Company

At present, the company is organized into three divisions:

• pharmaceuticals focusing on innovative prescription drugs;
• pharmaceuticals centred on generic prescription drugs;
• consumer health comprised of different activities such as health and medical nutrition including genetic engineering and the development of products.

The pharmaceutical industry is characterized by stiff competition. The international competitors of Merck are international, research-based pharmaceutical and biotechnology companies that also sell branded, patent-protected, prescription medicines. However, because Merck is ahead in research and development, specifically in technologies, these create leverages for the company to be at the top. Technologies help the company ease working loads; make them faster and more accurate.

Research is advancing at a rapid pace. The application of research provides the opportunity to improve productivity, quality, and cost control in education and research, security of health-related information, and reimbursement through new product development at Merck. While these advances in research promise huge benefits such as higher quality medicine, enhanced workflow and increased efficiency, there is also the potential for precious resources to be squandered and the added pressure of patient welfare at stake.

While Merck’s research systems were intended to steam line financial management and automate manual processes, Pharmaceutical Industries now require much greater functionality. The modern Pharmaceutical Industries is expected to link administrative, laboratory, financial and clinical data to provide faster diagnosis and better treatment.

The application of research at Merck would highlight the potential benefits of new product development in increasing access, improving quality, and reducing costs. While there is consensus that result will result in substantial cost savings, new product development can quantify the magnitude of the savings of Merck in a way that is scaleable to nationwide implementation.

With the mission statement of Merck, the company aims to provide high margin generic drugs. This objective resonate their mission of lowering or controlling the costs that they would pass onto their consumers. In order for Merck to achieve their objective, they must be able to find ways of lowering their production costs so that they will be able to lower the cost that they will pass onto their consumers. One of the policies that they implemented to see this through is by focusing on research to develop and maintain technologies. For example, Merck invested in information technology. This allowed them to create a web-based system that improved the company’s management of inventories and orders by enhancing their speed and accuracy. By lessening the margins for errors, Merck will also be able to lessen their production cost.

The website of Merck is able to adhere to the basic rules so as to ensure that the website created will be accessible.  The patients and caregivers website of Merck is easy to read, easy to navigate and easy to find.  In addition, the layout and design of the web is consistent throughout the site, plus the website and the needed information regarding the medicines is quick to be downloaded. This absolutely contributes to understanding Merck’s product line.

References

1. Corporate Responsibility: Committed to make a Difference. Retrieved May 23, 2007 from http://www.merck.com
2. Patients & Caregivers: Comprehensive medical resources to keep you educated and informed. Retrieved May 23, 2007 from http://www.merck.com/product/patients_caregivers.html

Mountain Man Brewing Company does not want to go another year with revenue lost from Mountain Man Lager. By adding a light beer to the product line it could gain loyalty from a younger crowd and attract more then just the workingman. At the same time he does not want to lose the brand equality that has taken years to create. He is also faced with solid monopolies in the beer world that make it hard to keep up. Chris is faced with a hard decision, will taking a chance and changing the image really be the right move for Mountain Man.

By introducing a new product line called Mountain Man Light the company would be able to reach a broader audience. They would no longer focus on the workingman, they would appeal to a younger generation of beer drinkers. They would also be able to gain a woman base, women being extremely heath cautious would be more likely to purchase the beer if it came to a “light” version with fewer calories. By launching a Mountain Man Light it would also play down most peoples perception of the Mountain Man Original being too strong and only a manly mans beer.

Mountain Man Brewing Company is a beer for the workingman. It has been around since 1925 and has gained strong loyalty from the baby boomer generation. Mountain Man has strong brand awareness down south and if you asked anyone over the 21 they are more then likely able to recognize the name even if they do not drink it themselves. The brand has been able to stay in the game with strong competitors such as, Anheuser Bush, Miller, and Adolf Coors.

The uniqueness of the taste along with the higher then average alcohol content is what makes its loyal customers coming back for more. One alternative to look at for the Mountain Man Brewing Company is to look and see how hard it would be to distribute it into restraints and local bars with the option to have it available on draft. By putting extra money into re-promoting the same recipe it would be a lot less costly. By offering specials at local bars such as dollar Mountain Man’s on Tuesday nights would introduce the beer to a younger generation.

Since the younger generation is the one to target because they do not have a beer preference yet this is a way that could get them hooked and at the same time make them proud to share a six pack that both the young 21 year old and his 55-year-old dad would both enjoy by keeping the tradition of alive. Other alternatives could be to go with the Mountain Man Light and don’t play it safe what so ever. If you’re going to be successful, your products must be different. Mountain Man should use loud colors to attract people attention, along with changing up the shape of your average beer bottle.

Other ways to not play it safe while promoting Mountain Man Light could be to use non-traditional shelving system. Instead of taking valuable shelving space away from Mountain Man place 6 or 12 packs in the middle of isles in a pyramid shape, that way people do not associate the two as much. My recommendation to the Mountain Man Brewing Company would be to keep the product just how it is and not introduce a Mountain Man Light. If a brand is able to last generation after generation there is a reason for this.

Strong brand awareness is hard to come by with so many new beer products appearing on the shelves each times you walk into any convenience store. The recognizable taste and working man persona is what kept them in the game year after year. If the company wants to boost revenue and assure they last in the future I would look into prompting at local bars and giving the younger crowd a chance to try the beer and even change their old perception about it. West Virginia’s beer should stay as just that and keep the tradition alive.

Group Assignment – HBC614B Company Auditing PART 1 THE INTERNATIONAL AUDITING STANDARDS BOARD AND ITS IMPORTANCE TO THE DEVELOPMENT OF AUDITING STANDARDS IN AUSTRALIA AND NEW ZEALAND The International Auditing and Assurance Standards Board (IAASB) is an independent standard setting body within the International Federation of Accountants (IFAC). Established in 1978, originally known as International Auditing Practices Committee (IAPC), it changed its name to IAASB in early 2001 and was then reformed by IFAC in 2003.

IAASB puts public interest first and aims to improve the quality and uniformity of practice throughout the world and to strengthen public confidence in the global auditing and assurance profession by facilitating the convergence of international and national standards. IAASB is committed to achieve its objectives through the following works: • Developing Standards – establish high quality auditing, review, other assurance, quality control and related services standards, such as International Standards on Auditing (ISAs). Global Acceptance & Convergence – promote the acceptance and adoption of IAASB pronouncements throughout the world and support a strong and solid international accountancy profession by coordinating with IFAC member bodies, regional organisations and national standard setters. • Communication – encourage debate and present papers on a variety of audit and assurance issues and increase the public image and awareness of the activities of the IAASB. To date, the IAASB has earned increasing recognition for the quality of its standards and the credibility of its standard setting process.

This has contributed to the increasing use of its standards worldwide. Over 100 countries are now using or are in the process of adopting ISAs into their national auditing standards. For investors in international capital markets, the quality of audit reports and audit opinions on financial reports are crucial when they make decisions about capital allocation. Audits, working within internationally accepted auditing standards, increase the credibility and reliability of the financial information provided in the financial reports.

As Australian capital markets are increasingly linked with overseas markets, it is important to have a globally standardised financial reporting framework that is supported by globally accepted auditing standards. The Australian Auditing and Assurance Standards Board (AUASB) made the compliance with IAASB standards easier via a long-standing policy of convergence and harmonisation with ISAs. The AUASB uses ISAs as a base to develop Australian Standards on Auditing (ASA).

For any revision and enhancement of ISAs initiated by the IAASB, the AUASB will make appropriate consequential amendments to ASA. The AUASB and IAASB generally issue an exposure draft of a proposed auditing and assurance standard concurrently for consideration by interested parties. In New Zealand, New Zealand Auditing Standards (AS) and Audit Guidance Statements (AGS) are also based on ISAs and International Auditing Practice Statements (IAPS). The New Zealand auditing authority adopts the IFAC documents and amends them only as necessary to achieve its – 1 of 11 –

Group Assignment – HBC614B Company Auditing objectives. Amendments to the IFAC documents may be made to reflect specific New Zealand legislative requirements or to reflect specific audit practising arrangements within New Zealand. As we can see, for years since IAPC or IAASB was established, it has played a very important role in enhancing and standardizing the quality of auditing and assurance services around the world. ============================= – 2 of 11 – Group Assignment – HBC614B Company Auditing PART 2 CO-REGULATION OF AUDITING PRACTICE IN AUSTRALIA

In most developed countries, including Australia, the auditing regulatory framework is provided, at least to some extent, by government through legislation and government agencies. In the past, however, the auditing profession in Australia was largely self-regulated through the rules and requirements self-imposed by the principal players in the field, i. e. auditing firms and auditing professional bodies. As a result of the Corporate Law Economic Reform Program (CLERP) 9, the Auditing and Assurance Standards Board (AUASB) became a statutory (government) body.

Since April 28th 2006, the Australian Auditing Standards (ASAs), which have been released by AUASB for purposes of section 336 of Corporation Act 2001, have Force of Law. The Financial Reporting Council (FRC), a statutory body under the Australian Securities and Investments Commission Act 2001 (ASIC Act), is responsible for providing broad oversight of the process for setting accounting and auditing standards as well as monitoring the effectiveness of auditor independence requirements in Australia.

Yet the control and enforcement mechanism of these standards is also supported by the auditing profession represented by two primary professional accounting organisations: CPA Australia and the Institute of Chartered Accountants in Australia (ICAA). Although the membership in these two organizations is voluntarily, it is still a necessary condition to get registration as a Company Auditor or a Liquidator. Some methods of control of quality of the auditing services imposed by these professional organisations include peer reviews, continued professional development and periodical rotation of the auditors.

There are also disciplinary procedures in place to encourage improved ethical behaviour and quality of service provided. This particular model of co-existence of government regulation and industry self-regulation in Australia is called ‘co-regulation’ of auditing practice. Co-regulation provides ‘interactions that produce pressures for the refinement of regulatory structures in terms of openness, consultation, independence and speed of response to urgent accounting problems’ [Malcolm C. Miller]. ============================= – 3 of 11 – Group Assignment – HBC614B Company Auditing PART 3 QUESTION 6. 3 – ASA 315 UNDERSTANDING THE ENTITY AND ITS ENVIRONMENT AND ASSESSING THE RISKS OF MATERIAL MISSTATEMENT – HOMECHEF PTY LTD. A first and very important step of the audit process involves the auditor gaining an early understanding and knowledge of the client’s business. In fact, ASA 315 requires that this step is carried out during the audit planning stage. The auditor must obtain or update their understanding of the client’s operations and circumstances, including its organisational structure, management policies, the company’ position in its industry, the economy and its legal obligations.

ASA 315 provides extensive guidance on matters related to obtaining an understanding of the entity and its environment, which may be classified into three main categories: (1) Internal control / organisational structure (2) Operational and legal structure (3) Industry and economic conditions An understanding of these three elements helps the auditor assess the client’s business risk and identify the events, transactions and practices that may have a significant effect on its financial report. This report presents a recent review of the operations and circumstances of one of our clients, HomeChef Pty Ltd. in accordance with the requirements of ASA 315. The main objective was to identify the events and developments at HomeChef which may have a significant bearing on the company’s business risk and consequently affect our audit. This understanding will help us plan and perform the audit more efficiently and effectively and will ultimately improve the services we provide to our client. HomeChef Pty Ltd has been the market leader in the boutique food and beverage industry for the last two years.

The company manufactures, supplies and retails quality ingredients for use in the home kitchen and small restaurant market. During the review our audit team identified a number of major events/transactions that may have a significant impact on the business and affect our audit process. Below is a brief discussion on each of these events/transactions: 1) New products and services: Recently, HomeChef introduced ‘pre-packaged’ meals suitable to be served at a dinner party. Preparation of the ‘ready to serve meals’ would require extra steps to produce the final product.

This would involve more processing facilities, more staff and more advertising. One potential related business risk might be the increased product liability. There may be extra compliance requirements from the Food Safety Regulators. There could also be risk that the demand has not been accurately estimated. The company’s capital and current expenditure may increase significantly because of the launch of the new product. This situation tends to increase our audit risk. The auditor, therefore, should carefully consider how this changing operating characteristic may affect his/her auditing process.

For example, he/she may need to review some Food Safety Regulation requirements to assess that correct amounts of expenditure is attributed to this particular type of compliance; or refer to some industry literature to get a better understanding of the niche market for this type of product. Reviewing – 4 of 11 – Group Assignment – HBC614B Company Auditing sales figures and sale forecasts may also help to assess to what degree the company’s business risk may be affected by this new development. 2) New lines of business: HomeChef has recently opened a number of small cafe where customers can sample the s company’s product range.

By doing so, the company is venturing into unfamiliar territory. In addition, the notes of HomeChef’s draft financial report reveal that the company has entered into agreements for building and developing a new entertainment complex. These events indicate not only changes in the company’s operational structure, but also those relating to its environment. New opportunities bring new risks. As this is HomeChef’s first venture into a new business area, lack of expertise and experience could be a real concern. The hospitality industry operates quite differently from the food manufacturing.

There could be many more competitive forces and regulations in place. This move could change the organisational/operational structure of the company drastically. For example, new divisions may need to be established and the company hierarchy changed. Apart from the potential risks of increased product liability and inaccurate demand estimates, similar to the case of all new products, this could introduce new risks associated with the company’s internal control. Also, the company’s potential business risk would increase its inherent risk. In general, this event is likely to increase our audit risk.

It is very important that the auditor familiarises him/herself with the company’s new operational structure, the industry conditions and regulatory environment related to this new line of business. Reviewing the hospitality industry publications and significant industry legislation may assist with basic understanding of how the company business risk is affected by this move. Aggressive marketing and acquisition strategy – Rapid growth: Over the last two years HomeChef has acquired a number of smaller competitors and become the market leader in its industry.

This is an indication of the company’s aggressive approach to expansion and growth. In such situations, it is often noticed that a company’s infrastructure is likely to lag behind in the process. In a hurry to expand, the organisational structure of the company may be changing too fast. There could be staff members with insufficient experience, the IT system may not cope well under the new conditions as new procedures and processes are added in. This significant and rapid expansion of operations could create strain and increase the risk of a breakdown in controls.

The auditor needs to discuss with the senior management and gather evidence from the company’s documents to assess this risk. He/she may need further understanding of the current cycle in the industry, to assess how this ‘acquisition spree’ could affect HomeChef’s business risk, and consequently the audit risk. Reviewing government statistics, trend forecasts, trade journals and financial newspapers may help improve the auditor’s understanding of the industry in general and the business in particular.

Changes in key personnel: The departure of a key executive (HomeChef’s finance director), probably with a significant loss of corporate history and experience, may also have an impact on the business. The new finance manager has been with the company for less than a month and may take some time to gain the knowledge and understanding of the business. He may have a different focus or 3) 4) – 5 of 11 – Group Assignment – HBC614B Company Auditing understanding of the company’s internal control.

The auditor should take this factor into account when assessing the risks of misstatements associated with the company’s financial report which, possibly, has been prepared under the instructions of the new finance director. 5) Newly-established internal audit group: HomeChef started using the service of an internal audit group for the first time this year. Generally, the existence and operation of an internal audit group indicate the commitment and serious consideration given to maintaining high standards of internal control by the management. This would normally reduce the control risk in a business and subsequently reduce the audit risk.

In addition, the external auditor could, to some extent, use the work of an internal auditor, after having gained knowledge of and satisfied with the scope of internal auditing and the audit team’s technical competence and professional care. However, in this case, as HomeChef’s audit team is new, careful considerations are required if the auditor is to rely on the internal team’s audit work. Installation of a significant new IT system related to financial reporting: HomeChef switched to a new computer system early this year. The system was installed by a professional computer company and the old and new systems were run parallel for 3 months.

Some new functions/modules have been introduced in the new system, including the ability to process stocktake results, account payable invoices and payments at the store level. This event highlighted a major change in one of the company’s internal control components. It seems that the new system is rather reliable as a systematic testing plan and an integrity checking process were carried out by the professional computer company and there have been no major problems with the system so far. The use of this new system could potentially decrease the company’s control risk. The audit strategy could focus on test of control.

A proper and systematic testing plan on the new system is recommended, especially on the new modules for stocktake and accounts payable process. Significant amount of non-routine/non-systematic transactions: HomeChef’s draft Income Statement includes an ‘extraordinary item’ of $231 million without any notes or explanations attached to it. The existence of this ‘extraordinary’ loss would certainly have a significant impact on the business and would increase the audit risk considerably. This particular transaction requires a significant amount of attention by the auditor.

Enquiries should be made to understand the nature and extent of all relevant details of this transaction. This would help the auditor assess if the transaction is legal, not dismissing the possibility of fraud, or errors, such as transactions recorded without substance, intentional misapplication of accounting policies, mathematical mistakes, oversight or misinterpretation of facts. The auditor should also examine if the valuation and allocation of the amounts have been done correctly. Company records and legal documents will need to be reviewed. An extensive substantive audit approach would be suitable for this particular area of the audit.

Debt structure – Covenant agreement: Note (e) to the draft Financial Report reveals that a covenant agreement exists between HomeChef and its bank. The bank loans are secured against the company’s remaining property, plant and equipment. This agreement specifies that the company should maintain a 6) 7) 8) – 6 of 11 – Group Assignment – HBC614B Company Auditing positive net tangible asset ratio and a positive current ratio. Given the large amount at stake, there is a great incentive for the company to falsify, alter and manipulate figures to achieve these positive ratios at any cost.

This situation would increase HomeChef’s business risk significantly and consequently increase our audit risk. The audit plan could focus on substantive testing of the accounts related to the current ratio and net asset ratio. The auditor must exercise reasonable care and skill and maintain an attitude of professional scepticism throughout the audit. Based on HomeChef’s financial ratios being adverse and the subsequent difficulty in complying with the terms of loan agreements, the auditor may need to raise a going concern issue.

It would be necessary for the auditor to discuss this problem with HomeChef’s management so that appropriate measures could be taken by the company to overcome this situation. As a result of reviewing HomeChef’s operations and environment, including its financial and marketing position, using the precepts of ASA 315, our audit team has been able to update our knowledge of the company’s situation and assess our audit risk accordingly. This understanding and assessment will direct the development of our strategy and plan for the audit of HomeChef. ============================ – 7 of 11 – Group Assignment – HBC614B Company Auditing PART 4 QUESTION 6. 22 – IMPACT OF BUSINESS RISK ASSESSMENT ON AUDIT STRATEGY This report presents a short case study of Weave Limited. The main purpose of the case study is to look at how Business Risk impacts on Audit Risk, and consequently, on Audit Strategy and Plan. Weave Limited is a closely held private company, manufacturing high-quality woollen cloth. It has been in operation for almost 60 years and the CEO of the company is also its major shareholder.

Currently, the company is under a great financial stress due to increased competition and falling sales volume. Three years ago the company was sued for dumping chemical pollutants into the local river. As a result, a settlement was signed with the Environmental Protection Agency providing that Weave construct a water treatment facility within five years. Our Audit Firm has been auditing Weave for the last ten years, and the current year interim audit revealed that there has been virtually no activity in the Water Treatment Facility Construction account in the current financial year.

To prepare for this year audit we need to take the following steps: (1) review the company’s business risk i. e. the risk that Weave’s business objectives will not be attained due to the above-mentioned pressures and, ultimately, the risk associated with its profitability and survival. (2) assess the implications of the company’s business risk on our audit risk (3) develop our audit strategy and audit program in response to the assessed risks. In order to assess Weave’s business risk, we felt that a PEST analysis would be the most appropriate approach.

It involves identifying the political/legal, economic, social and technological influences on an entity. • Environmental Protection Laws may have a heavy toll on the business. Compliance with these Laws (such as building a water treatment facility) may be very expensive, but non-compliance may actually have a suicidal effect on the company. • Economic risk should also be taken into account. Increased competition and limited market for Weave’s high quality and possibly expensive products could pose a serious threat to the company’s profitability and ultimately its very survival. Social risk component is also present in this case. The surrounding area is poor and unemployment rate is high. The company’s management may feel a social pressure to provide employment at any cost. The obligation to build a water treatment facility could be very expensive and resource-consuming. It is not an easy task to estimate or to make provisions for the resources required to meet this obligation. It is even harder to estimate the costs of not meeting this obligation. This adds unusual pressure on the management.

Potential incentives could arise for management to understate the company’s profit/cash flow to use as an excuse in an attempt to avoid fulfilling this particular liability. This situation is likely to increase Weave’s inherent risks. – 8 of 11 – Group Assignment – HBC614B Company Auditing In assessing the company’s control risks, certain observations and issues have come to our attention which suggest an unsatisfactory internal control system: • The company’s CEO is also its major shareholder who seems to be a strong character that has the overriding authority and decision making power. The CEO does not seem to take the compliance with the conditions imposed by the Government’s Environmental Protection Agency seriously. He decided to stop work on the water treatment facility as he thought that the State would not fine or close the company down for non-compliance. • The company does not seem to have any risk assessment policies or procedures for dealing with business risk. Based on the above findings, the audit team agreed that Weave’s business/inherent risks and control risks could be assessed as high.

This conclusion has had an impact on our audit strategy and audit plan. As we believe that the control risks are high, an audit strategy of a predominantly substantive approach has been adopted. We do not plan to obtain a thorough understanding of the company’s internal control or to carry out tests of control. Instead, we plan extensive substantive audit procedures based on a low to medium acceptable level of detection risk (depending whether the assertions under examination are at risk).

In response to the high level of inherent risks, we decided to assign more experienced audit personnel and to conduct the audit with a heightened degree of professional scepticism. As mentioned earlier, an accurate assessment of the extent of liability related to the breach of the environmental laws is not easy to achieve. As the company’s management does not seem to recognise the seriousness of this risk or to respond to it properly, we decided to engage environmental and technical experts to assist by providing us with legal/environmental opinion and estimates.

The engagement of an environmental consultant will be scheduled to happen before the year end audit. Weave’s increased inherent risk and control risk increase our audit risk. Some assertions in the company’s financial reports have been identified as the key audit assertions as they tend to be more at risk. These assertions will be examined closely (please refer to the matrix below) and more efforts will be focused on obtaining sufficient and appropriate evidence to test these assertions.

Financial Acct Liability Acct (provision for water treatment facility) Contingent Liabilties Valuation of the provision Sales Acct (Income Statement Assertions) Completeness all sales recorded Accuracy of recorded sales amounts Correct accounting period cut-off Inherent Risk Control Risk Debtor’s confirmation Assertions at risk (Balance Sheet Assertions) Completeness of all liabilities Inherent Risk Engagement of environmental expert/consultant Quotation / project estimations are recorded properly with appropriate amounts Audit Risk Procedures/Evidence 9 of 11 – Group Assignment – HBC614B Company Auditing To test if the liability account for the water treatment facility contains any material misstatement we will focus on whether the account has included all liabilities as per the environmental specialist’s advice and the amounts are properly estimated and recorded (completeness and valuation). We could do this by seeking confirmation from the environmental specialist and checking estimates/quotations for the project.

To support the company’s claim of ‘low sales volume’ and ‘low level of cash flow’, we will test if all sales transactions pertaining to the company have been included in the income statement (completeness) and all sales occurred during the current accounting period have been properly recorded with the correct amounts (accuracy and cut-off). Collecting debtors’ confirmations could be the approach to carry out this test. As our team has audited the company for the last ten years, it is assumed that there must be a certain degree of familiarity and complacency.

However, due to the new developments in the company’ situation, more specifically, higher level of business risk, this year’s audit strategy and plan have been revised accordingly. Apart from additional audit procedures and probably a larger sample size, our team will need to maintain a higher level of professional scepticism to make sure that the company’s accounts contain no material misstatements. It should be noted that had this audit been undertaken in the seventh year after the signing of the settlement with the Government’s Environmental Protection Agency, the situation would be different.

As the condition of the settlement to build a water treatment facility would have been breached by now, there is an imminent threat of the company being closed down by the government. A ‘going concern’ assessment at the planning stage (as required by ASA 570) would provide the following going concern problem indications: (1) increased competition and falling sales, (2) noncompliance with statutory requirements, and (3) legal proceedings against the entity. In cases where going concern is related to cash flow or solvency problems, some mitigating factors could be considered (such as sale of assets or additional contributions by owners).

However, in this case, it could be judged that a going concern basis is not appropriate as the business is now subject to closure by government regulation enforcement. We, as the auditors, would need to discuss ways to deal with the problem with the company’s management. The possible outcomes could range from renegotiating the settlement agreement to making the decision to liquidate. In the latter case, the auditors would have to assess the impact that a forced sale of assets would have on the book values and the classifications of assets.

The auditors would also need to assess the amount and classification of liabilities, including any provision for staff termination payments and other closing-down expenses. In any way, if going concern is an issue it should be adequately reflected (disclosed) in the Financial Reports. The Auditor’s Report should also include an ‘emphasis of matter’ [ASA701. 09 & ASA570], clearly stating that there is a significant uncertainty regarding a going concern problem. ============================= – 10 of 11 – Group Assignment – HBC614B Company Auditing REFERENCES: 1. 2.

Australian Auditing and Assurance Handbook, 2007 Edition, CPA Australia Australian Government’s Financial Reporting Council 2005, Australian Government’s Financial Reporting Council, viewed 20 May 2008, http://www. frc. gov. au/about 3. Brief History 2008, International Auditing and Assurance Standards Board, IAS Plus, Deloitte, viewed 18 May 2008, http://www. iasplus. com/ifac/iaasb. htm 4. Chris Pearce, Parliamentary Secretary to the Treasury, 22 November 2004, “The future of governance regulation in Australia, Address to the 21st National Conference of Chartered Secretaries Australia”, viewed 19 May 2008, http://www. reasurer. gov. au/DisplayDocs. aspx? doc=speeches/2004/001. htm=005=cjp=20 04=1 5. Gay & Simnett, 2007, ‘Chapter 6 Planning, Knowledge of the Business and Evaluating Business Risk’, Auditing and Assurance Services in Australia, revised edn 3, McGraw-Hill Australia Pty Ltd. 6. International Auditing and Assurance Standards Board 2008, IFAC, viewed 18 May 2008, http://www. ifac. org/IAASB/ 7. James M. Sylph, January 14, 2005, “Global Convergence – Near or Far? ”, American Accounting Association Auditing Section 2005 Mid Year Conference

i Ministry of Higher Education Colleges of Applied Sciences (Salalah) Department of International Business Administration International Business Environment (BUSN 3401) SPRING SEMESTER 7 (2012 – 2013) BOEING COMPANY Name: Mohammed Ahmed Salim al-moqimi ID number: 2008399331 TABLE OF CONTENTS: Contents TABLE OF CONTENTS:2 INTRODCTION:4 BACKGROUND OF BOEING COMPANY:5 Mission:6 Vision:6 Objective:6 COMPETITOR ANALYSIS:7 SWOT:9 Strengths:10 Weaknesses:11 Threats Implications:11 Opportunities:12 THE STRATEGY:13

The problems that the company faced are:13 The causes of problems are:13 Action planning:13 Alternative strategy:14 PEST ENVIRONMENT:14 Politics, Legislation:15 Economy, Business Environment:15 Socio-Cultural and demographic forces:15 Technology:16 Competitive forces:16 Physical and natural forces:16 CONCLUSION:18 RECOMMENDATION:19 REFERENCES:20 INTRODCTION: Nowadays, business is vitally affected by the economic, social, legal, technological and political factors. These factors collectively form business environment.

Business environment is the total of all external forces, which affect the organization and operations of business. The environment of an organization has got internal, operational and general lives managers must be aware of these three environmental levels and their relationship and importance. Therefore, I will talk about Boeing Company as an example. Boeing Company is American Company. It was founded in 1916. Boeing consider as the world’s largest aerospace company and leading manufacturer of commercial jetliners and defense, space and security systems.

The company design and make rotorcrafts, electronics, defense systems, missiles, satellites, launch vehicles and information and communication system. The biggest competitors of this company Airbus Company. Airbus is one of the world’s leading aircraft manufacturers and it consistently captures approximately half or more of all orders. In the coming lines, I will talk about the following points which are the background of Boeing Company, mission, vision and its objective SOWT analysis, competitor analysis, action planning, strategies, and the effect of the PEST environment forces on that company.

BACKGROUND OF BOEING COMPANY: Boeing consider as the world’s largest aerospace company and leading manufacturer of commercial jetliners and defense, space and security systems. A top American exporter, the company supports airlines and American. and allied government customers in more than ninety countries. The Boeing products and tailored services include commercials and military aircrafts, satellites, weapons, electronics and defense systems, launch systems, advanced information and communication systems, and erformance-based logistics and training. Boeing Company has a long tradition of aerospace leadership and innovation. Company continues to expand its product line and services to meet emerging customer needs. Its broad range of capabilities includes creating new and more efficient members of its commercial airplane family; integrating military platforms, defense systems and the warfighter through network-enabled solutions, creating advanced technology solutions and arranging innovative customer-financing options.

With corporate offices in Chicago, the company employs more than 159,000 people across the United States and in 70 countries. This represents one of the most diverse, talented and innovative workforces anywhere. More than 123,000 employees hold college degrees, including nearly 32,000 advanced degrees and in virtually every business and technical field from approximately 2,700 colleges and universities worldwide. Our enterprise leverages the talents of hundreds of thousands more skilled people working for Boeing suppliers worldwide.

Boeing is classified into two business units: Boeing Commercial Airplanes and Boeing Defense, Space and Security. Supporting this units are Boeing Capital Corporation, a global provider of financing solutions; the Shared Services Group, which provides a broad range of services to the company worldwide; and Boeing Engineering, Operations & Technology, which helps develop, acquire, apply and protect innovative technologies and processes. Mission: The mission of the company is to maximize the number of services and opportunities while establishing Boeing’s leadership in NMA activities.

Functions that control Boeing are business development and strategy, communications, engineering, operations and technology, finance/shared services group/Boeing capital corporation, human resources administration, international, law and offices of internal governance and public policy. So Boeing Company has many values work to achieve it. First, Leadership is the world class leader in every aspect of our business and in developing our team leadership skills at every level, in our management performance; in the way it design and build support our products and in our financial results.

Secondly, Integrity is always takes the high road by practicing the highest ethical standards and by honoring our commitments. It takes personal responsibility for our actions and treats everyone fairly and with trust and respect: Third, the Quality of striving for continuous improvement. So that it take rank among the world’s premier industrial firms in customer; employee and community satisfaction. Finally, Customer satisfactions are essential to our success. Vision: It seeks redressing from the other for unfair government subsidies in the development of new airplanes.

Also, it is important for people to work as a global enterprise for aerospace leadership “People Working Together as One Global Company for Aerospace Leadership. Also, it works hard to develop the education for her employees. Objective: 1. Improve Performance: • Sponsor outstanding dinner meetings and special events. • Exploit multi-media member communications. • Provide effective NMA metrics and reporting. • Address direct support of Boeing’s business goals. 1. Spearhead Expansion • Team with current chapters. • Maintain and increase membership. 2. Implement Training Provide regular development seminar • Apply NMA training tools and courses. 3. Support education and community • Award high school scholarships. • Speech Contest. • Hold Explore Engineering Programs. • Support volunteer activities. 4. Ensure Recognition • Acknowledge Boeing leaders. • Reward chapter contributors. COMPETITOR ANALYSIS: Airbus is an aircraft manufacturing subsidiary of EADS, a European aerospace company. Based in Blanca, France, near Toulouse and with significant activity across Europe, the company produces around half of the world’s jet airliners.

Airbus Industry began as a consortium of European aviation firms to compete with American companies such as Boeing. Airbus Industries were formally established on 18 December 1970. It had been formed by a government initiative between France, Germany and the UK that originated in 1967. In the commercial airline business Boeing operates in a duopoly with Airbus. Airbus has been the largest producer of large commercial jetliners for many years, but Boeing has been gaining ground since recent problems at Airbus, especially the 2005-6 massive production delay for the A380.

The delay gave Boeing a large advantage in the market for wide body aircrafts which include Boeing’s successful 747, 777, and 787 models. Although the Boeing has pushed back the first flight and delivery of the 787, the Airbus 380 delays have been far more substantial. Still, even with Airbus’ problems, the race is far from over and competition remains intense between the two companies. In February 2007, the U. S. Air Force awarded a controversial $35 billion air refueling tanker contract to rival Northrop Grumman (NOG) that was widely expected to go to Boeing.

During March of 2007, Boeing had filed a formal appeal against the deal with the Government Accountability Office. In June of 2008, the GAO sustained Boeing’s appeal against the Air Force and effectively reopened the contract for bidding. As of August, Boeing is currently requesting an extension past the October 1st deadline in order to alter its design to meet the government’s new specifications. Airbus employs around 52,000 people at sixteen sites in four European Union countries: Germany, France, the United Kingdom and Spain. In this table I will show you some statistic about Boeing and Airbus Industrie: Company |1994 Sales in $m |1994 Earnings in $m |Market Share % | |Boeing |16,851 |1,022 |62 | |Airbus Industrie |8,000 |N/A |24 | |Company |Gross orders |Cancellations |Net orders | |Boeing |120 |46 |74 | |Airbus Industrie |125 |54 |71 |

SWOT: Company is defined as a framework used extensively for an assessment of the internal as well as external business environment as a part of the strategic or corporate planning process. The framework is including the firm’s strengths & weaknesses as part of internal environment assessment and opportunities & threats as part of the external environment assessment that aids strategic decision making which may include macroeconomic matters, technological change, legislation, and socio-cultural Changes, as well as changes in the marketplace or competitive position. Strengths |Weaknesses | |Workforces and planning |Loss | |Innovation |Lack of technological innovations | |Management system |Threats of Substitute Products or Services | |Leadership |Competition of trains | |Knowledge |Affect of technology development | |Highly Skilled Managers | | |Provide global customer support | | |Outsourcing | | |High quality of products | |good services | | |Threats |Opportunities | |Competitor |Market developments | |Trade Barriers |Competitors’ vulnerabilities | |Deregulation of Airlines |Industry or lifestyle trends | |Threats of Substitute Products or Services |Technology development and innovation Global influences | |threat of the Airbus |Information and research | |Lack of planning |New aircraft to gain market share | | |Increase demand for point to point routes | Strengths: 1- Workforces and planning: Boing has trimmed its workforce to the minimum and it has plans to further cut 7000 jobs and has completed family of planes from the small 737 to the world’s largest carrier the 747 which allows it to serve any airline in any category. 2- Innovations: boing has innovated in many areas and has a very strong technological position it is well established. 3- Management system: It has improved its inventory management systems. 4- Leadership: It still has a leadership position in the industry. 5- Highly Skilled Manager The operation of the company will run smoothly.

The performance of the company will improve and would lead the company to be successful. 6- Provide global customer support it would serve the customers better and it would be very convenient to those customers in other countries to ask for help. This would help the company to gain a better image due to the provided services to help the customers. 7- Outsourcing: It can save time for the company to manufacture or assembly its products. 8- High quality of products: Emphasizing the product quality to ensure that the durability of the company is lasting for long period of time. 9- Provide Good services. . Weaknesses: 1. Loss: balance sheet and income statement point to some weaknesses.

R spending of $1,661 million, around 8% of sales is rather low for this industry. Its long term debt is also increasing and its overall return on common equity is around 8. 9%, below the average industry rate which is 13. 1%. This, associated with its declining defense revenues, may restrict its access to additional capital in times of crisis. 2. Threats of Substitute Products or Services: for example people don’t use planes to travel they will use train and other way. 3. Competition of trains: Customers run away from aircraft to trains because of its services. Threats Implications: 1. Competitor: The competitor might overcome them and the threat is increasing the competitor’s market share. 2.

Trade Barriers: They may encounter difficulties in the regulation regarding aircraft imposed by the country to which they export their products to. 3. Deregulation of Airlines: The regulation of the company for its customers would compromise in order to gain favor of the customers. 4. Threat of the Airbus because Airbus is the big competitor for Boeing Company. 5. Lack of planning. Opportunities: New aircraft to gain market share: with the impressive show of Airbus A380 recently, Boeing also plans to release its powerful weapon in the competition with Airbus. The new version Boeing 787 which inherits the most advanced technologies and advantages of the previous models is hoped to be a big hit to the airline industries.

At the moment, Boeing has received a number of orders for Boeing 787- Dream liner and this opportunity actually shows that Boeing still insists on its successful business strategy to build longer-range, more capable, smaller aircraft that could go point-to-point and therefore, serve city pairs directly rather than having to hook them up through a hub. The new 787 is the proof that Boeing does not lag behind the competition. THE STRATEGY: The problems that the company faced are: 1. Unwinnable competition, which is wasteful. 2. Design and engineering problem. 3. Poor cost control. The causes of problems are: 1. Poor engineering expertise. 2. Poor marketing research. 3. Using wrong strategies. Action planning: 1. Merge to companies 2. Get good engineer (work with university). 3. Get good marketers. 4. Do comprehensive. 5. Marketing research. 6. Restructure. 7. Use cooperative strategies. 8. Improve design and R. 9. Make the right aircraft. 10. Cost leadership.

There are many problems that come from the using of wrong strategies, poor engineering expertise and poor marketing research. The basic problems are unwinnable competition which is wasteful, design and engineering problem and poor cost control. Boeing Company uses poor engineering and poor design that actually will affect the nature of the working of company. Boeing Company is unwinnable competition because their competitors have high quality management and good services better than them so, customers prefer to deal with their competitors. It has also problem with marketing research. However, good marketing research can help company to know strength and weakness of their competitors and to know how to improve their works and to be able to face new technologies.

Boeing Company has poor cost control that will lead to lose their money and the profit will be low. There are many actions that the company should follow to overcome any problems such as get good engineers who graduated from university and have high qualification and experience. Boeing Company has to restructure its strategies and use cooperative strategy. Also, if it merges with companies, get good marketers, do comprehensive, marketing research, improve design and R and make the right aircraft, it will achieve competitive advantage and maximize the profit. Alternative strategy: Cost leadership, it focuses in decreasing the cost and price.

It is a good strategy for the company, if it follows this strategy, it will be more successful and it will reduce its economic costs. Also, this strategy will help company to develop and grow very fast. PEST ENVIRONMENT: Political, Economic and financial, Social, physical and natural, competitive, demographic, Technological forces (PEST) analysis is concerned with the environmental effects on a business. The term PEST stands for the Political, Economic and financial, Social, physical and natural, competitive, demographic, Technological issues that could affect the strategic development of a business. New I will explain the forces that effect Boeing Company in Us: Politics, Legislation: Political forces refer to country’s political system.

The ability to support or disrupt business operations of domestic & international firms that mean Influence of politics & political interests. Also, Governmental topics, taxation issues, environmental controls and dependencies, subsidies and quotas regulations, employment and labor laws, consumer legislations and regulations, competition issues, health & safety concerns and issues. Economy, Business Environment: The economic environment refers to differences between countries economic systems in the country which the organization operates. Therefore, when we talk about condition of economic system I mean the economic growth, inflation and unemployment.

As we know, the economic crisis affects all the businesses around the world. Boeing Company effected by this crisis so what happened in the economy will have a big effect on the company. Despite Boeing’s 2008 revenue has declined to 8. 25% and that because of the economic crisis. In particular, revenue in the Commercial Airline division fell by 15. 34%, as a strike by the International Association of Machinists in 2008 resulted in 104 fewer airplane deliveries than planned. Furthermore, net income fell 34% and contractual backlog expanded to a record level of $279 billion. Net income declined by 22. 1% over the first half of fiscal year 2009. Socio-Cultural and demographic forces:

The social dimension or environment of a nation determines the value system of the society which affects the functioning of the business and Refer to way shared beliefs, values & attitudes affect employee & consumer behavior & management of foreign subsidiaries. And demographic forces refer to the characteristics of population, e. g. size, growth, spending power. Socio-Cultural has changed when the country get developed. The changing maybe in education, public opinion social mobility, and attitudes so the socio-culture can affects the business: ? Population growth rate and age profile. ? Population health, education and social mobility, and attitudes toward those. ? Population employment patterns, job market freedom and attitudes to work. Press attitudes, public opinion, social attitudes and social taboos. ? Lifestyle choices and attitudes to those. Technology: Refers to technology-induced changes that have altered the way firms undertake & coordinate their international activities. Transportation and communication technologies – firms able to outsource R and back office processing. Technology is used in many of life fields. First, we use technology in the process of manufacturing and that through buying effective and modern machines and equipment. Second, we also use it in design techniques and in management of our company through using computers and other tools of technology.

Third, technology provides us with some ways in marketing and advertising via TV, Internet and others tools. Technology influences the company in terms of investment in technology, consistent application of technology and the effects of technology on markets. Emergent technologies have a big Impact on company. It can speed up the work in the company so it can apply all the orders. Also, the internet has its own impacts which are reducing communications costs and increasing remote working. (Reference: http://en. wikipedia. org/wiki/Boeing) Competitive forces: A competitive force refers to the pressures imposed by other firms in competing industries.

Boeing company faced strong competitive from Airbus Company because these two company work in same field. These two companies compete in price, service and product. Physical and natural forces: Physical and natural forces refer to environmental pressures and risks that influence international business strategy. These forces divided to two types. First, natural risks arise from environmental disasters (e. g. earthquakes). Second, Manufactured risks are environmental risks created by human intervention – pollution, threat to eco-systems, climate change, genetic modification, and terrorism. This factor can effect in Boeing company very clear. CONCLUSION: In conclusion, I am going to summarize the points that I have talked about in my report.

First, background of Boeing Company which is a major aerospace and Defense Corporation, founded by William E. Boeing in Washington its international headquarters has been in Chicago since 2001 and its mission, vision and objectives. Second, I have analyzed their competitor which is Airbus and it is the biggest its competitor. Airbus is one of the world’s leading aircraft manufacturers and it consistently captures approximately half or more of all orders for airliners with more than 100 seats. Third, I analyzed its internal and external environment factors which are referred to SWOT. Fourth, I have talked about the strategy which includes problems, causes and action plan of the company.

Boeing Company has to restructure its strategies and use cooperative strategy instead. I recommend Boeing Company to merge with companies, get good marketers, do comprehensive, marketing research, improve design and R&D and make the right Aircraft; it will achieve competitive advantage and maximize the profit. Finally, I have talked about the term PEST which stands for the Political, Economic, Social, and Technological issues that could affect the strategic development of a business. RECOMMENDATION: In fact, Boeing Company is a popular company in the world, but there are several forces and challenge which face it and make it in a bad situation. So I explained them in my assignment.

Therefore, I recommend this company to develop their abilities such as employee’s skills, investment, competitive advantage, consumer relationship management and advertising. In my opinions, I think Boeing Company can develop their employee’s skills through training. Also, I should invest in rich countries which pay more money to increase the profitability to company. A good idea to the company creating new and develop aircraft to unique it from other companies. Finally, I think if Boeing Company does good advertising that enough for it to monopoly aircraft manufactured over the world. REFERENCES: http://www. boeing. com/companyoffices/aboutus/brief. html http://manonamission. blogspot. com/2005/08/boeings-ba-mission-statement. html : http://www. boeing. com/news/speeches/1998/980121. htm http://www. boeing. om/companyoffices/aboutus/community/focus_objectives. html – http://www. soe. ucsc. edu/classes/ism158/Winter03/boeing. htm – http://en. wikipedia. org/wiki/Airbus http://www. writework. com/essay/boeing-s-strength-weakness-threats-oppotunities-and-its-im : http://www. soe. ucsc. edu/classes/ism158/Winter03/boeing. htm http://en. wikipedia. org/wiki/Airbus http://www. companiesandmarkets. com/Summary-Company-Profile/boeing-company,-the-swot-analysis-145568. asp http://www. wikinvest. com/stock/Boeing_Company_(BA)) http://en. wikipedia. org/wiki/Boeing Books: (Principles of Marketing) Thirteenth Edition, Philip Kotler and Gary Armstrong. Books: (Management 9e ) John R. Schermerhorn, JR.

DE LA SALLE PROFESSIONAL SCHOOLS GRADUATE SCHOOL OF BUSINESS CASE ANALYSIS “O. M. SCOTT & SONS COMPANY” SUBMITTED BY: ESTIMADA, ANNA GABRIELLA C. Executive Summary The O. M. Scott and Sons company was a company which first started to produce weed-free grass, but diversified into other products related to its product line: lawn mowers, fertilizers, and other garden paraphernalia. It encountered the problem of nationwide distribution, finding difficulty in the delivery of its product.

The company solve this problem of nationwide distribution by first, increasing its work force to keep up with the voluminous orders. Second, by setting up dealerships which will distribute their products and lastly, establishing a trust receipt payment system in order to assure the quick returns of investments. Problem The company encountered difficulty in the distribution of its products for two reasons: the nature of its agriculturally based products necessitated the quick distribution of products upon order.

The voluminous orders and distances of nationwide coverage rendered the distribution difficult. Corporate Objective In keeping up with the modernization of agricultural products and technology, the company expanded its product line by diversifying into related products and services. From grass, O. M. Scott & Sons started the production of fertilizers, lawn mowers and other products. This diversification assured the company against stagnation. Areas of Consideration Shareholders & Key Officers Sales Force The company’s success can be attributed to the efforts of the sales force since they are the ones who are improving the salesmanship of the dealers in order to be available to their prospective customers. * Dealers The dealer is one of the key players in the company’s sales since the products are made available through them. With the dealership, the company can save money from overhead expenses and other general and administrative expenses from operations. * Scott

The owner of the company is considered as one of the key players in the company since he had found ways to cope with the market trend. Market Profile * Product Initially, the company is only selling the country’s first clean, weed-free grass seed in 1868. Scott’s business began to grow rapidly in the local market in Central Ohio. In 1990’s, the company have expanded it’s product range from grass seeds to new chemical weed and garden pest controls and special-purpose lawn fetilizers. * Price * Place & Distribution

When the company first started, the weed-free grass seed was available upon order over the phone and after some time, the seeds will be delivered to you house. However, as the business expanded, Scott realized that neither him nor his competitors were able to tap the potential market of lawn care. In the company’s case, this was attributed to the distribution system since the customer’s could not buy the products easily. To address this issue, the company opened its products to dealerships wherein the sales force is tasked to train dealers how to do a better selling job with the company’s products. Promotion and Advertising When the business became successful during its initial operations, the company began to advertise extensively, In 1927, the company added a free magazine called Lawn Care, which was widely distributed. Financial Profile * Profitability * The company’s profitability for the next 5 years, as computed in the projected plan, will greatly increase as computed for the gross profit rate and contribution margin rate. There is a yearly increase of 1% for both rates which is a good sign for the company. * Turnovers The turnover rate for the first projected year will not be good since it will take longer for the inventory to be converted to cash. However the succeeding projected years is seen to be improving in terms of the turnover rate. * Capacity Utilization * For the projected years, the rate of capacity utilization will improve as it was projected that the rate will increase by 2% yearly. * Financial Leverage * The liquidity of the company will neither improve nor worsen as projected in the plan. There was only a little difference in the yearly computed projected rates.

The Coca-Cola Company deals with the manufacture of beverages that are non-alcoholic. The Coca-Cola Company has over four hundred brands in many countries of the world. The Company is responsible for manufacturing, distribution and marketing of the beverage product. It uses a franchised system of distribution where the concentrated syrup is sold to bottlers that are in most countries (Coca Cola Company & Quality Information Publishers, 2007). The refreshment Company is Centralized with Human Resource staff that are highly experienced.

Centralization in the company helps improve employee’s relation and benefits the consultants (Hays, 2004). The Coca-Cola Company has a mission of refreshing the world, inspiring moments of optimism and creating value as well as making a difference. The vision of the Company states what the Company aims at achieving. The Company has an emphasis on the customers, partners, portfolio, profit making and productivity of the Company (Foster, 2008). The Company uses a multi-divisional matrix because of its huge size and scope of operation. Coca-Cola Company has many International staffs in the separate International Divisions that it owns.

They are all isolated from the main head office as they are located in Africa, Europe, Pacific, Latin and North America. These divisions are further divided according to the geographical location. This is crucial since it helps in decision making at the local level of the region (Isdell & Beasley, D, 2011). When decisions about the Company product are made at the local level, the Coca-Cola Company is able to change with the demands in the market. Such an organizational structure is effective for a big Company. Coca-Cola Company has close-fitting operations that are operated from the head office.

The organizational structure of Coca-Cola Company is aimed at meeting the sensitivity of the market in the region where the Company is located (Kalapos, 2006). The organizational structure of the Coca-Cola Company is designed to fulfill its own requirements. There both formal and policies and rules within the Company. The structure helps in the facilitation of communication and authority within the Company (Hays, 2004). For the organizational structure of Coca-Cola Company to be effective, it should clarify employees’ responsibilities so as to eliminate any possible obstacles.

Designing the organizational structure of Coca-Cola Company is the process since all resources must be coordinated in an effective way. This helps curb competition in the environment where Coca-Cola Company is located. The structure is required to be flexible, constantly change and evolve with the changes in the environment. Coca-Cola Company organizational design in any region of the world needs to learn faster, execute its roles quickly and change easily for it to maintain and increase its market share in the area (Hays, 2004).

The Coca-Cola Company fins benefits in standardization because of the many acquisitions that are made by the company. It does not use local policies but uses shared policies for the entire company. This is aimed at ensuring that the customer experience is similar for their interaction. Standardization in the company helps in retention and recruitment. The idea of hiring highly motivated and competent personnel to work in the company is an emerging issue. It is crucial for the company to have skilled employees for success reasons (Isdell & Beasley, D, 2011).

Coca-Cola Company has mass production, and it must hence use mechanized structures for efficient production. The Coca-Cola Company does not produce the end products, but it distributes the concentrated syrup to bottlers to sell the product. To boost the Company performance, the lower management has been involved in the company’s activities, and this instills a sense of responsibility to them. Coca-Cola Company has worked out on ways aimed at reducing bureaucracy and speed the process of decision making. (Coca Cola Company & Quality Information Publibhers, 2007).

Decision making within the company is done through incremental process where it does not readily decide on the creation of new products (Hays, 2004). The decision making process within Coca-Cola Company can be termed as unstructured since the model involves those in the lower management even in decision making (Hays, 2004). Unstructured decision making is useful to the Company as it helps in solving problems and decision making process within the company. (Hays, 2004). Coca-Cola Company helps in environmental and climate protection efforts.

The Company has good programs to balance on the use of water in the line of production (Hays, 2004). The Company has many water initiatives in various communities as well as efforts to conserve soil and climate (Coca Cola Company & Quality Information Publishers, 2007). The lifecycle of Coca-Cola Company products starts from the ingredients used in the manufacture of the syrup, packaging, manufacturing, distribution, refrigeration and storage, consumption and finally recycling the cans (Isdell & Beasley, D, 2011).

Coca-Cola Company was started in 1886 in Atlanta, Georgia, USA. The founder of the Company who was John Pemberton sold it to Asa Chandler who named it Coca-Cola Company in 1892 (Isdell & Beasley, D, 2011). There is a competitive advantage between the Coca-Cola Company and the distributors. There is a symbiotic relationship that is interdependent where the failure or success of one has an impact on the other (Pendergrast, 1993). Over a year, the Coca-Cola Company has built strong brands of drinks which cannot be imitated by its competitors (Pendergrast, 1993).

References

1. Coca Cola Company. , & Quality Information Publishers. (2007). Historic vending machine films. Asheville, N. C. : Quality Information Publishers.
2. Hays, C. L. (2004). Pop: Truth and power at the Coca-Cola Company. London: Hutchinson.
3. Isdell, E. N. , & Beasley, D. (2011). Inside Coca-Cola: A CEO’s life story of building the world’s most popular brand. New York: St. Martin’s Press.
4. Kalapos, G. (2006). Fertility goddesses, groundhog bellies ; the Coca-Cola Company: The origins of modern holidays. Toronto: Insomniac.
5. Bell, L. (2004). The story of Coca-Cola. North Mankato, Minn: Smart Apple Media.
6. Pendergrast, M. (1993). For God, country, and Coca-Cola: The unauthorized history of the great American soft drink and the company that makes it. New York: Scribner’s.

A prominent publishing company, has contacted you about the possibility of writing a new textbook for the first semester History of World Civilizations course, a potentially very lucrative undertaking.

The company requires a short description of the proposed project that includes:  a possible table of contents; an overview of the purpose of the book (and what will be unique about it); a rationale for the book’s organization; and an explanation of the key themes to be developed.

Please take the time to organize your thoughts in a logical manner and cite evidence to support your analysis.

The 21st century is filled with technological innovations and scientific discoveries that have significantly improved how the human race subsists. Since the beginning of time, man has constantly aim for development and progress.

As a result, numerous changes have transpired which paved the way for the occurrence of civilizations. Without these developments, the contemporary society would not be able to enjoy and at the same time benefit from the modern conveniences that were all made possible through the ingenuity and intelligence of the ancient people.

Most of the history books have almost accurately tackled the advancement of the political, social, cultural and economic aspects of the society in the six continents of the world namely: Africa, Europe, Asia, Australia and North and South America. However, this book that I am proposing would discuss the relationship between nature and civilization.

There have been previous studies conducted that argued that civilization is a “by-product of these social adaptations to environmental change” (Rockets, 2006). More so, based on several archaeological expeditions, scientists and historians have theorized that the “development of civilization was simply the result of a transition from harsh, unpredictable climatic conditions during the last ice age, to more benign and stable conditions at the beginning of the Holocene period some 10,000 years ago” (Environment News Service, 2006).

Because of this notion, I have decided to write a book that would provide historical accounts on how man and nature have evolved that contributed to the formation of civilizations which have become the core of human existence. Through this book, readers would be enlightened on how the interaction between man and nature and their development have played a role in the advancement of humanity.

Moreover, this undertaking would provide answers on why climate has changed and determine the contributions of man in the present environmental phenomenon. This book offers a timely subject matter and revealing historical information that would give a new perspective on World Civilizations.