Company Directors Course Assignment - Burns Foods Pty Ltd
The significant issues and the reasons for being significant
It has been observed that the Burns Food was one of the largest food processing firms in Australia. It has been also noticed that 80% of the entire product range is sold in the supermarkets of Australia and rest of the 20% is exported to New Zealand and UK. The significant issues that have been identified in this entire case study are as follows: Firstly, one of the major issues that has been found out was while I was taking a trip in the supermarket for checking the shelf-allocation of the Burns Food and also I intended to do some shopping it was suddenly noticed that the YummyTasty Foods one of the main competitors of the Burns Food were supplying large strawberries in the Superlarge Supermarkets. From the last board meeting, it is also known that the large strawberries cannot be sourced for freezing presently in Australia. It can be also said that the large strawberries are imported from China by the YummyTasty and after that, it is packaged in Australia. Additionally, the strawberries were also labeled as if they were from Australia that is also quite wrong. It can be also concluded in this matter that the company was not at all complying with the new labeling laws of Australia. On the other hand, the strawberries by the YummyTasty Company was also sold at 25% less than the Burns Foods frozen strawberries and it has been also closely noticed that these products are also promoted at an alarming rate in the company's weekly sales. I believe it is one of the significant issues because it is strongly against the Australian labeling laws and it is also doubted to be imported from China and sold in Australia claiming that it is their strawberries. The second issue that has been identified is the suspicious request from the Superlarge Supermarkets to the Burns Food. It has been noticed that the chilled food buyer named as David Price has asked Burns Food to provide $27,000 in cash by the end of the week. A review has been conducted by the Superlarge Supermarkets with regards to the sales performance of the Burns Food and it is witnessed that their sales have increased by 10% but the Supermarket's profit margin only remained at 4%. It has been also said that the Burns Food should have provided the retailer a good amount of their profits keeping in mind the economies of scale that has been achieved by the company in the present times. Legal counsel also has been contacted after observing this matter minutely. On the contrary, it has also come to the limelight that the large supermarkets are playing nasty games with the suppliers for the superior shelf space and that is the reason they are requesting the cash injection from the company. As the director, I personally felt that the board of directors with regards to the company must be contacted as this particular issue needs to address in the meeting that is slated to be held on February 6th. It is one of the most significant issues because in the past no other supermarkets asked for the cash injection from the suppliers.
The questions that need to be asked during the meeting
After identifying two of the most significant issues in the Burns Foods there are some of the questions that need to be asked to the board of directors as well as the executives during the meeting. The set of questions that is prepared for them will be discussed in the below-mentioned segment: Firstly, in the agenda item 2.1 it is proposed that the FoodEase Ltd has an excellent takeover offer for the Burns Food so in this scenario I want to ask everyone during the meeting is it a good option to sell the company completely in the hands of the FoodEase? As it has been noticed that the company will not only take over the processing side of the Burns Food but also they will retain the goodwill and name that Burns Food has gained all these years. After reading the entire agenda item 2.2 I will be asking everyone in the meeting that is it a good idea to sign a three-year agreement with regards to supply to the Superlarge Supermarkets after the cash injection case? It has been noticed that the Supermarkets always want to keep the cheapest products from their suppliers so that they can sell that product to their consumers at a good price ensuring a good profit margin for them. Earlier this supermarket has already caused few problems for the Burns Food so I want to ask the members before entering into the contract.
In case of the agenda item 2.3 it is the risk committee report for this I want to ask in this segment that how the company will prepare themselves form facing the unforeseen natural disasters that would in future affect the earnings of the business by reducing it to a great extent and also data and cybersecurity risks are increasing at an alarming rate in the recent times so what are the new measures that the company will take into account for facing this risks? Additionally, one more question will be asked in the segment that is how the company will protect their brand? So that they will be able to increase the value of the brand along with their goodwill. Referring to the agenda 2.4 it is the plan of the company to expand in the logistics and cold storage part. It has been already noticed that the company is doing extremely well for a long period of time by utilizing the radio frequency data in the management software that is supplied to them by the RF Pty Ltd. Is considering the capital injection into the building the cold storage facilities is a good idea? As Martina Burns, the MD has proposed this particular idea. On the other hand, it will cost the company a whopping amount of $3 million. After observing the Agenda 3.1 that states focusing on the long-term strategy of the company, it has been closely noticed that the company is going strong from the last three years as they have increased their supply and production by five percent each of the year but Burns Foods have been brought down by the nasty tactics played by the Australian Supermarkets. Throwing light on the above-mentioned statement it will be asked: What are the new strategies that the company will be applying so that they can deal with the tactics of the Australian supermarkets in a peaceful manner? Another question with regards to the key suppliers it will be also asked: What will the company do when they will not get an opportunity to select premium or best vegetables and fruits for freezing? It has already occurred earlier and the company has a reputational risk in this specific segment. I want to also ask in the meeting: What are the new health and safety methods that will be taken into account by the company in the future? It has been observed from the operational statistics of the company have not quite well.
Recommendations for the issues that have been identified
Some of the recommendations for the significant issues that have been highlighted in the segment 1 are as follows: Firstly, in the first case it has been highlighted about the strawberries that are supplied by one of their potential competitors namely YummyTasty foods is quite large and it is also believed that it is not an Australian product although the company is claiming it as an Australian product and selling it for less than 25% in the Superlarge Supermarket. Therefore, in this scenario as the new director of the Burns Food it is recommended that they must consider the competition risk and they must file a case against them with regards to not complying with the new Australian labeling laws so that Burns Food do not face any type of false competition in the marketplace and gain their profit at an alarming rate. In case of the second case, it is recommended that the company should not accept the suspicious request from the Superlarge Supermarkets for providing them with $27,000 cash as it completely makes no sense as it has been already discussed with the legal counsel and they have strongly advised ignore this irrelevant request and to inform the ACCC on an urgent basis.
The outcomes assuming the recommendations are adopted by the company
The outcomes from the above-mentioned recommendations are as follows: It can be said that if Burns Food follows recommendation 1 that is to file a case against one of their potential competitor YummyTasty Foods then they will gain a competitive advantage as YummyTasty Food will be sued completely on the basis of not complying with the new labeling laws as set by the Australian government. On the other hand, if recommendation 2 is adopted by the company then they will not have to provide $27,000 to the supermarket by the end of the week and Burns Food will not be required to be victimized under the cash injection.
Skills that should be brought to the board
It has been said in the case study that the company has considered me as one of their new board members and with the freshness, it has been also asked by the company to review the present board composition. The current composition of the board of directors in the company is as follows: Adrian Burns who will be resigning within the next 12 months at the age of 70 from the Burns Food after serving the company for 16 years. It has been also observed that during his term of service that is rendered to the company Burns Food were transformed from the small wholesaler to one of the biggest food exporter and food processor in the entire world. It can be commented that Adrian was one of the strongest pillars for the company as he was the managing for the company for last 16 years and during that time the whole company was transformed into one of the biggest giants in the world of food. The next member of the board is his daughter named Martina Burns and she was associated with the company from 15 years of age as she worked in the frozen vegetable section with regards to the processing plant during her holidays in her schooldays. It can be commented that Martina is also quite capable like her father as it has been observed that from her childhood days only she had a keen interest in the business. It has been also witnessed that she well groomed herself to fit in the position of managing director in the Burns Food. She has been phenomenal for assisting the storage and the logistic side of the business and also securing the shareholder Moving Pty Ltd and external investor. Her dedication towards the company was excellent it is one of the most prominent reasons for the company to be able to export the frozen foods in entire Asia successfully. Interestingly, her husband also owns the RF Pty Ltd that is the radio frequency data management software company. Moreover, Martina's husband also assists the board on the issues arising from the IT that also includes the cybersecurity.
The proposal for the addition of a new board member in the Burns Food is as follows:
Firstly, this is to propose that there must be another board member in the company so that the duties can be carried out in a successful manner like the present board members. Secondly, the addition of the new board member will help the company to a great extent as Adrian Burns will retire within 12 months. Hence, the board needs one member more so that nothing can stop the company to be extremely successful in the marketplace in the upcoming days. The key skills that the new board member should bring in this board are: It has been witnessed that from a very long time Martina and Adrian Burns have been applying the same strategies and tactics for retaining their position in the marketplace although they are quite successful in doing still the new board member should be able to bring some form of innovation and creativity in the board.
The recruitment process suggestions and timeline and rationale for change
It can be said that the recruitment will be one of the toughest and important elements when the board of the company is selecting another member of their team. The recruitment process of the board should contain the following elements in it: Firstly, the job description should be quite catchy in order to attract the relevant person for the position. Secondly, Burns Food must consider having the service level agreements between the recruiters and the hiring managers for stating who is responsible for what and which of the timeframes are realistic in nature. Thirdly, the assessments may also play a vital role when an individual is hired for an upper level as they will help the HR of the company to identify the best candidate among the rest in the screening as well as in the sourcing process. Fourthly, the reffferal system might also be one of the best practice in the entire recruitment process because the individual who is best is mainly known by the other people. Hence, it is very likely to bring the best performers in the company who can be the best fit for this particular job. Fifthly, the company should also consider taking interviews in an innovative manner such as there should be more than interviewee present during the interview so that the HR is clear and they can also contrast the ability of both personas at the same time by saving a lot of time and energy at the same time. Lastly, Burn Food should also consider building a good rapport with the hiring managers because they are the individuals who are always at constant pressure to fill up the position as fast as possible. Furthermore, the main goal of the company will be is to make the hiring managers realize that they are trusted as an advisor by the company.
Rationale for a good recruitment process is as follows: Good job descriptions in the recruitment process will meet the requirements of the company to a great extent, the recruitment process is also quite lawful, the individuals are generally assessed in the recruitment process against the constant selection criteria at the each and every stage, the entire recruitment process can also follow the stakeholders of the company and the individuals who are selected for the job can be quite confident as it will be a genuine job offer.
5 governance issues that have not being addressed
The 5 governance issues that have not been addressed in part 1 and part 2 are as follows: Firstly, in terms of the suppliers of the company it has been noticed that the Australian Government has introduced a new tax on the backpacker worker's earnings that would be a flat of 15 percent. It has been a great relief for the suppliers of the company who are farmers for picking the vegetables, fruits. On the contrary, it has been also observed that in some of the scenario the entire production has been left to rot where the farmers naturally failed to attract the employees who are working visas to work in their respective firms in the year 2016. Throwing light on the above-mentioned statement it can be also said that Burns Food has suffered in this case from not being able to select the best or premium vegetables and fruits for the purpose of freezing. The biggest fear of the company in this specific scenario is if they experience any kind of reputational risk during this period of time. The company has also stated their fear with regards to the size of the strawberries that they are sourcing is small in size than the strawberries that they have sourced in the year 2016. The second issue is related to the health and safety of the workers. It has been noticed although the workplace health and safety is in the stable place still it has been witnessed that the time lost in the injury has increased at an alarming rate. The claims by the workers with regards to the sickness have also increased in the last 6 months. The third issue is that the annual budget is also not approved and the performance is also no monitored against the budget. Fourthly, another issue with regards to the governance is the company does not follow any such type of policies in their frozen food products segment. The last issue that identified is there is no strong code of conduct that is established by the company for the senior staffs and the directors.
Recommendations on the above-mentioned issues
The recommendations for the above-mentioned issues are as follows: In the first issue, Burns Food should select an alternative method of obtaining the best quality of the vegetables and fruits without depending on the local farmers always. Secondly, the company should also take necessary steps for improving the health and safety of their workers. Thirdly, the annual budget needs to be approved by the company and also Burns Food must monitor the performance of the budget. Fourthly, the company should take control and ensure they comply with the regulations, laws and the policies lay down by the government with regards to the transportation, preparation, and storage of the foods. The last recommendation will be to establish a strong code of conduct by the company for the director and the senior staffs in the company.
Influencing the directors for accepting the recommendations
The directors will be shown the possible advantages of the above-mentioned recommendations. Then I will also be confident enough to convince them the recommendations that have been made is completely for the well being of the company valid examples will be presented with regards to the real world scenarios. In each and every scenario it has been observed that confidence is the key so it will work for this case also to a great extent.
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