Malaysians have been coffee drinkers ever since the late 19th century.

This habit was influenced

by the Chinese Immigrants. Unaccustomed to the bitter and strong British Coffee, the Hainan
Chinese modified the taste of Western coffee to be better suited to the palate of the Chinese
population. Thus the white coffee of Ipoh Old Town was born and the tradition of making white
coffee has been carried on for generations. White coffee is now one of the staple drinks of
Malaysians. White coffee was first sold by a Hainanese coffee roasting master in one of the old
coffee shops in ‘Old Town’ Ipoh. Gradually, white coffee began to put its mark on Malaysian
culture and society. The rise of the popularity of this drink was also due to the arrival of branded
retail outlets such as Coffee Bean and Starbucks in the local market around 1997-1998. The
Malaysian local coffee culture grew, starting with the commercializing of so called ‘kopitiams’
(derived from the word ‘kopi’, from Malay/Hokkien for coffee and ‘tiam’, which means shop in
Hokkien), which is the rebranding of local coffee shops by upgrading their services by not only
selling products, but also embracing technology as part of their marketing plans. The OLDTOWN
White Coffee brand is an example of this upgrading.

Today, OLDTOWN White Coffee is Malaysian’s largest halal-certified kopitiam.

OLDTOWN White Coffee was established by a two-man, Mr Goh Chin Mun and Mr Tan
Say Yap in Ipoh, Perak, in 1999. Initially, the company operated as a local coffee shop
but has now expanded its business to almost all stated in Malaysia and as well as
internationally. The group opened its 200th outlet in a period of just over seven years.
Now, OLDTOWN is diversifying its products by exporting its instant beverage mixes to
more than 14 countries and is publicly listed on Bursa Malaysia’s main board and has
expanded even further into café outlets, franchise outlets and food processing facilities.

The company’s vision is to be leading white coffee brand in the Asia Pacific region by
providing high quality products to customers globally. Its mission states that ‘Our People:
We believe that our people are our assets’. The company believes that its human capital
is its most valuable asset and it is thus important to create a stimulating and motivating
working environment. It acknowledges its workers as people who grow together with the
company and appreciates its workers for their full dedication. Its workers are valued for
their efforts and what they are able to bring to the company. This is shown by providing
platforms and opportunities for career growth and enrichment knowledge in its workers’
development programmes. A dynamic and challenging workplace is provided to
encourage development of employees’ skills, talents and capacities. The aim is to
cultivate passion and to install dedication in delighting customers as an important work
value into its staff to bring forth their best efforts, experience and to retain customers’
loyalty.

Currently, OLDTOWN White Coffee outlets in west Malaysia have achieved 100% halal
status certification by the Malaysian Islamic Halal Board of the Islamic Affairs
Department. This recognition and certification will enable the company to bid and make
further ventures and investments into the halal market. The company also intends to
restructure its services-oriented business mode and move towards a self-service
concept, together with the launching a new range of set menus in their café outlets. For
its dedication, the company has received recognition and awards, both locally and
internationally. In 2017, it won the Gold Award for the Trusted Brand Awards – Malaysia,
organized by Readers’ Digest.
Sources: Adapted from Norlida, K, Za’faran, H, Rabiah, A W & Rohaya, M H,2018.
Principles of Management. 3rd ed. Malaysia: Oxford Fajar

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1. Why need to know about the evolution of management?

∙ “Provide stable focus for comprehending what we experience. ∙

Provide criteria for determining what is relevant.

∙ Able to communicate efficiently through theories, and thus, move into more complex

relationships with other people.

∙ Theories challenge us to keep learning about our world.”

(Kamaluddin, N., 2018, P. 27)

2. List three (3) advantages and three (3) disadvantages of scientific management.

The advantages are;

∙ It provides a proper selection of workers with trained and stabalized mind in order to

achieve organisational goals.

∙ High chances for building a good relationship between the worker and the

management. (“Advantages and Disadvantages of Scientific Management”, 2019) ∙

Provides better development of work standards.

The disadvantages are;

∙ It is unsuitable for small firms since it involves an enormous cost. Therefore, small

firms could not be able to afford it.

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∙ Mere speeding up the workers can lead to physical and mental disorder for the

workers.

∙ Management will increase the efficiency via general methods, working conditions, tools

and equipment. Since the output per employee is increased, there will be a

discount in the employment opportunities. (“Advantages and Disadvantages of

Scientific Management”, 2019)

3. Differentiate the Theory X and Theory Y management approaches.

Theory X workers are categorized as lazy and dislikes works. They try to avoid

responsibility as possible as they can and seek direction from superiors. “The

workers are self-oriented and unconcerned about organizational objectives.” (S,

Says, & Takue, 2017) “Therefore, the managers must control, direct and threaten
 the workers with punishment in order to get them to achieve the organizational

objectives.” (Kamaluddin, N., 2018, P. 39) Theory X workers are mainly motivated

for financial rewards.

Theory Y workers are the ones that likes work. They willingly accept and seek for

responsibilities. The workers are ambitious and provide full contribution in their

task. “The workers will exercise self-direction if they are committed to the

objectives.” (Kamaluddin, N., 2018, P. 39) “The capabilities and calibre of the

workers are underutilized, who possess unlimited potential.” (S, Says, & Takue,

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2017) Theory Y workers are mainly motivated by non-financial rewards such as

status and job enrichment.

4. From the case study, identify and explain environmental factors influenced

OLDTOWN White Coffee?

The environmental factors are;

I. Political

This factors decide the government policies and felony elements that are assessed in

terms of their potential to have an effect on the enterprise environment and

alternate markets. (“PEST Analysis Definition and Examples in the Business

World”, 2020)
 Business is exceedingly based on trade relationships. Trade relationships within the

same industries, in this case, the coffee industry that produce and consume

coffee products are drastically contributed in determining the final price tag of the

product. If there perpetuates any mishap within these industries, it will severely

affect the OLDTOWN White Coffee and enlarge manufacturing cost. (“PESTEL

Analysis of the Coffee Industry”, 2019)

II. Economic

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These elements are determinants of the financial issues that are bound to have an

impact on the commercial enterprise and have resonating lengthy time dimension

affects. (“PEST Analysis Definition and Examples in the Business World”, 2020)

Economic factors that influence OLDTOWN White Coffee is the growing incomes of the

consumers. As the buyers are becoming wealthy in this financial world, they will

surely devour more luxurious products and beverages. Therefore, it is hugely

have an impact on the coffee industry where as the consumers will most probably

consume or spend on higher pleasant coffee products. (“PESTEL Analysis of the

Coffee Industry”, 2019)

III. Social

These factors scrutinize the socio-economic environment of its market by way of

elements like purchasers’ demographics, cultural limitations, lifestyle, attitude and

 education. With these, a commercial enterprise can apprehend how consumer

desires are frequent and what brings them to the market for a purchase. (“PEST

Analysis Definition and Examples in the Business World”, 2020)

“The current trend in society towards foods and beverages is health consciousness.

Coffee is high in caffeine, which in turn may lead to sleep disorders, irregular

heartbeats and migraines in some people. This has led to reduced demand for

coffee in recent times. At the same time, this trend has equally given a greater

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demand for decaffeinated coffee products but with lower caffeine quantity.”

(Farooq, 2019)

Another social trend is fair trade. Fair trade is an international movement that seeks to

better compensate the farmers in the back of produce, as an alternative of the

many middlemen that have historically reaped large profits. Importantly, the

coffee industry is one of the primary ambitions for the fair change movement. As

buyers exhibit increased demand for truthful exchange coffee products, the

farmers will earn extra and the middlemen earn less. However, fair exchange

ought to now not have an effect on the typical dimension of the industry, except

fair trade coffee prices (which are greater than regular coffee prices) drive away

customers. (“PESTEL Analysis of the Coffee Industry”, 2019)

IV. Technological

“How technology can either positively or negatively impact the introduction of a product
 or service into a marketplace is assessed here.” (PEST Analysis Definition and

Examples in the Business World, 2020)

Another factor in the OLDTOWN White Coffee is the advent of new-specific appliances

such as coffee grinders and drip machines. “These multipurpose coffee machines

have helped to preserve the coffee culture in place. Since buyers are now also

buying coffee machines for their homes that allow them to brew coffee with the

most quantity of ease possible, this has resulted in a dip in the consumer

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scale who would have in any other case purchased their coffee from a readymade

vendor. Vendors are now attempting to innovate new recipes that will help

maintain the demand for readymade coffee-based beverages.” (Farooq, 2019)

The development of coffee machines is also a factor that influenced OLDTOWN White

Coffee. This indicates that coffee machines are getting less expensive in the

business market. This leads to consumers can now make their very own coffee at

homes rather than buying outside. The development of coffee machine also

means that coffee machines can be bought by small firms, which in turn increase

the competitors within the industry. (“PESTEL Analysis of the Coffee Industry”,

2019)

V. Environmental

“These factors relate to the effect of the surrounding environment and the impact of

ecological aspects.” (What is a PESTEL analysis? 2020)

 Coffee industry is dependent to the harvest of coffee crops. This also include the

condition of the nature such as earthquakes and drought in which it affect the

harvest. This result the change of the quantity and the supply of coffee beans.

(“PESTEL Analysis of Coffee Industry”, 2020)

VI. Legal

“Legal factors are exterior elements which refer to how the law influence the way

businesses operate and clients behave.” (Legal Factors Affecting Business, 2016)

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The coffee industry, like the entire other industries, is furthermore exaggerated by

minimum possible wage laws as well as laws regarding bribery and corruption in

the international location in which they are choosing to act business. (“PESTEL

Analysis of Coffee Industry”, 2020)

Another legal factor is the food standards. Many countries are placing strict regulations

on the quantity of caffeine the beverages can contain and this has sharply hit the

coffee industry. People who desire excessive amounts of caffeine in their drinks

can no longer avail it from readymade vendors. (Farooq, 2019)

5. By relating to behavioural perspective of management, how does OLDTOWN White

Coffee show its commitment to its employees?

Behavioural perspective theory is involved with how to manage productiveness through

 understanding employee motivation, which include expectations, desires and

interests, and group dynamics. Behavioural management concept is now and

then referred to as the human relations motion due to its focal point on the human

dimension of work. (“Human Resources Management”, 2020) There are 3 sorts of

behavioural perspective which are the Hawthorne Studies, Theory X and Y, and

Maslow’s Hierarchy of needs. “Hawthorne studies refers to the inclination of some

people to work harder and perform better when they are being observed as part of

an experiment.” (The Economic Times, 2020) “Theory X and Theory Y are based

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on the premise that management has to assemble all the factors of production,

including human beings, to get the work done.” (Greyson, 2016) “Maslow’s

Hierarchy of needs is a motivational theory in psychology comprising a five-tier

model of human needs, often depicted as hierarchical levels within a pyramid.”

(Mcleod, 2020)

From the case study, it mentions that the company believe that the workers are a huge

motive for the company’s growth. Its mission as well states that ‘Our People’ in

which that they believe that their people are their assets. They additionally

admitted that as the company grow, the workers are also enhancing their selves

professionally and thus, value their full dedication. Therefore, it states that the

company providing platforms and opportunities for career growth and enrichment

of knowledge in its workers’ development programmes. They’re aim to inspire the

passion and the dedication produce by workers to fulfill the customers and to

retain

customers’ loyalty.
As a result, this indicates that the workers of the OLDTOWN White Coffee are

categorized as Theory Y workers. The company’ employees are taking full

responsibility and give priority in their work. They are certainly ambitious and

contribute in their work. They are internally prompted as they work to achieve the

organizational goals, at the same time improving themselves without anticipating

a reward in return. They do not necessarily need to be supervised by the

managers to create a quality product. On the other hand, the managers of

OLDTOWN White

Page | 9
Coffee trust their employees and believe that they will provide the first-rate of their

work. Furthermore, the managers will often involve their employees and ask their

opinion in the decision-making progress.

 Page | 10
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3) Greyson. (2016, June 13). What is Theory X and Theory Y? definition and

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FAJAR

6) Legal Factors Affecting Business. (2016, July 13). Retrieved August 27, 2020,

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https://www.simplypsychology.org/maslow.html

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