Internal Controls Proposal free essay sample

Consulting Firm Inc. has been hired to review Auto Parts Inc. company functions. The consulting firm reviewed the cash, sales, accounts receivable, inventory and production functions. Based on this review, the consulting firm has prepared a proposal of internal controls for each function of the company. This proposal will give a background of each function and a list of the proposed internal controls. Cash Auto Parts Inc. manufactures and sells auto parts to car dealerships as well as the general public. Cash receipts come in the form of credit card, electronic payments, cash and check. Very little cash or check is received through the mail however there may be one or two orders through the mail. The company receives cash at their store location from customers and electronic payments from the dealerships on a daily basis. The sales department is responsible for sales to the dealerships. Cash is not received at the manufacturing plant. We will write a custom essay sample on Internal Controls Proposal or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page However there is a petty cash fund at the plant for incidentals. Cash disbursements are made to purchase supplies and inventory and for daily operations of the plant and store. In order to prevent errors and fraud, the following controls have been proposed for the cash receipt and disbursement process. Cash Receipts 7 When cash/checks are received in the mail, two people should open the mail. 8 All checks should be endorsed immediately. 9 A list of the cash receipts should be prepared immediately. 10 All cash/checks will go to the cashier’s office where the deposit slip is prepared. 11 Deposits are made daily by 2pm. Any cash receipts that come in after that time is kept in a locked safe until the next day. The supervisor and the lead cashier are the only persons with the key. 2 The list of the cash receipts and remittances will be sent to accounting to be recorded. 13 For receipts at the cash register, the drawer will be counted at the beginning of the cashier’s shift and again at the end. There will be $100 kept on hand in the drawer for change. 14 The lead cashier or supervisor must be present when the drawer is counted. The cashier will co mplete the form detailing how much cash, credit card and checks are received. This should be compared to the register tape. Both the cashier and supervisor must sign off on the form. 15 At the end of the day, once the drawer is ounted, all cash is locked into the safe until the next day when the deposit will be prepared and sent to the bank. 16 Once the deposit is made, a copy of the slip from the bank should be compared to the cash receipt and remittance list and the general ledger by accounting to ensure all of the receipts were deposited. 17 Bank reconciliations shall be prepared monthly by an employee who does not perform any of the other above functions and reviewed and approved by the supervisor. This should be prepared no later than five days after the bank statement is received for the month. 8 All electronic payments received from dealership orders must be compared to the customer accounts each month once the bank statement is received. 19 All persons handling cash should b e bonded. Cash Disbursements 20 Cash disbursements must be authorized by the supervisor in accounts payable. 21 There must be an approved purchase order, invoice and receiving report before payment can be authorized. 22 Payments over $10,000 must have two signatures from persons in the cash disbursement office that are authorized by the board of directors. 3 Pre-numbered blank checks will be locked up in a file cabinet in which only the authorized signers have access to it. 24 The accountant will record journal entries for all cash disbursements. 25 Invoices shall be marked paid to prevent double payment. 26 Bank reconciliations will be performed no later than five days after the bank statement is received for the month and reviewed and approved by the supervisor. 27 For the petty cash fund, any disbursements from this fund must be approved by the manufacturing plant supervisor. The money shall be locked in a safe. 8 Employees who use petty cash must turn in all receipts. 29 There w ill be no more than $1000 kept for petty cash at the plant. Sales Sales are the driving force of a business and must be accurate and reliable for the company to succeed. The sales cycle starts with a customer request for parts and sets in motion a sequence of procedures in which internal controls are necessary to provide accurate information for the financial statements. The controls include separation of duties, proper authorization, adequate and pre-numbered documents, monthly statements, and internal verification. The following controls are suggested for sales: 30 Upon receiving a customer order the sales person will search the database for the correct customer number which will pre-fill the shipping information as well as the negotiated pricing for that customer. They will also enter their sales associate number for tracking of sales. 31 If the customer is a new customer the sales person will forward the information on to the sales manager for price negotiation and credit authorization. Once this is complete the sales manager will enter a new customer file with the negotiated pricing and credit limit. The sales manager will return the order authorization to the sales person for order entry into the system. 32 The sales person will enter the order into the sales system generating a pre-numbered sales order acknowledgement. 33 The sales order acknowledgement will be sent to the customer and the shipping department. 34 The shipping department manager will review the order, checking to make sure stock is available to fill the order. 35 The shipping department manager will generate a packing list based on available stock and forward on to the shipping clerk to fill the order from stock. 6 The shipping clerk will notate the packing list as to the exact quantity being shipped, initial it and return the document to the shipping manager. 37 The shipping manager will review the document and if discrepancies are found will physically check the shipment for accuracy. If accurate the shipping manager will approve the packing list marking the date of shipping, send a copy back to the shipping c lerk for shipment, attach a copy to the order acknowledgement and send back to the sales department. 8 The sales clerk will enter the shipment into the computer to generate a pre-numbered invoice which documents the terms of the customers negotiated purchase agreement and the shipping date. 39 At the end of each day the sales invoices are returned to the sales manager who checks the invoices for accuracy, double checks the pre-numbered invoices against the sales transaction log for the day, and signs off on the transactions. 0 If sales returns are authorized a return merchandise authorization number should be issued to the customer and authorized by the sales manager, who handles customer complaints. 41 When the merchandise is received, a pre-numbered receiving report will be issued and the receiving clerk will sign and date indicating the receipt has been made. 42 The receiving report will be entered into the computer system by the sales clerk and a pre-numbered credit memo will be issued. A copy will go to the sales manager for review of correct quantity and correct pricing from the original invoice. 3 If commissions are involved, the sales figures will need to be checked by the sales manager and will be released for payment once accounts receivable shows the invoice has been paid. Accounts Receivable (A/R) The essential activities in the revenue and collection cycle consist of receiving and processing customer orders within the credit granting, delivering goods to customers, billing customers and coding for accounts receivable, and collecting and depositing cash received from customers. The company needs to consider various controls in this department because the cycle can be very vulnerable to fraud. Some of the most fraud schemes in accounts receivable are: Lapping that can happened when many payments from customers are received; Fictitious receivables that are usually set up to mask fictitious sale by recording a sale trough a receivable account that never get collected, and eventually written off; Improper posting of credits as return, discounts, or written- offs that can be posted in a customers account to disguise a fraud Procedures to prevent any of those fraud schemes consist of: Detailed control that include comparison of the checklist and the records to customer’s credit accounts on the daily posting to ensure that the payments are applied to the correct customers. This procedure will test the accounts receivable lapping to find the existence of credits given to customers for whom no payments were received. Verify the accurateness of customer accounts balance by sending monthly current statements to customers to identify if any discrepancies exist between the acco unting records and customer records. Reconciliation of customers accounts in a period basis. The transaction must be recorded only when the final invoice is issued to the customers which can be consider as a backup for each account. To enhance the controls for the accounts receivable cycle, the company should have a segregation of duties. Recommendations for the company to consider include: 44 Employees responsible for issuing and authorizing credit limits should not have the ability to record adjustments to customer accounts. 45 Access to modifying sales pricing should be restricted to the employee responsible with accounts receivable without the approval of his/her manager. 46 Employees who have the ability to modify the accounts receivable balance should not receive payments. 47 Credit adjustments need to be reviewed by a supervisory-level employee. 48 Employees responsible for collections should not have access to customer payments. Inventory Inventory is an area where fraud may occur and oftentimes, go unnoticed for long periods of time. Conducting inventory counts on a regular, consistent basis will help in detecting potential errors, miscounts and misstatements concerning inventory values. Misstatements in inventory can cause false representations on the financial statements. The following checklist of controls should be used to minimize areas vulnerable to fraud with respect to inventory observation and counts. 49 A listing of individuals responsible for taking the physical inventory counts should be supplied. These individuals should remain independent from the acquisition and procurement departments to prevent false counts. Ideally, an outside firm or a supervisor from the accounting department should conduct these counts. 50 The date and time(s) of the inventory counts should be recorded. Many times, inventory counts take place over a period of days and it is imperative to record when counts occur to match up with the values in the inventory system at that given time. 51 Inventory counts will be recorded on a preformatted spreadsheet that details each item that is typically in inventory that includes a description of the item, model number (if applicable) and measurement of quantity (for example: each, dozen, gross, etc. ) Additional columns will be provided to manually write in the quantity counted during the inventory count. Additional lines are provided at the end of the spreadsheet to identify items not preprinted on the listing, but observed in the inventory count. 2 Obsolete and/or worn items will be recorded on a separate spreadsheet, similar to the one used for counts and items shall be documented and removed from the shelves for disposal or return to manufacturer. 53 During inventory counts, the plant will suspend operations to prevent any items from moving. Counts should occur after production and sales hours so as to not impede regular business and provide the most efficient inventory counts. 54 In the event that counts take place during business hours, any employee that needs to remove a part that is scheduled for a count should document the item being removed from storage as well as notify the supervisor in charge of the count. If goods are received during the counts, these items shall be set aside and entered into the system after the count is completed. 5 Upon completion of all counts, data from the preprinted spreadsheets will be entered into a master spreadsheet for comparison against actual numbers on hand as per the inventory tracking system. 56 Items that do not match up will be counted again and any variance should be documented, researched and corrected in the inventory system by a manager. Production The management team of Auto Parts Inc. determines the production of parts from analyzing the sales forecast. Management will then create the production plan. Production work orders are then created to build the required parts. The production plan will provide general information to auditors for a complete understanding of production of a particular part, the production work order and inventory plan provide the details needed to complete the audit. Both documents list details of raw materials, approval for requisition of materials and labor. The production work order is the tracking instrument which will follow the inventory through the production cycle and requires signatures from each of the different staging areas. Completed production work orders are recorded in the production report for the Cost Accounting Department. Production Risk and Controls In production, parts are built on work orders. The each work order will designate the desired of parts needed to build `the product was well as the amount of product needed. The raw materials are pulled form inventory and placed in a kit for the build. As production builds the product, each part needs a serial number and counts for the inventory records 57 Production orders will contain list of material and quantities 58 Requisition orders will move raw materials in to production 59 Production orders will be approved by production planner/schedule 60 Material requisitions will be sent to coast accounting department with signatures of production coordinator material inventory keep. Requisition order will be compared to production order. 61 Employees will tack their time for each project. Time will be tracked on time card with product cost accounting will reconcile labor costs associated with production orders from pay roll department. 62 Production reports and completed work orders will be reviewed by quality control department to complete the work order. 3 Production Supervisor will need to verify final count of finished product. Inventory control will entered production into inventory records Conclusion Team A consulting has prop osed the above listed internal controls for the different functions of Auto Parts Inc. in order to help prevent and detect errors and fraud. It is also a good idea to have an inspection periodically to ensure the controls are operating as effectively. If these controls are implemented, this should help the company as well as an audit run more efficiently. Reference Louwers, T. , Ramsay, R. , Snason, D. , Strawser, J. (2007). Auditing and assurance services: A look beneath the surface (2nd ed. ). New York, NY: McGraw Hill/Irwin.

September 11 2001 essays

September 11 2001 essays Every single person in the world has been affected by Tuesday, September 11, 2001. This event will live long in our memory, both those who witnessed the unspeakable horror, those who watched it and cried from afar. Our children's children will hear of this day in future history classes. May we never forget, and may we keep this day, the events and the tears in our minds, our memory and our hearts and take them with us as we carry on. May we always remember this day, and may we find peace in this beautiful world created by god. May this never happen again. Teach your children well. Offer a helping hand, where just a few months ago, you would have just continued on your way. Absorb your spouse's hug, kiss, and your life together; breathe in that moment; today might be their last day. Give your child a cheery, loving smile and hug, make sure they know you love them. Today might be their last day. Call your family; tell them what you have been putting off. Today might be their last day. Stand quietly, peacefully in the wind, listen to the birds, and watch the sun set. Today might be your last day. Treasure each day like it's the last day. What a beautiful sayings. This is a part of an article, which has been edited slightly and found with pictures at (packrat-pro.com/911.htm) check it out; its neat. The reason why this part of the article was put in this report is because it relate to the song for this report. The song chosen is by Michael Jackson Heal the World. It also shows eminent examples of emotions on how this day should be remembered as. Plethora of people thinks of this day as a tragedy; as a day in which a throng of terrorist attacked and destroyed Americas unity. American citizen; dont think like that, lets stand together as a nation and show the terrorists that we are intrepid and nothing could break us apart. Please do not think of revenge; r ...

Stephen Decatur, Naval Hero of the War of 1812

Stephen Decatur, Naval Hero of the War of 1812 Stephen Decatur (Jan. 5, 1779–March 22, 1820) was a U.S. naval officer who became famous for his exploits during the  Tripoli War. He later served as a heroic commander in the  War of 1812. He was killed in a duel by a fellow officer whose court-martial he had participated in years before. Fast Facts: Stephen Decatur Known For: Naval exploits during the Tripoli War and War of 1812Born: Jan. 5, 1779 in Sinepuxent, MarylandParents: Stephen Decatur Sr., Anne PineDied: March 22, 1820 in Bladensburg, MarylandSpouse: Susan WheelerNotable Quote: â€Å"Our country! In her intercourse with foreign nations may she always be in the right; but our country, right or wrong!† Born at Sinepuxent, Maryland, on January 5, 1779, Stephen Decatur was the son of Captain Stephen Decatur, Sr. and his wife Anne. A naval officer during the American Revolution, Decatur, Sr. had his son educated the Episcopal Academy in Philadelphia. Graduating, young Stephen enrolled at the University of Pennsylvania and was a classmate of future naval officers Charles Stewart and Richard Somers. At the age of 17, he secured employment with the firm of Gurney and Smith and aided in securing timber for the keel of the frigate USS United States (44 guns). Early Career Wishing to follow his father in the naval service, Decatur received the aid of Commodore John Barry in obtaining a midshipmans warrant. Entering the service on April 30, 1798, Decatur was assigned to United States with Barry as his commanding officer. He sailed aboard the frigate during the Quasi-War and saw action in the Caribbean as United States captured several French privateers. Demonstrating his skill as a gifted sailor and leader, Decatur received a promotion to lieutenant in 1799. At the end of the conflict in 1800, the U.S. Navy was downsized by Congress with many officers discharged from the service. First Barbary War One of thirty-six lieutenants retained by the U.S. Navy, Decatur was assigned to the frigate USS Essex (36) as first lieutenant in 1801. Part of Commodore Richard Dales squadron, Essex sailed to the Mediterranean to deal with those Barbary states that were preying upon American shipping. After subsequent service aboard USS New York (36), Decatur returned the US and took command of the new brig USS Argus (20). Sailing across the Atlantic to Gibraltar, he turned the ship over to Lieutenant Isaac Hull and was given command of the 12-gun schooner USS Enterprise (14). Burning Philadelphia On December 23, 1803, Enterprise and the frigate USS Constitution (44) captured the Tripolitan ketch Mastico after a sharp fight. Renamed Intrepid, the ketch was given to Decatur for use in a daring raid to destroy the frigate USS Philadelphia (36) which had run aground and been captured in Tripoli harbor on October. At 7:00 PM on February 16, 1804, Intrepid, disguised as a Maltese merchant ship and flying British colors, entered Tripoli harbor. Claiming that they had lost their anchors in a storm, Decatur asked permission to tie up alongside the captured frigate. As the two ships touched, Decatur stormed aboard Philadelphia with sixty men. Fighting with swords and pikes, they took control of the ship and began preparations to burn it. With combustibles in place, Philadelphia was set on fire. Waiting until he was sure the fire had taken hold, Decatur was the last to leave the burning ship. Escaping the scene in Intrepid, Decatur and his men successfully evaded fire from the harbors defenses and reached the open sea. When he heard of Decaturs achievement, Vice Admiral Lord Horatio Nelson called it the most bold and daring act of the age. In recognition for his successful raid, Decatur was promoted to captain, making him, at age twenty-five, the youngest to hold the rank. For the remainder of the war, he commanded the frigates Constitution and Congress (38) before returning home at its conclusion in 1805. Three years later he served as part of the court martial that tried Commodore James Barron for his role in the Chesapeake-Leopard Affair. In 1810, he was given command of United States, then in ordinary at Washington DC. Sailing south to Norfolk, Decatur oversaw the refitting of the ship. War of 1812 Begins While in Norfolk, Decatur encountered Captain John S. Garden of the new frigate HMS Macedonian. During a meeting between the two, Garden wagered Decatur a beaver hat that Macedonian would defeat United States should the two ever meet in battle. When war with Britain was declared two years later, United States sailed to join Commodore John Rodgers squadron at New York. Putting to sea, the squadron cruised the east coast until August 1812, when it put into Boston. Returning to sea on October 8, Rodgers led his ships in search of British vessels. Victory Over Macedonian Three days after departing Boston, Decatur and United States were detached from the squadron. Sailing east, Decatur spotted a British frigate on October 28, approximately 500 miles south of the Azores. As United States closed to engage, the enemy ship was identified as HMS Macedonian (38). Opening fire at 9:20 AM, Decatur masterfully outmaneuvered his adversary and methodically pummeled the British ship, ultimately forcing its surrender. Taking possession of Macedonian, Decatur found that his guns had inflicted 104 casualties, while United States had only suffered 12. After two weeks of repairs to Macedonian, Decatur and his prize sailed for New York, arriving to a massive victory celebration on December 4, 1812. Refitting his ships, Decatur put to sea on May 24, 1813, with United States, Macedonian, and the sloop Hornet (20). Unable to escape the blockade, they were forced into New London, CT by a strong British squadron on June 1. Trapped in port, Decatur and the crew of United States transferred to the frigate USS President (44) at New York in early 1814. On January 14, 1815, Decatur attempted to slip through the British blockade of New York. Loss of President After running aground and damaging the ships hull leaving New York, Decatur elected to return to port for repairs. As President sailed home, it was attacked by the British frigates HMS Endymion (40), HMS Majestic (58), HMS Pomone (44), and HMS Tenedos (38). Unable to escape due the damaged condition of his ship, Decatur prepared for battle. In a three-hour fight, President succeeded in disabling Endymion but was forced to surrender after sustaining heavy casualties by the other three frigates. Taken prisoner, Decatur and his men were transported to Bermuda where all learned that the war had technically ended in late December. Decatur returned to the United States aboard HMS Narcissus (32) the following month. Later Life As one of the US Navys great heroes, Decatur was immediately given command of a squadron with orders to suppress the Barbary pirates which had become active again during the War of 1812. Sailing to the Mediterranean, his ships captured the Algerian frigate Mashouda and swiftly compelled the Dey of Algiers to make peace. Using a similar style of gunboat diplomacy, Decatur was able to compel the other Barbary states to make peace on terms advantageous to the United States. In 1816, Decatur was named to the Board of Naval Commissioners in Washington D.C. Taking up his post, he had a home designed for him and his wife, Susan, by famed architect Benjamin Henry Latrobe. Death by Duel Four years later, Decatur was challenged to a duel by Commodore James Barron for comments he had made regarding the latters conduct during the 1807 Chesapeake-Leopard Affair. Meeting outside the city at Bladensburg Dueling Field on March 22, 1820, the two squared off with Captain Jesse Elliott and Commodore William Bainbridge as their seconds. An expert shot, Decatur only intended to wound Barron. As the two fired, Decatur severely wounded Barron in the hip, however he himself was fatally shot in the abdomen. He died later that day at his house in Lafayette Square. Over 10,000 attended Decaturs funeral including the President, Supreme Court, and the majority of Congress. Legacy Stephen Decatur was one of the first national heroes after the American Revolution. His name and legacy, like those of David Farragut, Matthew Perry, and  John Paul Jones, became identified with the U.S. Navy.

Cultural Event Report Essay Example | Topics and Well Written Essays - 500 words

Cultural Event Report - Essay Example The museum is located on 5th avenue in Manhattan, New York. We visited the museum on 1st October 2011 during the morning hour period. On arrival to the museum, I was immediately perplexed and remained rooted to a beautiful statue by the of the entrance, which could only have been made by non other than Michelangelo. The statue was of King David with the right hand holding the thigh and the left hand touching his shoulder. Even Monica who does not easily get excited was awash with a big smile on her face not believing that a fellow human being could have done such a statue. The most beautiful site we visited was the Temple of Dendur located in Sackler wing of the museum. We learnt that the magnificent artifact was built during the Roman Period in the days of Augustus Caesar and transferred from Egypt to the United States in 1965. Two years later, it was given to The Metropolitan Museum of Arts. At the base of the temple are papyrus carvings that look like they are growing from waters. The image of the sun can be seen from the top of the gates. On the way in, are images of the vultures with their wings spread out making the scene totally scintillating that left us simply amazed. The image of the king offering sacrifices and holding scepters is seen between the walls that separate the sky from the earth. The gods Isis and Osiris are crowned and with some writings by their figures. The believe within the temple of Dendur is that if a couple make love there, they will never part ways until death. This was good news for Monica and I since we have marriage p lans in the future but that was saved for another visit. We also visited the section where American art collections are stored. The most exciting scene was that of George Washington and his soldiers crossing the Delaware. Being a passionate lover of Africa, we could not leave the museum without visiting the African Art site, and I must say,

Starbucks Marketing Research Paper Example | Topics and Well Written Essays - 1250 words

Starbucks Marketing - Research Paper Example In 1992, there was no focus on advertising and Labor force but with the growth of retail outlets, the company was still reluctant in increasing the Labor force, which is the company's major expense. Starbucks didn't spend any money on advertising. So, during the early 1990s, the company had no promotion. The only promotion made was through opening many retail outlets and boosting the sales promotion. 2. Starbucks has picked up an additional target segment of customers by 2002. Who were these customers What is Starbucks' position for this new segment relative to its position for its earlier customers What are the implications of this new target and position for Starbucks' marketing mix Starbucks positioning changed with the expansion in the target market. Starbucks established itself as a dominant specialty-coffee brand and its objective was "To become the most recognized and respected brand in the world." This was achieved through: Starbucks introduced a wide range of product variety including whole bean coffees, rich brewed coffees, Italian style espresso drinks, cold-blended beverages, premium teas, pastries, sodas, juices, sandwiches and salads. The product mix varied depending on a store's location and size. The biggest driver of company's growth was product innovation. New products were launched regularly and a new hot beverage was introduced during every holiday season. Brand name was establi... Starbucks introduced a wide range of product variety including whole bean coffees, rich brewed coffees, Italian style espresso drinks, cold-blended beverages, premium teas, pastries, sodas, juices, sandwiches and salads. The product mix varied depending on a store's location and size. The biggest driver of company's growth was product innovation. New products were launched regularly and a new hot beverage was introduced during every holiday season. Brand name was established and this again contributed to the position of the company. Starbucks had the Size advantage over its competitors and its goal was opening 15000 stores world wide. Service was the distinguishing factor and the employees were trained and empowered to provide good quality service, which was evaluated on service, Cleanliness, Product quality and speed of service criteria. Service innovations along with technology functionalities like T-Mobile HotSpot wireless internet service was an added advantage. Price Discounts were given at stores. Spilt drinks were replaced without any additional charge. Regular customers were given sample free drinks if they didn't have cash and provide cheque. Starbucks established itself as a premium-priced player in the market but service overwhelmed price in this aspect.Place Channels were used very effectively and Starbucks opened licensed stores world wide. Nearly 77% of the sales came from these stores. Starbucks also sold its products through non-company operated retail chains called Specialty Operations which accounted to about 15% of net revenues. Starbucks operated domestic and international licensed stores. Starbucks also had a joint venture with Pepsi-Cola to distribute bottled beverages. Starbucks had plans to open 15000 international locations. This will

Main Sources Of Resistance To Organizational Change Management Essay

Main Sources Of Resistance To Organizational Change Management Essay Change is inevitable for modern organizations and increasing rapidly in the world due to internal and external triggers (Refer to Appendix 1) (Buchanan and Huczynski, 2010). For survival, organizations must be able to anticipate change and keep reconfiguring themselves as it is critical determinant for their success although it has difficulty and challenges. Organizations that wait for an overwhelming mandate to engage in change efforts are very likely to be left behind and may struggle to survive (Lawler and Worley, 2009). For example, Nokia has already been through one successful change; turning itself from an unfocused conglomerate into a focused mobile phone producer in the 1990s. But, lack of accountability, poor leadership and complacency those came from mobile phone success has caused less competitive in the market due to customer transition from mobile phone to smart-phone (Riley, 2012). According to Nauss (1999), Jacques Nasser, Ford Motors CEO also argued that any business that is satisfied with the present state of affairs is deluding itself. Sitting still or moving at a snails pace is effectively moving backward. Organizational change must be based on intention and goal-oriented and come from within the organization to be effective (See Figure 1 and 2) according Cumming and Worley (Hellriegel, Slocum and Woodman, 2001).It also need very careful assessment of individual and organizational capacity for change since they are potential resistance to change. In this report, we will first discuss various causes for resistance to change from those who affected positively or negatively using Arthur Bedeians four common causes for resistance to change, Kotter and Schlesingers six practical techniques to overcome these resistances and Kurt Lewins 3 phase change management model. 2.0 Resistance to Organization Change Buchanan and Huczynski (2010) define resistance to change is unwillingness or an inability to accept or discuss changes that are perceived to be damaging or threatening to individual. Carr et al also claim that its significance can be measured by those affected perceive and react to it (Salawu, 2011). As a result, change efforts are often found resisted by individuals and groups overtly and covertly due to their negative perceptions to some extent. Hellriegel, Slocum and Woodman (2001) suggest a variety of sources of resistance in Figure 3 (Detail in Appendix 2). To overcome resistance to change, managers and employees must understand its reasons and sources. Arthur Bedeian cites four common causes for resistance to change (Buchanan and Huczynski, 2010). 2.1 Parochial self interest Individuals are so comfort and content with their current situation and they fear that any change in organization may threaten their vested interests. It is one of major reason that people resist organizational change. According to Desler (2004), there are 4 types of organizational change: its strategy, technology, structure and employees. Structural change requires reorganizing organizational chart involving replacing, dismissing or adding personnel (Salawu, 2011). When this situation comes, employees fear to lose their existing positions. E.g. Current Burmese government involves liberal and conservative. Reorganization needs for democratic change process. It is good and can improve the status of its people, but most conservatives fear reorganization as they think that it is a threat to their status quo and interests. For these reasons, Burmas change processes encounter resistance longer time than desired and resulted as a poor country. 2.2 Misunderstanding and lack of trust Buchanan and Huczynski (2010) suggest lack of understanding the reasons and consequences can create resistance to change because it might cost them more than what they will gain. Such misunderstandings most likely occur where there is lack of trust between manager and employees. My former Singapore based Japanese construction announced to his managers an implementation of a flexible 5 days work for all site staffs. No managers resisted because they were introduced the concept of that change in management meeting. Shortly after circulating announcement, various resistances arise from site staffs who do not understand and trust the meaning of flexible working days. One rumor is that they might need to work extra hours in the evening. They were not satisfied with management decision at the beginning. According to Kotter and Schlesinger (1997), only few organizations have a high level of trust between employees and managers. So, it is easy to develop misunderstandings when organizational change is introduced. If managers do not clarify them in time, this can lead to resistance. 2.3 Contradictory assessments Another reason people resist to change is evaluation of costs and benefits differently. According to Buchanan and Huczynski (2010), it is the result of poor communication and inadequate information that causes contradictory assessments. But such resistance to change may lead to constructive criticism and improved proposals to achieve better outcomes since people have different perceptions and knowledge. E.g. My previous project director of Construction Company was shocked by his design team members who made value engineering of structural column. Although this value engineering can achieve design requirement while saving cost, he thought that it can damage the companys reputation. So he didnt allow the design proposal submission to owners consultant. He had reorganized the design team immediately that caused resistance from the people involved. As a result, company lost two good designers and crippled the design team. Different people have different skills and knowledge that may lead to resistance. For the above case, design team has more skill and knowledge than director. And resistance resulted from reorganization will be good for companys future. Low tolerance for change Buchanan and Huczynski (2010) suggest that people respond to change and uncertainty in different ways. Some are more readily to accept and adapt to changes. Others may have a low tolerance to adapt to changes since they have different abilities compared to others. Drucker (2010) also argue that the managers are the major obstacle for organizational growth since they are unable to change their attitude and behavior rapidly to meet organizational requirement. It is the result of peoples limited tolerance that lead to oppose potential beneficial changes even they know that it is positive change. E.g. an engineer in my former construction company received a significant promotion due to expansion. New position required new skill set, relationships as well as loss of some satisfactory current situation. It made him uneasy to give up certain aspects of current situation and resist changing since his tolerance for change was low and he did not understand wisely the reason of change. 3.0 Overcoming Resistance Many managers underestimate not only the variety of ways people can react to organizational change, but also the ways they can positively influence specific individuals and groups during change ( Kotter and Schlesinger, 1997, p-454). E.g. Singapore construction industry has been unable to achieve better productivity due to past experience of managers who dont understand advantages and disadvantages of the methods which they are familiar. So, organizational change becomes managements responsibility. And coping resistance resulted from organizational change becomes the haunting question for todays manager because it determine the success or failure of organization (Martin, 1975). Kotter and Schlesinger identify six practical techniques for managing and overcoming resistance (Buchanan and Huczynski, 2010): 3.1 Education and Communication Education is one of most common way that communicates ideas to reconcile opposing views. Kotter and Schlesinger (1979) discuss that this program can be ideal when resistance is based on inadequate or inaccurate information and analysis especially if the initiators need the resistors help in change implementation. Afferson, M. (2010) argue that this program requires face to face communication to discuss sensitive issues since email or written notices are very weak at conveying and developing understanding. E.g. former Philips CEO, Timmer used this program to explain the future of Philips to his employees. As a result, its operating income has increased (Strebel, 1998). Moreover, Buchanan and Huczynski (2010) also highlight requirement of mutual trust to overcome misunderstanding. 3.2 Participation and involvement According to Buchanan and Huczynski (2010), it can reduce opposition and lead to employees wholehearted commitment if the managers who initiate this program address to their concerns. And it will provide employees a sense of belonging to successful implementing of change. E.g. Coch and French (1948) experimented to examine the efficiency and effectiveness of participation to overcome resistance to change involving: introducing by managers to employees, employees representative participation and all employees involvement. Based on their experiment, all employees involvement was the best for overcoming resistance. But Buchanan and Huczynski (2010) also highlighted that it is time consuming and will be useful if employees skill and knowledge has ability to cope the changes. 3.3 Facilitation and support Buchanan and Huczynski (2010) suggest facilitation and support can overcome resistance when it is caused by fear or anxiety. Such approaches include new trainings or simply listening or emotional support. According to Kotter and Schlesinger (1979), one rapidly growing electronics company devised this program for its employees to adapt frequent organizational changes. They employed four counselors to spent most of their time in talking, listening, educating and training to employees. 3.4 Negotiation and agreement It is another way to deal with powerful individuals or groups who create major resistance such as offering incentives to facilitate changes (Buchanan and Huczynski, 2010). But they also alerted that it may become expensive for change and take more time to negotiate. E.g. Former Burmese military general have strong power to resist political reform in Burma. Current government has to negotiate with them to reach an agreement for successful change such as protecting their interests. 3.5 Manipulation and co-optation It involves covert attempts to sidestep potential resistance. Management puts forward proposals that appeal to the specific interests of key stakeholders. This information is selective, emphasizing benefits and playing down disadvantages. Co-optation involves giving key resistors direct access to the decision-making process, perhaps giving them well-paid, high-status management positions (Buchanan and Huczynski, 2010, p-573). E.g. A local manager in my former Japanese Construction Company invited Japanese manager to analyze one missing item in the design. Due to busy schedule, he was unable to do proper analysis. It limited his influence on the analysis. But his commitment was subsequently very important during discussing with Japanese director. Generally, he did not like someone trying to make changes. After discussion with Japanese manager, he did not try to block the change. 3.6 Implicit and explicit coercion Although many researchers advocate supportive approaches to overcome resistances, managers have to deal with resistance coercively such as firing or transferring to facilitate change. Buchanan and Huczynski (2010) discuss such situations as where the target group is profound disagreement, has little chance of shifting their ground, and the speed is essential for survival. But Kotter and Schlesinger (1979) argued that using coercion is risky because people will resent forced change inevitably. 4.0 Conclusion Strong resistance to change may root deeply in some organizations, but change has become inevitable for todays modern organizations in fast changing business environment for survival. In Figure 1, effective change management program should be implemented properly by the managers who understand the firms culture to facilitate the change process while protecting the interests of affected person. In this report, we applied Kotter and Schlesingers approaches to manage change. Since these approaches have their limitation, they may not be likely to be effective under all conditions and circumstances. There are many prescriptive models or approaches for successful change. In reality, appropriate approaches can be implemented based on the primary cause of resistance. So, manager may need to combine various techniques to manage organizational change. Finally, we would like to suggest Kurt Lewins 3 phase change management model: unfreezing, moving and refreezing because present approaches or technology may be unsuitable in future. We can learn from the failure and success of Nokia and Apple. Apple was able to unfreeze the old technology or mind set that are outdated, develop new process and technology to move on from the old ways of doing things to the new and refreeze again when all seem okay. And they start Lewins process again since refreezing stage may be temporary in future (see figure 4) where Nokia didnt.

Nation-States in Modern Times

The natives of Waitangi in New Zealand had to give up their sovereignty to the British throne at the time that the Crown arrived in the country.   Since then, the natives have tried to fight for their right to govern their areas of New Zealand again.   If do they get this permission from the New Zealand government, which they most probably will not get in modern times, the natives of New Zealand might make their own nation-state, that is, a place that is ruled by a certain entity and occupied by people belonging to the same culture and having the same values that are unique to that group (â€Å"Nation-State,† 2007). This is the nature of the nation-state: It is a government form that may not be able to thrive in the era of globalization marked by cultural homogeneity, and featuring immigration laws, skills exchange, outsourcing, foreign direct investment and the likes. In the olden days, Greece was a nation-state.   Athens was the city-state of Greece, protecting a common culture under its own laws.   Greece was the ruler of Athens at the same time.   It had the power to dissolve Athens.   Yet, Athens was an extremely popular cultural hotbed.   It was not wise to dissolve Athens (Polopolos).   Most importantly, Greece and Athens serve as excellent examples of governance for the politicians of the modern world.   As a matter of fact, people use Greece’s example in thinking about how to develop a civilization.   Alexander the Great continues to be remembered. It is definitely possible for nation-states to develop in our day by following the example of Greece.   Weaker groups such as the natives in New Zealand represent a minority nowadays, and may not be able to form their nation-state.   At the same time, America used to be referred to as a ‘melting pot,’ even though the ‘Americanization’ of the world as a synonym for ‘globalization’ could easily have turned America into a lover of its own culture.   America could have become like Greece if it had wanted to preserve its culture; however, the nation’s political mind is very much occupied with the business sense of things. America chooses not to become a nation-state because it benefits immensely from foreigners.   What about Europe?   Can Europe become a nation-state with European Union, the Euro and its likes?   Perhaps places like France and Italy, in particular, might consider becoming nation-states with the strongest regard for their culture.   In point of fact, parts of Europe have been especially concerned in recent times with the upkeep of their traditional agricultural styles.   As an example, certain European farm products like the French cheeses have become â€Å"entwined with the national cultural identity† (Kaplan & Calzonetti, 2005).   Would globalization allow Europe or parts to Europe to turn into nation-states or city-states? – Perhaps so.   Do we expect it to happen? – Probably not. Let us turn to the Middle East.   Could it happen among the Arab nations, with the strongest ties to their culture?   Could Israel become a nation-state, with Jerusalem as its city-state?   Yes, it is possible once they stop fighting over the Middle East.   Arabs hate Americanization, apparently.   But they cannot live without America and Europe buying their oil.   They want to preserve their Islamic culture against the unIslamic behavior shown on Western television nevertheless. They also do not want American clothing to be worn in their societies.   Hijabs and extremely long skirts are still the norm in Saudi Arabia, very difficult for most foreigners to adjust to.   Perhaps Arab nations and/or Israel will be the first to turn into nation-states, if they are not already.   At this time they are not cultural states clearly because they fight too much.   At a time of peace alone will art and culture be nurtured.   Perhaps Middle East should really stop fighting now and become a nation-state if it wants to. References Kaplan, Eben, & Calzonetti, Claire. (2005, December 9). The WTO’s Troubled ‘Doha Negotiations.’ Council on Foreign Relations. Retrieved 27 November 2006, from http://www.cfr.org/index.html. â€Å"Nation-State.† (2007). Wikipedia. Retrieved 7 May 2007, from http://en.wikipedia.org/wiki/Nation-state. Polopolus, Leonidas C. â€Å"Athens, Greece: A City-State that Grew from Optimality in the Golden Era to Excessive Urbanization by the 21st century.† University of Florida. Retrieved 7 May 2007, from http://www.clas.ufl.edu/users/kapparis/AOC/ATHENS.htm.