationship with Perkins. Perkins demand very high standards and therefore the
production process has to be managed to ensure that standards are maintained and hopefully
exceeded. Fraser Foods uses local suppliers and has built up an excellent relationship with them.
During the ‘horsemeat’ scare, Fraser Foods were able to reassure customers of the sources of
their meat and this enhanced their reputation for quality products. Mistakes can be very costly for
the business especially when it affects Perkins.

Robin Fraser, David’s son is Operations Director and has responsibility for all production,
product development and quality assurance. Some of the business operation is automated but
there is still a relatively labour intensive production process. The food industry is heavily
regulated so the company has to ensure that quality control is a high priority. There are tight
tolerance levels for Fraser Foods product ranges and ensuring the correct combinations of
ingredients are used is important in controlling costs, maintaining profitability and providing the
consumer with a consistent level of quality.

The maintenance of strict hygiene conditions is not only a health and safety requirement it is an
important part of the quality assurance procedures for the business and this is reinforced through
training courses and regular management updates. Robin likes members of his team to take part
in customer visits and be fully aware of any issues that may arise.

Robin took over responsibility for production and product development from his father David
Fraser in 2010. David’s style of management was very different to Robin’s. David liked to be
referred to as ‘the boss’ while Robin is on first name terms with staff. David also felt it was his
role to make all the decisions affecting production. He didn’t see the need to involve staff and
believed they preferred to be told what to do and didn’t want the responsibility — that was the
manager’s job, not theirs. He believed staff were motivated by money and should be paid
bonuses if targets were exceeded.

Hazim Khan works at the product development stage and analyses sales trends of different
products, evaluating feedback from customers and ensuring that the company is keeping abreast
of the changes in their market. Hazim has a team of chefs who work on developing new products
and recipes. He regularly meets with his team to discuss their problems and ideas but gives them
freedom to use their talents in the creation of new products and how to go about their job. High
quality products that meet the needs of consumers and which can be produced efficiently and to
the exacting standards of their customers are essential. Teams are kept aware of the changing
market in food and the importance of responding to that changing market.

Laura Bolton is Finance Director and has responsibility for Finance, Human Resource
Management (HRM) and Purchasing. Laura is concerned about the company’s finances and
keeps a close eye on cash flow. Perkins regularly delays payment and although David has
discussed this with them, he is worried that if he puts on too much pressure, they will look
elsewhere for a supplier. Pressure is also placed on profit margins. Perkins expects Fraser Foods
to absorb any increase in raw material costs. Perkins will not accept these increases and pass
these on to their customers.

With 120 staff, HRM is an important area for the firm. Kathryn Hannah joined the company in
2007 and heads the HRM team which comprises a Training Officer, a Health, Safety and
Wellbeing Officer and an Administrative Assistant. Kathryn has a wealth of experience, is CIPD
qualified and ambitious. She has used her experience to help the company update and develop a
range of HR policies. Kathryn has good relationships with the local college and offers work
placements to students. The company provides good training opportunities and Kathryn is keen
to offer more inhouse training to ensure staff continue to have the skills the business needs. It
was Kathryn who encouraged Janice, (David’s PA) to attend evening classes.

The work on the shop floor is repetitive and working conditions can be challenging due to the
temperatures required for hygienic food production and the noise of the machines. Shop floor
teams are set targets but have freedom to organise the way they achieve them. Team members
move around to carry out different tasks which help break up the routine nature and boredom of
some of the jobs. This has improved staff morale, increased staff flexibility and developed a real
sense of teamwork. Staff are issued with a company uniform to help them identify as part of a
team.
The company values its staff and offers a competitive remuneration package. All employees are
paid above the minimum wage and can pick up bonus payments and allowances for shift work.
Employee benefits include health insurance, pension scheme, subsidised canteen and profit
sharing scheme. Employees receive a regular company newsletter giving an overview of the
whole organisation with information about the number of complaints, production targets and
wastage. It highlights successes in the company and the role of individual employees and teams
in that success.

Future plans

Management are concerned about the heavy reliance on one customer and the narrow product
range. They feel this is making the company vulnerable and have come up with ambitious plans
to expand the business over the next five years to help reduce their reliance and over dependence
on one key customer.

Hazim has produced a report showing customer tastes are changing and families want more
exciting meals as well as healthier options. Teams and consumer groups have been involved in
new product trials and four new microwaveable recipes have been approved — Red Thai
Chicken, Caribbean Chicken, Chill Beef and Pasta Bolognese. These would be sold under the
new Fraser Foods ‘Fresh n Easy’ range in clear packaging showcasing the colourful fresh
ingredients. Hazim has also suggested the introduction of a ‘Ready to Cook’ range.

Two new Director posts have been created to support Fraser Foods’ expansion plans, increasing
the number of Directors to five.

A key new appointment has been made in Sidra Aktar as Marketing Director. Sidra has a strong
marketing background and brings with her expertise from her career working in both retail and
manufacturing. She has a track record of involving staff and increasing sales. Sidra’s remit will
be product development, developing the company website, raising brand awareness and
widening the customer base. She will be expected to raise awareness of the Fraser Food’s brand
and help launch new products. Sidra will work closely with Robin trialling and piloting new
product ideas. She will also take responsibility for producing the company newsletter and
promotional materials.
Sidra wants the business to tap in to the increased popularity of TV programmes like Come Dine
with Me that have created a demand for cookery classes. Sidra will be working closely with one
of Robin’s chef’s Peter Armstrong who will be promoted to lead a new project team that will set
up ‘Frasers Cook School’ where chefs will run day and evening cookery classes in a new
purpose built kitchen training facility.

Kathryn will be promoted from HRM Manager to a new post of Director of Organisational
Development and in this role she will be instrumental in leading the change process.

The family and the bank have agreed additional investment and this will be used to fund these
proposals plus to increase automation. Robin wants to make processes less labour intensive,
increase productivity and reduce unit costs. Some members of the management team and many
employees are concerned this change in strategy will change the ethos and culture of the
business. However it is generally accepted that the company needs to reduce its reliance on
Perkins and in order to diversify and successfully expand in a challenging market, it needs to
restructure. Understandably many of the workforce are anxious about the impact of these
changes on their jobs.
Assessment 1
Outcome covered 1
Assessment instructions

You should answer all questions below.

Your response for all questions should be a total of approximately 700 words.
Your response must be specific to the particular organisation given in the case study.
It should not provide exhaustive lists of theory that does not apply to the example in the case
study.

Questions
1. Analyse the relationship between organisational goals, objectives and policies and

explain their contribution to effective management at Fraser Foods.

2. Explain the composition of the open systems theory and explain how it applies to the case

study.

3. Identify the key stakeholders in Fraser Foods and explain their interest and influence in

the company.

4. Identify the main difference between the formal organisation and informal organisation

within Fraser Foods.

5. Recommend an effective control strategy that applies to Fraser Foods and justify its

suitability.
Assessment 2
Outcome covered 2
Assessment instructions

You should answer all questions below.

Your response for all questions should be a total of approximately 700 words.
Your response must be specific to the particular organisation in the case study.
It should not provide exhaustive lists of theory that do not apply to the example in the case study.

Questions
1. Explain a content theory of motivation and a process theory of motivation and illustrate

how they can explain actions of individuals in Fraser Foods.

2. Explain the methods used by managers to improve job performance within Fraser Foods

and justify their suitability.

3. Explain the importance of team working and state how it operates within Fraser Foods.

4. Identify and analyse three factors that affect team cohesiveness and performance.

Examine the influences of the three factors in Fraser Foods.

Assessment 3
Outcome covered 3
Assessment instructions

You should answer all questions below.

Your response for all questions should be a total of approximately 700 words.
Your response must be specific to the particular organisation in the case study.
It should not provide exhaustive lists of theory that do not apply to the example in the case study.

Questions

1. Explain the main roles and activities of a manager. Identify the relevant roles and the

activities utilised by a manager in Fraser Foods.

2. Describe two ways that Fraser Foods can measure managerial performance. Explain how

each measure can be utilised to assess managerial performance.

3. Identify and explain an appropriate behavioural theory of leadership and highlight its

application to Fraser Foods.

4. Identify and explain a contingency or transformational theory of leadership and highlight

its application to Fraser Foods.

5. Explain how theories of leadership can be used to improve the way in which management

lead Fraser Foods’ staff through the proposed expansion plans.

Assessment 4
Outcome covered 4
Assessment instructions

You should compile a report to address the questions listed below. The report should be

approximately 1,100–1,400 words in length.

Questions

1. Identify, illustrate and describe the type of structure that best describes the organisation,

Fraser Foods.

2. Suggest and describe an alternative form of structure that would be more appropriate for

Fraser Food’s expansion plans. Your answer should include a clearly labelled diagram.

3. Clarify and illustrate line, staff, functional and lateral relationships within Fraser Foods.

4. Explain how authority, responsibility and delegation can be exercised within the new

structure.

5. Identify and explain how the expanded organisation will be consistent with the main

situational variables of a contingency approach.