Case Study Of Kitchen Best Appliance
Recommendation report
Introduction
During 2010, Kitchen Best Appliance Co. Ltd was experiencing various problems with inappropriate business practices. Top management has raised concern about these problems and they should be addressed so that Kitchen Best can achieve a sustainable expansion. The crises reveal that there is internal and external misconduct by the top management and company’s business partners. Company may suffer losses and commit an offense if no immediate action is taken to prevent further deterioration. Changes in management system of Kitchen Best are required and this report is intended to propose tactics and solutions for improving internal control systems.
Summary and conclusion
Three incidents reveal that ineffective internal control system is the root cause for all problems. These problems lead to potential losses and restrict future expansion of the company. Effective internal control system is critical to good governance and to prevent corruption through plugging loopholes for malpractice and fraud. A code of conduct and feedback system are possible ways to improve the current …show more content…
Purchasing and production manager, who is responsible for sourcing the gift sets which were later found faulty in in-house testing, were offered a free package tour to Europe for awarding the production order to his brother-in-law. Despite the fact that quality control manager acknowledged the suspicious relationship, no report and further investigation were conducted. The result of this incident was catastrophic because Malaysia-based distributor Shago had demanded Kitchen Best both a refund and compensation. Managers are not acting at the best interest of Kitchen Best due to nepotism and conflict of interest. Furthermore, this misconduct could eventually affect the quality of goods and may jeopardize the interests and reputation of the
Introduction
During 2010, Kitchen Best Appliance Co. Ltd was experiencing various problems with inappropriate business practices. Top management has raised concern about these problems and they should be addressed so that Kitchen Best can achieve a sustainable expansion. The crises reveal that there is internal and external misconduct by the top management and company’s business partners. Company may suffer losses and commit an offense if no immediate action is taken to prevent further deterioration. Changes in management system of Kitchen Best are required and this report is intended to propose tactics and solutions for improving internal control systems.
Summary and conclusion
Three incidents reveal that ineffective internal control system is the root cause for all problems. These problems lead to potential losses and restrict future expansion of the company. Effective internal control system is critical to good governance and to prevent corruption through plugging loopholes for malpractice and fraud. A code of conduct and feedback system are possible ways to improve the current …show more content…
Purchasing and production manager, who is responsible for sourcing the gift sets which were later found faulty in in-house testing, were offered a free package tour to Europe for awarding the production order to his brother-in-law. Despite the fact that quality control manager acknowledged the suspicious relationship, no report and further investigation were conducted. The result of this incident was catastrophic because Malaysia-based distributor Shago had demanded Kitchen Best both a refund and compensation. Managers are not acting at the best interest of Kitchen Best due to nepotism and conflict of interest. Furthermore, this misconduct could eventually affect the quality of goods and may jeopardize the interests and reputation of the