Corporate governance can be defined as a system by the corporations are controlled, directed and administered. The structure of governance is used to specify the distribution of responsibilities and rights among the different participants in a company such as managers, board of directors, creditors, regulators, auditors, shareholders and other stakeholders, etc. It also specifies the procedures and rules for the major decision making in corporate affairs. Corporate governance tends to provide a structure by which organizations can set their objectives and pursue those objectives along with the reflection of the context of regulatory, social and market environment (Simanovsky, 2010, pp. 14-17). It also provides a mechanism for the monitoring of policies, actions and decisions of corporations. The main perspective of this assignment depends upon a case study of a company with the name of Phone for Less. The assignment is based on the report.
The method to complete the paper in an effective manner would be qualitative in which the data would have been accumulated from the external analysis and then put in the right section to analyze. It is the best method to complete the same.
Nature and Purpose of the Organization
The company that has been chosen for the same analysis is a hypothetical company with the name of Phones for Less Ltd, Dark Store. The core purpose of the company is to provide the most up to date mobile phones at the cheapest cost available to the end customers. The nature of the company is a marketing based company provides a mobile phone to its consumers. There are four different ranges of activities which are essential for the company
- Providing the work and environment to the locals in order develop the stuff
The operations of the company are perfect, and it is made up effectively in the market. The ownership and management of the company are perfect, and well organized by having a perfect hierarchy in particular. It is an effective sign from the viewpoint of the company. Henry Ford is known as the Chief Executive Officer (CEO) of the company. The report is presented in an effective manner with analyzing each and every aspect accordingly.
Identification of Stakeholders and Risk Faced
The internal stakeholders are committed to supporting certain development that lends a hand to build smooth working connections between operational segments. Each department cannot operate or pursue conflicting goals alone, otherwise the company's strategic goals and objectives would certainly be damaged. The aim of developing a positive working place environment between operational departments enables the company to operate effectively.
The internal stakeholders of the company are employees and upper management. There are numerous things which the company is trying to give to its internal stakeholders, including motivational stance and others. Phone for Less has a perfect managerial hierarchy which is a positive sign from the standpoint of the company. The risk involved in the company related to the employees is a low amount of communication with the management of the company. Due to this particular problem, risk of de-motivation of employees would certainly increase in the near future. Due to the managerially based hierarchy, Phone for Less Ltd Dark Store, the company is minimizing the risk of low communication accordingly (Nieuwenhuizen and De Beer, 2008, pp. 27-31). It is found from the case study that the level of communication in the company is perfect which shows that the decision would have been taken from their commitments and support. Joanne Smith, Laura Google and Tony which are the management accounting consultant of the company are in regular communication with the employees of the company as far as getting their problem is concerned.
The positive stance of the company in terms of ethics will ultimately give an upshot of financial competitiveness, because the ability to increase sales and better retain and fascinate upcoming talented persons. In many companies, external stakeholders are mainly considered as important facets as their feedback plays a major difference in the company’s entire reporting process. The reason is that they are the key determinants assisting the organization to identify, analyze and design report on the sustainability theme that means a lot.
Apart from the internal stakeholders, there are external stakeholders as well associated with the company, which are the investors. The main risk which they handle is the fluctuation in the net income recognition and revenue growth of the company. Apart from this, inefficient of growth in the dividend payout ratio is an important risk factor which would be in a place for the external stakeholders of Phone for Less (Manalo and Brandleyebookit.Com, 2013, pp. 51-59). Appropriate accounting system (AS) is an important thing from the viewpoint of the investors of Phone for less and the company has a remarkable hierarchy as far as accounting system is concerned, which shows that the chances and amount of mishaps would be quite low in the company.
Analysis of the Accounting Department and Motivating Employees
Employee motivation is a must element in raising the productivity of the company. The company can be eligible to get into the ambit of economic prosperity by neglecting the employee motivation factor. The success of the company from any facet is directly integrated with highly motivated individuals. Whether, it is a matter of productivity and returns or the process of recruiting and retention, motivated employees are considered as the backbone of any success that leads the entire operations towards the next level. In order to increase the morale level of employees, the administration usually arranges two forms of rewards that include intrinsic and extrinsic rewards. Intrinsic rewards are intangible rewards that can only sense or feel and it can be classified as words of mouth, take the suggestions from employees, increase their rank, etc. while, the extrinsic rewards are performance based rewards that make the environment of competition among employees for better performance and prevail over the objectives. Some tangible rewards in creating the motivation spark among employees are increment in salary, bonuses, paid leaves, etc. Employee motivations are those kinds of psychological factors that set the working behavior of an employee in an organization; determine the effort level and the individual’s level of perseverance. Employee motivation is totally different and separate topic as far as motivation is concerned.
Organization basically refers to a place where in different departments work together merely for the achievement of a single and pre-specified goal in particular. Among a number of departments, the name of the accounting department is one of them, which has its own recognition and importance in a broad nutshell. The accounting department is held responsible for the management of accounts of the company including the management of the day to day transaction of the company (Boone and Kurtz, 2010, pp. 31-36). Likewise, other companies, the essence of a perfect and well organized accounting department is effective in Phone for less, as well.
Phone for Less is one of those companies which have a separate person for the separate departmental analysis, like financial accountant, management accountant, payable managers, petty cash managers and others. The accounting department of the company could be analyzed with the help of a SWOT analysis table with focusing on 4 different areas which are mentioned below
- Internal Control
- Motivation of Employees
- Management Style
- Market Research
The majority of the organizations are encountered with a number of ethical issues that are considered as the biggest hurdles in attaining the prospective goals. The ethical dilemmas can be of many types, and it varies from industry to industry and companies. The ethical issues should overcome wisely as it is the foremost provision for all big and small companies to prevent the certain devastating impact in the future that may pose horrible impacts over the company stability in the case of neglecting it. The organizations should prop up valuable ethical choices and strives hard to carry out every possible effort to mitigate or put off all unethical stances from the workplace environment. The unethical behavior can be classified as diversity in working groups, the technological perspective and concerning to quality of product or services (Carlon and Kimmel, 2011, pp. 19-23). The Prevention of unethical issues in corporate structure can be achieved through continuous training and strengthening the desired behavior. The essence of unethical behavior can be unfavorable for the workplace since it would be so expensive and may devastate good terms between business partners.
In terms of ethics, there are two different stances which have been supposed by the company that predominantly are employees’s based dilemmas and expense based dilemmas. It has been the consensus that the biggest weakness of the company is lagging in the MBO approach. Due to this particular thing, the biggest ethical dilemma which the company is facing that their employees are not perfectly organized and motivated due to inefficiency in the MBO approach. The stance of business communication is quite low in the company that should be increased accordingly. The second biggest problem associated with the company is low recognition of expense and revenue in particular. The expense to revenue ratio of the company is extremely high, and it needed to be decreased accordingly and effectively; otherwise, this particular dilemma would derail the entire operations of the company heavily that may not be effective for Phone for less in their future.
The administration is held responsible for playing a central part in maintaining the corporate governance. The whole system has strongly been influenced by the primary members such as stakeholders and board of the organization. The framework of corporate governance hugely relies on laws, regulations, institutional and ethical social environment. They are committed to providing the instruction on how the companies can be commanded or controlled, so that it can perform, increasing the value of the company, but also conducive to the way of all stakeholders in the long term aims and objectives. The team that is engaged in deploying the corporate governance system in an enterprise is primarily comprised of smart and talented group of personnel that enable the administrative committee to make fruitful decisions in the best interest of the enterprise as well as stakeholders. In today’s era, the companies work hard to get benefited from strong corporate governance system. However, the corporate governance also proves to be a framework for achieving the company's objectives and has a relationship in almost every segment of management from the action plans to in-house command, so as to evaluate the achievements and corporate disclosure as a whole.
The company has to bring an MBO approach in particular for their employee’s productivity
The expenses of the company should be decreased in order to compete with other organizations
Simanovsky, S. 2010. Accounting for beginners. Grandville, MI: Global Finance School.
Pride, W. M., Hughes, R. J. and Kapoor, J. R. 2010. Business. Mason, Ohio: South-Western Cengage Learning.
Nieuwenhuizen, C. and De Beer, A. A. 2008. Entrepreneurial skills. Lansdowne, Cape Town: Juta & Co
Manalo, M. V. and Brandleyebookit.Com, S. 2013. Basic Accounting: Service Business Study Guide. Miami: eBookIt.com.
Carlon, S. and Kimmel, P. D. 2011. Accounting Building Business Skills 4E. Queensland: John Wiley & Sons Australia Ltd.
Boone, L. E. and Kurtz, D. L. 2010. Contemporary business. Hoboken, N.J.: Wiley.