Accounting, Behavior, and Organization - Case Study Example

Accounting, Behavior and Organization (JB HI FI Ltd) Name Institution Name Introduction Organizational structure is the manner in which a company groups its employees together in order to co-ordinate, manage and control organizational elements such as resources, people or activities. Understanding organizational structure is a significant step towards designing the company’s management accounting systems. JB Hi Fi Ltd is a retailer of branded home entertainment and electronic products in Australia and New Zealand. The company has positioned itself as the best entertainment and electronic products retailer in the industry due to its excellent business operations in the region. This report provides JB Hi Fi Ltd background as well discuss the business strategy of the company together with its organizational structure. The mission, competitive advantage, and the company’s key success factors are exceptionally discussed. Business Background JB Hi Fi Limited is an Australian company operating as discount retailer of branded home entertainment and electronic products. It was founded in 1974 by Mr. John Barbuto (JB) as a single store in East Keilor, Victoria. The company majors its business in Australia where it has 163 outlets. Similarly, JB Hi Fi Limited has business in New Zealand operating 13 outlets. In general, JB Hi Fi has approximately 6,600 employees responsible for the company’s business across all outlets (JB Hi Fi Ltd., 2014). Accordingly, the company is listed on Australian Securities Exchange using the code JBH and Chadstone, Victoria is where the company is headquartered. JB Hi Fi sells commodities including consumer electronics, games and consoles, mobile phones and accessories together with DVDs, CDs, and other audio equipment. The commercial division of the company provides telecommunication and electronic products to businesses such hospitality and education sectors. JB Hi Fi constantly improves its business operations whereby it current operates discount electrical superstores (JB Hi Fi Ltd., 2014). Some of the main products sold in these superstores include consumer electronics, cooking appliances, white goods and air-conditioning. Superstores are branded JB Hi Fi HOME and the company is expecting to open these superstores throughout Australia. The company also operates an online store which has substantially increased its market share. Business Strategy JB Hi Fi Mission To deliver a special range of hi-fi and recorded music at Australia’s lowest prices Competitive advantages The company has a sustainable competitive advantage, for instance JB Hi Fi has: Unique value proposition in the marketplace; the company holds the first position as it has the largest market share in every product category they trade in. For example, the company has a 20% market share in software selling across Australia (JB Hi Fi Ltd., 2014). JB Hi Fi has a strong brand name; it has a unique brand personality. The company has a low cost business advantage, 14.9% lower than any Australian limited retailer which is well below international competitors like Amazon Low price discount retailing Niche Market; video games only focus on game players like PSP machines Outlets are located strategically e.g. high foot traffic (JB Hi Fi Ltd., 2014) Key Success Factors The company has a clear position as a lower price retailer: Australians fully understand JB Hi Fi as a low price retailer of branded entertainment and electronic products as compared to it competitors like Myer, Good Guys, Harvey Norman, Premier Investments, and Super Retail Group. Location: the company outlets are located strategically in towns and city centers where customers have ease of access. Accordingly, JB Hi Fi HOME are mega stores that houses almost all home entertainment and electronic products and thus consumers can get everything under the same roof. Website: the company website not only provides massive information with regard to what products the company deals in, but also gives visitors an opportunity to interact in real time with the company as well as allowing them to shop online. Staff: the company staff is credible and mostly comprise of Generation Y individuals who not only understand the products and technology, but are users of the products themselves. Organizational Structure An organizational structure is the way in which an organization groups its employees together in order to co-ordinate, manage and control organizational elements such as resources, people or activities (Davis & Davis, 2011). Similarly, organizational structure helps the organization in focusing its attention towards particular objectives and activities that support organizational strategy (Lee & Epstein, 2013). It is a type of management control which is extremely essential in guiding the design of management accounting systems for the organization (Zoogah & Beugre, 2012). JB Hi Fi has a hierarchical organizational structure that is organized into work units. The company owns all of its outlets and thus management roles and skills are applied successfully for the overall benefit of the company. In this regard, management at different levels is responsible for making tactical, operational and strategic decisions. The company’s organizational structure is hybrid whereby it is both functional oriented and business. For instance, the company focuses on specific functions as well as specific markets. Hybrid Organizational Structure Given the fact that JB Hi Fi Limited has a hybrid organizational structure; for instance the functional aspect of the structure organizes the company along functional lines while the business aspect allow the company to focus on business process. This hybrid structure has empowered JB Hi Fi to optimize its activities across all its functional units as well as its business work units. By optimizing all its functional units together with its business process has ensured that the company positions itself strategically in the market place as the best retailer of branded home entertainment and electronics products in Australia and New Zealand. In the same line of discussion, by having a hybrid structure, JB Hi Fi ltd is organized in a hierarchy whereby each organizational unit is tasked with specific functional responsibility (Kinney & Raiborn, 2012). The integration of these functions is done at a higher level which has always resulted into exceptional performance at functional level but with poor integration between business units. On the other hand, the business structure allows the company to efficiently interact across all business functions and levels; this has positioned the company to achieve or rather perform well in meeting its objectives and targets. By having a hybrid structure, JB Hi Fi provides a win-win environment across all its business units. By having strictly functional structure coordination between different work units can be extremely difficult (Kinney & Raiborn, 2012). For any organization to succeed, work units must effectively coordinate with the required inputs in other departments. Business structure on the other hand provides a unique approach that encourages direct interaction between the company’s work units. The work units prioritize business activities coordination over organizational functions. In this regard the direct coordination path culminates into efficient and streamlined work flow. Given this comprehension, JB Hi Fi by having a hybrid structure that company has been able reap massive benefits by seamlessly serving its customers. In essence, there is excellent coordination of business activities across all company work units. Functional work units are known for work optimization; for instance each department independently optimizes its activities (Kinney & Raiborn, 2012). For examples, the sales department is able to maximize orders received while other departments may not be able to deliver as required. The business structure singularly focuses on processes which on the other hand ensure activity optimization across all departments. Given this understanding the hybrid structure demands that all departments work together to optimize their business activities. In this regard by JB Hi Fi using a hybrid structure allows it to optimize their business activity which has resulted into better company performance (JB Hi Fi Ltd., 2014). Using a hybrid structure not only has it allowed the company top management to assign targets to its different departments but also encourage the departments to achieve their targets in collaboration with other departments (Kinney & Raiborn, 2012). For instance, if one department fails to achieve its targets the company may suffer as a whole. These has ensured the JB Hi Fi business departments work together to accomplish the company goals. Planning in this essence is not singularly focused on a specific department but rather encourages all departments to work together to achieve a common goal. Benefits and/or limitations that come with work units allow the company to have different means of competitive advantage which are then matched to dissimilar work unit types (Kinney & Raiborn, 2012). By using both functional and business work unit structure, JB Hi Fi has largely differentiated itself as the best company offering branded home entertainment and electronic products in the industry (Kinney & Raiborn, 2012). Consequently, the company has managed to maintain its position as the best cost leader. Conclusion JB Hi Fi Ltd as discussed above is a retailer of branded home entertainment and electronic products in Australia. The company was founded in 1974 by Mr. John Barbuto (JB) as a single store in East Keilor, Victoria. Currently, the company has more than 170 outlets in Australia and New Zealand. The company has strategically positioned itself in the industry as the best entertainment and electronic products retailer due to its low cost strategy. JB Hi Fi Ltd has a hybrid organizational structure that comprise of both functional and business work units. This organizational structure has been instrumental in ensuring that the company superbly provides products to its customers timely and efficiently. References Davis, C., & Davis, E. (2011). Managerial accounting. New York: John Wiley & Sons JB Hi Fi Ltd. (2014). Home. Retrieved from https://www.jbhifi.com.au/ Kinney, M., & Raiborn, C. (2012). Cost accounting: Foundations and evolutions, 9th Ed. London: Cengage Learning Lee, J., & Epstein, M. (2013). Advances in management accounting. London: Emerald Group Publishing Zoogah, D., & Beugre, C. (2012). Managing organizational behavior in the African context. London: Routledge Publishers Read More