Management Of Business

(Internal Assessment)

Topic: internal controls

Name of candidate: Jermaine Kennedy

Name of teacher: Miss Sinclair

School: Calabar High School

Territory: Jamaica

Centre#: 100013
 Table of contents

Introduction……………………………………………………………page 1-2

Problem statement……………………………………………………..page 3

Project aims……………………………………………………………page 4

Company history & background…………………………………………page 5-6

Literature review………………………………………………………..page 7

Methodology…………………………………………………………….page 8

Presentation of data…………………………………………………….page 9-15

Conclusion………………………………………………………………page 16-17

Recommendation………………………………………………………..page 18
Introduction
This project seeks “To investigate the effects of not having a proper management
system at B&J LTD.” Within this research the candidate will show the disadvantages
the organization will face when not in practice of proper internal controls. The candidate
will be assessing the company’s performance based on its management system “internal
control” and how well the business is being stabilized financially and how this will affect
its employees. This topic was chosen because, the candidate will in doing this research
gain knowledge about management and the styles of management and how these affect
employees.

Internal control is all of the policies and procedures management uses to achieve the
following goal:

 Safe guard assets - Well designed internal controls protect assets from accidental
loss or loss from fraud.
 Ensure the reliability and integrity of financial information – Internal controls
ensure that management has accurate; timely and complete information, including
accounting records, in order to plan, monitor and report business operations.

 Ensure compliance - Internal controls help to ensure the University is in

compliance with the many federal, state and local laws and regulations affecting
the operations of our business.
 Promote efficient and effective operations - Internal controls provide an
environment in which managers and staff can maximize the efficiency and
effectiveness of their operations.
 Accomplishment of goals and objectives - Internal controls system provide a
mechanism for management to monitor the achievement of operational goals and
objectives.

The B & J staff of the various departments for example. Accounts and the Human &
Resource department have been filing complaints based on the most frequent assessment
of the various departments of the firm they have claimed that items such as pens that
were provided and books for entry were either lost or damaged and as such there has been
a shortage of office stationary. Another report was from the human & resource
department that there was a lack of resources and this was as a result of the lost and
damaged items. This was very similar to that of the accounts department.

The relevance of this research is to help the management team of B & J LTD to find
corrective measures that will eradicate the issue of poor management especially the
monitoring of their fixed assets based on the findings. This research will also be geared
towards assessing the different departments and finding out how satisfied the employees
are in an effort to help management to motivate its workers.

In order for managers to motivate its workers they must ensure that workers are
satisfied and comfortably stationed in their different departments. How can one enjoy or
do his/her job to their full potential if they are not fully equipped with the tools they need
to work? The employees of any organization represent its image publicly. If an employee
isn’t motivated then more than likely based on how they are treated will “advertise” the
business as being disreputable.
Problem Statement

In order for any organization to have workers working to their utmost or motivated
management must ensure that all their employees are equipped with the essential things
they need such as resources and a comfortable working environment. There should be
proper management put in place to ensure that each department has the essentials they
need and to ensure that workers are comfortably stationed. In order for this to be in place
management must be made aware of these policies and procedures known as internal
controls. With internal controls management will be able to implement internal policies
such as safe guarding of fixed assets to ensure that the company’s assets are properly
monitored. Also with the internal control system management with the correct procedures
will be able to ensure that each department has adequate amount of resources needed to
carry out their task. On entering B&J LTD I noticed that employees were constantly
asking each other for various resources such as pens and pencils to borrow from the
different departments. This was the initial findings for my research. The methods used to
carry out this research comprised of primary data collections. The primary data collection
included close ended questionnaires and face to face interviews.
 Project Aims

I. To investigate the different issues faced by employees of the different department

as it relates to the management of the firm.

II. To assess the firm’s management style and the data that will be collected in an
effort to find corrective measures that may eradicate the issues faced by the
management of B & J LTD.

III. To show the importance of having proper management and why it is important to
practice using a proper internal controls system.
 B & J LTD
COMPANY HISTORY AND BACKGROUND

B & J LTD is a distribution company that deals with the distribution of goods. The
business was established by Barton Smith and James Smith both of them brothers. Their
idea of setting up such an establishment came from their youthful days where the two
used to pretend to sell and distribute goods. Barton in this situation was the manufacturer.
He would make fake items and sell them to James for distribution. The two eventually
developed a love for this as they grew older. Their first established distribution company
was named “OD LTD” which stood for “Our Distribution LTD”. Barton however
decided to change the name in 1990 to B & J LTD.

B & J LTD operates as a merchant wholesale distributor. They buy products directly
from the manufacturer then move them from their warehouse to companies that either
want to resell the products to end users or use them in their own operations.

Due to the competitiveness of businesses then the two decided to expand the business.
The two knew that advertising was important, and knew that this was their best chance of
getting on the global market. The company was named one of the best distributors on the
island, but after the changes in management after the two founders/former managers had
passed B & J LTD was no longer in the spotlight. The company lost profits but still
managed to maintain itself.

B & J’s strategic objective:

“To be among the best distribution companies in the globe, acquire large sums of
foreign income by getting attention from overseas based manufacturing companies”
B & J’s vision statement:

“To be the number distribution company in the Caribbean”

B & J’s Mission Statement:

The mission statement of B & J LTD is to offer the utmost services to its customers
by ensuring that their requirements are met and by doing this we should earn customer
loyalty thus making the firm reputable in its class.
Literature Review
In 1943, Dr. Abraham Maslow 's article "A Theory of Human Motivation"
appeared in Psychological Review, which were further expanded upon in his
book: Toward a Psychology of Being  In this article, Abraham H. Maslow attempted to
formulate a needs-based framework of human motivation and based upon his clinical
experiences with people, rather than as did the prior psychology theories of his day from
authors such as Freud and B.F. Skinner, which were largely theoretical or based upon
animal behavior.  From this theory of motivation, modern leaders and executive managers
find means of motivation for the purposes of employee and workforce management.
Abraham Maslow's book Motivation and Personality (1954), formally introduced the
Hierarchy of Needs.

The basis of Maslow's motivation theory is that human beings are motivated by
unsatisfied needs, and that certain lower factors need to be satisfied before higher needs
can be satisfied. According to Maslow, there are general types of needs (physiological,
survival, safety, love, and esteem) that must be satisfied before a person can act
unselfishly. He called these needs "deficiency needs." As long as we are motivated to
satisfy these cravings, we are moving towards growth, toward self-actualization.
Satisfying needs is healthy, while preventing gratification makes us sick or act evilly.

Internal controls are essential to the effective operation of local governments and
school districts. Simply put, internal controls are activities or procedures designed to
provide reasonable assurance that operations are “going according to plan.” Without
adequate internal controls, management has little assurance that its goals and objectives
will be achieved. Properly designed and functioning controls reduce the likelihood that
significant errors or fraud will occur and remain undetected. Internal controls also help
ensure that departments (other than the main finance office) are performing as expected.
When the subject of internal control is discussed, the conversation frequently centers on
control activities or procedures, rather than the bigger picture of the whole internal
control framework. To execute its responsibilities effectively, management needs to
understand how an integrated internal control framework should work. This guide is
designed to introduce local government and school managers and officials to the
components of an integrated internal control framework.
Methodology
Research Design

The project employs the use of the qualitative method of research. The researcher
used the primary data collection tools such as questionnaires and a structured interview.
The information collected will be analyzed and an analysis will be presented under the
information collected with the cause and effect. The questionnaires were written and
properly examined before they were handed out to the employees of B & J. The questions
were structured to be handed to the workers of the following departments: Accounting,
Human & Resource and Store Room Office. B & J LTD consists of 65 workers that have
been distributed in different departments. The interview was set up and an interview done
with employees of the different departments affected. The relevance of the questionnaires
was to find out about the issues each department faced as it relates to management of the
business. The interview was set up from the questions of the questionnaire. The
data/information for the literature review came from the internet a secondary source.

There wasn’t a specific age group selected for the research as all employees were
qualified to do the research. They were selected because the effectiveness of the research
would’ve been affected as the researcher seeks “To investigate the effects of not having
a proper management system at B&J LTD”, and how its employees will be affected.
Employees in this case refers to everyone employed at B & J ltd irrespective of their age.
Presentation of data

Analysis of the information gathered.

Questionnaires were given out to all 65 members of staff. On the day the questionnaires
were given out the members all but twenty(20) members of staff started to answer the
questions on the questionnaire. After the questionnaire was administered on the same day
only forty five(45%) percent of the members handed back their answers on the day. The
remanding fifty five(55%) percent handed them in on a later date. This information is
presented in the figure below.
Figure 1

data of participants

on the day
45%
after
55%

The information above displays the percentage of those who handed in their
questionnaires on the day it was distributed as oppose to those who did so on a later date.

Figure 2
 how long have you working at B & J LTD
30

25

20
how long have you working at B
15 & J LTD

10

0
over ten less than twenty less than
years ten years years and five years
over

The following information shows that four(4) of the staff members worked in the firm for
over ten(10) years, twenty five(25) of them for less than ten(10) years, nine(9) of them
for twenty(20) years and over and twenty seven(27) of them for less than five years. It
can be concluded that the majority of the staff at B & J LTD has a relatively young staff
and the senior staff or more experienced staff isn’t as common as those who have been a
part of the firm for a relatively short period of time. B & J has a young staff and hence
there is a lack of veteran workers who can ensure the smooth flow and discipline within
the firm.
Figure 3

have you ever encounteres in any conflict

with a coworker because of lack of resouces

no
25%

yes
75%

Figure three (3) shows the majority seventy five percent (75%) of the respondents
encountering in conflicts due to the lack of resources. And the minority twenty five
percent (25%) not having this issue. It is clear that by the display of information of his
chart that the staff is not satisfied with how they are being treated. Management
obviously isn’t ensuring that its employees are properly equipped. This is big issue in the
organization and must be addressed.
Figure 4

are office stationeries changed often?

yes
7%

no
93%

The following information was gathered from the human and resource department and
the accounts department of B & J LTD. We can safely say that management is not
consistent at all. With departments such as the human and resource and accounts
department that needs office stationery, they must have these essentials and they must be
changed often. With nearly all its members of staff agreeing that managed doesn’t change
its stationery often. A calculated figure of ninety three percent(93%) of the two tested
staff agree that management doesn’t change or replace its office stationery.
Figure 5

do you feel motivated to work?

wants to leave
9%

yes
23%

no
68%

Based on the graph presented above it can be seen that well over half the staff of B & J
are not motivated to work. Sixty eight percent (68%) of the respondents do not feel
motivated and just a small fraction of them want to leave. If the management team
continues this way the firm will be labeled as disreputable. They will not attract
employees with this taking place.
Figure 6

what are the most important measures put

in place by managemnet as internal con-
trols?

30
20
what are the most important
10 measures put in place by
0 managemnet as internal con-
trols?

“Safe guarding of fixed assets” only had four (4) respondents agreeing seeing it as being
import. In making reference to figure 4 where it speaks to the fact that only seven percent
(7%) of the respondents agreed that office supplies are changed often and a significant
amount disagreeing. I can be said that management isn’t doing such a good job with its
assets. Twenty five (25) of the respondents saw “the surveillance of the storage facility”
as being an important internal control measure implemented. Based on the figure it can
be said that they have been carrying out this measure. Only one respondent saw” ensuring
that resource are properly managed” as being important. It is an important measure but it
isn’t being carried out therefore the reason it is said that it has no importance. Based on
the findings it can be interpreted that it reflects some of these measures as having no
importance to the firm.
Figure 7

when were you first exposed to the com-

pany's manual as it relates the policies of the
firm?
30

20

12

induction via the intranet never from a coworker

A large number of the staff was not exposed to the company’s manual. Hence they are
not aware of the policies of the firm. In analyzing the information it can be seen that the
majority of the respondents had to acquire the information through other means. It was
not made aware to them in a formal setting. Four percent (4%) of the respondents were
made aware of the policies on the day they were inducted. In further investigations it was
discovered that the four percent (4%) were of the senior staff and those who acquired the
information from a coworker got the information from a senior staff member also. Based
on this finding it can be seen that management has failed to carry out its roles as it relates
information being disseminated to its employees.
Conclusion

In concluding, proper management controls must be implemented in order for there to

be smooth operations within the firm. Also it is important for the firm to practice these
measures because or internal controls to prevent its employees from feeling unmotivated
because of poor management. Poor management means that employees will in some
instances take on the same behavior of its manager. This may lead to the following:

 Its staff may not be motive to work efficiently as there is no trend set by
management. Workers may not see it fit to work as hard when management
doesn’t show interest in managing.
 Workers will lose interest in their job. This is as a result of lack of information of
the company policies. Workers may not know some of the criteria established by
management for them to follow and thus may not see the point of working harder
thus losing interest.

B & J LTD vision statement is “to be the number one distribution company in the
Caribbean. In order for this to a reality management must refine its policies and making
them aware to its managers. Also they must educate their delegates of the internal control
measures that are in place. They must now carry out these tasks. If B & J continues this
way they will lose staff and may not grab the interest of other workers. Information gets
around quickly in these recent times and hence any bad report of the firm will get to the
public quickly making them aware of the performance of the business.

It is evident based on figure seven (7) that there is a company manual that states its
policies and entails its internal control measures. The diagram however showed that a
majority of the workers were not made aware of these measures. This shows that the
management style of the leaders of the business are that of a laissez-faire s type. The style
of management must be changed in order for the firm to boost its profits once again and
attract locals as well as foreigners.
Recommendation

change the style of management

In order for the staff to b motivated there must be a change in the style of
management. The current manager’s style is affecting the smooth running of the business
where assets are not being properly supervised and replaced. This has caused conflict to
arise in different departments where staff has a shortage of office stationery.

Make employees aware of the internal control measures

By making the staff aware of these measures they can know in case of any breach can
report it to management. Management will now not only depend on its management team
to report to them in aiding with the running of the firm but also will get help from its
staff. They are in fact the ones who work in and around the different departments they
have a better view of things hence the reason they should be aware of the policies.

Have meetings twice a month so the staff can voice their opinion

For B & J to have a flexible relationship between management and staff it must allow
staff members to have a say as it relates to the business’s management. They should be
allowed to make suggestions and these must be considered. Doing so will make the
employees feel important hence causing them to be motivated.
 Bibliography
References
http://amj.aom.org/content/45/3/546.short
http://onlinelibrary.wiley.com/doi/10.1111/j.1467-
6486.1987.tb00462.x/abstract
http://www.jstor.org/discover/10.2307/2491398?
uid=3738312&uid=2&uid=4&sid=21103709982421