Chicken Run

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INTRODUCTION
Encik Selamat, a Certified Public Accountant (CPA), had been the General Manager of Excel Poultry & Meat Sdn Bhd (EPM), a subsidiary of PCK Holding, since 2005. The set up was small and medium sized enterprise (SME) located in Kluang, Johor. In year 2008 his career track and had been smooth closing when the company he presently helmed faced operational crises. The “chicken run” saga pictured a case that was familiar in respect of management of SME industry, at the infant stage when there was a lack of focus on the important considerations for proper running of business operation.

THE MALAYSIAN POULTRY INDUSTRY
EPM was established in 1998 to carry on chicken farming and supplying of whole chickens to various outlets in Malaysia. The company was one of the members of the Federation of Live Stock Farmers Association of Malaysia (FLFAM). In august 2008, FLFAM issued a statement depicting a stark contrast in local poultry production costs between 2006 & 2008.

FLFAM made a higher chicken price in order to protect producer earnings in the face of the feed cost hike. However when the seller of chicken in Malaysia markets did increases the retail price, some members of FLFAM complained that they had seen a drop in demand.

STRONG CHICKEN CONSUMPTION IN DOMESTIC MARKET
Malaysia had a history of self-sufficiency for chicken meat despite recording one of the world’s highest rates of consumption per person/year. In GAIN report (2000) on Malaysian poultry and products where the country was having one of the highest per capita consumption rates in the world for chicken (32.5kg) and eggs (298 units). So that, there is no dietary prohibitions and religious restrictions against chicken consumption, it was the most popular and cheapest source of meat protein among Malaysian.

The domestic market was further intensified by the popular home-grown fast food chains such Marrybrown, Sugarbun, Nineteen O One and Ball Fastfood – all with chicken menus similar to those of KFC. In Traditional Malaysia such as Satay Ayam, Rendang Ayam and so on. Business in these local chains was reported to be doing well.

ISSUES

1. Leaderships
En. Selamat do not have value an ethic as a leader:
* Independent
* Director reluctant to take any actions against En. Selamat since he is very well connected and had good reputation in previous company. * En. Selamat use delegation style with trust to En. Kassim.

2. Internal System Control
* Marketing department continued to supply the product even the credit limits of Cold Gold Sdn. Bhd has gone its limit. * Weakness in Cash Collection, because of customer selection and depends on relationships business matter. * Account not being maintain properly.

* Theft on Cash Collections.

3. Conflict of Interest
* Occurs in individual relationships between En. Selamat and En. Azman

RECOMMENDATION

1. LEADERSHIP STYLE
Leadership style is the manner and approach of providing direction, implementing plans, and motivating people. The three major styles of leadership are : i) Authoritarian or autocratic
This style is used when leader (En Selamat) tell their employees what they want done and how they want it accomplished, without getting the advice of their followers. Some of the appropriate conditions to use it is when he have all the information to solve the problem, are short on time, and the employees are well motivated.

ii) Participative or democratic
This style involves the leader including one or more employees in the decision making process (determining what to do and how to do it). However, the leader maintains the final decision making authority. Using this style is not a sign of weakness; rather it is a sign of strength that the employees will respect.

iii) Delegate or Free Reign
In this style, the leader allows the employees to make the decisions. However, the leader is still responsible for the decisions that...
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