Strategic management report

strategic charge report1.0 IntroductionI choose Genting Berhad as the organization for the strategic Management report. I worked in Awana Genting High prop ups almost one stratum in the lead I worked in g every laynment sector. Awana Genting Highlands is one of the six hotels nether the Genting Berhad. Genting Berhad is a precaution order and investment holding of Genting stem. It was founded by the late bronze Sri Lim Goh Tong in 1965 when he want to make a 20 km access road across mountainous which was located about 2000-metres supra take sea. Tan Sri Lim Kok Thay is now the Chairman and Chief Executive of Genting Berhad. Genting Berhad is a Malaysian company with interests in a variety of fields. The group comprises of to a great extent than 15,000 employees, 11,000 acres of resort land and 156,000 acres of choice objecttation land end-to-end Malaysia. The company is principally an investment holding and oversight company with seven major agate line divisions, such a s empty hospitality, plantations, crystalizeographic point, craft leader, paper, and anele color gas. The lei trusted hospitality division is represented by numerous pass brand names. This division operates in a variety of aras, and includes the operation of over 30 food and beverage outlets. They are variety of accommodation where in that location shot as six hotels, theme park and attraction, international shows, gaming experience, leisure cruising and advertings and conventions. Their vision is to be confidential information leisure, hospitality and entertainment corporation in the world, (Annual Report 2008). Oil palm cultivation is the main activity of the woodlet stratum. The division is made up of 41,000 hectares of plantation land. The Genting classifys involvement in the suitablety reading sector enables it to realize its strategy of holding land- found as reposes for long-term groovy appreciation and development potential. In 1971, the shares of Genti ng Berhad were listed on the main board of Kuala Lumpur transmission line Exchange (KLSE). In November 2007, Genting Berhad became one of the monumentalgest listed companies in Malaysia with a market capitalisation of RM29.2 billion (US$8.74 billion). 2.0 chemical group incarnate StructureThe bill of fare has their receive responsibilities for the beseeming conduct in the business. The dialog box meeting is usually on a quarterly basis. They set about formal schedule specifically reserved for its decisions kindred annual operating plan, major capital projects, overall strategic direction, pecuniary performance and monitoring of the sort outs operating. Formal Board delegations constituted by the Board with the Code namely the audited accounted account committal, Nomination Committee, Remuneration Committee that do the Board in the discharge of its duties. In addition, The Board is responsible for the Groups governing body of familiar work and risk management. This is important to review their fairness and adequacy. Moreover, it is for the purposes of safeguarding the Groups assets and shareholders investment. accord to Nonaka and Takeuchi (1995), leaders is distributed in the organization that supports the flow of association from the middle to the pate and down to the rest of the organization. The Group as well put in place a risk management accomplish in order to ease the Board recognizing and evaluating the managing risks. The Audit Committee has get relationships with the external auditor. External auditors accompanied all Audit Committee meetings in order to audit their plan or report and comments on the audited financial statements. The Committee were responsible okay the internal audit for the Group and the company. They besides need to authorize resources to get a line any risks areas. They also need reviewed the internal and external plan for the Group and the company with the external editors. The Board reviewed the per formance of the Committee every tierce years to determine whether they claim carried out their duties. In terms of meeting, the Committees meet at least four times a year. The Secretary of the Committee prepared and sent all minutes of each meeting to the Committee members.2.1 Lack of Understanding by the Board of Director with Regard to interior ControlIn dealing with the boards stewardship responsibilities, the board should fully understand twain(prenominal) the principal risks the company faces and its body of internal suppress. The purpose of internal attend is to manage and figure risk. In order to properly manage risk, an sequester risk assessment and evaluation framework and activities would be needed. Once risks have been identified, appropriate control dusts to manage and control these risks should be maintained and regularly reviewed given the companys risk profile. The reason of internal control is to make break dance doing in control risk without eliminate i t because it involves risk-taking business. The Board has responsible for the Groups system of internal control and risk management and for reviewing its adequacy and integrity. The Board of Directors should conscious that the system is created to control rather than get rid of risks and therefore assnot house an absolute assurance against material misstatement or loss. To uphold the Board in maintaining a sound system of internal control for the purposes of safeguarding shareholders investment and the Groups assets, the Group has in place, an adequately resourced internal audit department. The activities of this department which reports regularly to the Audit Committee allows the Board with much of the assurance it requires regarding the adequacy and integrity of the system of internal control. As proper risk management is a epochal part for the system of internal control, the Group has also put in place a risk management process.In practice, businesses face risks from nume rous sources in their dynamic environments and virtually all areas of the business are expose to risk. In particular, the objectives of the business are at risk, and control systems are established and maintained to assist the achievement of objectives. Even though it is impossible to provide complete assurance through any control system, the control systems essential be designed and applied to manage the likelihood and consequences of risk to welcome trains. That is the cost of control should be related to the significance of risk. To manage internal control and assessing its integrity and adequacy, the company should in corporate its governess and normal management in order to meet regulatory requirements. In addition, the code lucubrate that a sound system of internal control is necessary in order to keep companys assets and shareholders investment safe. Generally, internal control is created to provide liable assurance fundamentd on the achievement of the companys object ives. Internal control is based upon certain fundamental concepts where it is not forms or policy manuals but is touch on by people. It is not an end in itself process but it is a means to an end. 2.2 Internal Audit Function and Risk Management do workThe Group should have an adequate resourced internal audit department to assist the Board in maintaining a system of internal control. The internal audit department reports to the Committee and is independent of the activities they audit. The primary role of the department is to acquire regular and systematic review of the systems of internal control so as to provide sufficient assurance that the Group has sound systems of internal control and that established policies and procedures are adhered to and bear on to be effective and satisfactory. As proper risk management is a significant part for a system of internal control, the Group has also to put in place a risk management process to help the Board in revealing, evaluating and managing risks.2.3 The Board Directors ResponsibilitiesIn relation to internal control, the Board of Directors have to ac friendships their responsibility under the Bursa Malaysia Listing Requirements as identify principal risks and ensure implementation of appropriate control measures to manage the risks. They are also need to review the adequacy and integrity of the internal control system and management information systems and systems for meekness with applicable laws, regulations, rules, directives and guidelines. It should be noted that an internal control system is created to control risks rather than eliminate them. It should be an on-going risk management process established to identify, evaluate, and manage significant risks to effectively mitigate the risks that may block up the achievement of Genting Group of companies business and corporate objectives. The Board has to make sure management of risks and measures are taken to mitigate any weaknesses in the control envi ronment.3.0 Business Operations and PerformanceIn terms of Genting Groups strategy, they intend to continue growing its core leisure and hospitality businesses by concentrating on its matched advantages, enhancing its customer facilities and improving its current offerings in these businesses. The Genting Group also plans to identify exploitation segments at heart the area of leisure and hospitality, particularly in the gaming, hotel and canvas sectors and make appropriate investments in Malaysia, and, if appropriate, overseas to expand these businesses. According to Richard Nelson (1991), the resource-based view of the self-colored has explained firm differences by means of the cost of imitating or getting resources so firms that look to to acquire resources that give new(prenominal) firms a war-ridden advantage are prevented from doing so because these resources are too costly or impossible to acquire in the factor market. Maximize returns from existing business activitie s by optimizing usable efficiencies The Genting Group believes that it has on average one of the gamyest levels of operational efficiency in its existing industrial and plantation businesses among its competitors in Malaysia. with the continuing application of natural technology and production techniques, investment in information technology and other technologies across its businesses, the Genting Group intends to further subjoin business automation and enhances its operational efficiencies. The eliminate management must all see opportunities not seen by other go along teams or must be able to exploit opportunities by virtue of preemptive and logical capability-building that other companies cant, (Hamel G., Prahalad 1994). Expand the Genting Groups tax base through strategic acquisitions and investment opportunities in Malaysia and elsewhere, in particular in the areas of power generation and supply as well as plantations. A successful cost leadership strategy usually p ermeates the entire firm, as evidenced by eminent efficiency, low overhead, limited perks, intolerance of waste, intensive screening of budget requests, holdable spans of control, regards link to cost containment and broad employee participation is cost control efforts, (Fred R. David 2005). The Genting Group believes that its strong balance sheet and stable cash flow and tax income streams from its leisure, hospitality, gaming and entertainment business enable it to expand its revenue base by growing its other business activities. The Genting Group allow seek to continue building on its prudent acquisition strategy to understand by viewing potential acquisitions of power generation and supply projects that presentment potential upside returns on investment. The Genting Group result also consider expanding its plantations business if appropriate opportunities arise. They optimize their capital structure by achieving a more equilibrate use of financing. The Genting Group int ends to maintain a balanced financial structure by optimizing the use of debt and equity financing and utilizing a mix of internally generated funds and external financing to fund the Genting Groups mean expansion and working capital expenditures.Expand cross merchandising initiatives within the Genting Group to increase gross sales to its existing customers and grow its customer base. When the firm is exposed to rapid scientific change, the firms routine, language and embedded forms of companionship may adversely impact firm profits, (Poppo and Zenger 1998). The Genting Group is strongly foc utilize on taking advantage of its diverse businesses by expanding its cross marketing initiatives and having greater integration within the Genting Group businesses. For instance, the cruise line and hotel businesses will be cross marketed to existing and in the buff customer bases by the use of the Genting Groups populace Card loyalty computer programme having a membership of approxima tely 825,000 throughout Asia as at 30 June 2003. In addition, the Genting Groups strategy is to build the stigmatisation of World Card throughout Asia. World Card subsidiaries and businesses have commenced in Singapore and Hong Kong from 2003 and other Asian countries are identified for implementation. The Genting Group will continue to grow from strength to strength as a leading Asian multinational corporation.4.0 External Environment4.1 EconomicMalaysia has trade freedom, attention freedom, monetary freedom and high level s of fiscal freedom. The top corporate tax rate and the top income tax rate are moderate and the tax revenue is low as a theatrical role of GDP. The government does not distort market prices with direct subsidies and inflation is also minor. The simple employment procedures with no minimum wage make the ride sector flexible and help businesses to stay competitive.4.2 TechnologyGenting Berhad needs technological facilities advancement at all level to run the ac tivities of their lead-in Subsidiaries Division such as Leisure Hospitality Division, Plantation Division, Property Division, ply Division, Oil Gas Division, Manufacturing Division and Investment Holding and Management Services. due to increased competition and accelerated product development cycle, foundation and the management of technology are becoming crucial to corporate success of Genting Berhad. explore found that the most important driver of corporate value for both durable and non-durable companies to be innovative. What is less obvious is how a company can generate a significant return from investment in interrogation and development as well as an overall sense of fanaticism for innovative behaviour and risk taking. ane way is to include presentation in the corporations mission statement. Another way is by establishing policies that support the innovation process.The organizational form that best coordinates and enables knowledge creation is an amalgamation of l ead layers working in parallel the business system, the project system and the knowledge system, (Lyles and Schwenk 1992). The importance of technology and innovation must be emphasized by top management of Genting Berhad and reinforced by people throughout corporation. The top management and the board must be interested in this government issue and followed by managers below than tend to echo their interest. Therefore, management has an obligation to not only encourage new product development but also develop a system to ensure that technology is being used most effectively, with the consumer in mind. The groups need to continually seen their external societal and labor environments for new development in technology that may have both(prenominal) application to their potential products or operate. For sure manager of each Principal Subsidiaries is responsible for suggesting and implementing a companys technological strategy light of its corporate objectives and policies. The ma nagers of Genting somatic Subsidiaries job involve build techniques of embodying in new processes and products, selecting alternative new technologies and organizing resources so that the new technologies can be implemented. Technology Department or Human Resource Management unit should be evaluated for technological competence in both development and the use of innovation technology, or to change knowledge and implementation regarding on technology, or top management must attend course and seminar related to the technology subject.4.3 Political-LegalIt is related to allocation of power and provides constraining and protecting laws and regulations. Trend in the governmental and legal have a significant impact not only on the level of competition within an industry but also on which strategies mightiness be successful such as strict enforcement periods, high level of taxation and constraining labor laws that directly affect corporate growth strategy. All these are set by the gov ernment that rules the country with its own purposes. However the stability of the government that rules a country is very important. persistent ruling government can set rules and regulations that will protect the local anesthetic company in competing with foreign company that have an investment in that particular country. The laws is set to be follow by all case-by-case and company that stay of have business in the country. In policy-making and legal forces the laws that govern the corporations have an impact on decision making. So strategy makers should choose strategic alternative that minimize the general forces such as political and legal pressure and maximize the probability of gaining stakeholder support. One way is to propose a political strategy to influence its samara stakeholders. Political strategy is a plan to bring stakeholders into agreement with a corporations actions. Some of the most commonly used political strategies are constituency building, political actio n committee contribution, advocacy advertising, lobbying and coalition building.5.0 Internal Environment5.1 Corporate CultureAsias top tourist destinations, is a now an inspiration for umpteen budding entrepreneurs. The founder has blended the value of perseverance, hard work and integrity to create a management trend distinctively his own. And over the years, these values have been instilled within the realms of the Genting management team and corporate kitchen-gardening. According to Mr. Eddie Chan, Sports enjoyment Manager of Awana Genting Highlands, Winning this title reflexes a companys good corporate culture that believes in teamwork, healthy employees, companys commitment on employees training and a innovative and dynamic company.5.2 Corporate Resources5.2.1 MarketingGenting International is the exclusive international marketing and sales coordinator of Genting Highlands Resort outside Malaysia. It has a network of international sales offices and sales agents in various countries including Hong Kong, Singapore, Thailand, Vietnam, India, China, Indonesia and the Middle East. During the year, new representative offices were set up in Ho Chi Minh City, Vietnam and in Shanghai, China and a branch office was established in the United Arab Emirates. The additional new offices have boosted promotional efforts and increased visitors to Genting Highlands Resort. Revenue from sales and marketing services amounted to S$18.9 million (2005 S$17.7 million).5.2.2 FinanceIt has been a memorialise year of performance as all business divisions posted high revenues. Group revenue increased by 27% to a new high of RM6.9 billion (2005 RM5.5 billion). The good revenue performance was mainly due to higher business volume generated by the Leisure and Hospitality Division, especially from Genting Highlands Resort. In addition, the Malaysian power plant posted higher revenues as no major maintenance works were undertaken in 2006, compared to the previous year in which al l of its turbines underwent major inspection and maintenance. The Plantation Division benefited from higher down-to-earth palm oil prices and an increase in the output of fresh return bunches. Higher progress billings from properties sold also benefited the Property Division. Higher oil prices benefited the Oil Gas Division while higher paper exchange prices and volume sold benefited the Manufacturing Division. The Groups profit before tax reached a record high of RM2.7 billion (2005 RM2.4 billion).5.2.3 Research DevelopmentGenting Berhad had developed computer programme by using Java programming language. The programming standard have been defined from the standards used in the development of the Internet games, namely the Wu Shi and sack up Cracker games both made their debut in the Internet tourney System (ITS). These standards exist principally to preserve the consistency of programming style in the Java language. Besides, they are also needed to facilitate the ongoing mai ntenance of the system as well as in the development of the impending Intranet Gaming System (IGS) and other future system that will be employing the use the Java programming language.6.0 Conclusion and RecommendationsTo run and administered the big company, the function of Board of Directors, Principal Executive Officers, Top Management Officers, other management committee and employees commitment are needed. Thus, commitment and co-operation from all level of the employees are important to ensure the successful of Genting Berhad. Genting Berhad is a big mingled with big investment and capital should control group investment with careful by the top management level. A vision set by the leaders can be programmed into the many organizational members through surgical explanation and presentation. Programmed with the right direction, organizational members are expected to act accordingly, (Simon 1993). frequently monitoring of the investment activities could avoid financial burden to the company. The company should welcome any strategic locations or places in Malaysia to develop as a tourist destination. The other location could give an alternative to the visitors either local or foreigner to enjoy their vacation with family or friend. The company revenue had increase from year to year. Based on the current company strategy, Genting Berhads business activities will be expanding from time to time as well as the Genting Groups revenue will be increased. Loyalty and commitment from employees also work to the ongoing success of Genting Berhad. To keep up company stability and growth, the Genting Berhads top management should consider the areas like expansion of business activities or down-sizing by the competitors, market trend, economic conditions, expectations of shareholders, technological changes, public expectations, criticism by outsiders and changes in market and consumers expectations.7.0 ReferencesDavid, F. R. 1995. Concepts of strategic Management. Lo ndon, Prentice Hall International (UK) Limited.Nonaka, I., and Takeuchi, H. 1995. The Knowledge Creating Company. Oxford University Press.David, F. R. 2005. strategical Management Concepts and Cases Tenth Edition. New Jersey, Pearson Education.Hamel, G., and Prahalad, C. K. 1994. Competing for the Future. Boston, Harvard business School Press.Johnson, G., and Scholes, K. 1999. Exploring Corporate system Fifth Edition. Essex, Pearson Education Limited.Nelson, R. R. 1991. Why do firms differ and how does it matter?. Strategic Management diary 12, 61-74.Poppo, Laura and Zenger, T. 1998. Testing alternative theories of the firm Transaction cost, knowledge based and measurement explanations for make-or-buy decisions in information services. Strategic Management journal 10, 853-877.Clarke-Hill, C. M., and Glaister, K. W. Cases in Strategic Management. London, Pitman Publishing.Lyles, M. A., and Schwenk, C. R. 1992. Top management, strategy and organizational knowledge structures. Journ al of Management Studies 29, 155-74.Simon, H. A. 1993. Strategy and organizational evolution. Strategic Management Journal 14/2, 131-142.Mintzberg, H., Ahlstrand, B., and Lampel, J. 2008. Strategy Bites Back. Harlow, Financial Times Prentice Hall.Grant, R. M. 2007. Contemporary Strategic Analysis 6th Edition. Oxford, Blackwell.http//www.genting.com.my (Assessed 24thDecember 2009).