Newly design a management control system for A2B limited company

8.1 Introduction

Through qualitative research and critical review, we were able to find a few strategic and operational issues with relation to A2B Australia Ltd. we discovered that there are strategic problems because of high turbulence and strategic uncertainty in the external environment of the Taxi industry. Competitors such as Uber and Ola pose a threat to the company and force A2B to continuously monitor the external environment to re-evaluate whether the realized strategy is viable or not. For example, the company changed its name and acquired various companies to compete with Uber. The number of services and products also increased as a result of the competition. Telstra, one of the leading suppliers of A2B, had a connectivity outage which disrupted A2B’s service activities and cost the company 5 million dollars. A2B relies on Telstra’s network heavily to provide services to A2B’s customers. Hence, it is a risk factor.

The company faces management control problems including lack of direction, motivation and Personnel limitation. A2B lacks controls to address these issues. Therefore, our team will design MCS to mitigate these issues present in our organization.

The company attracts employees through competitive salary but do not have manifest incentives or critical performance variables as challenges to achieve targets which will motivate and direct employees to perform better.

A2B lacks evidence of Job design which affects the motivation of employee’s working in the company. A2B also lacks the evidence of a reference check system to avoid fraudulent behaviour and at the same time employing the right person for the right job. Our design will address this issue as a personnel control to solve personnel limitation problems.

There is no evidence to show intra- organizational transfers in cultural control to build emotional ties within the company.

Administrative constraints were not developed in action control, which company cannot reduce the potential misconduct.

8.2. Results Control

Designing New Results Control
Problem	Type of Results Control	Relation of Results Control to Vision	New Results Control	Costs Associated with Results Control
Due to the online booking developed, there might be a loss of management control occurring. For instance, the workloads do not balance with employees who work in different locations and this would affect its customer satisfaction.	Employee Performance Evaluation	The satisfaction of customers is a priority for A2B. Hence, “always looks ahead” core value has been applied to improve customer satisfaction and also create the best solution for both customers and its employees.	The Key Performance Indicators (KPI) could be applied to evaluate employee performance and measure customer satisfaction.	The Key Performance Indicators may also cost the company but it would not be in a huge amount.

Regarding A2B’s result control, to evaluate such control, the performance target of employees is the primary element concerned since it encourages employees to work efficiently which means they would also provide the best service to customers leading to high customer satisfaction. KPI is a quantifiable metric that is directly linked to the organizational strategy. Thus, it would be beneficial to the company as after evaluating the employee performance, the company could know and understand what exact difficulties associated with customers are, then, the appropriate improvement and solution for each issue will be implemented. There would be cost incurred for applying KPI into the company. However, to get customer satisfaction achieved, it would be definitely worth the cost. Also, such development does not cost a huge amount of budget. Therefore, the strength of this new control designed is that it is tight control, practical and low-cost application.

8.3. Action Controls

Designing New Action Controls
Problem	Type of Action Control	Relation of Action Control to Vision	New Action Control	Costs Associated with Action Control
With a huge number of vehicles after the Yellow Cabs Queensland acquisition, A2B will employ any taxi drivers without a proper background check, lead to difficulty in safety control during the trip.	Physical Constraint	A2B’s vision was to bring a safer experience to people.	A2B should design an SOS button in its application to passengers and drivers ask help in an emergency during the trip. The company may use mystery passengers to evaluate the driver’s performance.	Investing in designing the SOS button system in FAREWAYplus and online customer service staff overtime’s salary will pressure the company’s budget.

A2B’s goal and objective are to build a national platform by adding more than 1200 vehicles to its fleet from the Yellow Cabs Queensland acquisition (Objectives). This extensive process may face negative consequences. With a huge number of vehicles after the acquisition, A2B will employ any taxi drivers without a proper background check and knowing the aims and motives of the person. A2B’s vision centered on the safety of people, therefore, the company’s current action controls such as code of conduct and surveillance cameras are not enough to protect both passengers and driver’s safety during the trip.

A2B could use action control, behavioral constraints through observation to solve this problem. A2B should design an SOS button in its application FAREWAYplus. If there are any emergencies happened during the trip, passengers or drivers may ask online customer service assistance by pressing the SOS button. Also, A2B could control through observation in the way of mystery passengers to see if every taxi driver is complying by the standard set out by them or not.

This MCS may help to create a safe feeling and comfortable during the trip for both passengers and drivers. Then, it will create a better reputation for the company and attract more passengers in the future. This design helps to build a tighter action control in A2B’s management control system.

However, A2B will have to spend more money and time researching and developing the SOS button in the FAREWAYplus application. Moreover, online customer service staff overtime’s salary also put pressure on the company’s budget.

8.4. Personnel Control

Designing New Personnel Controls
Problem	Type of Personnel Control	Relation of Personnel Control to Vision	New Personnel Control	Costs Associated with Personnel Control
In A2B’s 2008 scandal, a group of taxi drivers has overcharged passengers thousands of dollars due to processing fraudulent payments on customer Cabcharge eTicket vouchers. Thus, the potential problem of A2B relating to personnel control is how to select honest and reliable drivers among different employee’s backgrounds.	Personnel Control	The A2B’s objectives are to achieve employee diversity is not only gender but also cultural background, religion, sexual orientation, age, disability, and ethnicity.	A2B should not rush the employee selection process. The hiring process should be focused on effective communication between all relevant parties involved in the hiring process so that everyone involved would be on the same page. Brief background check.	Cost of background checks from different reliable and authentic sources. Cost of an increasing number of efficient employers for the hiring process.

A2B can eliminate the personnel problem in its firm by introducing a clearly defined employee selection process as it is regarded as the most impactful part of recruiting and retaining new talent. All the related parties involved in the hiring process need to have two-way effective communication between them to make sure everyone would be on the same page. There should be enough background checks on the applicants so that only deserving candidates could be hired and A2B does not have to face potential personnel problems in the future.

8.5. Cultural Controls

Designing New Culture Controls
Problem	Type of Culture Control	Relation of Culture Control to Vision	New Culture Control	Costs Associated with Culture Control
As mentioned in A2B’s goals, the company’s core values mainly focus on providing values to customer satisfaction and lack of mention toward the commitment of management board to employees	Codes of conduct	If A2B mentions relating to how companies bring values to their employees not only customers, it will motivate employees to achieve the company’s objectives	Adjust the current core values of the company on its website. By changing “people” to specified “customers” and “employees” in its website	New control does not require more cost.
We cannot find the evidence of intra-organizational transfers being applied at A2B.	Intra-organizational transfers	A2B apply employee rotation in their working schedule	Applying rotating employee’s working schedule will avoid familiarity relating to working with just specific area	New control does not require more cost. However, Rotation employees to the new area need to be considered based on the salary budget of the company

For the physical system of the first problem of A2B’s culture controls, A2B should adjust the current core values of the company on its website by mention providing benefits to both customers and employees instead of using “people” in its current core values. It could be practical and there is no challenge to practice the new controls because updating or modification information on the company’s website could be easily for A2B’s IT department and not require more money. As a result, the new control could help build a tighter culture control because it makes employees understand their importance for A2B and also boost their motivation to act the acceptable actions that help A2B to reach their objectives.

For the second problem, the new control is the rotation working area of employees. A2B should apply employee rotation in their working schedule every month. It is also easy to practice the rotating employee’s and it does not increase more cost for A2B. However, Rotation employees to the new area need to be considered based on the salary budget of the company, for example, how many drivers per shift in each area. The shift managers just need to change the working area between employees that help employees to experience relating to working with a new location and avoid the familiarity working with the only specific location they are in charged. As a result, that prevent some unacceptable behaviors such as driving customer the long way to get arrivals for extra payment that makes the culture controls tighter.

Summary of case study

In conclusion, the purposes of this case study are to analyze the situation of A2B critically from various perspectives and design an effective management control system for this company.

In part 1, we explained vision, mission and core values in A2B. Second, we illustrated four strategies, also goals and objectives that aligned with the firm’s core values. Third, the governance mechanism of A2B and the regulatory environment of the taxi industry are discussed. Then, we described the relevant information about products and services. The organizational stakeholders are identified in the next section, and we have examined how the entity’s strategy would influence the related parties. In the sixth section, external environmental factors include relevant economic, technology competitors and other environmental factors are explored. The used management control in these six sections above are all involved and associated with the seventh section as the management control section. In part 1, the seven segments were analyzed through a critical review and found the relevant issues.

In part 2, we designed a new management control system for A2B based on the problems we found, related to action, results, personnel, and cultural controls. Teammates applied our relevant knowledge in the MCS design and learnt that the MCS implementation needed to consider the situation of the company from different views.

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