Company corporate governance
Corporate governance can be described as the process by which an organization is managed by its stakeholders or even the head of departments. This aspect of management ensures that the organization achieves the stated goals. Corporate governance refers to the way organizations are directed and controlled with a focus on customer satisfaction. This is enhanced by offering better services to the client with effective results. In the case of Timothy’s Fine Tobaccos Company, the proprietor and business owner have used an excellent way to manage the business. In addition, the customer service offered has attracted a good number of loyal customers. From when he started the business in 2003, Tim Soccer has continued to develop and expand his business with a clear direction and control combined with excellent decision making. He established policies for the governance of the business, which paid off with a high number of customers. This also translated to considerable sales turnover over the years.
Although he started the business as a part-time job to provide humidors in local establishments, the business has grown to greater heights. He moved out of his home to a convenient location closer to the customers. When he moved the business location on a street in downtown Bay City, the business recorded a sales increase of over 200%. In this case, many customers were able to access the facility and sample the product and services that were offered. The service offered improved from offering humidors to selling cigarettes, cigars, and their accessories like the humidor, cutters, and lighters. New customers were attracted due to the new services offered and their relaxation, as well as interacting with other customers. New customers required a new workforce, and that is why Tim employed his daughter and his friend in the business. The business offers some extra special offers such as hosting the Cigar night, which attracts a large clientele in the business as a guideline to making customers loyal to the services being offered. The customers see it as a place of relaxation and enjoyment of the various products offered. The proprietor has an eye on excellent customer service that is paying off with increased sales and a large clientele (Monks & Minow, 2011).
Issues facing the company
The company seems to be facing some issues regarding expansion and possible relocation to a larger space that will offer great comfort for customers and an increase in sales. The business owner has been uncertain of the current place because of a possible increase in rent by the landlord. The business lacks experienced tobacconist who is advanced in offering their special skill to the customers. The workforce in the company lack skills in handling the sale and the technical know-how of selling cigars. The manager, Tim, is an experienced engineer with very little knowledge of how to purchase and sell cigar products, but he has had on-job self-training. Another issue that comes up is the issue of competitors. However, this is not a worry to the business because the company seems to have a competitive advantage over the other businesses. Offering unique services have been behind the success of the company. The customers associate the company with excellent services and a competitive price for the products as compared to the other business. Tim is considering relocating to a new location with a larger space and a convenient location. The moving idea has been a dilemma to the manager because he is not sure if the loyal business customer will be maintained even after relocating. The new location might not offer the same relaxation as the one in Downtown Bay City Street (Tricker, 2012).
Managerial accounting concept
The management accounting concept can be applied by the company management to address some of the issues that the company is facing. The term management accounting can be used to mean how managers use accounting information to make decisions for the company that is better equipped to handle issues, which affect the business. It includes drawing up policies that will help the business to expand and offer enhanced products and services. The policies are supposed to help with better decision-making through reliable data and problem definition. The company needs to identify and estimate the costs that will be incurred before the company is relocated. It is also important to estimate the benefit that the company is likely to enjoy with the new location. Time is also a factor to consider before moving to a new location. Furthermore, customer access to the relaxation facility should be considered. The management accounting concept may be used to identify some of the issues that the company will face in the future. This can be achieved through forecasting the sales in the next financial year and calculating if the move will be a cost-benefit to the operations of the company. If the company decides to move, the benefits of this option should outweigh the risks involved in the continuity of the business and eventual growth (Weygandt, 2009).
Managerial accounting tools
Management accounting tools refer to the technique and concepts that managers of companies use to plan, manage, and control company resources through clear strategies aimed at helping the company to achieve its set goals and objectives. Managers should apply tools that help run the organization through consultation before decision-making on critical matters that are important to the company. These tools may include the job order costing method that guides the company management on how to manage their stock. Stock in a business is vital as it ensures continued business without delays. The customers are also able to get satisfaction in large supply from which to choose. The management of Timothy’s Fine Tobaccos Company has implemented a job order costing method.
This is meant to ensure that there is enough supply to the organization and the customers find their favorite choice with ease. The job order costing method has also helped the organization to mark profitable products. Budgetary planning is also a vital management tool that will be helpful to budget the company resources through the allocation of funds to profitable projects. Budgeting is useful in the planning to introduce a new product or even relocate the business, as well as the implication it will have on the financial position of the company. Tim is planning to relocate the business to a convenient location with large space for expansion. Cost volume profit analysis is another management tool that the manager of Timothy Fine Tobaccos Company may apply to analyze the effect of relocating the business. Tim is planning to purchase a new building for the business venture. Cost volume profit will help determine the profitability of the move and the implication it will have on the business activity (Balakrishnan, Sivaramakrishnan & Sprinkle, 2009).
Managing the employees
Tim may use managerial tools that will help to empower the company employees to ensure employee efficiency. An employee evaluation analysis should be done often to assess each employee on the strength and weaknesses when handling clients. This will help the business to identify the crucial areas to train the employee to deliver the required working standards. The business gains new customers each day, and thus the workforce should be empowered on how to deal with new challenges that face the organization. Although Tim is an experienced engineer, he needs to undertake managerial courses that will help him in different areas of running the tobacco business. These skills will be vital to the growth and expansion of the company. To empower the company employees, the management should set up a training facility to train employees on customer service and management of the business. Trained employees deliver better results than untrained ones. Thus, the growth of the business is emphasized with an empowered workforce. Notably, tobacconists play a major role in helping customers to make their choice regarding the best cigars in the market (Hansen, Mowen & Hansen, 2006). Therefore, training the employees is a vital process for the organization’s operations. Customer satisfaction will be achieved through empowered employees and thus the business future is protected. Better pay would be offered to employees as a reward for good work and sustainability of the industry.
References
Balakrishnan, R., Sivaramakrishnan, K., & Sprinkle, G.B. (2009). Managerial accounting. Hoboken, NJ: John Wiley & Sons.
Hansen, D.R., Mowen, M.M., & Hansen, D.R. (2006). Managerial accounting. Mason, OH: Thomson/South-Western.
Monks, R.A.G., & Minow, N. (2011). Corporate governance. Chichester: Wiley.
Tricker, R.I. (2012). Corporate governance: Principles, policies and practices. Oxford: Oxford University Press.
Weygandt, J.J. (2009). Managerial accounting: Tools for business decision making. John Wiley & Sons.