Johnston Plc is a software development and computer manufacturing company. The company has grown considerably...
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Johnston Plc is a software development and computer manufacturing company. The company has grown considerably in the last seven years; expanding to have more than thirty factories across the globe, including the UK and with operations in more than sixty locations worldwide. Its customer base includes retailers as well as individuals, to whom direct sales are made through their website. The following recent developments have come to light: In April the Board of Directors appointed a new CEO and an acting FD to replace the former CEO and FD who were asked to step down by the Board, due to ongoing fraud investigations. For the last ten months the accounts department has experienced a high turnover of staff, with most exstaff joining the companys main competitor, Dawson Plc who offer more attractive pay packages. One of Johnston Plcs other competitors, Cogy Limited, went into receivership in March due to the increasing pressure on margins in the industry as well as changing market conditions resulting from the coronavirus crisis in Europe. Required: b Highlight the business risks in the above scenario, and the actions management could take to mitigate these risks.
Johnston Plc is a software development and computer manufacturing company. The company has grown considerably in the last seven years; expanding to have more than thirty factories across the globe, including the UK and with operations in more than sixty locations worldwide. Its customer base includes retailers as well as individuals, to whom
direct sales are made through their website.
The following recent developments have come to light:
In April the Board of Directors appointed a new CEO and an acting FD to replace the former CEO and FD who were asked to step down by the Board, due to ongoing fraud investigations.
For the last ten months the accounts department has experienced a high turnover of staff, with most exstaff joining the companys main competitor, Dawson Plc who offer more attractive pay packages.
One of Johnston Plcs other competitors, Cogy Limited, went into receivership in March due to the increasing pressure on margins in the industry as well as changing market conditions resulting from the coronavirus crisis in Europe.
Required:
b Highlight the business risks in the above scenario, and the actions management could take to mitigate these risks.
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