Emergence Of The Management Control Systems -Myassignmenthelp.Com

Question: Discuss About The Emergence Of The Management Control Systems? Answer: Introducation Walmart stores online sales growth has contracted to 12 percent for the fiscal year 2016 subsequent to twenty-two growth recorded in fiscal year 2015. However, the ecommerce performance for Walmart remains impressive. A 14 to 15 billion dollar online Walmart business is more than respectable, particularly where it augments a brick-and-mortar business. The brick-and-mortar generates about 470 billion dollars in annual sales. Walmart stock market is unfriendly as the investors negates the long-run benefits if the organizations ecommerce investment. Due to underperforming and persistent loses, Walmart closed 269 stores globally alongside 154 stores in the United States. The company has reported worse sales in 35 years since 1980. The sales have dropped 0.70% in revenue to about 482.10 billion dollars due strong dollar that could have Walmart sales revenue increasing 2.8%. Walmarts ecommerce sales growth has slowed for 5 quarters in a row to 8% in final three months of fiscal 2016. The sales growth outlook has decreased to flat from three to four percent worse than expected impact from fluctuations in currency and revenue loss from stores closure. Walmart share has slid 3.10% to 64.09%. Walmarts retail sales market share has dropped 0.7% from 9.9% to 9.2% five years ago. Net sales went up 2.5% to 81.5 billion dollars and traffic improved by 0.7%. In the fourth quarter overal sales dropped 1.5% to 129.7 billion dollars which would surged 2.20% in absence of currency fluctuations. Walmarts net income for 3 months dropped 7.90% to 4.57 billion dollars. Sales in the UK fell 5.80% in most recent quarter six-times in a row drop. Walmart is reducing cost and investment 1.50 billion dollars over the 4 years. Walmart earned 446.980 billion dollars in profit in year 2014, a 6.0% surge in sales in year 2013 based on its financial statement (2011 to 2013). The most dividend surge was reported in 2015 February where 2.0% surge was approved by its Board of Directors equivalent to a surge of 0.49 cent a share. For the previous 5 years, Walmart US reported 328.70 billion dollar sales in top line revenue. Walmart is presently valued at 15.1 times forward earnings with real trade of 69.480 a share. Walmart has 11, 000 million stock authorized alongside 3780 million outstanding traded in stock exchange markets. The operating income of the Company surged to 32585 million dollars in 2014 from 28545 million dollars in 2012. Over the past three years, the revenue of Walmart has surged 39,736 dollars. The gross surge in revenue has been 9.10%. The Walmarts cost of sale surged from 304657 million dollars to 335127 million dollars. In 2014, Walmart recorded a 2.0% surge in assets over three years. Walmarts stock comprised 78% of total assets. Property and equipment stood at $170 indicating a good surge over past 3 years because of new retail stores being built. Walmart liquidity ratios as at Jan 31, 2015, Jan 31, 2014 and Jan 31, 2013; current ratio 0.970, 0.880 and 0.830. Walmarts quick ratio showed 0.24; 020; and 0.20 and cash ration showed 0.140; 0.10 and 0.110. These ration indicate good direction. Walmarts liquidity ratio preset ratio surged from 2013 to 2014 as well as from 2014 to 2015. The quick ratio dropped though improved from 2014 through 2015 exceeding 2013s ratio. Potential Problems Facing Walmart Walmart is facing stiff competition against Amazon in e-commerce while coping with the effect of the strong dollar as well as loss of share in the Walmarts United Kingdom stores. This has since the company report its 1st annual sale decline since at least year 1980. The revenue of Walmart declined by 0.7% to 482.10 billion dollars for the year. This was mainly triggered by the strong dollar, without the effect of which its sales would have surged 2.80%. The decline, the Walmarts worst in at least thirty-five years based the data from SP Capital IQ. This plunged came as the global hugest retailer stated that ecommerce sales growth slowed for fifth quarter in a row to 8% in the final 3 months of year. Walmart has blamed the Chinese, Brazilian and UK marketing deceleration. Amazon quarterly growth by contrast stood at 26% despite the Walmarts much huger base. The company has cut down its sales growth outlook for this fiscal year to flat from between three to four percent manifesting the Walmarts worse than anticipated influence from the fluctuations in currency as well as revenue loss from its closure of stores. The Amazon share slid 3.1% to 64.090% dollars. The firm is facing intensifying competition amid the fast shifts in the manner consumer undertake their shopping. The market share of Walmart has slipped to 9.2% from 9.9% five years ago. Walmart remains on the back foot based on rethinking its business model for this novel landscape. This has negatively impacted Walmart because the firm has not played far harder in online space and hence it cannot retain its retail crown in the long run. The stiff competition has turned Walmart American stores unattractive and unappealing to shoppers. This is the competition come in all types and from all angles including online or discount stores such as Dollar General as well as Kroger, higher end store (Merchant Van, 2012). This has seen Walmarts sales figure blunt by deflation in some groceries, like meat and the impact from lower petrol process. This has seen Walmart spent a lot of money to compete with Amazon online and integrate ecommerce into its stores, like Walmarts mobile pay app as well as click-and-collect pick-up service. The company is also using a lot of cash to expand its online grocery service to additional parts of the United States. The organization is facing what is described as a perfect storm in regards to its top-line growth which has hurt its sales substantially. The Walmarts core customer are really struggling with flat levels of income. The saving from lower prices of fuels are never translating into increased retail expenditure (Davila, 2005). The business is trapped under intense pressure from deflation in core product categories including food alongside the impacts of strong overseas dollars. This is occasioned with the inability of lower-to-middle-income consumers health to improve leaving Walmart to face a prolonged macroeconomic headwinds in the United States. Action Control The company focuses it action control on 4 vast areas including company asset, information and reputation; operational planning, sales and customers; and regulation and laws. Walmart undertakes to acknowledge each regulatory requirement initially and highlight them precisely. The firm ensures strict adherence to the requirement compliance. Walmart puts a mandatory approval for each stakeholder who wants to trade in its shares as an evidence of strict compliance with Company Act and US SEC rules. All Walmart operational procedures follows detailed pre-action reviews while all its financial objectives, key corporate actions as well as capital spending must be reviewed and subsequent approved by Walmart board prior to execution (Schaeck Cihk, 2014). Walmart mandates the Board Committee to acknowledge both actions as desirable or undesirable to come up with reinforcement as well as rules for such classified actions. Walmarts staff and directors must read, consent and sign significant documents including Code of Conduct. Walmart seeks to establish a culture of customer-friendly and further successful application of action accounting to this culture. Walmart has barred its staff from drinking alcohol at workplace. The company has documented and disseminated precise and straightforward instructions on delivery time, price display as well as store pick up time. The firm strictly follow its employees to ensure strict adherence to such instructions while keeping their unquestionable and unwavering promises to both potential and existing customer-based. The personal information regarding clients are never used outside the firm and only serves the intended purpose and those employees that violates such instructions must show cause. No asset and services of Walmart are allowed to be used by employees for their self-interest. All employees and executive are prohibited from conflict of interest and commercial interest in Walmart rivals must be disclosed promptly (Korhonen, Laine Martinsuo, 2014). The confidentiality of Walmart is of paramount among the employees. An employee of Walmart must receive an advanced approval in order to receive any form of loan, gift or substantial benefit in the company. Walmarts part-time staff must never engage in any form of conflict of interest while working in the company and always ensure that solely the objective and strategic goals of the organization flourish. Action Control Side Effect The Action Control of Walmart has captured a huge scope of its business hence filling the disparities in other firms controls. Walmart has precisely defined its desired actions in various operational aspects including delivery time, stock pick time and requirements for disclosure. The firms often undertake effective review of the staff behavior and conduct against the signed Code of Conduct and promises made to customers as well as confidentially and disclosure requirements in terms of conflict of interests. Nevertheless, Walmart still exercise relative loose action controls on the general conduct and behavior of employees and this sometimes stretches to customers services rather than increasing dependence being put on both cultural and personal controls (Fiordelisi Mare, 2014). Walmart exercise stronger action controls in regards to legal requirements as well as information, reputation, and resources of Walmart apart from particular invisible stock controls. References Davila, T. (2005). An exploratory study on the emergence of management control systems: formalizing human resources in small growing firms. Accounting, Organizations and Society, 30(3), 223-248. Fiordelisi, F., Mare, D. S. (2014). Competition and financial stability in European cooperative banks. Journal of International Money and Finance, 45, 1-16. Korhonen, T., Laine, T., Martinsuo, M. (2014). Management control of project portfolio uncertainty: A managerial role perspective. Project Management Journal, 45(1), 21-37. Merchant, K.A. Van der Stede, W.A. (2012) Management Control Systems, 3rd edition, Prentice-Hall. Schaeck, K., Cihk, M. (2014). Competition, efficiency, and stability in banking. Financial accounting, 43(1), 215-241.