Managerial Accounting: Samuel Truett Cathy Profile

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Succeeding in entrepreneurship in the contemporary times is a challenging task for many new enterprises due to the risks involved. Previous studies show that most business start-ups experience challenges leading to their closure. A study conducted by Small Business Administration [SBA] shows that 80% of new businesses started in the US do not survive beyond the 3rd year of their establishment (Gerber, 2001). Seventy five percent (75%) of these businesses fail due to financial problems mainly arising from poor financial management. This aspect underscores the importance of effective financial accounting, which mainly focuses on reporting an organization’s financial performance.

The information generated from financial management cannot be valuable if it is not utilized in management. This goal can be achieved by implementing managerial accounting concepts, which focus on ensuring that organizational leaders and managers have information that they can depend on in managing their organizations. Therefore, adhering to managerial accounting increases the likelihood of succeeding in entrepreneurship (Garrison, Noreen & Brewer, 2012). Samuel Truett Cathy is one of the most successful entrepreneurs in the United States. This paper evaluates the source of his success with specific reference to managerial accounting concepts and issues.

Samuel Truett Cathy profile

Born in 1921 in Eatonton, Georgia, Truett is 93 years old. His interest and commitment in entrepreneurship are evidenced by the success with which he established and managed the Chick-fil-A, Inc. from 1946. During its inception, the firm was known as Dwarf House Restaurant. Chick-fil-A operates as a fast food chain in the United States and its headquarters are located at Georgia. Samuel Truett Cathy served as the firm’s chairperson until 2013, when he handed over to his son, Dan T. Cathy. Due to his managerial skills, Truett Cathy has established outlets in over 1,600 locations. Samuel Truett Cathy’s source of wealth is self-made and he is ranked amongst the richest businesspersons in the world (Hattwick, 2005). By the end of 2012, Truett Cathy’s net worth was estimated to be $ 6.2 billion.

Analysis of Samuel Truett Cathy managerial skills

Managerial roles -Planning, decision making and controlling

Managers are charged with the responsibility of executing a number of vital activities, which include decision making, planning, and controlling. Planning is concerned with effective formulation of organizational goals coupled with how to achieve them. On the other hand, controlling focuses on monitoring the formulated plan in order to eliminate deviation while decision-making entails determining the best course of action.

Managerial accounting enables organizational managers to execute these activities effectively. The success of Samuel Truett Cathy as an entrepreneur has largely originated from the incorporation of the concepts of planning, effective decision-making, and control. Truett Cathy faced numerous challenges in the process of establishing Chick-fil-A. Some of these problems include intense competition, high interest, and lack of the right and sufficient resources. Truett illustrates the significance of effective planning in establishing a new business.

First, Truett selected a strategic business location outside Atlanta airport. Moreover, his effectiveness in financial planning is evidenced by the success with which he established his first outlet. Truett set up his first outlet with a budget of only $10,600. However, his proficiency in budgeting enabled him to establish a 5,550 square foot unit.

Despite the intensity of competition in the United States’ fast food industry, Truett managed to succeed by making the decision to provide sandwich products, which were an alternative to hamburgers. Truett was concerned with introducing a high quality and unique fast food product that could be introduced successfully to different markets in order to develop a sufficient market share. The decision to introduce a new fast food product attracted a large number of customers. Additionally, Truett implemented an effective control strategy, which entailed relying on market feedback. For example, Truett took into account customers’ complains and complements, as evidenced by his ‘instruction, influence, and image’ philosophy.

Managerial skills

Success in business is dependent on a variety of skills, which include process skills, strategic management, enterprise risk management, and measurement skills. In the course of his entrepreneurship, Samuel Truett Cathy has continuously appreciated the significance of an effective strategy. In order to develop a high level of customer loyalty, Truett ensured that the firm’s products were supplied directly to customers through various outlets. In a bid to achieve this objective, Truett adopted the franchising strategy. Subsequently, the firm has been in a position to maintain the quality and safety of its fast foods, hence increasing the volume of sales.

One of the issues that he advocates in business operation is effective targeting of customers, as evidenced by his philosophy of creating a loyalty effect. Moreover, Samuel Truett emphasizes the significance of creating an unforgettable experience amongst customers. In order to achieve this goal, Truett has nurtured effective process management skills. Truett has implemented an effective value chain in order to serve customers effectively. The value chain is comprised of a number of business functions, which include product research and development, product designing and manufacturing, marketing, and customer service. These functions have played a significant role in the success of Chick-fil-A by nurturing a high level of customer loyalty despite the intense competition in the United States’ fast food industry. For example, customers can easily access Chick-fil-A products in different regions in the United States. This aspect has remarkably improved the firm’s competitiveness and steady growth as opposed to other franchises such as Kentucky Fried Chicken and Wendy’s.

Truett is also concerned with creating a high level of customer satisfaction by ensuring that its employees are customer-focused. In his opinion, people are the foundation of every business (Hattwick, 2005). This aspect highlights the extent to which Samuel Truett Cathy has integrated customer value proposition in his strategic management. Truett recognizes that the long-term success of any business entity may be affected adversely by risks. For example, employees may steal company assets hence crippling the firm’s financial capacity. In order to mitigate the likelihood of such issues, Truett has been advocating the importance of adopting effective leadership skills. One of the areas that he has emphasized on relates to promoting organizational identification amongst employees.

In order to achieve this goal, Truett been focusing on employee career development. In his opinion, organizational success is not dependent on technologies and data, but people who have diverse personal interests. In order to develop a high level of employee commitment, Truett established a comprehensive employee-training program in 1973 dubbed ‘The Team Membership Scholarship. Over 20,000 Chick-fil-A employees have achieved educational excellence since its inception. Due to employee training, Truett has managed to increase the level of commitment and motivation amongst his workforce. Subsequently, the firm’s employees are focused to ensuring optimal production and service delivery, which has led to the development of a strong customer relationship.

Managerial costs

The success of a business is also dependent on the effectiveness with which different costs are managed. Chick-fil-A incurs different costs in its operation. Some of these costs include the non-manufacturing and the manufacturing costs. Some of the manufacturing costs that the firm encounters include the manufacturing overhead, direct labor costs, and direct material costs. On the other hand, the non-manufacturing costs include the administrative and selling costs. Since its inception, Truett has continuously ensured that the firm’s costs are managed effectively. This move has played a remarkable role in improving the firm’s competitiveness with regard to setting the price point of its fast food products.

Corporate social responsibility

Truett understands that corporate social responsibility is a fundamental element in businesses’ long-term operations. In an interview at the University of South Carolina on 18 April 2007, Truett asserted that his decision to venture into entrepreneurship was motivated by the need to increase his wealth and serve the community. The success of businesses is affected by the extent to which the management has taken into account the concept of serving various external stakeholders such as suppliers, customers, employees, and the general society in which it operates. Subsequently, it is imperative for managers to take into account the needs of diverse stakeholders in their decision making process.

Truett’s managerial skills underscore the view that taking into account the concept of corporate social responsibility increases the likelihood of the organization achieving long-term success. Previous studies show that social responsible investors control over $ 2.3 trillion of the total invested capital in the world. In a bid to access this capital, it is imperative for organizations to depict a high level of excellence with regard to social performance. Currently, the labor force market is increasingly inclining towards socially responsible organizations. Additionally, customers increasingly prefer to purchase from responsible organizations.

In an effort to enhance Chick-fil-A’s long-term success, Truett has invested heavily in corporate social responsibility. One of the ways through which he has achieved this goal is by supporting the Win-Shape Foundation, which he established in 1984. The objective of the foundation is to shape young entrepreneurs. In order to achieve this objective, the foundation sponsors 20 to 30 youths to pursue education at Berry College in Georgia every year. Truett has also established the Win-Shape Foster Home, which is based at Woodbury Cottage, Georgia, with also other branches established at Alabama, Brazil, and Tennessee. The foster homes aim at building personal character and nurturing a high level of self-esteem amongst children from disadvantaged backgrounds. His commitment towards corporate social responsibility has improved Chick-fil-A’s image greatly in the society, as evidenced by the numerous humanitarian awards that he has received.

Managerial accounting and ethics

Ethical attributes play an important role in the long-term survival of both large and small enterprises. Numerous organizations have collapsed due to lack of ethics in their operations. Examples of such organizations include WorldCom, Tyco International, Adelphi Communications, Enron, Rite Aid, and Global Crossings. Most of the managers and employees of companies involved in corporate scandals have suffered immensely due to the imposition of huge fines and long jail terms. In other cases, these scandals have led to the closure of the involved companies.

Truett’s success in business also emanates from his commitment to maintaining ethical standards in the course of executing his duties. As a young entrepreneur, Truett recognized the importance of doing things right (Reichhold, 2001). As a leader, Truett advocates his followers to adhere to high ethical standards in executing their duties. Truett constantly reminded the firm’s managers such as the firm’s management accountant to maintain a high level of confidentiality with regard to sensitive company matters, maintaining professional competence, and personal integrity. In order to promote ethics within Chick-fil-A, Truett has been emphasizing on the importance of effective internal organizational control. One of the areas that he has paid much emphasis relates to financial aspects. Truett advocates for a high level of transparency in the accountants’ financial management practices. This aspect has greatly improved the level of confidence amongst external stakeholders such as credit financiers.


Potential entrepreneurs can learn a number of managerial accounting issues and concepts from Samuel Truett Cathy’s success in establishing and sustaining the growth of a firm. First, it is imperative for managers to be effective in undertaking diverse managerial roles such as planning, controlling, and decision-making. Secondly, success in entrepreneurship requires one to possess diverse managerial skills such as process management skills, strategic management, enterprise risk management, and measurement skills. These skills play a fundamental role in enhancing an organization’s operational efficiency. Furthermore, organizational managers must appreciate the significance of effective cost management in order to develop sufficient competitiveness in setting their product prices. Finally, managers should entrench the concepts of ethics and corporate social responsibility in order to promote their firm’s image, and hence its long term survival.


Garrison, R., Noreen, E., & Brewer, P. (2012). Managerial Accounting (14th ed.). New York, NY: McGraw-Hill.

Gerber, M. (2001). The E-Myth Revisited: Why Most Small Businesses Don’t Work and What to Do About It. New York, NY: HarperCollins Publishers.

Hattwick, R. (2005). S. Truett Cathy: The Chick-fil-a-story. Web.

Reichhold, F. (2001). Loyalty rules. How today’s leaders build lasting relationships. Boston, MA: Harvard Business School Press.

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