Leadership Leadership And Followership - 996 Words

Leadership and followership are two sides of the same coin. However, one of these topics is more closely studied than the other. Leadership is studied in the halls of famous universities and discussed in various books and articles. Many of these discussions involve the same question; what makes a good leader? The question to this answer is both the cause, and the product, of excellent leadership, good followers. What a leader strives to create in the company can only be completed by a force of followers with the ability to realize the leader s vision. So instead of asking what makes a good leader, it must first be asked what makes a good follower. As leadership and followership mirror one another, looking at the parallels between the two may help to answer this question. Leaders are meant to lead teams in an ethical manner in order to realize a vision for the company. Therefore, in order to support the leader, followers must be able to work in a team and help actualize the leader s v ision in an ethical manner. As the leaders develop their grand ideas, it is the followers who actualize them, therefore it is necessary that effective followers have a conceptual understanding of their business (Antelo, 2010). They must be able to do the job. A welder would not expect a career ballerina to run a welding torch and a ballerina would never expect a welder to complete a pas de deux. A good follower must understand what they are doing. This is the foundation of a follower s work.Show MoreRelatedLeadership : Leadership And Followership865 Words   |  4 Pages1. When discussing leadership and followership, there is often a split in personal opinion when it comes to which one is more important. Leadership and followership both offer unique benefits in their own right and have supporting factors, which give them the perceived appearance of being more important. The focus for this paper will be to advocate the importance of followership over that of leadership. This will be accomplished by addressing the pros of followership to include some core skillsRead MoreLeadership : Leadership And Followership1099 Words   |  5 PagesLeadership and Followership Both leadership and followership is a continual journey through actions and growth (Stricklin, 2014). Therefore, leaders must seek development opportunities to optimize their effectiveness. In a followership role, leaders learn important skills that enable them to become better leaders. Ironically, the importance of followership is often overlooked. This essay will identify the leadership skills Mark Zuckerberg, CEO of Facebook, still needs to develop and explore hisRead MoreLeadership and Followership3976 Words   |  16 Pages There is no leader without at least one follower. Yet the modern leadership industry, now a quarter-century old, is built on the proposition that leaders matter a great deal and followers hardly at all. Good leadership is the stuff of countless courses, workshops, books, and articles. Everyone wants to understand just what makes leaders tick—the charismatic ones, the retiring ones, and even the crooked ones. Good followership, by contrast, is the stuff of nearly nothing. Most of the limited researchRead MoreFollowership is as Important as Leadership1319 Words   |  6 PagesPhD in organizational leadership, but you can’t even get a bachelor’s in followership.† (Mercer) Why should an organization focus on followership as much as leadership? The Merriam Webster dictionary defines followership as â€Å"the capacity or willingness to follow a leader†. Over the last several years, there’s been a huge interest in leadership. However, former HP Executive Vice President, Vyomesh Joshi, shared that the key to being a great leader is not about leadership but instead the real attributeRead MoreLeadership and Followership800 Words   |  4 PagesOne of the most important components of leadership is the leader. A leader is responsible for his or her followers and the overall goal of the group or organization. Leaders are the people held accountable or everything that happens, good or bad. On the other hand, the second major component of leadership is the followers. Without followers, a leader would be worthless. Followers make up the backbone of a leader because they are the masses that get goals accomplished. A leader is just one personRead MoreFollowership: Leadership and Followers1218 Words   |  5 Pagesof a le ader, but followership has received less attention. Treister and Schultz (1997) â€Å"suggests that a follower is someone who accepts guidance and, on receiving it, takes the appropriate action. Treister et al (1997) also state followership is â€Å"considered a passive or submissive role of lesser importance than leadership. However, the effectiveness of leaders to a large measure depends on the qualities of their followers.† Treister et al (1997) go on to say â€Å"good leadership enhances followersRead MoreLeadership As A Dynamic Followership And Leadership Role1270 Words   |  6 PagesIn the preface of Followership, the author Tom Atchison, states the reason there has to be a dynamic followership and Leadership role it s not that there s a lack of effective leadership in healthcare, it’s that the current, worsening, issues are the moral and the staffing shortages of followers which result in a toxic work environment and the challenges on how followers overco me that while being a productive team. In followership there needs to be a leader that inspires and bonds followers togetherRead MoreFollowership And Leadership Of General Schwarzkopf876 Words   |  4 PagesFollowership and Leadership of General Schwarzkopf Introduction General Norman Schwarzkopf had a long lasting career in the United States Army as a follower and a leader. Schwarzkopf’s Army career began with experiencing the Vietnam War, Cold War and eventually commanding the US Central Command (CENTCOM) during Operation Desert Storm and Desert Shield. His ability as a follower and leader influenced multiple layers of personnel in executing military operations, and fostering affiliations amongstRead MoreAnalysis Of Leadership And Followership. Reflecting On1183 Words   |  5 PagesAnalysis of Leadership and Followership Reflecting on my nursing career and trying to pick out a situation that would appropriately describe a leadership or follower situation, I decided on a leadership scenario. I most often assume the role of follower and avoid taking charge of situations. Once I had worked a few years in the emergency department, I began to be nudged into the leadership role more often. Working in the resuscitation room gave me a better feeling of leadership amongst my peers.Read MoreThe Difference Between Leadership and Followership759 Words   |  4 PagesExplain the difference between followership and leadership As you have all learned from leadership classes, all leaders are followers, but not all followers are leaders. One of the biggest differences that separate leaders from followers is the fact that many leaders have charisma. Many followers have charisma, although it may be stifled because they are not in a proper position to utilize it. Charisma, by my own definition, is the compelling attractiveness or charm that enables you to influence

The Changing Face Of Basketball Essay - 1491 Words

The Changing Face of Basketball Basketball has come a long way since its soccer ball and peach basket beginnings in that its style, players, facilities and leagues have developed dramatically and gained tremendous popularity. Salaries have increased from Bob Cousys minute $45.00 a game (Minser 37) to Michael Jordans $300,000 + per game (Minser 37). Basketball is a sport in which all ages can participate in any way, shape, or form and is a big part of American society today. In 1891 James A. Naismith invented basketball at a YMCA gymnasium in Springfield, Massachusetts (Hollander 4). He told a custodian to nail two peach baskets 10 feet high on opposite ends of the gymnasium walls. The first teams consisted of nine players on each side†¦show more content†¦He Graduated DePaul in 1946 as a three time All American, and was the biggest basketball star up to that time (Minsky 16). there were only a few centers that would ever classify as great, but George Mikan, Bill Russell, Wilt Chamberlain, and Kareem Abdul-Jabbar head that list. Georges build, Russells defense, Chamberlains style, and Abdul-Jabbars grace all set these guys apart from the rest of the basketball world. Like Mikan, Russell was the typical hard-working team player. Russell was one of the best rebounders, if not the best, ever to play basketball. Out of all the centers ever to play the game, Russell had the most success. He led his Boston Celtic team to 11 NBA titles (eight in a row) in 13 years; an all time NBA record (Minsky 26). Russells Celtic team was one of the best ever judging by statistics. However, there was no one Bill Russell feared more than Wilt â€Å"The Stilt† Chamberlain (Minsky 26). Russell , being the best defensive center in the league, prided himself on being able to guard the best offensive center in the league: Chamberlain. Russell verses Chamberlain will go down in history as one of the best matchups in the history of the sport. Throughout the ten years the opposing centers played, they met 162 times (Minsky 30). In those games, Chamberlains points were down and rebounds were up and visa versa for Russell (Minsky 30). last, butShow MoreRelatedMichael Jordan Research Paper1553 Words   |  7 PagesMichael Jordan is arguably the best athlete to ever step foot on a basketball court. He is still one of the most popular athletes in the world. This was because he was a hard worker on and off the court. Jordan was also looked at as an icon because he was an African American that was changing the National Basketball Association (NBA) by breaking records and developing new styles of play. 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Growing up basketball was more than a game, it was a way of life. My brothers and I analyzed every aspect of basketball, we were students of the game. I recall the 2008 NCAA Men’s Basketball Tournament, there was this undersized point guard playing for Davidson College by the name of Stephen Curry. This kid took the basketball world by storm, he became an overnight sensation. He led the Davidson College WildcatsRead MoreShould College Athletes Be Paid?1397 Words   |  6 Pagesto college athletes the main focus is on basketball and football athletes. The sports of both basketball and football in the NCAA generate the most revenue amongst all other college sports. The combined profit of these two sports go through a trickling down process, in which the income is distributed amongst the other sports teams of the university. The ideal thing to expect is to pay all college athletes, the reality is that only football and basketball players will be paid. 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It’s a place that’s resistant to change. Hickory is a place where, according to Myra Fleener, a character in the film, â€Å"basketball heroes are treated like gods†. This town takes their basketball seriously, a settingRead MoreThe Movie Othello By William Shakespeare Essay1493 Words   |  6 Pageshigh achievements and talent to be a professional basketball player, the audience sympathizes with him in this scene because he was accused unfairly. Right after this scene, Nelson showed a scene of Odin beating up Roger. Odin responds very violently and he caused harm to other. Hugo continues to act loyal and tried to be a good friend to Odin, but in the back, he’s feeding Odin lies and having the intention to destroy him. Before an important basketball game, Hugo gives him some cocaine to help himRead MoreEarvin Johnson is Magic on the Basketball Court1795 Words   |  7 Pagesearly 90s. The 1980s is known to many people as NBA’s best decade. This era featured a combination of the best style of basketball, as well as some of the greatest players of all time. Magic Johnson headlined this elite group of players. Because of the immense amount of talent in the game at this time period, basketball was emerging as a big part of a lot of people’s lives. Basketball was growing in popularity and was becoming one of America’s favorite sports to watch. Magic Johnson only made this sport

Integrated Business Management Project

Question: Discuss about the Integrated Business Management Project. Answer: Inroduction: This research proposal is about analyzing the impact of social media marketing on the purchasing decision of customers. A case study for the company Tesco has been selected for this research proposal. Tesco is British Multinational retail organization established in the year of 1919 (Cheung Thadani, 2012). It has stores in more than 12 countries all over the world. The company has 28.4% market share. Background of the Study According to Akehurst Afonso and Martins Gonalves (2012), technology has given consumers the opportunity to examine about an offered product or a new product. Presently, internet technology such as social media marketing has added a newer perspective to business. Social media marketing has improved the communication between companies and their customers (Fan Gordon, 2014). It has also affected the decision making process of customers (Fotis, Buhalis Rossides, 2012) (55%). They can give their review and opinion about a product on social media, which can affect other customers as well. Problem Statement According to Fotis Buhalis and Rossides (2012), an increase of social media marketing has suppressed the effectiveness of traditional marketings such as T.V. advertisements, newspaper advertisements, banners, and hoardings. Most of the company invest a large amount of money for social media marketing. However, most of the marketers are not able to recognize the specific necessities of customers (Fan Gordon, 2014). For this reason, most of the social media advertisements are becoming less effective. In, additions, most of the companies use false statement in their social media advertisements. It has negatively affected the purchasing decision of customers (Akehurst, Afonso Martins Gonalves, 2012). Research Aim and Objectives The aim of the research proposal is to assess how social media marketing has changed the customers decision making process. The objectives of the research proposal are given below: To analyze the factors that affect consumers purchasing decision To assess the difference between traditional marketing and social media marketing To analyze the changes that social media marketing has initiated at every stage of consumers buying decision Research Questions What are the factors that affect the customers purchasing decision mostly? What is major difference between social media marketing and traditional marketing? How social media marketing affect customers purchasing decision? Literature Review Customers Purchasing Model A five-step model of consumer purchasing decision has been developed by Koalt, Engel, and Blackwell during 1968. These five stages are like recognition of problem, searching information, finding alternatives, decision of purchasing and post purchasing behaviour (Fotis, Buhalis Rossides, 2012). These stages are discussed below: According to Cheung and Thadani (2012), problem recognition starts when there is gap between the real situation of clients and their preferred situation. The needs of customers can be analyzed with help of Maslows need of hierarchy. They are such as psychological needs, safety needs, love and belongings (Fan Gordon, 2014). When the needs are identified, customers start searching information. As Cheung and Thadani (2012) stated that internal information is collected through customers own experience and external information are collected from friends and family members. After collecting information, customers look to find out product options that meet their needs (Akehurst, Afonso Martins Gonalves, 2012). At the next stage, the actual prpurchasing action occurs. However, Cheung and Thadani (2012) mentioned that it is not the end of purchasing stage. After the purchasing stage customer analyzes their products and decides whether they are satisfied with their products or not. This stag e is known as post purchasing stage. The sense of satisfaction in this stage can improve customer loyalty. Research Methodology In order to develop this research work, positivism research philosophy is used along with deductive research approach and descriptive research design. Methods of Data Collection As Waits and Paetkau (2015) stated that, there are mainly two types of data collection method is used in a research work. They are qualitative data collection method and quantitative data collection method. In order to analyze the effect of social media marketing on consumers purchasing decision, quantitative data collection method is used. It helps to gather data from a large population in a cost effective manner. Survey questionnaires will be developed and distributed to 55 customers of Tesco. Collected data will be analyzed with the help of MS Excel. Data Collection Sources According to Thomson and Emery (2014), there are mainly two types of data sources available for a research work. They are such as primary sources and secondary sources. Primary data can be collected with the help of surveys and interviews. On the other hand, secondary data can be collected from books and journals. In this research work, primary data will be gathered with the help of survey questionnaires. It will provide an overview of the impact of social media marketing on customer's purchasing decision. Gantt Chart Gantt chart (Source: Created by Author) Reference List Akehurst, G., Afonso, C. Martins Gonalves, H., (2012). Re-examining green purchase behavior the green consumer profile: new evidences. Management Decision,50(5), pp.972-988. Cheung, C.M. Thadani, D.R., (2012). The impact of electronic word-of-mouth communication: A literature analysis integrative model.Decision Support Systems,54(1), pp.461-470. Fan, W. Gordon, M.D., (2014). The power of social media analytics. Communications of the ACM,57(6), pp.74-81. Fotis, J., Buhalis, D. Rossides, N., (2012).Social media useimpact during the holiday travel planning process(pp. 13-24). Springer-Verlag. Hajli, M., (2014).A study of the impact of social media on consumers.International Journal of Market Research,56(3), pp.387-404. Thomson, R. E., Emery, W. J. (2014).Data analysis methods in physical oceanography. 5(2), pp.252-270 Waits, L. P., Paetkau, D. (2015). Noninvasive genetic sampling tools for wildlife biologists: a review of applications and recommendations for accurate data collection.Journal of Wildlife Management,69(4), pp.1419-1433.

Royal Ahold’s Case Write Up Essay Example

Royal Ahold’s Case Write Up Essay Executive Summary The case discusses the Royal Ahold’s the major events that led to the demise of a great European company. The case presents some of the key issues in the areas of leadership, strategy, audit and accounting fraud that resulted in their disaster. The case identifies the problems made by the management in selecting the improper growth strategy and incentive plan that encouraged unethical behaviour from the senior management. The events presented touch and highlight management and governance issues, which are so important in managing global companies. After analysis of the cases and financial statements, I have come with questions and concerns on the management and financial statements that could have caught this earlier on. Questions to be asked and process of approving budgets, corporate strategy, risk controls would have raised concerns on the management style. Some of the other recommended actions for board and its various committees would have discouraged the improper management practices. Some of these questions might have surfaced real issues and / or encouraged the right practice. I found various accounting standards, challenges of global audit process; in this case it was led by Deliotte. The CEO’s and leadership growth strategy was the reward and recognition was improper. The number of acquisitions made during the 90s and continuous pressure was put on all subsidiaries to grow the sales by 15% were bad decisions. This alone led to many other problems within the company. The CEO’s growth strategy and desire to quickly grow the company put immense pressure on all other companies and senior management to somehow meet the CEO’s expectation. We will write a custom essay sample on Royal Ahold’s Case Write Up specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Royal Ahold’s Case Write Up specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Royal Ahold’s Case Write Up specifically for you FOR ONLY $16.38 $13.9/page Hire Writer It all resulted into fraudulent activities and ultimately disaster of great company. I recommend adopting changes to incentive plans, non-financial factors be part of success criteria. In measuring financial success, working capital ratio, inventory days, receivable and payable targets should be part of incentives. Above all, I recommend changes to the board committees and ensuring their work is independent was also important, i. e. audit committee, establishment of HR committee to raise issues and improve the overall organization culture. The case also highlights the issue of multiple accounting standards being practiced in very country. A standard corporate wide accounting standard in Royal Ahold must have been used. Both external and internal auditors must have report ed numbers in a consistent approach. I recommend that auditors had direct reporting to board and should have empowered and trained to look for documentation and management structures in their audit process. Had they dig deep on all areas of concerns of material significance they might have found side letters. I have also highlighted other recommendations including the controls in the accounting standards and in preparing financial papers. Incentive plans and corporate strategy be realistic to avoid unwanted behaviors. Tone of the top management including the board’s, assignment of responsibilities be clearly stated and periodically measured. Student id: 250712690 1 Management Accounting Exam Problem Identification: The case depicts another case of fail of governance and business ethics. This appears to be a fraud and not just accounting mistakes. By 2003, the time of the case, Enron, WorldCom and few others had already identified the need of business ethics and corporate governance. Royal Ahold series of events happened mainly due to greed and unethical behaviour but what really underlies is the objective setting, growth strategy and, rewards recognition criteria set by management. The case also presents issues of cost accounting, in terms of, when to apply the manufacturing rebates. Consolidation of subsidiaries and joint ventures also played a role in this fraud. It also shows bad governance, flaws in external audit, failure of internal audit functions and to some degree their competency. Leadership strategy: Royal Ahold’s CEO’s strategy of 15% growth year-over-year was very aggressive. The reward and recognition structure around the sales number was improper as it led management of all subsidiaries and other business units to increase the revenue and meet the targets. CEO kept communicating to board and shareholders the expectation around the sales strategy and likelihood of meeting these targets. Consequently, it created a culture whereby senior management were under pressure to meet the sales objective. The senior management and head of subsidiaries must have felt that missing the sales targets is not even an option. Accounting Fraud: The case presents few big issues of accounting. Firstly, the issue is of the incorrect accounting treatment of manufacturing rebates and promotional allowances. My opinion is that rebates cannot decrease the cost of goods unless there is a certainty of getting the rebates. If the rebates are uncertain they cannot decrease the cost of goods incorrectly. From the case, it appears that management ordered more quantity of goods then they could have sold. They booked the rebates at time of goods received and decrease the cost of goods prematurely. (Assumption: It is not very clear from the case, if these rebates were booked as income or adjusted against the cost of goods i. . decrease in cost of item. I have assumed that Royal Ahold accountants decreased the costs (prematurely as per above paragraph). If these were booked as income, then it is even a bigger fraud and not an accounting error) Second accounting fraud problem is the accountants preparation of Royal Ahold’s parent company financial statements. They consolidated the financial statements including some of the joint ventures when Royal didn’t even had control over them. Royal Ahold did not own more than 50% of these Joint Ventures and did not have the control of the decision making. They created fraudulent paper work to show they had control on these join venture companies. This is a pure fraud as they created agreements to satisfy auditors and try to hide the real facts. Audit: Both external auditors and internal auditors (and audit committee) failed to detect any of the accounting issues. It could have been missed as accounting standards in many countries is different. External auditors, even though they may all be of Deloite, of one country only audits that country statements, so they may not be familiar what might be happening in other parts of the company. However, the Royal Ahold parent company auditors are responsible to have an oversight of companywide audit and should be held responsible for over -looking these fraudulent transactions. Internal audit and board’s audit committee failed to detect any of the misrepresentation either. On top of that in Netherlands there were two boards (Governing Board and Supervisory Board) and both boards weren’t able to detect or raise red flag on any of these problems and misrepresentations. Management having two sets of paper work with JV (Joint Ventures) without coming under the investigation shows incompetency of audit functions. Governance / Audit Structure The way the governance and audit structure was laid out at Royal Ahold, there were five different committees and entities were responsible to review accounting and financial controls and practices that could have asked questions and raise concerns (red flags). They were: The governance board, supervisory board, the audit committee, internal audit department and the external auditors. Each should have independently reviewed management controls and financial statements and raise concerns and issues. Raising Red Flags In my opinion, the governance structure and audit committees and external auditors were sufficient enough to handle or uncover such fraudulent activities had they been critical, created the right controls, empowered the internal auditors and obviously asked the right questions while reviewing the financial statements and other management documentation. As part of board, I would have asked questions following questions, or have acted when seen abnormalities. This would have helped me in identifying issues, concerns and in raising red flags on the Royal Ahold 1999-2001 financial statements. Also some of them are related to mid 90’s management attitude and strategy. Strategy and Growth Approach: The target of meeting 15% year-over-year in sales, especially in US in 2000-01 when economy was in recession should have alarmed the board and internal auditors. They should have investigated how the sales targets are being achieved. It is not easy to meet 15% sales in US food industries under this economic climate. This may have led the management behaviour in meeting the targets. As board member, I would have asked CEO to explain the strategy of rewards and recognition, mainly on top line bonus as it is a wrong choice. (I have personally worked at Compaq during 1999-2000 and have seen the issue of top line bonus and commission on sales. This led to Compaq’s continued crises and eventually it was bought by HP in 2003). I would tried to influence the board and hence the CEO to consider a more comprehensive rewards strategy. From my experience bonus strategy plays a big role in company culture. The other important factor that develops the management attitude is what CEO likes to hear. It seems Royal Ahold’s CEO, Cees van der Hooven, wanted to hear from all his subsidiaries and Joint Ventures that sales targets are being met every quarter. I would have influence the management style and company culture to be protected by changing (or diluting) this approach. CEO’s attitude and leadership style was one of the leading cause of Royal Ahold demise. His aggressive acquisition approach would have resulted in integration issues within the company. As board member, I would have asked the management plans on integration and how culture of the organization would not be negatively impacted. I would have created the board HR committee to influence management not to allow the negative impacts on the organization culture, integration within the organization, rewards and recognition be such that it would not have allowed the culture to deteriorate. The cultural issues, integration issues and above all greed among the management team members was uncontrolled in Royal Ahold’s accounting scandal. The growing number of acquisitions was extremely risky initiative; the corporate strategy was carrying high risks at all operational levels including controls, integration that may have led to frauds. Also, this had potential to be a reputation risk as well. In my opinion, board should not have approved such an aggressive corporate growth strategy. Consolidated Statements Although Royal Ahold ownership is less than 50% in some Join venture companies, they showed controlling interests in some companies. To me an agreement paper presented by the management is not sufficient. I would have asked the significance of Royal Ahold’s control and ask management which areas of Joint Venture management we have been making decisions on. If we are making decisions, even though we don’t own more than 50%, what are the risks associated with these decisions. As a board member, I would have understood how Royal Ahold has influenced the Joint Venture management. I would have also asked audit committee to understand the management structure of Joint Ventures. Taking a step further, assuming that 20% share would have given Royal Ahold right to appoint a board member on Joint Venture’s Board, I would have understood from the Joint Venture board member (through Royal Ahold appointed director) how the joint ventures decision making process really works. By asking such questions and efforts in trying to understand from the board and management of Joint ventures how the organization is actually structured and working. If Royal Ahold does not have a controlling authority on the acquired company, the company financial statements cannot be consolidated. Royal’s accounting practice o f consolidation will first bump up the revenue numbers. This was purposely done to beef up the revenue figures. This may have resulted bigger bonus for the senior management. Also, the balance sheet would be more attractive to the shareholders (and potential shareholders). To explain this here is simple illustration: Parent Current Assets Assets Total Assets Current Liabilities Liabilit ies Total Liabilities Shareholders Equity Debt to Equity Ratio Subsidiary Consolidated 3 7 10 1 3 4 4 10 14 4 1 5 3 7 0. 5 1. 5 3. 5 8. 5 3 2. 5 5. 5 2. 3 0. 6 1. 5 As illustrated in the hypothetical example above example, by consolidat ion the debt looks more attractive then it would have looked otherwise in the parent company. The debt to equity shows debt-to-equity of ($1. 5:$1) when consolidated, and ($2. 3:$1) when not consolidated. Similarly, other financial ratios would have looked good with consolidation of financial statements. The consolidation resulted in better financial statements; hence Royal Ahold used this approach. In actual, this should not have used consolidated method. As per the accounting text, Parent when owns an investee company’s 20%-50% should use the equity method of accounting. The equity method would have mainly impacted the earnings on the Income statements. The net income, however, would result the same earnings without changing the revenue numbers. On the balance sheet side, the equity method would only show true â€Å"Assets† number, as per the investments made in the JV by Royal Ahold. The financial ratios (e. . debt to equity or quick ratio etc. ) will not be as appealing as it started to sound with consolidated statement. Risk Controls: As board member, I would have influenced the entire board not to approve the corporate strategy as a budget was too aggressive and unrealistic. As pointed out above, realistic targets are extremely important. If strategy is too aggres sive and corporate culture is to share good news with the CEO the unrealistic budgets targets may lead to malpractice and improper (fraudulent) activities. In my opinion it is supervisory board obligation to approve only realistic targets. The corporate strategy in the growth years of mid ‘90s was too aggressive. This has done part of the damage in the culture and mind-set of the senior management that 15% growth is not unrealistic and has created an attitude to meet these targets in any way possible. This encouraged the wrong doings and possible frauds that started to take place in 1999-2001. Although it is not very clear from the case, were there any wrong doing (or activities) in 199798, but in the hind-sight, it appears that some of the issues must have started or existed in that time as well. The board and senior management should actively work on identifying risks to the organization and work on strategies that mitigates the risks. A key here is to have a formal risk assessment process on an annual basis. The assessment is under supervision of the board and results are reviewed by the board. Inventory 2001 balance sheet shows 20% rise in inventory, I would have raises some concerns that might have uncovered the management improper decision to order such high quantity of stocks to get the manufacturing rebates. Accounts Receivable In 2001, accounts receivable increased by Euros 605M i. e. 21. 2%. I would have asked questions around the assumptions and likelihood receiving the Account Receivable. More importantly, who owes this receivable to Royal Ahold. This may have been due to the manufacturing rebates included in the accounts receivable. If so, it would have led to the whole issue of management aggressive behaviour on ordering stocks to get rebates. It might have opened up the entire incorrect accounting treatment of manufacturing allowances and rebates. General Reserve Royal Ahold is showing consistently on their balance sheet a general reserve item that is over 5 to 6 Billion euros (approx). This appears to be high, I would have asked on what assumptions these provisions are made. It might have uncovered some of the assumptions that are being made by management. This general reserve is in addition to the 1. 5B euros in other provisions. This is should have been a red flag. Other Recommended Preventive Measures Besides the concerns and red flags mentioned above, I would have raised based on what I would have seen. I would have also taken following measures to prevent this from happening. Incentive (Bonus) Structure: The bonus structure cannot solely be based on financial goals. The bonus structure has to base on non-financial goals as well. Within financial goals all aspects to kept in mind when designing the appropriate incentive program. The increase in working capital (inventory, receivables, payables etc. ) is kept at minimum or in line with the net income. The increase or decrease in working capital beyond the realistic proportion to earnings should be discouraged through the incentive program as well. Audit Committee Structure: The case presents the audit committee and internal audit department weaknesses and signs of some of their inefficient processes and competency issues. Besides reviewing the audit committee performance, monitoring and control issues were also been found. I would have influence the audit committee to have a metrics of internal audit department. This may have encouraged more objectivity of audit functions and may have aligned management controls to the overall governance issues. It is the responsibility of audit committee that internal and external auditors have an open communication. Besides audit of the current financial statements, and review of controls and structures, the auditors must identify areas of improvement in controls and work on action plan in improving the organization controls and monitoring process. HR Committee As mentioned above, I would have asked board to create HR committee that takes an active role in setting the controls in the organization. The committee should take an active role in reviewing the annual compensation and objective setting. Committee should have taken an independent review of key hiring decisions and management capability on integration and organization culture. Some key decisions in this area should only made by committee after consulting with the management, audit and board’s general direction. IT System: I would have asked internal audit committee to ensure all IT systems are audited to ensure proper controls are in place. Usually, in fraud IT systems controls could have loop holes or management may have the ability to bypass some of the checks and balances and/ or segregation of duties. Consistency in financial Statements Royal Ahold had companies in four different continents and in many countries. Financial statements presentation and laws across the globe are not consistent. US GAPP, Netherlands GAAP, IFSA and others are not standard across all countries where the Royal Aholds companies are in operation. While the fact makes a challenge for the board, it doesn’t give them an excuse of letting things slip. The board should have worked out with internal and external auditors in creating a minimum corporate standard across the group of companies. It is the flaw in governance and leadership to over-look this fundamental point.