1. Thank you for allowing us the opportunity to work with your company. As requested, we have examined business operations at Leo’s Four-Plex Theater, with the help of Park Cockerill. After thorough evaluation we discovered several control issues we believe are hindering the profitability of the business.
2. The key control issues that need to be addressed are cash and sales discrepancies, ticket stub collection errors, and poor managerial leadership. Cash and sales discrepancies are the first control issues we noticed when evaluating Leo’s Four-Plex Theater. At the end of each day the employees reconciling the cash register at the ticket booth and concessions counter often found irregularities between the amount of sales and the cash collected. …show more content…
The problem at the attendant station is that employees were not collecting all of the ticket stubs according to how many people passed through the entrance. Also tickets sold on different days were accepted at this station in error. Ticket collection errors are a control issue because customers could be entering the screening rooms without paying, thus loss of revenue. The margin of error can be minimized with the correct training and procedures in place.
Poor managerial leadership is the third control issue that is hindering the success of Leo’s Theater. Bill Reilly is not supervising the staff to ensure they are capable of doing their jobs to the best of their abilities. There also is no discipline guidelines or sense of accountability expectations from any of the employees. When proper management is not present in a business, it opens the doors for more problems that normally could be prevented in a optimal business setting. …show more content…
Similarly, the action accountability controls mentioned above, some behavioral constraints can be added to help theater be profitable. One such constraint can be installing closed circuit TV or DVR recording system which will help monitor or supervise the employees from the booth and concessions counter. Employees action can be observed and corrective actions can be taken by the manager in a timely manner on some unaccepted behaviors. On the other hand, an upgraded technology, back office software, can help track inventory, view cashiers activities like voids and refunds, and enter daily paperwork can help to keep track of employee's actions such as fraud or theft. In conclusion, behavioral constraint ensure that proper behavior of the individual is focused by direct supervision by the organization
2. The key control issues that need to be addressed are cash and sales discrepancies, ticket stub collection errors, and poor managerial leadership. Cash and sales discrepancies are the first control issues we noticed when evaluating Leo’s Four-Plex Theater. At the end of each day the employees reconciling the cash register at the ticket booth and concessions counter often found irregularities between the amount of sales and the cash collected. …show more content…
The problem at the attendant station is that employees were not collecting all of the ticket stubs according to how many people passed through the entrance. Also tickets sold on different days were accepted at this station in error. Ticket collection errors are a control issue because customers could be entering the screening rooms without paying, thus loss of revenue. The margin of error can be minimized with the correct training and procedures in place.
Poor managerial leadership is the third control issue that is hindering the success of Leo’s Theater. Bill Reilly is not supervising the staff to ensure they are capable of doing their jobs to the best of their abilities. There also is no discipline guidelines or sense of accountability expectations from any of the employees. When proper management is not present in a business, it opens the doors for more problems that normally could be prevented in a optimal business setting. …show more content…
Similarly, the action accountability controls mentioned above, some behavioral constraints can be added to help theater be profitable. One such constraint can be installing closed circuit TV or DVR recording system which will help monitor or supervise the employees from the booth and concessions counter. Employees action can be observed and corrective actions can be taken by the manager in a timely manner on some unaccepted behaviors. On the other hand, an upgraded technology, back office software, can help track inventory, view cashiers activities like voids and refunds, and enter daily paperwork can help to keep track of employee's actions such as fraud or theft. In conclusion, behavioral constraint ensure that proper behavior of the individual is focused by direct supervision by the organization