AP/ADMS 1000 Mini case

Q1. Explain how the six (6) external environmental forces are impacting the company
Molson. Provide a detailed analysis using all case examples.

Ans 6 external environment forces impacting the Molson are:

Economic: Molson has been affected by economic factors due the rising prices of
food and other basic essential items which lead to some users spending on items like
beer and alcoholic beverages this has also led to Bank of Canada raising interest rates
six times in order to try to stall the inflation. Health reasons are another factor for
Molson diversifying into other beverage markets. Clearly, drinking alcohol brings
economic costs to Canadian taxpayers. Beer industry has also helped in the growth of
the Canadian GDP with $13.6 billion annually along 149,000 jobs. Moreover,
Researchers concluded the labels were so effective in communicating the risks to
consumers that the labels caused a reduction to alcohol sales; thus, harming the
industry.

Social: Molson has been affected by social reasons due to the increasing concern of
the young consumers regarding their health. Mainly the age group of 18 to 24 age
group which earlier consisted of 27% consumers has now diminished to 7%. Nowadays
younger generation is more interested in alcohol free beverages like mocktails and
carbonated drinks. Another growing phenomenon is youngers customers are showing
more interest in alcoholic beverages with health benefits including hard kombucha and
botanical spirits, allowing consumers to enjoy drinks that are flavourful without the use
of sugars and syrups. Beverages with adaptogens (herbal pharmaceuticals stemming
from roots and herbs from Chinese and Ayurvedic healing traditions) are also increasing
in popularity. Moreover, alcoholism has been a serious threat to mental and heart
health. In recent times health-conscious consumers are also reducing their beer
consumption to live more healthier and active lifestyles. As per the case study “alcohol
use was linked to 7,000 new cancer cases in 2020, including 24 per cent of breast
cancer cases, 20 per cent of colon cancers, 15 per cent of rectal cancers, and 13 per
cent of oral and liver cancers.” People at home during the pandemic went from drinking
alcohol at home to wines and spirits at home.

Technological: Molson’s president Frederic Landmeters $600 million investment in

new brewery in Quebec is an example of technology investment as well as expansion of
the business. Along with another $60 million investment in the Canada’s largest brewery
in Ontario just off Highway 427 in Toronto.

Competitive: Molson also partnered with coca cola to produce simply alcohol drinks
a line of spiked alcohol lemonade beverages. No alcohol company is voluntarily
disclosing the risks which leads to increase in the competitiveness among the
companies.

Political-legal: Many other companies like Yukon were affected by regulation like to
put warning labels on wine, beer, and liquor to educate consumers about the risk of
cancer. The Yukon government discontinued the labelling due to complaints from the
industry and the fear of a lawsuit. “Canada has some of the highest alcohol taxes in the
world. On average, 47 per cent of the price of beer in Canada is from federal or
provincial taxes. Canadian approximately pay $20 billion annually in alcohol taxes.

Global: “Molson is trying to adapt to a new reality due to the falling beer sales. During
its 2nd quarter ending June 30, 2022, Molson’s profit dropped to $47.3 million (US),
from $388.6 million in the previous year”. Currently, Molson is working on trying to
improve water-use efficiencies and to produce beer in more sustainable ways. In 2022,
Molson donated bottles of water to hurricane and flood victims in Florida and elsewhere.

Q2 Explain how the Behavioural Management Philosophy may help Molson and why?
Provide a detailed explanation using examples from the case.
Ans: As behavioural management suggests every organisation needs to produce goods
and services efficiently and effectively the Molson’s are trying to achieve the same.
Behavioural management philosophy consists of 4 main parts:

1. The human relation movement: This theory states the Hawthorne effect which
says that organisation is a social system and not simply formal structures,
employees need social interaction. Molson could apply the Hawthorne effect by
creating a more interactive atmosphere for the employees along with this it can
engage with the public and conduct surveys to know more about the ongoing
trends and not only setting up new plants for alcohol production.

2. Mary Parker Follett: A philosopher argued that about the 3 main features.
Coordination, self-management and collaboration.
 Coordination sates that employees in an organisation need to coordinate with
each other for more effective and efficient governance of the organisation.
Self management states that each and every employee should manage
himself, decision about the work should not be taken by the managers and
should rather be taken by the person doing the job.
Collaboration states that employees should be included in the decision-making
process. Managers and workers should be view themselves as partners or
collaborators. If Molson adapted to the Mary Parker Follett theory, it would
improve the internal management of the organisation which would make better
decision output for example the losses that Molson faced on June 30, 2022,
Molson’s profit dropped to $47.3 million (US), from $388.6 million in the previous
year could not have occurred if the management was better collaborated as well
coordinated.
3. Chester Bernard: States that organisation is a social system, communication
system, organisational objectives, unity of command, collaboration. Chester
Bernard’s theory can be used by the Molson of better execution of the goals and
the similar theory that Mary parker Follett states.

4. Motivation based perspective: In layman’s terms it states how to motivate

employees to carry out tasks. Molson with the help of better motivation
techniques can achieve better outputs through highly motivated work force can
have a huge impact on the beer production units. Furthermore, highly motivated
employees can reduce the losses and increase the overall innovation which
leads to more ideas leading to new ventures and startups. For example,
introduction to new and healthier options of drinks for health-conscious people
can be a great success.