Accounting for Management Control - Case of Upton Ltd - Essay Example

Upton Ltd Case Study A programmed decision is a phrase that is used to refer to a situation that is adequately understood to warrant a reliable or credible prediction of the final decision that is to be made as an outcome of the circumstances of the situation (Emmanuel, Kenneth and David 15). This definition can be used to determine the programmed decision within Upton Ltd in line with the closure of the restaurant that is motivated by the circumstances that the business environment and the management processes illustrate. The fact that Upton Ltd is a family business, in which the owners of the business within the family occupy top managerial positions, illustrates a possibility of conflict of interest in the management processes. This is a situation where the interests of the family members are more likely to conflict with the interests of the business such as adherence to the objectives, plans and goals of the company. In this regard, it can be predicted that if there is significant conflict of interest within the company a programmed decision of closure of the restaurant or part of its business units can be made. Samantha who is the manager of the toy department is engaged with her studies which mean that she does not have adequate time to play her role within the Toy department which serves significant activities and processes within the restaurant. This means that the productivity of the Toy department will deteriorate as a result of poor management or absentee manager. This can be used to predict the closure of this department within a programmed decision framework. Furthermore disagreement between Samantha and Albert, her uncle, reveals that there is poor communication within the management team which is as a result of age differences and opinion of managers on the best strategy of conducting business activities. It is argued that when the management team is unable to come into a consensus over decisions because of divergent views and interests, failure in effective decision making is likely to result (Simons 34). Therefore failure in decision making which represents an important function of the management team leads to programmed decision for closure of the restaurant. From the Upton Ltd case, it is notable that the promotion of employees to the top management positions is rarely based on qualifications. This is illustrated by the fact that Claude who was a chef was promoted directly into the manager position in the restaurant. The management team of a company must be equipped with adequate skills, knowledge and competencies which are required for effective management. Failure of a manager to exhibit these skills means that his or her managerial roles will not be effective and as a result translating into business failure (Gorry and Morton 27). In this regard therefore the lack of qualifications among some managers within Upton Ltd can be argued to be a reflection of a predictable business failure and as a result reaching a programmed decision for the closure of the restaurant. Lack of the stock control system within Upton Ltd demonstrates a looming failure in the business processes of the restaurant which can be used to make a programmed decision for closure is nothing is done soon to solve the problem. This problem within the restaurant is further revealed by the fact that storage of stock is largely inadequate and ineffective. In addition, it is notable from the case study that the equipment that is used within the restaurant is old and rarely maintained. Inappropriate equipment within a business entity is said to be the main cause of business process inefficiency which would lead to possible discontinuity of business processes (Gorry and Morton 31). It is therefore reflective from the case study that the restaurant faces a risk of losing business continuity which makes a programmed decision for closure a reality in the Upton Ltd case. Customer service is inefficient within the restaurant as reflected by the fact that customer are kept waiting for a long time before they are served. Consumers or customers of a company are said to be the most important or significant stakeholder of the business. It is because of this that the services and products that are provided to these customers should be designed to be as efficient as possible and also of the right quality as desired by the consumers (Simons 47). The failure of the restaurant to meet the needs of consumers for efficiency is most likely to cause loss of their loyalty to the company. In return the company will lose its customers to rival businesses which means that the restaurant will lose is competitive advantage in the market and a resultant loss of profitability. These circumstances therefore lead to reaching a programmed decision for the closure of the restaurant. The use of manual record management system within the restaurant in addiction to lack of documentation illustrates that the company is likely to be faced to lack of accountability for business processes. The manual record keeping systems also demonstrate that there are inefficiencies in the management of data and information within the company. Decision making processes depends on information and data which is managed and communicated within the record management systems. This means that inefficiency in records management will significantly slow down the process of decision making. In this sense, the managerial function of decision making will be curtailed leading to loss of business opportunities. It is therefore the poor record management system within Upton which leads to a programmed decision for business failure and a resultant closure. This programmed decision is also reflected by the suggestions that are presented to the management for the closure of the Toy department with some individuals suggesting that the whole restaurant required to be closed down. More notably, the information that is provided by Samantha demonstrates that the flow of stock is very low especially within the Toy department. This means that the performance of the restaurant is significantly low. The circumstances within this company are therefore the basis upon which a programmed decision for closure is based. Works Cited Emmanuel, Clive, Kenneth Merchant, and David Otley. Accounting for Management Control. London, Chapman & Hall, 1991. Print. Gorry, George, Anthony, and Morton, Michael, Scott. A Framework for Management Information Systems. BiblioBazaar, 2011. Print Simons, Robert. The Role of Management Control Systems in Creating Competitive Advantage: New Perspectives. 1990. Print. Read More