Business control

Instructions

Evaluate the following case taking into consideration the elements of the control function discussed in chapter 14 of the textbook, entitled "Basic Elements of Control."

*You will find the case at the bottom*

After reading the case, you should do a written assignment where you answer the following guiding questions:

1. Write an introduction in which you introduce the topic of control.
2. Identify all internal control issues that arise from the case.
3. For each problem identified, apply control measures (feedback, concurrent or anticipatory) that improve internal control in sales operations, in the warehouse and in general operations.
4. Answer: Why are internal controls failing?What should we do as managers to ensure that internal control is effective?

Case:

BUAD 2000: Fundamentals of Management

Case Analysis 7.1: Business Control

(Value: 58points)

Rosaliz has worked for ten years in a food and institutional product distribution company that provides services in Puerto Rico and the Caribbean. The company provides food, frozen food, dairy products, beverages, paper, disposable products and public hygiene effects to hotels, restaurants, fast food establishments and public and private institutions. After many years of effort and long hours of work, two years ago it was Appointed Sales Manager and since then in charge of 15 salespeople around the island Rosaliz holds meetings with the Sales group every Monday at 8:00 a.m. In these meetings, the priorities of the week in terms of sales, delivery routes of purchase orders and particularities that affect customers are discussed. She is very skilled and has shown the ability to deal with all the situations that arise on a daily basis. After finishing today's meeting, Alan, her supervisor, calls the office to discuss various issues related to the quarter that just ended. Alberto, the warehouse supervisor, is also in the office. Alan shares his concern about declining income, particularly from customers who buy him groceries and frozen foods. The data is presented below:

Year 1Qtr. 20x2 1Qtr.20x3 Difference

Groceries $8,500 $6,000 -$2,500

Frozen $3,800 $2,900 -$900

Dairy products $2,400 $2,300 -$100

Drinks $1,700 $1,850 +$150

Paper $2,800 $2,800 $-.--

Disposable $1,350 $1,500 +$150

Hygiene $1,600 $1,800 +$200

Rosaliz indicates that she discusses with her staff the sales objectives for each week, although she acknowledges that she cannot always do these meetings due to the complications that arise in the routes that they must complete. Likewise, she reports that she has not been able to meet with the Marketing Director for several weeks due to problems with their schedules. This indicates that, since the beginning of the quarter, sellers in the sale area had manifested certain situations with customers who indicated that they did not receive their merchandise on time, which caused discomfort. She spoke with Alberto in the warehouse and understood that everything had been solved. Alan told him that this was new news for him and that he had not been notified. She admitted that she had made these notes in her personal notebook, but did not document the situation due to lack of time, as she prefers to work these situations in person and understands that she got the precise answers. She indicates to Alan that the problem has been solved. On the other hand, Alberto mentions that he has received complaints from customers indicating that when they go to deliver goods, sellers do not properly register the order, resulting in shortages. Rosaliz indicates that it is true and that she has had to call attention to several sellers for this situation. However, she indicates that she had already reported to the IT department certain inconsistencies between the data entered in the purchasing module of the ERP system that caused errors in the orders. However, he is not aware of what has happened to this problem. Alberto indicates that if he receives a wrong order through the system, the dispatch of the merchandise will go wrong as well, but he cannot stop the dispatch of the merchandise. Besides this, Alan You've been getting out of inventory information and wondering if this has to do with problems with your computerized system. When Alberto asked him, he explained that one of the vendors in the northern area had to assist him for several days since the accountant who manages the merchandise entry and exit system was out due to illness and the Human Resources Department did not solve it in time. Rosaliz was aware of the situation. Alan added that during that same week he was visiting the warehouse and could notice an excess in the inventory of paper, a product that, according to what he had already warned, did not show movement in sales. Alberto pointed out that Rosaliz had reported a possible purchase of said material, but never received a confirmation. Rosaliz indicated that she understood that the merchandise had been returned to the supplier. Alan is very concerned about everything that has emerged from the meeting and requests an emergency meeting with the entire management team. The main topic: internal control.