How can the partners of the Lucky Prawn Farm manage their prawn farming venture?
How can they settle the issue about poor communication and transparency? How can they assure that their (the partners) total invested capital will not be put into waste?
Alternative Courses of Actions (ACAs)
a. Improve Internal Control;
b. Regular visit of the three non-residents to the farm;
c. Shift to Bangus Business and stop Prawn Farming;
d. Ben Torres should be given some freedom in running the venture.
a. Improve Internal Control
This will require Ben Torres, the managing partner, to make monthly Financial and Managerial Reports, and to send proposals to be approved or disapproved by the three non-resident partners.
* There will be a transparency in all of the finances of the venture; * There will be no problem or questions to where the money is spent; * It will be easier for the partners to check the venture’s condition and financial position; * Torres can state what he needs for the betterment of the business; * Can be an avenue for improved communication between partners; * Will lead to improvement in decision-making and investment-making for the business. Disadvantage:
* Ben Torres might need to hire additional secretary to make the financial reports which make it more expenses; * Ben has to spend time in encoding and transcribing the finances; * Decision-making may not be uniform (others may approve, others may not); * There is a possibility of misunderstanding and result to a conflict between the partners.
b. Regular visit of the three non-residents to the farm
This will mandate partners to take responsibility in making periodical personal check-ups in the actual business site. This will also be a form scheduled meetings for the partners.
* Clearly check the status of the farm;