Chicken Run

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1. INTRODUCTION

1.1 Case Background

This case is about the Small medium enterprises, Excel Poultry & Meat Sdn Bhd (EPM) that face management, production, financial and internal control problems. Besides that, In this case also show conflict of interest between General Manager of EPM, En Selamat with the main debtors. The lack of internal control causes bad financial performance since 2008. Other than that, this case also shows the external factors for the production process that cause “chicken run” crisis.

Our responsibility is to give the solutions to EPM for face their problems. SMEs is the most important for Malaysian economic growth, so for that purpose we need make sure our SMEs had the excellent management in their financial and internal control.

2. Company Background

Excel Poultry & Meat Sdn Bhd (EPM) was establish in 1998 as Small and medium sized enterprise (SME).Their Core business is chicken farming and supplying to various outlets in Malaysia such as hypermarkets and restaurants. Currently, they have more than 200 employees. EPM aso knowed as Top 5 chicken supplier in mid-tier producers in the country.

3. Definition of SMEs.

Malaysia adopted a common definition of SMEs to facilitate identification of SMEs in the various sectors and subsectors. This has facilitated the Government to formulate effective development policies, support programmers’ as well as provision of technical and financial assistance. An enterprise is considered an SME in each of the respective sectors based on the Annual Sales Turnover or Number of Full- Time Employees.

SMEs were divided into two categories. First category is manufacturing, manufacturing-related services, and agro-based industries. Small and medium enterprises in this industries have full-time employees not exceeding 150 OR with annual sales turnover not exceeding RM 25 million. Second category is services, primary agriculture, and information & communication technology (ICT) sectors. Small and medium enterprise in this sectors have full-time employees not exceeding 50 OR with annual sales turnover not exceeding RM 5 million (SMEs. Corp, 2012). Table 1: Definition of SMEs |Type/ Size |Micro-enterprises |Small enterprise |Medium enterprise | |Manufacturing, |Sale turnover of less than RM |Sales turnover between RM 250,000 and|Sales turnover between RM 10 million | |Manufacturing- |250,000 OR full time employees |less than RM 10 Million OR full time |and RM 25 million OR full time | |Related Services and |less than 5 |employees between 5 and 50 |employees between 51 and 150. | |Agro-based industries | | | | |Services, Primary |Sales turnover of less than RM |Sales turnover between RM 200,000 and|Sales turnover between RM 1 million and| |Agriculture and |200,000 OR full time employees |less than RM 1 million OR full time |RM 5 million OR full time employees | |Information & Communication |less than 5 |employees between 5 and 19. |between 20 and 25. | |Technology (ICT) | | | |

(Sources: SME Corp. Malaysia)

Table 1 above shows the summary of defining Malaysian SMEs.

2.0 ISSUES AND PROBLEMS

There are many problems that can be detected in Excel Poultry & Meat Sdn Bhd (EPM). The main issue is a lack of internal control. There is no segregation of duties among EPM staff. This situation can be seen when Munir, the former staff at the finance department, collects the payment from client but he does not disclosed...
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