ACCL International is a Dubai based construction company. The company is in business of construction for more than 13 years. The company came into existence in the year 2005 and since then has grown leaps and bounds. The audit of the company using Integrated Management System (IMS) shall be conducted to evaluate its operating efficiency.
Integrated Management System Audit:
The success or failure of an organization is very much dependent on the management of the organization. An efficient management system will help an organization to make optimum use of its resources. The management system within ACCL International is to be appraised for the audit purpose in this document to evaluate the ability of the company to effectively utilize its resources in business operations (Arasu et. al. 2016).
Strategy of the company:
The company has a three tier management system namely; executive and the strategic management, middle tier management and operational management. The corporate policy is formulated and developed by the executive at the strategic level. The executive management that includes the President and Principal of the company, Executive Vice President, Chief Operating Officer and other top executives, determine the objectives and mission of the company. Haji Habibullah, the President and Principal of ACCL International, has always emphasized on the importance of efficient management (Asif et. al. 2013).
The corporate policy of the company:
The corporate policy of the company is to build civil engineering marvels in all across the globe. The company has always focussed on using top quality materials for building civil structures both within and outside the country. A closer look at the business of the company reveals that the company has expanded its business in number of countries over the years in accordance with its corporate strategy. At present the company has large branches in United Arab Emirates, Kenya, Mongolia, Uganda and United States of America (Doherty, Horne, and Wootton, 2014). Thus, the company has moved forward with right strategy to achieve its objectives by its corporate policy. The main objective behind using IMS is to ensure that the corporate policy is aligned with strategies of middle tier and operating management to achieve the desired objectives.
The corporate strategy formulated by the executive management of an organization is implemented by the management below the strategic management. Generally referred to as the middle tier management, they are the one who coordinate the operational management to materialize the strategic policies of an organization. Integration of corporate strategy with efficiency of operational management is the main responsibility of middle tier management (Goetsch and Davis, 2014).
In case of ACCL International the management at the middle tier includes the Business Development Manager, Project Coordinator, Director of operations, Director of Finance, Finance Manager, Purchasing and Logistic Manager, Human Resource Manager, Business Development Manager, Catering Controller and Finance Officer. All the managers work tirelessly to achieve the desired objectives of the company as put forward by the Executive management (Halbe et. al. 2013).
The Manager for Development of Business and Project Coordinator Mohammad Khalid Aryan along with the other members of management team formulates the operational planning for the company. In order to ensure that the operational planning is in alignment with the organizational objectives as set out by the top executives including the President of the company all necessary efforts are made. The operational planning cannot be made in isolation thus, the Business Development Manager along with the other members of management team conducts regular meetings in the company with operational managers of the company. Operational managers include manager of various departments, managers of different regions etc. An effective operational planning will be one that will be able to blend the executive strategy of the top management with the operating efficiency of operational management. ACCL has put in place an effective management team both at organizational level as well as operational level (Hill, Jones and Schilling, 2014). Thus, the integration of organizational objectives with operational efficiency has been possible.
Annual budgeting and planning:
Based on the corporate strategy and after discussion with operational management about the organizational objectives the company moves forward towards achieving these objectives. At the very beginning the company prepare budgets as per the organizational strategy. Annual budgets help the company to be in the right direction at the uncertain future. Annual budgets include construction expenditure budget, sales budget and overhead budget. At the time of preparation of budgets the company makes sure that all relevant factors are considered to ensure these budgets are realistic. Budgets also sometimes work as motivation for different departments however, these must be realistic and practical (Kerzner and Kerzner, 2017).
The company knowing very well the importance of operational controls clearly define the controls. The company has clearly segregated the responsibilities by segregated duties to different departments. Appropriate managers have been appointed to fix responsibilities. For example the company for each of its branches have branch managers. Apart from branch managers there is a procurement department and sales department. The branch managers coordinate different departments to successfully implement the decision conveyed to them by the organizational management (Laudon and Laudon, 2015). Organizational management by fixing responsibilities with different departments have ensured that there is a proper person to fix responsibilities for different jobs. The following operational controls are in effect within the company that helps the company to keep track of internal functions within the organization.
- Order processing: The order processing is completely automatic. No employee can manually influence the order processing controls. The automated order processing controls ensure there is no chance of error or fraud in order processing.
- Cost controls: In order to control the expenditures the company has a constant evaluation system for the expenditures incurred by the organization. For each procurement the company follows tender system, i.e. it ask eligible and eager traders to quote material prices, qualities and quantities. Based on quality and cost of materials the most suitable traders are selected to procure materials for different construction projects (Rebelo, Santos and Silva, 2014).
- Sales: The sales are carried out by only accepting payments in banks or via cheques. No cash payments are accepted to safeguard the resources of the company.
Human resource management (HRM):
Managing the human resources is an integral part of successfully running an organization. Efficient utilization of human resources is of paramount importance for an organization to achieve its goals. An efficient strategy is a must for an entity to manage the human resources of an organization. ACCL has a centralized human resource management strategy which is not changed under any circumstances irrespective of the situation and place. Marisa, M. Meldo is the Human Resource Manager of the company. She has almost decade long experience of managing human resources. All activities and strategies for human resources is the responsibility of Marisa. The company has a standard policy of recruiting professional and qualified persons only for different jobs without discriminating any applicant on the basis of their caste, creed, colour and religion. The integration of management functions is mainly possible due to the ability of the company to manage its human resources very effectively (Robson, 2015).
Training and development of the employees:
The HRM of the company has a standard practice of conducting regular training for the employees and workers to equip them to deal with complex working environment under ever increasing pressures in the modern world of business.
Individual objectives and design of jobs:
On the basis of individual objectives of the employees and workers and after considering skills and competencies of the employees and workers the jobs are assigned to the individuals. Often the design of a particular job is also developed keeping in mind the skills, competencies and objectives of individuals in the company (Simon, Karapetrovic and Casadesús, 2012).
Management development and succession plan:
Any organization must be prepare for the succession of the management since the old guards one day or the other have to make way for the new generation. However, an organization will not be greatly harmed even at the departure of top executives and management provided it has make necessary provision to replace managerial personnel subsequent to their departure by nurturing talent with development plan (Simon et. al. 2013).
ACCL International has no policy to nurture and develop managerial personnel for future endeavours of the company. Management development plan helps to develop managers for future generation by learning from the existing managers by assisting them (Robson, 2015). The company has no such management development succession plan thus, it is real cause of worry for the company as most of the executive are quite experienced. The company should hire interns to work as assistants with the senior executive to learn from their experiences and be ready to run the business at the time of retirement by the senior executives (Stahl et. al. 2012).
Appraisal of performance:
The company has a performance appraisal system that runs throughout the whole year and selects the top performers annually. These employees and workers are rewarded for their excellent and outstanding contributions at annual program of the company. The performance appraisal system is an in-house program of the company. The system is also helpful in unearthing the problems faced by the employees and workers in discharging their duties. As a result necessary changes are introduced to ensure that the workers and employees are not hindered from giving their best for the company (Su and Wright, 2012).
Use of innovation and technology:
The company is known for its effective strategy to use innovative technology for the day to day affairs and operations. Innovation and technology has come a long way and the organizations that have made huge strides in the market have all made effective use of innovation and technology. ACCL has number of advanced technology in its disposal that it uses in its operations to get competitive edge in the market. Apart from that the company also use number of different software in accounting, financial reporting and organizational management system (Turner, 2014).
The project managers of the company evaluate each and every single proposal before deciding whether to make investment in the projects or not. Project evaluation techniques include using investment appraisal techniques such Net Present Value calculation, IRR method to determine whether the projects are financially viable for the company. Only the projects that are financially viable are undertaken by the company.
Accounting and financial reporting:
The company has separate department for accounting and financial reporting purpose that works under the leadership of the Finance Manager of the company. The accounting helps the company to keep control of its resources. The management also can use the accounts and financial reports to evaluate the performance of the company on periodic basis. The financial reports are prepared annually as per the accosting standards applicable in the country. The financial reports are audited as per the provisions applicable in the country. These statements help the company to conducts the affairs of the company better. The books of accounts on the basis of which financial reports are prepared is the responsibility of the management thus, the management must take all necessary actions to ensure preparation of books of accounts is in accordance with the applicable legislations in the country. Otherwise the company would be penalize severely in case incorrect and fraudulent reporting of financial performance and position of the company.
Integrated Management system:
The integrated management system within the company is working effectively as is clear from the detailed discussion made in this document. However, it is a continuous process and needs to be evaluated on a regular basis to incorporate necessary changes and modifications where ever necessary at organizational and operational level.
The IMS has helped the company to integrate its corporate strategy with organizational and operational strategy effectively. The contribution of IMS is huge in the success achieved by the company over the years. Ability to integrate management at various levels of the organization is one of the most significant factors that have played a huge role in the success of the company. However, it is important to keep on improving by modifying the existing system as and when necessary to achieve greater success in the future.
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