Understanding The Issues Affecting Burns Foods Company

Purchase of the food processing sector

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Some issues arose during the meeting of the Burns Foods' committee members, but they were crucial in the company's decision making. One of the most crucial concern was that FoodEase limited company wanted to buy the food processing sector of the Burns Food. This issue was significant since it would help the company understand the effects of accepting the purchase and hence deciding if it was necessary or not. Another problem was the probability of the continuity of the warehouse and logistics business if FoodEase purchased the food processing sector of the company[1]. The issue would help the company access if they could manage the warehouse and the logistics effectively to bring them enough profit. The company had a problem of signing a three-year agreement for supply to the SuperLarge Supermarket (SLS). The ACCC wanted to assist Burns Food Company to sign a contract with the SuperLarge Supermarket.[2] The issue was of importance because it would help the company find means of keeping that contract and ensuring that it would not be broken. Another problem was the need to increase the demand for their products. The issue helped the company because it helped the Burns Foods Company come up with strategies to improve the quality of their products, create awareness to all the Australian citizens of the services and products that the company produced, and maintain their brand.[3]

One of the primary concern was an issue of the imported food products which some companies after importing repackaged, branded as their own, and sold to supermarkets with the Australian labels. One of such instance was the case of the imported berry. The competitor imported the frozen mixed berries from China, processed, packaged, and sold the berries to consumers as their brand.[4] There were other similar cases where foods, fruits, and vegetables were imported and repackaged as Australia's brand. The advantage that the company had was that the laws of Australia concerning the labeling of food products implemented a new law that the food processing companies must disclose all the details concerning the source and packaging of their food products.

The significance of raising the above issue was that it would help the company come up with strategies to overcome competitors who involved in unethical business practices to monopolize the market. Another issue that was raised was the focus on the long-term plan of accomplishing the company's goals.[5] The management developed some strategies that would ensure the company realized its long-term goals. Some of these strategies were; reduction of prices, improvement of the quality of their products and services, and how to regulate the competition from similar industries. The issue was fundamental because besides helping the company accomplish its goals, it would help the company to know how to deal with companies who imported low-quality goods and packaged the food products in Australia and sold them as their brand. Another critical concern regarded the auditing matters.[6]

Continuity of the warehouse and logistics business

The auditors of the companies were required to access the potential risk areas in auditing. This concern would assist the company's auditors to come up with quality audit reports. Another problem that drew the attention the committee members was the report on sustaining the company in the future.[7] The company foresaw that the electric charges are likely to increase by over 80%. The effectiveness of the energy would then not be conducive since the temperature usually controls the warehouses. Raising the above problem was fundamental to the company because it would help the company plan well for the future. The company raised another primary concern about how they could protect their contract with the Super Large Supermarket. The report of the CFO reported that the Warehouse and the Logistics business centers brought new opportunity because the SLS started demanding for their repositories and transport services. This concern was fundamental because it would help the company understand all the legal laws governing contracts which would help the company avoid some unethical practices that would lead to the termination of their agreement with Super Large Supermarket.[8]

Some of the questions that I would ask regarding the company's continuity and profitability are as follows: How can we further secure the contract with the SuperLarge Supermarket and any other agreements in the future? How do we accomplish our long-term goals? How do we deal with competition from firms producing similar products? How should we maintain the reputation of our company? How do we deal with the black market and the companies producing counterfeit products of our brand?

The effect of selling the food processing sector of the company to FoodEase Company led the management into a dilemma.[9] I would recommend the company to accept the offer because there are more associated benefits than if the company did not sell. The FoodEase Company has promised to promote the reputation and the label of the burn foods.[10] The amount of money that the FoodEase Company is willing to pay for the pay for the purchase is $140m. We will request FoodEase Company to add the amount because we believe that the food processing sector is worth much more than that amount. Concerning the issue of continuity of the warehouse and the transport sector after the sale of the food processing business, I propose that the company carries on with the remaining segments. This is because the sector's products are still in demand. Furthermore, stopping the operations of the two industries would mean the closure of the company.

Signing of a three-year contract with SuperLarge Supermarket

Another concern that arose was signing a three-year contract with the SuperLarge Supermarket (SLS) to become their supplier of food products. I would suggest that the company should agree to the signing of that contract with the SLS. The agreement would help the company have a ready market for its food products as well as finding new strategies for increasing the demand for their products.[11] The company had to consider expanding the demand for their products increasing the quality of their products, lowering prices, and doing innovative advertisements. The company needed to improve the relationship between them and their customers.

The problem of imported products was a severe concern. Some companies exported food products from other countries, packed them, and rebranded them as their own.[12] The posed a competition challenge to the Burns Food Company since they sold their products at far much lower prices than that of the Burns Food Company. Regarding the above peril, I would recommend the company to seek assistance from local authorities and report such cases because they are unethical. If the company were to take this step, then the demand for their products would rise again because the authorities would eliminate unscrupulous traders from the market.[13]

Some of the challenges the company was going through were discussed during the risk analysis. I will encourage the company to find ways of mitigating the business-related risks to minimize the effect of the occurrence of the risks and evade them if it is possible to do so. The company should consider endorsing well-secured policies to protect the company from macroeconomic factors and natural disasters such as floods, earthquakes, and many other natural calamities.

I would recommend that the company considers installing robust firewall systems as well as the antimalware and antivirus software programs to minimize cases of cyber crimes and attacks. The software and the firewall systems would be very crucial in maintaining and protecting the integrity of the company's data.  I would also encourage the company to endorse the idea of preserving the company's assets by frequently monitoring and renovating them.[14]

Another threat that the company is facing is the incapability of the company to supply all their clients' orders. This could have resulted from poor management or poor communication and transport services. I would encourage the company to become fully committed to their current and future customers. I would also elude the company to ensure that it satisfies all the need of its customers and that it advertises its brand most effectively.[15] The company was also having difficulties in securing its brand. I would request the company to improve its marketing and advertising skills to maintain its brand.

Dealing with imported products

There is no doubt that if the above recommendations are implemented, they will be a significant change in the profitability, financial position, continuity, and other related sectors of the firm. Most of the recommendations above are the remedies for some problems that the Burns food has been facing since time immemorial. The above approvals have helped the company in making more decisions concerning the various issues and dilemmas the company has faced.[16]

Selling the food processing sector of the company had a positive contribution to the company. The company’s reputation and label were enhanced. The FoodEase Company kept their promise that they would stay and uphold the status of the company. With the higher esteem, the demand for the company's products increased and so did their sales and profits. The company's decision to continue with the warehouse and the transport facilities was an advantage. The company continued making income and with the $140m that the FoodEase gave them was used in further investment, and it funded SuperLarge Supermarket was fundamental because it provided a ready market for the company’s products.[17] After signing an agreement with the SuperLarge Supermarket, many other institutions and organizations approached the company with the aim of seeking a contractual agreement. This was a good sign of the company’s reputation. The problem of imported goods had been among the most fundamental concerns of the company.[18] They took my advice of consulting the local authorizes and it worked wonders. The unscrupulous business people were given legal restrictions from engaging in such businesses.

The result was that the company faced fair competition and that the company's products were not duplicated. The company's intellectual property was also protected. The company followed my advice on doing a risk analysis. The risk analysis helped the company solve some of its perils. The company was able to mitigate cases of macroeconomic factors and natural disasters.[19] Some natural calamities such as floods and earthquake had destroyed some of the company's assets such as a building. My advice of recommending significant buildings for the companies worked because the company no longer faced losses when such calamities happened. The installation of antimalware and antivirus programs helped to keep the company's data correct and safe. The facility of strong firewall attacks reduced cases of cybercrimes considerably.

John Burns was the co-founder of the Burns Foods company, and he is Adrian's grandfather. Adrian joined the company in 1969, and he managed meat processing by then. Adrian worked hard at the company, and he was the company's managing director for sixteen years. Through Adrian's hard work, the company grew from selling wholesale products to processing and exporting foods. Adrian was appointed as the company’s chairman in 2005.[20]

Mitigating business-related risks

Adrian Burns is the father of Martina Burns. She started working for the company when she was only fifteen years old at the processing plant.[21] Martina's father Adrian led her to acquire all business skills, and she inherited her father's position as the managing director of Burns Food in 2005 after she completed her degree in MBA. Martina has promoted the growth and enhancement of the warehousing sector of the business.[22] Martina's hard work has made it possible for the number of exported frozen foods to increase. Mark is the husband of Martina, and he owns a radio frequency company that provides software to the company which assists in the control of data and scanning. Mark’s company also provides IT services to the company.

Tessa Townly: Tessa represents the majority shareholder of the Moving’s food company. Tessa does exports and imports related businesses as well as the logistics. Over the past four years, Tessa and the managing director have worked in unity to protect the contracts in and out of Australia. Tessa is a board member of the Moving Foods Company. She is the director for two companies which have been enlisted on the ASX. Peter Townly, who owns 80% of the Moving Foods Company's shares is her brother.[23] Tessa was appointed as a non-executive director in the company in 2005

Don Duate: Don is Tessa's husband, and he also owns majority shares in the Moving Foods Company. Don was appointed as one of the company's directors in 2005. Don's health has deteriorated, and thus he has been failing to attend the meetings of the board members due to his poor health conditions.

Kenneth Chan: Kenneth is a sole proprietor of an importing and exporting business in Kuala Lumpur. Adrian, the current chairperson of the Burns Food Company was a close friend to Kenneth attended the same university, and they have been close friends since then.[24] The Burns Food Company caters for Kenneth's transport expenses from Kuala Lumpur to Melbourne to attend the meetings of the board members.

Prof. Marcia Moore: Professor Marcia has specialized in dietary and plays a vital role in developing laws that control the labeling of food in Australia. Moore is a board member of two more food processing companies in Australia. Moore is also a board member at Moving Foods Company. In 2005, the Moving Foods Company nominated her to become a board member at the Burns Food Company.

Dr. Silviar Mugo: I have a doctorate in MBA.[25] I was appointed to become the company's board member in November 2016. I attended my second board meeting on 6^th February 2017.

The current board of the Burns Foods Company has two main categories of board members; the risk committee and the finance and audit committee.

The board members of the risk committee: Kenneth Chan is the chair of the risk committee. The other board members of the risk committee are Marcia Moore and Dan Duate.

• They analyze, discover, and report the possibility of a risk.
• They maintain a clean record of the company’s previous risk and monitors them
• They accredit all the quality assurance policies.
• They take care of any issues that might have a negative impact

The board members of the risk committee: The chair of the Burns Foods' risk committee is Adrian Burns, and the managing director is Martina Burn. Isla Manning is the CFO while Denis Dunston is the secretary of the company.[26]

• They engage the editors
• They report for the annual financial reports for the company
• They prepare audit record from the available financial statements.
• They check whether the audits comply with the statements of accounts.
• They ensure that auditors produce high-quality audit reports.

It is vital for the company to add a new board member to assist in decision making.

Recruiting a board member is necessary because it helps determine if the candidate has the right worth and attitude and whether he/she is committed and skilled enough to lead. The company should follow four steps to recruit a candidate fully. The company should:

Define the requirements: The Company should explain terms, responsibilities and duties, time and legal commitments, and authorities to the willing candidates.[27]

Find the prospective board members: The Company should call the candidates and interview them.

Shortlist the selected candidates: The company should choose the candidates with the best qualifications.

Introduce them to their new environment: The Company should take the selected candidates through orientation so that they learn the requirements of the company.

Period/time	Activity
Week  1	Defining the requirements
Week 2&3	Interviewing the candidates
Week  4	Shortlisting
Week   5,6&7	Orientation

Some other governance issues that the board should consider are-:

Engaging the shareholders: The board members may join the shareholders by considering their options and views.

Creating an environment and developments which are sustainable: Creating a sustainable environment and events is very crucial for any company. The Burns Food Company needed to consider it.[28]

Planning on who will succeed the senior managers: People who will take over the management should be highly skilled in managerial and leadership areas, have the right willpower, and they should be entirely responsible for their actions.

Overlooking the activities of the board members: Board members should be ignored lest they involve themselves in unethical business practices.

The composition of board members: Composition of board members means that the members should have the required skills and working experience to take part in formal board decision making

I discovered that involving the company's shareholders in decision-making or considering their views would be very important in understanding their needs. I would recommend the board members of Burns Food to collect the shareholders’ feedback to understand them. Concerning the issue of succession, it is important that people with the right skills take over the power. The success of the Burns Food Company, in the long run, would be highly determined by its successors. I would advise the directors to carry out the recruitment process effectively to ensure only the best directors are in power.[29] Creating a sustainable environment and developments would mitigate risks, enhance the company's reputation, and promote the company's worth in the long run. The board makes decisions concerning vital operations in a company. The excellence of the Burns Food company depended on the quality of the performance of the board members. As a result, the shareholders and stakeholders should oversee the execution of the board.[30] I would encourage the board members of the Burns Foods Company to allow some stakeholders and shareholders to manage their operations.[31]

I will change the directors of Burns Food Company to take my proposal by showing them the importance of the process. I will use several case studies of the organizations which had implemented the concerned issues and the effect on their success. If the directors understand that taking the above actions will enhance the reputation of the Burns Food Company, they will be convinced that my idea was of value.[32]

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