accounting in business (unit 4)
DESCRIPTION
PGD level 7 Unit 4TRANSCRIPT
Table of content
Introduction.....................................................................................................................6
Task 1
1.1 Concerned with the Legal Manner............................................................................6
1.2 Tyler, s Ethical Responsibility...................................................................................7
1.3 Stakeholders, and their impact on Company.............................................................8
1.4 Recommendations Report..........................................................................................9
Task 2
2.1 Different types of Organization Structures..............................................................11
2.2 Present Scenario Organizational Structure...............................................................17
2.3 Report on Brill Solution Culture..............................................................................17
2.4 Effect of Delegation of Authority and Power..........................................................19
2.5 Summary of the Social Responsibilities on Organization.......................................19
Task 3
3.1 Role of Accounting Department Function................................................................20
3.2 Department Mentioned in the Scenario Needs Improvements.................................21
3.3 Audit of the Company..............................................................................................22
3.4 Users of Internal and External financial Information of Brill Solution....................23
3.5 Comment on the financial system and IT related applications.................................24
3.6 Summarize the Risks with Security data..................................................................24
3.7 Problems arising from Bass behaviour towards Tom................................................25
3.8 Design for Effective, dynamic Teams.......................................................................25
Task 4
4.1 Reasons for the customers to switch to another company (bottleneck)...................26
4.2 Competence Framework..........................................................................................28
4.3 Methods of Communication used in the company……………………………..…29
4.4 Design a Policy to retain Employees……………………………………………...32
4.5 Ethical Dilemmas and Conflicts..............................................................................33
References....................................................................................................................34
Brill Solution Co. Business and Role of Accounting Function
Introduction
Financial decisions are the key functions of an organization, as they integrate all the
functions and activities, of an organization. Accounting is the language of the business, and
vital for the growth, progress and success of the business entity. The financial accounting
involves the strategic planning, communication, identification, allocation, distribution and
utilization of resources and control of an organization. The globalization and technological
advancement results in the integration of financial, cultural, skills and HRM. The attitude and
behaviour of the customers has changed drastically as they want more quality, highly
differentiated branded goods and services at compatible price. There is an intense rivalry
among firms as the firms strive hard to attract customers through quality and brand image.
The role of finance or financial decisions have become more vital and important, as
management accountant plan strategically identify, acquire, allocate, distribute, and utilize
resources (Human, Financial, and Technological) in optimal manner to achieve goals and
objectives.
Task 1
1.1 Concerned with the Legal Manner
The management has the responsibility to analyse thoroughly the organizational internal and
external business environment, to make valid decisions (Porter, 2008). The managers of the
financial institution conduct analysis of the organization, the internal organizational structure,
performance, market image, brand strength, and gearing before extending any loan. In the
present scenario the loan manager is concerned that the company does not corporate good
governance and strategic control as the company is still a partnership not a limited
corporation. The company, s management is conducting business in a rather casual way, as
there is not a proper recruitment policy and procedure to hire and place employees. The top
management do favouritism, people are hired through reference, they are not properly being
trained,there are more delays in the project completion, which is creating negative image of
the company. The strategic vision and leadership is lacking though employees are involved in
decision making through regular meeting, but they are not contributing enough due to the
lack of training, knowledge sharing, and effective team work. The organization is conducting
its business without proper market analysis, external environment analysis (PESTEL),
competitors’ analysis, as there is a lack of strategic planning and control. The organization
structure and the role of the managers are ambiguous, as there is a lack of communication and
coordination among the management. The Brill solution is a software developer company
mainly work for overseas and the owner, and top management is lacking strategic leadership
approach, there is a communication gap among different levels of management. The top
management is lacking ethics and moral approach, as they do not have trust among
themselves, projects are being delayed, there does not have performance appraisal system,
market image of the company has been shaken, due to delays, and wrong estimation of
resources. The loan manager has concerns, over the structure of the company, its operations,
and gearing of the company. The Brill Solution is not using the proper accounting standards
techniques and soft-wares compatible with the international accounting standards, rather the
company is using its own software for the accounting purposes, and the loan manager has
also concerned on it. The Brill Solution is not following the legal framework of accounting
standards so as a loan manager one has to have concerned over it.
1.2 Tyler, s Ethical Responsibility
The modern concept of the management and business to be ethical and moral, as the ethical
and moral values are highly preferred. It’s the prime responsibility of the management and
employees to follow the ethical and moral values, as the ethical and moral issues are highly
regarded as the success and image of the business (Mintzberg, 2008). The ethical issues are
the work according to the mission and vision of an organization honestly, include all
ingredients in the product which is written as a composition, pay your suppliers in time,
satisfy customers, needs and wants, honestly with moral values, adopt a fair innovative,
hiring and development techniques with the system to hire efficient employees, provide them
with suitable salary and working conditions to work and make progress, environment
friendly, follow the rules and regulations, do not use the unfair mean, to manipulate the
accounting records, and to have a human approach in the business. The Tyler, s ethical
responsibility involves;
To establish a fair recruitment policy and provide training and development to employees so
that they can become the vital part of the organization.
Training and knowledge sharing must be encouraged.
Encourage to establish more trust and understanding, among management and employees.
To establish more strategic planning and control to achieve goals and objectives
Employees must be selected on merit, without favouritism, and personal links.
To incorporate or use accounting software compatible with the international accounting
standards, to prepare financial statements showing true, fair, facts building the confidence of
the investors and the creditors.
The management must adopt new latest methods, techniques, technology to produce software
in time.
To establish effective monitoring and controlthrough accurate estimation of resources.
There should not be unnecessary delays in the completion of the projects (soft-wares).
The top management should have more response towards the openness in the organization
culture.
Environment friendly and pay suppliers in time,
The company should follow the latest software for accounting, and company must follow the
IFRS (International Financial Reporting System), and GAAP (Generally Accepted
Accounting Principles) while preparing financial statements showing the true fair facts and
figure based on statuary accounts.
The top management contribute more positively in creating value for all the stakeholders.
Decisions should not be imposed, as there must be more knowledge sharing and feedback to
improve the performance of the employees and organization.
1.3 Stakeholders, and their impact on Company
The management for strategic planning, and contingency plans due to changes in the external
business environment, as it affects the abilities of the managers, market position of the
company and the expectations of the stakeholders (Johnsons, and Scholes, 2008). It’s the
responsibility of the managers to assess the changes in the external and internal environment,
market trends, changes in raw material price, and changes in political and technological
environment. The market, product, and competition, to analyse the microeconomic
environment. The external environment is composed of different political, economic, social,
technological, ecological, and legal factors (PESTEL Analysis) competitors’ analysis, and
analysis of your own company, market analysis, and Porter five forces analysis (Bargaining
power of buyers, bargaining power of suppliers, threats of substitute, threats of new entrants’,
and competition). It is very vital to conduct external and internal environment analysis to
judge and evaluate the changes and plan and modify strategies according to the changes in
the external environment. The management has to evaluate the changes in macroeconomic,
and microeconomic, employment, unemployment, recession, boom in the market, changes in
tax, rules regulations, changes in new emerging trends, and thorough competitors analysis,
their strengths, weaknesses, opportunities, main threats. Management has to conduct all these
analysis in order to form effective strategies, contingency plans, achieve strategic goals and
objectives. The strategic leadership allocate use resources to improve the quality of goods and
services, improve the brand image and achieve more market share and become market leader
(Gibson, 2012). The managers, analyse, the interests rate, recession, or boom,
unemployment, tax rate, and other market factors to form strategic plans to achieve goals and
objectives according to the mission and vision of an organization. The management adopt
strategic position, or plans according to the external environment in order to achieve goals
and objectives. The management has to form contingency plans for worse scenario to achieve
strategic objectives and fulfil the stakeholders’ expectations. Different stakeholders have
different expectations, as customers want to have more quality goods and services at
compatible price, shareholders want returns on their investment, creditors expect that interest
would be paid along with the principal amount on their borrowings, suppliers want their
payment in time, government want that company obey rules and regulations and pay taxes,
and community expects more jobs for local people, contribute towards health and social
(charity) sectors, and environment friendly. The management has of the stakeholders is very
vital and important as to achieve value for stakeholders means to achieve competitive
advantage and become the market leader.
1.4 Recommendations Report
Financing is to provide funds, capital for a project, and a business. Funds can be allocated for
either short term or long term business and projects. The main sources of funding are, equity,
debt (bond and debenture, term notes), preference share (preferred equity), and retained
earnings, joint ventures, collateral.
Companies issue equity in the form of shares and these shares are traded in the stock market
and investor invest in the company buying the shares of the company, and the company pay
dividend to equity holders, this is equity financing. These equity holders are owner of the
company and have the right to vote and elect board of directors and influence the decisions of
the management. It’s the prime responsibility of the management to create value for
shareholders through strategic planning and successful business operations (Arnold, 2008).
When the company makes the profit the shareholders, get their return in the form of dividend,
increase in the share price, and increase in the earning per share (EPS), this motivates the
shareholders, to buy more share of the company, and company can invest this amount into
profitable projects to create value for stakeholders and for firm through sustainable
competitive advantage. However the equity is more costly as compared to debt, as the
shareholders demand more return on their investment, and also with more equity in your
capital structure the weighted average cost of the capital (WACC) increases that cause
problems in the investment appraisal. The preference shares are attractive to investors as
they offer a regular fixed income at a higher return than that available on fixed interest
stocks (bonds) and comparatively cheaper to equity (Arnold, 2012). The preferred equity is
cheaper and dividend can be omitted for one or more years, and the preference shareholders
do not hold the voting rights. However often it has been seen that the preference shares
increase the fixed cost of the capital of the company, as the return on the preferred stock is
higher than return on the debt.
Since in this scenario if the loan officer does pass the loan the Tyler should focus on.
The retained profits and reserves: These are the funds earned by the firm through the
profitable business operations, and are the most important source of finance.
Sale of non-current asset: The non-current assets which are not used by the business can be
sold to fulfil the fund’s needs.
Trade credit: It is the delaying the payment for goods received, and a convenient way to
utilize the funds for some other business purposes. Wynne (1988) states that there is a cost
related to the trade credits that company may lose the trade discount. The company must
avoid trade credit, as they (companies) may lose discount, and also for the ethical issues the
payments should be made in time, as the supplier has to face the problems.
Factoring: The Company raise the funds on the security of the company, s debts, as the
factoring firms provide cash to the firms and take the responsibility to collect the funds from
the debtors and they (factoring firms) charge the cost for their services.
Bills of exchange: A buyer sends a promise to pay a sum of money at a future date to a
supplier; the bill then can be sold before the set date to a bank or discount house for cash. It is
useful for overseas trade.
Acceptance credit (bank bills): A bank promise to pay out the amount of bill of exchange
at a future date. The firm then sell the bill, on maturity the bank pays the holder, and the firm
pays the bank.
Joint Venture: Allow other companies to invest in the business project and share profit and
loss according to the business agreement.
Hire purchase: A company purchases an asset which is used by the hiree, who after a series
of payments becomes the owner. It is convenient when other finance is not available.
Leasing: An equipment owner conveys the right to use the equipment in return of the rental
payments over an agreed period. Drury (2012) states that leasing, has the tax, advantages,
but managers needs to conduct situational analysis to decide either to buy or lease. But the
company has to analyse the particular situation the buying would be better or leasing, because
in some cases buying is better as compared to leasing.
Task 2
2.1 Different types of Organization Structures
There are different formal and informal organizational;
Business: Any activity to generate money is called business
Organization: A social entity / a structure in which members of society work together under
certain rules and regulation share role and responsibility and achieve some common
objectives.
Business Organization: A structure in which members of society work together share roles
and responsibilities, offer goods and services on commercial basis to satisfy customers /
consumers / people needs and wants, and earn profit / money.
Examples., Marks & Spencer, IBM, Barclays bank, Brill Solution all business commercial
organization with formal structure
Not for profit organization: Organizations with main aim to serve the community, not the
profit, as they provide services to community (Mullins, 2007). These organization either have
formal or informal structure.
E.g charities, social clubs, public sector school, and hospitals
• Why do we need them?
• We need organisations to
• Share skills and knowledge
• Specialise
• Pool resources
• Share skills and knowledge: Members of organisation share their knowledge and
experience to work closely to achieve the goals and objectives of the organisation.
• Specialise: People / employees / managers of the organisation get / achieve expertise ,
specialisation in particular fields, areas to achieve the excellence and targets for
organisation.
• Pool resources: Resources are utilized in the best possible manner, like resources are
allocated, distributed for each department according to the requirement in order to
achieve the goals and objectives.
• E.g human resource, financial resources, expertise are allocated to different
departments according to their requirements and they are assigned to achieve certain
goals and objectives for organisation.
The organizational structure and the efficient management with skills, knowledge, and
professional exposure enable the organization to achieve value for stakeholders (Kesler,
and Kates, 2010). There are many organizational structure but mainly three to four
common formal organizational structure under which a formal commercial organization
operate.
Functional structure: It is set up so that each portion of the organization is grouped
according to its purpose. In this type of organization, for example, there may be a marketing
department, a sales department and a production department. The functional structure works
very well for small businesses in which each department can rely on the talent and knowledge
of its workers and support itself
Advantages:
Easier to budget and to control costs.
Greater control of technical resources, since all are managed under the general department or
divisional management.
Policies and procedures are consistent among the teams reporting to a common management
line.
Vertical communication channels are easily defined.
Reaction times are minimal to address any issue.
This type of structure allows the managers to improve the performance of each function
(department), and helps to form strategic plans to create value for the business.
The management develop better performance appraisal techniques in this type of organization
structure.
This type of organization structure facilitate strategic planning and control to coordinate
resources to achieve desired results, to improve the performance of the employees and the
organization.
Disadvantages:
No individual is responsible for overall deliver of a project.
Coordination of resources outside of vertical communications channels is difficult.
Customer communications are channelled through upper management.
Each functional group can make a play for power within the hierarchy.
Projects tend to fall behind schedule due to the complexities of coordination.
The managers are more focused on the each department and sometimes ignore team
objectives.
The conflict of interests among different department sometimes creates implications to
complete projects, and strategic objectives.
(2) Divisional structure: It is used in larger companies that operate in a wide geographic
area or that have separate smaller organizations within the umbrella group to cover different
types of products or market areas.
Advantages;
The benefit of this structure is that needs can be met more rapidly and more specifically;
Different offices at different location can be managed through this structure
To have more access to local people, and their choice,
Organization and the management have opportunities to enhance market share in different
geographic areas, to earn more revenue, and improve the standards of the products and
services according to the choice of the local people.
The country managers, can develop their own plans according to the choice of the local
people to capture more market share to achieve better profits.
Disadvantages;
Lack of communication, slow response in decision making.
Difficult to coordinate all functions of an organization.
Lack of coordination, and team work.
Ineffective for strategic planning and control.
Far away office location create implications for the central management to coordinate
properly with the different countries managers.
Sometimes country managers follow their own plans instead of the strategic plans of the top
management which create implications in achieving goals and objectives.
(3) Matrix Structure: It is a hybrid of divisional and functional structure, and is used in
large multinational companies. The matrix structure allows for the benefits of functional and
divisional structures to exist in one organization. This can create power struggles because
most areas of the company will have a dual management--a functional manager and a product
or divisional manager working at the same level and covering some of the same managerial
territory.
Advantages:
The PM maintains complete project control through the resources' management.
Policies and procedures are set up for each project so that they are meaningful to the project
and not more general.
Quick response to changes and resolution.
Conflicts are minimized and those that do surface are easily remedied by working up the
hierarchical management.
The management and employees have ample of opportunities to enhance skills and
professional exposure to improve the performance of the company.
This type of organizational structure facilitate more effective strategic planning and control to
utilize resources in the best possible manner to achieve stakeholders objectives.
Disadvantages:
Information flow moves in multiple directions.
Resources need to report to functional management and to project management.
Management goals can differ from project goals.
Additional time and effort are required to develop the specific project policies and
procedures.
Lack of communication or communication gap at different levels of management create
implications to achieve goals and objectives.
The different department depend on each other and managers, have conflicts over the
distribution of resources, which create implications to achieve goals and objectives.
The decision making is slow and more time is consumed in discussions and suggestions.
(4) Pure Product (Projectized) OrganizationIn this structure, the product manager maintains authority over the project. They can assign work, but also conduct reviews. With everyone reporting up to one person, communication is strong, which results in a very quick reaction time.Project management the integration of all aspects of a project, ensuring that the proper knowledge and resources are available when and where needed and above all to ensure that the expected outcome is produced in a timely cost-effective manner, to achieve organizational goals and objectives.Management conduct consistent strategic analysis, consistent strategic review and monitoring for the identification of project objectives and benefits (Porter, 2008).Project leader, and team members analyse business strategy what business wants to achieve through the project and what are the main benefits which an organization can achieve through this project and how they will achieve it.
Advantages:
Complete authority of resources and over the project.
All work is funnelled through the project manager.
Communication is strong with the single reporting structure.
Better morale with more ownership of an individual's work.
More flexibility in making trade-offs with time and costs.
Upper management gains more time for executive decision making instead of dealing with
the departmental or divisional issues.
Disadvantages:
Possibility of inefficient use of resources, when multiple products are introduced by
duplication of effort in resource utilization.
Workload balance must be managed as projects are closed out and started up.
Limited use of advanced technology in project implementations due to a lack of strong
functional groups to research and implement.
No transfer of knowledge of lessons learned between projects
2.2 Present Scenario Organizational Structure
The project management achieve goals and objectives of the project through knowledge
sharing, learning, consistent review and monitoring (Pearlson, and Saunders, 2009). The
consistent review and monitoring highlight the issues, problems, constraints, like resource,
time, budgets, costs, what has been achieved, and what has to be achieved within cost-
effective and timescale.The present scenario structure is the functional structure with task
allocation or task management which is one function of organizational structure. Since the
Brill Solution is a Desktop software developer, the chief purpose of organizational structure
software is task supervision, also often called project management, project monitoring, or
teamwork management or supervision. Software designed for team leaders, managers, or
supervisors encompasses the previous two functions of task allocation and task coordination.
Additionally, task supervision software helps managers work and interact more quickly and
efficiently with individual team members, as well as collaborate on tasks and keep everyone
on track. In this functional structure, project (Desktop soft-wares) are developed for overseas,
managers share role and responsibility to achieve goals and objectives. However there are
many implications or problems in the system, lack of knowledge sharing and communication,
no feedback, favouritism, no team dynamics, no innovation and creativity. The research and
development department is not functioning properly. The resources and funds are not
properly identified, allocated distributed and utilized to achieve the organizational and
stakeholders objectives.
2.3Report on Brill Solution Culture
The culture of an organization is the way of doing things, setting goals and objectives
according to the mission and vision of an organization and form strategy to achieve these
goals and objectives. The values and behaviours, that contribute, to the unique social and
psychological environment of an organization (Porter, 2008).Organizational culture includes
expectations, experiences, philosophy, and values that hold it together, and is expressed in its
self-image, inner workings, interactions with the outside world, and future expectations. It is
based on shared attitudes, beliefs, customs, and written and unwritten rules that have been
developed over time and are considered valid, and also corporate culture. The culture
involves;
(1) The ways the organization conducts its business, treats its employees, customers, and
the wider community.
(2) The extent to which freedom is allowed in decision making, developing new ideas,
and personal expression,
(3) How power and information flow through its hierarchy.
(4) The monetary and non-monetary rewards and their impact on the performance of
employees and the organization.
(5) How committed employees are towards collective objectives, and how they improve
their skills to achieve the strategic organizational targets.
The Brill Solution culture is pretty much lacking the specialities, and the
characteristics of a dynamic, innovative creative organizational culture which other
well reputed organization in the industry possess.
(i) The Brill Solution is lacking proper communication, feedback and knowledge
sharing.
(ii) Brill Solution does not have effective employees recruitment, and
development, policies techniques
(iii) Employees are mostly hired through reference or personal links, not on merit,
and proper recruitment selection process.
(iv) Training and motivation is lacking, and no knowledge sharing, as decisions
are imposed, so employees are demotivated.
(v) There is no feedback culture, and managers use powers to instruct or guide
employees.
(vi) The mutual trust among managers and employees is lacking
(vii) Resources are not utilized in the optimal manner to create value for the
company as well as for the stakeholders.
(viii) There is no rewards and recognition in Brill Solution system of management
(ix) Managers have boss attitude, and they do not involve employees in decision
and feedback.
(x) Brill Solution does not have supportive working environment where
employees can utilize their full potential to contribute for the long term
competitiveness of the company.
2.4 Effect of Delegation of Authority and Power
The top management and organization delegate authority and power to manager, employees
to make their own decisions form strategic plans to achieve competitive advantage for the
business (Koch, 2011). The top management delegate authority to the department managers,
to make their own decisions and achieve goals and objectives according to the mission and
vision of the organization. When authority are given to managers, they form knowledge
sharing and feedback culture, involve employees in decision making, establish their goals and
objectives according to the mission and vision of the organization, discuss these goals and
objectives in mutual discussion, and problems conflicts are remove through knowledge
sharing, and form strategy through external environment (PESTEL) analysis, market analysis,
trend analysis, competitors analysis, and form contingency plans to achieve strategic targets.
The managers provide training and development to employees to enhance their skills and
professional exposure to achieve organizational goals and objectives. The participative
leadership approach of the top management encourages employees to enhance their skills and
utilize their full potential to add value to the business and stakeholders. The managers
develop teams and coordinate with knowledge sharing and feedback, offer quality goods and
services, and achieve competitive advantage and create values for all the stakeholders. The
delegation of authority creates positive impact on the performance of the employees and the
organization.
2.5 Summary of the Social Responsibilities on Organization
The modern concept of the management is to be ethical, moral, and contribute more towards
society, and social issues. The society has stake in the organization and is interested to know
how much money would an organization would spend to up lift the standards of the
community, like contribution towards health and social sector, more jobs for local people,
and environment friendly (Bhimani, and Horngren, 2006).A better financial performance of
the company would bring brand strength, customers’ loyalty, there would be profit, there
would be more jobs for the local people, and company would contribute more towards the
betterment of society. The people or employees will get high salary; they would do shopping,
more hoteling and enjoyments, there would be economic boom. The managers will more
focused on strategic planning and control, to improve the quality of products and services,
and enhance the sales and achieve the profit, and distribute dividend, there would be increase
in share price (net worth of the organization), and the organization would provide more jobs,
to local people with incentives, and there would be economic boom. The social responsibility
of the Brill Solution is to create value for the society, provide more jobs to local people,
follow standards recruitments policy and procedures, contribute more towards health and
social sector, improve the working environment of the organization by incorporating the
training, knowledge sharing and feedback culture. The Brill Solution must adopt the proper
effective recruitment policy and procedures to hire employees based on merit, right person
for the right job with the right level of qualification. The Brill Solution must follow the IFRS,
and GAAP standards while preparing financial statements, showing the true fair picture of
accounts,. The top management must establish the more openness and trust among
employees, and form strategic planning to improve the quality and brand of the products
(soft-wares), and services, and create value for shareholders (owners), manager, customers,
society, and all other stakeholders.
Task 3
3.1 Role of Accounting Department Function
The accounting department is an important department in an organisation, as this department prepare payrolls for employees, fixed asset and financial reporting, and procurement and inventory. The department also handles cash collections and ensures that deposits are made to the correct accounts.
The role of accounting department has become more vital and important, as management
accountant plan strategically identify, acquire, allocate, distribute, and utilize resources
(Human, Financial, and Technological) in optimal manner to achieve goals and objectives, to
achieve competitive advantage, (Dyson, 2010). The following are the main function of
accounting department;
Accounting function: maintain the general and subsidiary ledgers; process and record all revenues and prepare general purpose financial statements in compliance with IFRSs and GAAP.
The accounting oversight and guidance to other internal departments to ensure the GAAP, and IFRS , legal requirements, policies and procedures and all consistently applied to maintain the integrity of the financial records.
The management accounting - budgeting, performance evaluation, cost management, asset management to achieve organizational objectives.
The accounting department provides accounting services and financial support to the organization, the department records accounts payable and receivable, inventory, payroll, fixed assets and all other financial elements. The department's accountants review the records of each department to determine the company's financial position and any changes required to run the organization cost effectively.
The payroll function of an accounting department ensures that the organization pays its employees accurately, including bonuses, commissions and benefits. The department monitors employees' time off, vacation and sick days. It pays the government taxes as well as union dues and other withholding from an employee's paycheck. The department reimburses employees for expenses and makes payments to vendors.
The accounting department handles the inventory and inventory management to achieve accounting objectives. The accounting department monitors the cost of inventory over a specific period against its revenues to ensure that the cost of raw materials, labor and overhead do not negatively impact cash flow.
The fixed assets (non-current assets, like machinery, plant & equipment). The accounting department is responsible for recording fixed assets on a balance sheet with depreciation. Fixed assets or non-current assets canbe intangible--such as goodwill or a trademark.
The efficient management form strategies and plans to perform accounting function in an optimal manner to identify, allocate, obtain, distribute and utilize resources in such a manner to achieve financial as well as organization objectives to create value for all the stakeholders.
3.2 Department Mentioned in the Scenario Needs Improvements
The human resource management department needs to improve the recruitment policies and
procedure, of the Brill Solution. There must be a training, and motivation, through knowledge
sharing, and feedback culture. The humans are the most vital resource of an organization as
they strategically plan allocate, distribute, and utilize resources to achieve the strategic
targets, for the firm and for the stakeholders (Hiam, 2003). There are few recommendations’
to improve the system and performance of the organization and employees.
There are several ways to improve the performance of employees and organization.
Some suggestions are given below.
Brill Solution should adopt the effective recruitment, system through innovative
dynamic, human resource hiring policies and procedure.
Brill Solution should adopt to change organization through training, knowledge
sharing, and feedback to motivate employees to achieve strategic goals and
objectives.
The Brill Solution must provide training to its employees to motivate them to enhance
their skills, professional exposure, to achieve goals and objectives.
Brill Solution should adopt a learning culture in which knowledge sharing and mutual
consultation preferred, and employees have say with more openness and trust, to
discuss and solve the problems, and conflicts.
As more employees turnover, exists in Brill Solution, as employees are demotivated
and leave the job, so the organization has to adopt the more effective training
development, knowledge sharing feedback techniques to retain the employees to
enable them to be the vital and productive part of the organization.
Management should promote innovative culture where teams are formed for better
performance and effectiveness to achieve shared goals and objectives. The concept of
synergy is availed as all employees contribute to organisational success by applying
their unique talents, knowledge and creativity in their work.
Brill Solution management should provide incentives, monetary and non-monetary
rewards to employees based on performance, to encourage them to achieve high
standards and excellence for the organization and themselves.
The Brill Solution should adopt the dynamic, creative cultural approach through
strategic leadership to motivate and guide employees to utilize resources in the best
optimal manner to improve the quality of goods and services and achieve competitive
advantage by creating value for all the stakeholders.
Brill Solution must use IFRS accounting standards to prepare financial statements to
provide useful information to stakeholders, showing true, fair, facts to achieve the
financial as well as non-financial organizational objectives.
3.3 Audit of the Company
Auditing is the systemic process of objectivity obtaining and evaluating the evidence
regarding assertions (of financial statements) about economic actions and events to ascertain
the degree of correspondence between the assertions (financial statements) and the
established criteria (GAAP, IFRS), and communicating their reliability, and validity, and to
assess the effectiveness of internal control. The assurance is the process of reporting by
independent professionals about the quality of information presented in the financial
statements reflecting the true and fair facts/figures to build up the confidence of the creditors
and investors, and all the stakeholders. The audit is very important and essential, for users’
investors, and creditors about the credibility, and reliability of company, s accounts, and
motivate them to invest in the company (Arens, and Beasley, 2013). The management
prepare published financial statements for users, managers to see the financial position of the
company, the customers want to know the financial statements whether company is in a good
position to provide good qualities of products and services at compatible price, the
shareholders and investors (banks, financial institutions, those provide funds for investment)
are interested to know the financial position of the company to invest or not whether they will
receive good returns on their investments or not, government is interested that company must
obey rules and regulations and (tax authorities) pay tax, community is interested that
company should contribute towards health, social, sectors, provide more jobs to local people,
and environment friendly. The statutory audit enables the management to improve their
business operations, improve their planning to achieve value for the company and for the
stakeholders (Davis, and Aston, 2010). The audit of the company enables the management to
accurately estimate the resources, to control the costs, to improve the operations, and create
value for the business.
3.4 Users of Internal and External financial Information of Brill Solution
The internal users are employees, managers, partners (owners), customers, departments head
for decision making. The managers, and owners analyse and judge which area they need to
improve, how can they improve to achieve the financial and organizational objectives. The
customers are interested whether the company is performing better, and would be able to
produce quality desk top soft-wares, with latest technology, to fulfil their anticipated needs
and wants.
The external users are the suppliers, government tax authority, which demand company obey
rules and regulation and pay taxes, the community / society, with expectation to provide more
jobs to local people, environment protection, and contribute towards the health and social
sectors.
3.5 Comment on the financial system and IT related applications
The effective innovative accounting techniques, and standards, with latest IT technology
applications are the vital tools to achieve success for the business and value for the
stakeholders (Dyson, 2010). The Brill Solution is using their own ERP accounting software,
which does not fully match with the Sage, and other accounting soft-wares, compatible to
follow the IFRS and GAAP standards. The Brill Solution must use latest technology for the
development of soft-wares and application, as their IT system application is four years old,
and does not up to the international standard to compete, and create brand image. The Brill
Solution is using its own soft-ware for the accounting purposes which is not compatible with
the international accounting soft-wares like Sage and other soft-wares, and must follow the
IFRS accounting standards to show fair true accounting information building the confidence
of the shareholders, investors, and the creditors. The company must invest funds to acquire,
new accounting soft-wares, to prepare financial statements free from errors, and must show
the true fair facts based on the statuary accounts, and improve the IT technology and its
application to improve the quality and achieve the strategic objectives.
3.6 Summarize the Risks with Security data
There are risks related with the security of the data, as employees turn-over is more, and there
has been a consistent delays in the completion of the project. The owner does not have full
trust on the employees, and the management, incorrect estimation of resources, and
completion of time is calculated and there are many risks related with the data, as the
employees, are demotivated, and decisions are imposed.
The management of the Brill Solution can manage risks, and resources, in the best manner to
achieve organizational objectives.
(i) The management needs to have a strategic cultural change through effective
recruitment policies, and procedures
(ii) The Brill Solution must provide training to its employees to motivate them to
enhance their skills, professional exposure, to achieve goals and objectives.
(iii) Brill Solution should adopt a learning culture in which knowledge sharing and
mutual consultation preferred, and employees have say with more openness and
trust, to discuss and solve the problems, and conflicts.
(iv) The management should develop the effective dynamic teams based on their
experience, qualification, skills, and provide them with necessary training
motivation to use resources to produce quality soft-wares, and achieve strategic
targets.
(v) Establish more openness and trust, conduct external and internal environment
analysis, market analysis, trend analysis, competitors analysis, to have more
effective strategic leadership approach to manage risks, improve brand image and
achieve goals and objectives.
3.7 Problems arising from Bass behaviour towards Tom
There would be more problems and conflicts as the Bass behaviour towards Tom is
favouritism, as Tom does not have the ability to perform the assigned task. The Bass does
not have the leadership skills, and qualities to influence the team members, to motivate
and guide them to achieve targets. Bass does favour Tom as they have personal relation
(brothers), and Bass himself is lacking professional and ethical skills, and does not have
leadership qualities to motivate employees to achieve targets. Bass impose decisions, and
does not involves employees in decisions making, and discourage knowledge sharing and
feedback, so the team members, dislike him, and are demotivated, so they would show
low performance, project completion delay, incorrect estimation, of resources, and
completion time, and this would deteriorates the market image of the Brill Solution.
There would be low performance and low productivity, and more turnovers of the
employees. The Bass is an incompetent managers and estimate resources in an incorrect
manner, there are delays in the project completions, employees and demotivated and
performance of the company is declining consistently.
3.8 Design for Effective, dynamic Teams
The strategic leadership approach in developing dynamic innovative creative teams to
achieve organizational targets is vital for the long term competitiveness of the company.
The management of the Brill Solution must adopt the strategic leadership approach and
follow these steps:
Brill Solution should adopt the effective recruitment, system through innovative
dynamic, human resource hiring policies and procedure.
Brill Solution should adopt the strategic cultural change organization through
training, knowledge sharing, and feedback to motivate employees to achieve strategic
goals and objectives.
The Brill Solution must provide training to its employees to motivate them to enhance
their skills, professional exposure, to achieve goals and objectives.
Brill Solution should adopt a learning culture in which knowledge sharing and mutual
consultation preferred, and employees have say with more openness and trust, to
discuss and solve the problems, and conflicts.
As more employees turnover, exists in Brill Solution, as employees are demotivated
and leave the job, so the organization has to adopt the more effective training
development, knowledge sharing feedback techniques to retain the employees to
enable them to be the vital and productive part of the organization.
Management should promote innovative culture where teams are formed for better
performance and effectiveness to achieve shared goals and objectives. The concept of
synergy is availed as all employees contribute to organisational success by applying
their unique talents, knowledge and creativity in their work.
Brill Solution management should provide incentives, monetary and non-monetary
rewards to employees based on performance, to encourage them to achieve high
standards and excellence for the organization and themselves.
The Brill Solution should adopt the dynamic, creative cultural approach through
strategic leadership to motivate and guide employees to utilize resources in the best
optimal manner to improve the quality of goods and services and achieve competitive
advantage by creating value for all the stakeholders.
Task 4
4.1 Reasons for the customers to switch to another company (bottleneck)
The management and the employees of the Brill Solution are ineffective in developing
producing, quality soft-wares in time, as there are more delays in completion, so customers
are not satisfied, so they are switching to other suppliers. The Brill Solution needs to have a
strategic visionary leadership approach to train, motivate employees through establishing
innovative organizational culture based on learning, knowledge sharing, feedback, and
involving employees in decisions making so they must know what is to be achieved, and how
to be achieved, and when to be achieved, and at what time and cost?. Recommendations’ are;
(i) The management needs to have a strategic cultural change through effective
recruitment policies, and procedures
(ii) The Brill Solution must provide training to its employees to motivate them to
enhance their skills, professional exposure, to achieve goals and objectives.
(iii) Brill Solution should adopt a learning culture in which knowledge sharing and
mutual consultation preferred, and employees have say with more openness and
trust, to discuss and solve the problems, and conflicts.
(iv) The management should develop the effective dynamic teams based on their
experience, qualification, skills, and provide them with necessary training
motivation to use resources to produce quality soft-wares, and achieve strategic
targets.
(v) Establish more openness and trust, conduct external and internal environment
analysis, market analysis, trend analysis, competitors’ analysis, to have more
effective strategic leadership approach to manage risks, improve brand image and
achieve goals and objectives.
(vi) Establish a proper reward and recognition system based on performance (not on
personal links) to motivate employees to achieve goals and objectives.
(vii) The owner Chris Tyler has to adopt the strategic leadership approach to establish
trust among himself and his employees, with human approach, and have close
relations with employees, listen their feedback and suggestions, and involve
everybody in decision making, and have effective leadership approach towards
problems solving, through knowledge sharing and mutual consultation.
(viii) Employees’ performance must be evaluated through performance appraisal
system, and other practices.
(ix) Establish an effective monitoring, and control system, to achieve the strategic
targets.
Consequences of ineffective at work
(i) There will be demotivation; more employees will leave the organization.
(ii) There will be delays as in the completion of the project.
(iii) There would be inaccurate estimation of the resources, and completion
time.
(iv) Resources will be wasted, and there would be low performance and low
productivity.
(v) The market position and the image of the company will deteriorate.
(vi) The company will lose the customers, and sales will drop, and company
will incur loses.
4.2 Competence Framework
The competence is the behaviour, or attributes technical knowledge that an individual
must have to perform a work or job effectively. The competence is a broad concept
that demonstrates performance outputs as well as behaviour inputs, and minimum
standards required to perform the job effectively to achieve targets (Armstrong, and
Redmond, 2010). It is very vital and important to have a competent workforce to
utilize resources in an optimal manner to enhance quality, and brand strength of the
goods and services, and achieve value for all the stakeholders. The competence
framework elaborate the ability, attitude of the manager to guide employees to
achieve organizational goals and objectives, removing the conflicts and solving the
problems to improve the performance of the employees and the organization. The
competencies are the critical thinking, and analytical skills to achieve organizational
targets, removing problems and conflicts to motivate employees to perform well. In
the present scenario the Tom, Bass, ,s brother does not have the competence and
professional experience of junior software engineer, to carry the project, so the
management will not be able to achieve the project objectives, as the skills, and
abilities require by a team leader are lacking in Tom. The Tom is lacking the creative
analytical skills, to perform the assigned job and also lacking the leadership skills to
motivate and guide employees to achieve organizational goals and objectives. Tom
needs further training, and development to handle this kind of project.
The management must develop effective HR policies to hire staff, employees through
innovative creative recruitment process to improve the performance of the organization. The
management identify the needs of the training and development of the employees, by
analysing the goals and objectives of the organization through external environment analysis,
market analysis, internal analysis, and competitors’ analysis, and access the employees
training and development’s needs.
Employees are provided with necessary on the job off the job training to motivate them to
improve learning, and performance, through knowledge sharing, and feedback.
As there is a change in technology, methods, and external environment, employees need to
improve their skills, and professional exposure to achieve strategic targets.
The employee can attend workshops, set up calendar reminders to work on specific skills,
solicit feedback and review the plan on a regular basis, to improve the skills to be able to
perform task in a better way to achieve goals and objectives.
Monetary and non-monetary rewards must be given to employees to enhance skills,
knowledge, and experience and contribute positively for the progress and long term
competitiveness of the company.
4.3 Methods of Communication used in the company
The effective communication in organization increases productivity, decreases employee
turnover and improves working environment(Verderber, 2010). The organizations,
management develop communication strategies to provide important information to
stakeholders what the organization wants to achieve for them, and what they want to achieve
in future to satisfy the needs and wants of the customers, shareholders, and other stakeholders
through improvement in the quality of goods and services and brand image, to achieve the
competitive advantage, and improve their market position. The organization normally used
different types of communication for the internal and external purposes. Following are the
methods used by an organization for internal communication;
Phone/mobile:
Phone calls allow Customers clients, people to contact local branches, which is ideal for brief messages, and customers can easily communicate with the company and useful for managers, employees to contact with other companies.
Fax:
Fax is ideal and effective to send urgent documents and contracts. The problems of sending a fax that who would be reading your fax, and sometimes unavailability of paper in the machine causes problems.
E-Mail:
Companiesuse email because it’s convenient for them to communicate messages easily. Customers, clients, managers can e-mail and get or exchange information in a convenient way.
Notices:
These are messages on single pieces of paper and would be displayed on a notice board to inform of arrangements or to remind staff of a meeting, or any important event happening in the store, or office.
Reports:
These are written form of documents or assignments that have requested for a subject to be looked at e.g. to present information on a market study to the managing director of company. e.g annual reports business reviews, financial statements are also written e.g. to provide information about the performance and operations of the company.
Meetings / Team Briefing
Organization conduct meeting, team briefing every month and whenever needed to discuss important issues. The purpose of the meeting/ briefing to discuss problems issues related to products, and services, operations, and generate new ideas for the promotion of goods and services to satisfy customers’ needs and wants and achieve organizational goals and
objectives and create value for all the stakeholders.
Sharing Data Base
Organization share data base related to different customers, clients, managers, to share information about the meetings, related to products, issues, profit, sales, and promotions information. Whenever head office wants to see profitability, sales, raw material stock information charts, then this is shared electronically.
External methods of communication
Billboards
Websites
Letters
Television advertisements
Online (internet)
Video conferencing
Forms
Meetings
Business to customers
Electronic data interchange
There is a communication gap among different levels of the management. in Brill
Solution.The management conducts a meeting at the start of the project and discusses the
details, as the decisions are imposed on the employees. There is a lack of knowledge sharing
and feedback so employees are demotivated as they do not know what to achieve, how to
achieve, at what cost to achieve at when to achieve?.The management should establish a
proper communication, through knowledge sharing, and feedback. The management is not
sharing the data properly related to different customers, clients, managers, to share
information about the meetings, related to products, issues, profit, sales, and promotions
information.There is a wrong estimation and delays in the completion of the project due to
communication gap, and lack of training, knowledge sharing and feedback.
4.4 Design a Policy to retain Employees
Employee retention refers to policies and practices companies use to prevent valuable
employees from leaving their jobs. How to retain valuable employees is one of the biggest
problems that plague companies in the competitive marketplace. Companies spent money and
time, efforts in hiring, developing employees to be a vital part of the organization. The
management form effective recruitment policies and procedures to train motivate and retain
employees to achieve strategic organizational objectives (Armstrong, and Redmond,
2010).To retain employees for a longer time the organization needs to have the following.
(i) The management needs to have a strategic cultural change through effective
recruitment policies, and procedures.
(ii) Training must be provided to employees to motivate them to enhance their skills,
professional exposure, to achieve goals and objectives.
(iii) The management should provide a learning and knowledge sharing supportive
environment, where employees can use their potentials and skills to improve their
performance to achieve the goals and objectives.
(iv) Brill Solution should adopt a learning culture in which knowledge sharing and
mutual consultation preferred, and employees have say with more openness and
trust, to discuss and solve the problems, and conflicts.
(v) The management should develop the effective dynamic teams based on their
experience, qualification, skills, and provide them with necessary training
motivation to use resources to produce quality soft-wares, and achieve strategic
targets.
(vi) Involve employees in decision making so they consider they have value so they
try their best to improve their knowledge and skills.
(vii) Establish a proper reward and recognition system based on performance (not on
personal links) to motivate employees to achieve goals and objectives.
(viii) Employees’ performance must be evaluated through performance appraisal
system, and other practices
(ix) Management should create a challenging organization environment where
employees have opportunities to grow professionally, and improve the skills, and
professional exposure, more earning and learning chances; they will stay for the
longer term and be the vital part of the organization.
However the employees have the right (as its, not unethical to change the company for
better opportunity) to find better opportunities, in other companies, but they must follow
the proper employees rules and regulations, and follow the recruitment policy, and rules
while switching to another.
4.5 Ethical Dilemmas and Conflicts
Organizational ethics deals with the ‘ethoses of an organization. It examines the shared set of
beliefs, of the group of individuals that make up the organization, which determines ‘the
climate of opinion that sets the standard by which right and wrong is to be judged (Porter,
2008). There are many organization in which beliefs’ are not openly stated, the ‘culture’ of
the organization is hidden and new employees are left to determine for themselves what is
‘acceptable’ behavior, as employees often learn by their mistakes and consequently may
defer tricky decisions to management. The ethical dilemma exists where an organizational
culture does not match with the mission and vision of organization to influence and motivate
employees to achieve organizational targets. The culture of the Brill Solution is not
appropriate to support their strategy and vision to achieve organizational goals and objectives
efficiently and effectively. The behavior of the Bas is unprofessional and unethical which
creates demotivation and employees are leaving the job. The Bas hire employees on personal
links, and have stereotype mentality, imposes decisions as he does not encourage knowledge
sharing and feedback. The employees are demotivated; there is no merit approach in hiring of
employees, so it’s highly unethical to hire an inefficient person for the job. There will be
demotivation, more delays in project completion, wrong estimation of resources, wastages of
resources, quality of the soft-wares will drop, sales will decrease, more turnover of the
employees there will be low performance low productivity. The market image of the
company will deteriorates, company will lose customers, there will be more conflicts among
employees, employees will behave unethically, and finally there will be a poor performance,
and the company will go out of the market.
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