Is This the Beginning of the End?
Q: Based on the information presented in the case, identify five examples of poor
planning on the part of this company.
The first and most important example of poor planning is simply the lack of
an HR department until 2 years ago and having previously not set aside the time and
resources to create one. This has had disastrous effects on the operation of the
company and is the most obvious mistake, at first glance.
Secondly, there is no formal hierarchy of authority set up within the
organization, which leads to errors in production and a lot of frustrated managers
and employees. There is no vertical integration in the company nor is there any
process by which employees report. Staff do not communicate together on projects,
the older staff go around their supervisors directly to the president who provides all
the older staff with special treatment, which is most likely the leading cause of why
Peter, Deanna and other supervisors are planning on leaving the organization.
Furthermore, each department has no form of an organized budget, which is
key in enforcing communication, coordination and providing direction. The
company simply operates by throwing money where and when it is needed. A
company simply cannot function without a budget to determine how their money is
best spent and what functions of the company require it. This is also a leading factor
of stress to the supervisors who are clearly unhappy with upper management, and
for good reason.
Additionally, an expansion plan that could have proven to be a turning point
in the companies operation has only led to more frustration for Peter. The
expansion should have been planned to allow for some small error so that it would
be ready in time. Also, those overseeing the expansion didn’t stay updated with the
progress and didn’t communicate with whomever was in charge of the expansion
leading to the improper installation of the wiring causing the end of the plant to not
be supplied with enough electricity to maintain production. This is now forcing
Peter to orchestrate the move of equipment during the busiest time of year, which is
most certainly going to end in failure.
Lastly, because the company had not previously planned or established a
production quality test, they have recently made a major error with a shipment to a
major customer. By simply placing a quality test at the end of production to ensure
that the product is what the customer requires, that it is the right quantity and that
it meets a quality standard for that product, they should not have made this mistake.
All of the major problems that have been listed above could’ve been avoided
if the company had taken some time as they were growing to plan for their future.
Because of this scarcity of planning, it has caused the company to lack structure and
communication, which has lead to no HR department, no budgets, a failed
expansion, a deficiency in organizational communication and an unreliable
Q: Explain the impact that poor planning has had on Peter and Deanna, and on the
success of the company as a whole. Poor planning has greatly impacted Peter and Deanna in similar manners. It
makes both of their jobs significantly more stressful, frustrating and challenging.
Poor planning has left Deanna with an inadequate amount of time and
assistance to get a legitimate HR department functioning. This causes her to spend
most of her time on recruiting and when she does receive help she shares the help
with production, where they are usually pulled back to for more important matters.
Also, as she lacks a budget, it makes it extremely difficult for her to organize her
resources and determine where they are best spent.
The lack of budget has a much larger impact on Peter, as he is the
organizations production manager. It makes Peters already stressful job almost
impossible as organizing the amount of product needed for each order is not
efficient. They just order materials as needed and without a budget to restrict/ limit
the resources, the possibility of overspending or failing to meet an order is very
Lastly, having a workforce that refuses to work together and communicate
makes it very difficult for Peter and Deanna to do their jobs and will lead to the
failure of the company. Without an established communication chain that upper
management supports and follows, the company will find it very difficult to be
successful. They wanted Deanna to set up clear policies and rules so that everyone
knew what they were to do, but if senior employees can just talk to the president
and get a bypass around the rule, then it is likely that the company will lose both
Peter and Deanna due to the inability to link the managerial levels of the company.
Q: What scheduling technique(s) could be used by this company, and in what area(s)?
The company could have used a Gantt chart to monitor the production
process. If this scheduling system had been implemented then the production
process would be much more organized and allow for frequent updates and provide
an opportunity to inspect the products process to make sure that it is being
produced to the required standards for the customers.
They could have also used a PERT chart for the organization of one of the
large projects, such as the structuring of a Human Resources department to make
sure activities were coordinated across all of the other departments. This would
ensure the communication required to get the department functioning as well as
enforce all the new policies that are trying to be instilled in the organization. This
would include meetings between departments as well as meetings for employees to
learn the new functions of the HR department.
Practising What You Preach
Q: Using the information presented in the case and on page 48 of your textbook,
identify the preventative, concurrent and corrective controls at work for the audit
Preventative: Controls that anticipate/prevent undesirable outcomes
For an audit to be successful, it requires very careful planning and strong
communication between all of those involved. This planning includes gathering all
relevant data on the company being audited, their audit history and which employees would be best suited for the specific audit. By setting up a budget, an
audit program and properly assigning procedures to individuals on the audit team,
Zahid is taking various preventative controls to ensure that the audit is successful
and that everything goes according to plan. Furthermore, through strong
communication, a LAN for employees to discuss and numerous meetings, Zahid has
established a strong sense of community for the employees where everyone knows
their specific roles as well as numerous opportunities to talk with Zahid to make
sure tasks are being completed properly.
Concurrent: Controls that are enacted while an activity is in progress.
With Zahid monitoring his employee’s progress on the audit, he is the concurrent
control. By maintaining strong channels of communication, it allows him to better
supervise the actions and work of everyone on his audit team and be able to correct
any mistakes as soon as possible as well as allow him to provide insight to specific
situations when an opportunity arises.
Corrective: Provides feedback after an activity is finished, to prevent any
The actual audit itself acts as a corrective control to inform the company being audit
of what the audit found or didn’t find. Furthermore, at the end of the audit, Zahid
reviews all the information collected by his team to make sure all the required
standard procedures were applied. Once he believes everything has been completed
properly, he submits it to his manager for review and answers any questions he may
have pertaining to the audit. Once the manager is satisfied, a