Teabox Case Study free essay sample

Stewards Limited has established TeaBox from September 2004, focusing mainly on the following aspects of social services; cooperation, integration and sharing. So far TeaBox has not been managed efficiently leading to a deficit in its financial reports. However, Stewards Limited has managed to recognize this at an early stage without putting the entire corporation into danger. 2. Introduction 2. 1 Overview To appropriately appraise the financial performance of TeaBox, an understanding of Stewards Limited operating environment would be key to comprehending the impact of its performance for the year 2006. 2. 1 Industry Stewards Limited has been incorporated in 1962 in Honk Kong as charitable organization. TeaBox was established in 2004 as a catering business for a new school in Siu Lik Yuen, Stewards Pooi Kei College and in 2005 established its second branch at Pooi Kei Primary School. 2. 2 Funding Stewards Limited was mainly funded by Hong Kong Council of Social Service and the Community Chest of Honk Kong. When the Honk Kong government changed funding scheme to reform the social welfare sector, Stewards established ARM services and TeaBox to compete for funds by employing people with disabilities through Small Enterprise Project. . 3 Purpose TeaBox serves the purpose for â€Å"Life Education† by giving work and training opportunities to disabled groups, and by also promoting the concept of a healthier life. 2. 4 Structure TeaBox lacks of a formal organizational structure, however the manager of the business is Susan Lee who has helped with the structure of TeaBox and the superintendent in charge is Alfred Ku. ? 3. Findings and Analysis 3. 1 Overview For the financial year ending 31 August 2006 TeaBox suffered a financial loss after one year of running. An overview of the reports would suggest poor management but a further analysis of the business operations and financial statements give a more precise view of the problems that might have caused this deficit. 3. 2 The Idea TeaBox, an innovative idea by Alfred Ku is implemented with the help of Susan Lee. In a business which does not require any additional skills such as marketing, supervision and good communication are the key skills needed to be successfully running. However, employing Susan Lee as the manager put the business in inevitable risk. Given her academic background, Lee has very little knowledge of the managerial responsibilities. 3. 3 Starting the business Responsible for supplying equipment to start the business was Susan Lee. In the stock catalog appears equipment not necessary for the start of the business. Examples of these are the LCD TV set and the digital camera of total cost $14,960. Lee advised the company to purchase unnecessary staff especially when the first year the business was self financed. 3. 4 Communication within the business Stewards Limited emphasizes into creating value and prospects for disabled and disadvantaged groups. However it appears that unwillingly it did not take a stand on matters of ethics and principles by lacking communication between its members. Alfred Ku was only aware that the staff was dissatisfied only when an evaluation was necessary. As a person with his academic background in social work and three years experience within the organization, he overlooked discussing with the employees their opinions and problems about their work. Employees were unsatisfied with their job due to Susan Lee’s behavior towards them. Using her position as the manager of the organization, she became domineering and enforced her privilege to harass and bully employees rather than consulting them. 3. 5 Structure Stewards Limited has a very hierarchical organization structure. On the contrary TeaBox lacks of a certain structure. Besides the two members; Susan Lee and Alfred Ku, it is unclear whether they are reporting to each other or to another member of the business about the performance of the business. The mission of the business is clearly stated to the members of the organization however an understanding of how to achieve it is missing from the business. No predetermined plan is set regarding the tasks of each member. As the director, Alfred Ku does not participate in the supervision of the employees and he is detached from the core activities of the business. 3. 6 Financial Information There is a conflict between the report of Alfred Ku and the financial summary of TeaBox regarding sales of the product. In the reports of Alfred Ku, he suggests that sales are going well however in the financial reports sales are decreasing. Also, the profit margin ratio is 7. 4% , which is relatively low meaning that the business’s profits will become critically risky if sales fall. ? 4. Solutions 4. 1 The Vision TeaBox’ s vision is to help people overcome their disabilities and work in a friendly environment where they can help each other but also provide help to the ones in need. Achieving such vision, it must first be credible to the employees and managers of the organization. This set back in the financial year of 2006 has lost faith in carrying out this vision for every member in the business. 4. 2 Achieving the Vision Starting by defining the vision of the business will add credibility to the ones trying to achieve it. Only then the business will be able to alter its strategy. Alfred Ku, a qualified manager and a strong willed person looking to overcoming this deficit in the financial reports of the business must firstly verify that the financial statements give a true and fair view of the business performance. For this an audit report will be needed. Having an internal audit will provide assurance in the financial statements. 4. 3 Professional assistance It would be inefficient if Alfred would try attempting to recover from such a deficit by himself. Thus, it would be preferable if he would seek advice from within the organization; for example Stewards Limited consultant Helen Tang. This way costs can be minimized and constrained within the organization. 4. 4 Attention to Employees Based on the analysis above, there was a problem regarding the attention given to employees. Additionally they were badly treated which caused a high employee turnover. Dissatisfied employees cause bad reputation to the company therefore extra attendance on employees is highly recommended. This task should be taken over by a person with communicating skills, with critical listening. In such an organization relationships between workforce is fundamental. 4. 5 Funding The business has the option to turn to its funder and explain that there was certain difficulty in the management and utilization of their funds and request for the next payment to be sent out sooner in order to organize the business better for the next financial year. 5. Implementation TeaBox is currently not making any profits however it is not in critical condition. Thus, there is no need for Stewards Limited to shut down the business. However they are in need of a restructure program and new management. It is necessary that the business takes immediate action because bad publicity for TeaBox not only can affect the future of the business but also the future of Stewards Limited. Good publicity is important especially for a non-profit organization depending on funds. Employees put the company in danger if they share their experiences within the business of TeaBox with former manager Susan Lee. Firstly the company must clarify its vision and then begin to make restructuring plans. By knowing exactly what would be ideal for the business, only then can begin to making changes to achieve it. It is preferable for the company that Alfred Ku is in the position of the manager and supervisor of the employees. He has been in the company for many years and he is the most qualified given his training to be emphatic and humanistic when solving various issues. Finally, Stewards Limited has the advantage of being a highly professional organization with many years of experience in the industry. Also, they can sell any items which are unwanted or unnecessary within the company to have money ploughed back into the business. 6. Conclusion TeaBox business has suffered a minor setback in its profits but is expected to upturn with rapid actions and efficient decisions.