Task: Explain the Management Control System of Hungry Jacks.
Introduction: To effectively keep tabs on the company’s performance and to use the Human resources and finance structures to their full potentials, Management control system can be applied. It also helps in collecting information so as to analyse the performance of the company. Management control system can be applies as a framework to improve the decision making in the company and help achieve its goals. In today’s age when a company has to manage and face companies at a global level, it is important to establish a good performance measurement system, it facilitates better stake holder management and the organisation’s performance (Shen et al., 2016). This assignment will critically analyse how the control system is managed at Hungry Jacks, which is an Australian fast food giant. Due to political agendas and influences and many other factors, the current environment of business is getting more and more complex, which results in constant change in the various business activities; keeping this in mind companies must start to adopt strategies to maintain sustainable growth in the long run. Hence, this assignment will look for these factors in the current management system of Hungry Jacks to establish their sustainability for the future of the company.
History of Hungry Jack’s and their Mission: Hungry Jack’s was first established in 1971, in the town of Innaloo, Australia (hungryjacks, ND). The store found success as soon as it opened and thus began Hungry Jack’s journey as a fast food mega chain. Up until 1990, Hungry Jack’s worked under the American fast food chain Burger King, after that the agreement they had was changed. Among these changes the most major one was the elimination of the non-compete agreement signed by the company, as a result Hungry Jack’s first independent store was opened under their own brand name. Since then Hungry Jack’s has spread throughout the Australian continent and has over 340 stores all across the country and has proven to be fruitful in establishing a solid presence among their customers.
Any company's mission demonstrates the final goals of presence on the market and their objectives over its operation, while vision gives companies insight as to what it wants to be in the years to come. The day to day activities of any company should follow the development strategies of an organisation, which is established in considerations of its current mission and the ultimate goal or vision. Hungry Jacks’ mission is to provide the best food to its customers all the while maintaining a quality of service and cleanliness at every step. To promote their vision, the company focusses in four key point which are giving importance to each customer, safety, integrity, continuous improvement based on customer feedback. In the service industry giving priority to the customer is the most efficient strategy in order to maintain sustainability and survive the competition. Hungry Jack’s have successfully managed to satisfy the customers requirements by constantly improving their food and providing birthday parties and other event for people. They have also maintained a powerful social presence by making efforts for the betterment of the community. They have also contributed to the Keep Australia Beautiful movement and came up with the catch phrase “Bag it and Bin it” to keep the city clean and ensure ambient garbage disposal. It resulted in increase in revenues and establishing an environmental sustainability image in the market.
Organisational Structure: The company's organizational structure is hierarchical in which the organisation's tasks and commitments are distributed between different employees at different stages. Hungry Jack’s follows a standard organisational structure in which the CEO has the most power followed by the General Manager who is in charge of all other respective manager of various departments such as finance, sales, customer service, marketing, sourcing.
Hungry Jack's Organisational Structure
Hungry Jack’s also hires project officers who are in charge of minimizing problems and enable smooth functioning during a work event. Although the company follows a hierarchy of management, the CEO of the company constantly makes efforts to maintain a healthy and innovative environment by considering the career growth of all the staffs and employee. They organise training and development programs regularly for the staff and employees. In 2009, the company established a College of Executive Development as a mode to offer a communications and enhanced engagement to the internal employees. In order to ensure a better presentation to the customer at the base level, the company constantly changes their business and customer service model to keep up with the changes and present the clients with the enhanced nutritional values of their products. The company offers the best structure of pay to their employees as compared to any of their competitors, so as to attract the best work force and motivation. In a report by PayScale,2016, it was found that the average salary of an Hungry Jack’s store employee is $20,000 to $40,000 AUD , whereas the salaries of the Assistant Manager and the Kitchen Head are $35,000 to $51,000 AUD and $32,000 to $48,000 AUD respectively. The company also gives out regular bonuses to Assistant Managers and the store employees.
Any company's organizational structure is affected to a ridiculous extent by the corporate environment it maintains. All the employees should be treated equally so as to align with the ultimate vison of the company and to promote it. Hungry Jack’s follows the same principle by making it mandatory for all the kitchen staff to exercise maximum caution and to wear safety aprons with the company’s branding on it. The upper management of the company put a key focus on the growth and well-being of the employees, make measures to support them by establishing a solid financial system. Hungry Jack’s follows a work culture which followed by mostly the biggest fortune 500 companies to enhance leadership and support the personal growth of the employees.
Financial Responsibility Centres Employed: The business performance of an organisation should be analysed with respect to its financial performance such as expenses, profits and revenues. By evaluating the general information which is disclosed by the company, such as expenses and turn over, the performance of the company can be calculated in terms of growth percentage of past years (Flammer, 2015). These factors and their influences have been analysed below:
Expenses: A major part of the expenses of Hungry Jack’s is incurred from getting the raw materials and ingredients which are required to make the dishes. In 2013 this expenses was calculated to an amount of $435.8M for the whole year. In addition to this, the training and compensating all of its staff, which currently includes 1800 store staffs and 900 managers also adds up to their expenses. Due their involvement in the environmental movements , and their mission to make Australia cleaner, their expenses increase as a result of adopting new ways of packaging and conducting marketing campaigns.
Profits: In a report published by Competitive Foods Australia, it was found that the total profits earned by the company till July 2013 was $21.4 million. From this report it was also concluded that the enterprise was able to triple their profits compared to the previous year, 2012 where the profit of the company was $7.9 million. This may have been due to the fact that the company frequently brings various offers and schemes for their fast food items, in order to attract more customers and retain the existing ones. The company practices a transparent guide which contains all the nutritional values and ingredients in their food items, for the convenience of the customer as you can see from the figure below.
Revenues: As per the report in 2013, the majority of revenues generated by hungry Jacks were because of its franchisors; due to this their yearly revenues totalled up to $1.03 billion. To open new stores and attract more customers to sell their fast food is the most important way of revenue generation for Hungry Jack’s. In the current scenario, Hungry Jack’s main source of revenue comes from its 390 stores spread all across Australia.
Control Mechanism at Hungry Jack’s: While administering their daily operations and activities, a company that practices proper control mechanisms can enhance their performance substantially, all the while increasing their profits and reducing wastes (Appuhami & Bhuyan, 2015). A better stakeholder management and expense reduction can be achieved by efficiently controlling activities, methods and people in any organisations.
The current control mechanism at Hungry Jack’s is explained below:
Action Control: As the main source of revenue generation for hungry jacks is expanding its stores, therefore they get regular franchisee agreements; therefore they perform thorough analysis of the applicants throughout the process. In this analysis process the company ensures that the applicants fulfil these major criteria: Having funds amounting to $1,300,000 and a borrowed sum of $1,300,000, they will advocate Hungry Jack’s products and policies alone, they have background of business, they will hire and work with young people over the age 15.
The applicant, who satisfies these criteria, has to undergo 13 months of training to open a franchise store of Hungry Jacks’. Since the survival of any business is hugely dependent on the investments they make, the has to maintain a strict criteria for the eligibility of an applicant to ensure profitability and successful performance.
People Control: The company takes the utmost care in order to follow their mission of delivering quality food items to its customers. Therefore all the new employees undergo training in order to maintain quality of service for the customer, by delivering the hot food made from fresh ingredients under the minimum time since the order was placed. To follow their mission and visons, the company ensures that all their franchisees get their ingredients from best farmers and markets of the most superior quality. For the purpose of improving their environmental sustainability practices, employees go through regular training and interventions, to further implement this, the company also introduced a system of electronic payslips for almost 11,100 staff members all across the country. In addition to this the company uses electronic invoice receipts for all their transactions at the stores.
Result Control: As a measure of the environmental sustainability project, the company takes sufficient plans and assessments to conserve energy, which result in reduction of cost. To further implement this, with coming of new technology of lights which consumes less energy, the company has replaced all their lighting at their stores with LED lights. With this step the company is projected to save approximately 743 Giga joules of energy and $25,000 AUD of money within 4 years and 4 months (Australian Government, 2012).
Personnel Control: For the purpose of motivating the employees Hungry Jack’s constantly tried to enhance their knowledge and capabilities with the help of new training and development programs and schemes of flexibility (Mozhayeva et al., 2019). Many of these methods are discussed below:
Placement and Selection: As mentioned above, Hungry Jack’s currently owns 390 stores which employees a total of 900 managers and 1800 store staff spread all across Australia. Since the Hungry Jack’s organisation is planning to expand its number of stores in many more regions across Australia, therefore it would need number of capable employees to carry out their day to day activities. To facilitate this the company is forming various techniques and development programs such as Young Endeavour, through which the employees will learn communications, teamwork and leadership qualities.
The company has to create recruitment advertisements on their websites, in order to attract new candidate with the required talent and knowledge for each specific designation or post. Currently the company is inviting applications for the position of Manager for over 55 regions in the Australian suburban areas, the main portal od these advertisements is through their websites. In addition to this, the company also ensures internal promotions and increments to keep their existing employees. In many cases the store employees who have exceptional skills and performance are promoted to Store manager positions. Internal placements and promotions helps an organisation by enhancing the motivation level of the staff and offering them career growth.
Training: Hungry Jack’s provides all of their new employees with training an management courses which are nationally recognised in the retail and hospitality segment without and additional costs so as to facilitate better career growth for them (Hungry Jack’s, 2016c). This allows the staff to get theoretical knowledge and certification combined with practical in-store exposure to retail and hospitality which enhances their career progressions and advancements.
Work Development and procurement of services: As a part of their flexibility scheme for the employees, Hungry Jack’s allows its employees to work in rotational shifts of 3 weeks which allows them to alternate between weekdays and weekend offs. In addition, the staff is also taught about the inventory control and store marketing as part of their training, which enhances the stores performance. Restaurants have to keep changing their menus to better suit the requirement so of the customers and hence the job design keeps on changing. The company regularly comes up with new themes, catchphrases and taglines as a part of their marketing campaign, which requires proper co-operations from the store staff in order to implement them better (Heuninckx, 2017). To achieve excellent performance, the company has set up a College of Executive Development (CED) to ensure the development of internal responsibilities between staff from various departments.
Tactical decision making and process of financial planning: Strategic planning can only be described as an organized practice by which companies work together in a single direction to achieve better performance, strategies and structures overall system goals. Although, the management teams agree that the overall budget is adequately divided and estimated in order to improve sales and performance. Hungry Jack's provides food products at a relatively lower price than its competitors and makes use of strong consumer marketing statements. For example: Having taglines such as “Lowest Prices are just the beginning” and “The Burgers are better at Hungry Jack’s” have allowed the company to gain consumer trust. The enterprise's strategic positioning company used cost differentiation in which it delivers quality food at a reasonable cost, generating significant competitive advantage and retention amongst customers. Hungry Jack's budgeting process allows upper management to better predict strategies and approaches and evaluate actual performance efficiency (Siminica et al., 2017). The enterprise is involved in providing detailed information about the corporation's investments and how it helps to achieve better results that would further propel managers and employees to increase efficiency. The business periodically reviews the operations carried out by the administrators of the kitchen and offers new ways to control energy usage with low capital expenses. All through the process, Hungry Jack sets targets and calculates the extra savings it can create by finding opportunities for improvement.
The report's main objective was to explain and examine Hungry Jack's management control system and its operational variations. The company's mission is to maintain the quality of food and neatness being delivered to visitors entering their stores. In addition, Hungry Jack's promotes four core values for a good organizational culture; giving customer utmost priority, ensuring their wellbeing, encouraging honesty and continually enhancing their quality based on customer needs. It was observed that their corporate structure is hierarchical in which everyone's roles have been organized at departmental level; furthermore, an inventive work atmosphere is established with the help of ventures such as College of Executive Development (CED) to promote better interaction between people. Through the assignment's responsibility centres segment it was found that the annual expenses and profits generated by Australia's fast food chain was almost $1.03 billion and the major portion to that amount was contributed by Hungry Jack's. This have 390 outlets across Australia's various parts because to that company can reach out to bigger groups of customers and achieve superior viability. The largest portion of expenditures involves raw materials and consumables which where nearly $435.8 million in the year 2013. The organisation has been involved in sound financial investment choices, strengthened supply chain management and product planning, and establishing goals for healthier outcomes and greater control mechanisms. Hungry Jack's workforce command is controlled by improved recruiting, learning, and job designs. The strategic planning and budget management system of the organization has proven to be successful in the industry with a stronger framework of cost control mechanism. To achieve stability and improved productivity, the organization will continue to improve their management control process by improving administrative and managerial capability and strategies Hungry Jack's management assignments are being prepared by our management assignment help experts from top universities which let us to provide you a reliable best assignment help service.
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