Organizational Theory Cosmopolitan Beverage Company Started Out Term Paper

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Organizational Theory

Cosmopolitan Beverage Company started out a business as a producer of non-alcoholic beverages concentrating in carbonated products like sodas. It was organized and formed on June 2000. Cosmopolitan or Cosmo Soda for short, targets market of all generations and walks of life with refreshingly, bubbly and addicting taste of Cosmo Soda. Presently, the Company has three plants located nationwide for greater service and faster product distributions and expanded its product to non-carbonated drinks also, such as juices and ice teas of different flavors.

Being a minor player in this field and considering the presence of established name of two leading beverages, Coke and Pepsi, the Company found it difficult to penetrate the market. However, with a positive note and confidently carrying a very tasty formula of our product, we were certain that we will surely have a share of that fame. With that in mind, we created a Mission of "To be known, visible and desired by customers and consumers" and a VISION of "To be a Beverage of Choice!" With that in mind, we proceeded with caution on the development and organizing the Company which would take the nation by storm.

The first couple of years of business had been very challenging. The Company, especially the Sales people had to work doubly hard to open up a single store. Carrying no name and with a young face in the market, most were very accustomed and comfortable with the taste of existing beverages products. We barely had a pea-size-close to non-existing market share.

In addition, we had no clear-cut Organizational Structure and Company policy. Starting a business with a very tight financial capacity, the Company had to suffice with minimum number of employees. The finance team merely consisted only of three personnel: the Finance Manager/Controller, and three finance staff in-charge of purchasing tasks, payment to creditors, collection from customers, recording financial transactions and preparation of financial reports. The Human Resource Department is composed of Manager and one staff in-charged of hiring personnel and preparation of payroll to be forwarded to finance, which will be in-charged of distribution to employees. The Marketing Department is also composed of two personnel, also in-charged of marketing strategies, promotions and advertisement. The Manufacturing Department is composed of one production manager who is in-charged of supervising production area which was mainly being ran by casual employees to avoid expenses, particularly in the field of salaries and employee benefits. The production manager also oversees that all products produced are of standard quality and those being distributed are free from gross foreign matters toxins. Sales Department, meanwhile, is composed of ten personnel, one sales manager and the rest are Account Development Sales Representative, tasked to visit stores, introduce, and open stores and sell and distributions our products.

With a limited number of personnel, one can only do so much. We were undermanned with a bulk of transactions to deal with. We knew that we were underdog and had to work three or five times more compared to establish Companies.

Considering that we are starting out, we cannot afford computerized system in recording transaction and was forced to accomplish in manual system. The employees had to share one or two units of computers, the rest are using typewriter or manual writing. With the se-up plus no clear-cut Company Policy, the organization is set-up with high opportunity for connivance and fraud. During one of the yearly audit for preparation and presentation of financial reports with Auditor's Opinion, auditors uncover that there were dubious transaction which was identified as repeatedly use of receipts to claim reimbursements. We lose about a thousand dollars with this anomaly.

To top it all of, there were issue of hundreds of cases produced and ready for distribution missing. Manager had been very careless in supervising and cost the company hundreds of thousands dollars over a period of six months. The manager had been lax and reportedly had a record to have taken home cases and cases of Cosmo products for consumption and selling for personal gain.

During one of my unannounced warehouse visits, I personally witnessed casual employees drinking the products direct from manufacturing line. Also, casuals who were assigned in their respective location to ensure products are properly and correctly manufacture freely roam the area or take a break without informing his supervisors, thus, leading to another major disaster: product leak. Apparently, one of the casuals who was supposed to watched the products, specifically in the production line where transfer and pouring of soda from the machine to bottle, was busy in preparation of the after office and was already combing her hair, ready to leave on the dot. As a result, a bottle of empty soda was unseen contaminated with hair. The said products were forwarded for delivery to customers and consumers. Consequently, a Customer filed a case against us, which further took us down the drain, cost us a lot of money and even lower market share.

On top of it all, aware that cost of television and radio advertisement is very costly, these form of marketing strategy became very limited and had to settle for one or two commercials a day in two of the mostly watched television stations or heard radio stations. We focused more on distribution of fliers and product sampling.

With numerous wrong turns and careless accomplishments of jobs, the Company was nearly on the edge of the cliff. It was literally falling. The executive officers continuously met to uplift and improvement of Company practices and strategies.

To start it off, the executive officers decided to create Company Policies for standardized practices and procedures. All department heads were called to a meeting to discuss this issue. Each department was to prepare walkthrough process and tasks. This will be the basis of analysis in the formation of policies. A Consultant was hired to oversee that the policies embodies control to ensure risks are properly managed and control was set up to safeguard Company assets, financial reports are reliable and has integrity, and at the same time ensure compliance with policies, plans, procedures, applicable laws and regulations.

Also, clear-cut organizational chart was shaped. Finance Manager would be directly reporting to Chief Finance Officer, Production Manager would be directly reporting to Logistics and Manufacturing Director, and the rest on the assigned executive officers. I, on the other hand, would personally administer and watch over that these were accordingly distributed.

To ensure that segregation of duties were properly executed, the executive officers weigh on hiring additional employees or creating a system that would give limited access to employees, depending on their jobs and duties. With the financial reports and analysis, the officers decided to do both, on the following conditions: One is only those departments with great risk of manipulation will be approved for additional manning; Second, an in-house computerized system will be built to adequately determine which controls should be focused and to make it more personalized for the Company; and Third is limited access through password use would be given to employees, depending on his/her scope of job. Although, this will cost a lot, the officers greatly understand its long-term benefits. The Officers approved on hiring additional employees to finance department and approved on the creation of Internal Audit Department to ensure compliance on policies and risks are sufficiently managed. The Internal Audit Department would be directly reporting to me, Founder and Chief Executive Officer of the Company to unbiases.

The greatest challenge encountered so far was the file case against the Company on the strand of hair found on the bottle of soda. The Customer agreed on the settlement not to pursue the case and it was very unfortunate and costly on the Company's part. It was a hard lesson learned and the Company did not waste time to correct the mistake made. The Production Manager was forcedly resigned and a new personnel with much experience on the department was hired. Also, included in the manufacturing and production policy was strict compliance on no leaving the post unless a reliever was present and hairnets and hand gloves are required upon entering the production are. The Production Manager or Supervisor assigned will be randomly roaming the production line to ensure this was properly carried out, among others. Quality Control Representative was also hired to perform test of finished products and ensure no unwanted foreign matters were inside the bottle and only best and acceptable standard products are produced and distribute. Also, QC Representative was in-charged of testing raw materials to ensure only raw materials of high standards were purchased.

To address improvement of marketing strategy, the officers approved aggressive marketing strategy. Despite minimal television and radio advertisements, the Marketing department made up with almost 80% visibility on school affairs, company and event sponsorships. Marketing and Sales Department joined forces to penetrate the market. They gave out concessions to those stores who would permit selling our products. In addition, marketing supports and additional discounts were continually given for those who… [END OF PREVIEW]

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