Profits Mascotte’s shareholders may earn profits in two ways. They could be paid a dividend from the shares they are holding, which is a return from the face value of the shares. They may also choose to sell their shares at a much higher price than what they have originally paid for, therefore making fortunes if the business is prosperous and the value of the company raises.
Legal Liabilities Since Mascotte is a medium to large business, there are complicated legal requirements to deal with. I assume that Mascotte has employed it’s own specialist lawyers to deal with the paperwork and registration of the company, which would involved a submission of the memorandum of the business. This is necessary to gain recognition and approval from the Registrar of Companies in Hong Kong. The memorandum is available for the general public to read and it provides a general idea of the company and it’s objectives. It usually includes the company’s name, registered address, objectives, capital, and objectives. Mascotte would also have to present an article of association, which states the rules that govern the company. They are as follow (taken from Pg 52 of the textbook):
- The rights attached to the holding of the various types of shares offered by the company.
- The rules and procedures for issuing and transferring shares
- The procedures and timing of company meetings
- The details of how accounts will be kept and recorded
- The powers and responsibilities of directors
- The details of how company officers will be appointed
Mascotte has already gotten the certificate of incorporation and they are entered into a contract.
Objectives and Mission Statement of MIA
(as told to me by Mr Lam over the phone)
- To maintain survival and upkeep of the company
- To make a profit
- To be flexible in it’s policies and running of the company according to market requirements and trends
- To face the competition and overtake it’s rival companies
- To be innovative in it’s products and product design
- To keep the company in a healthy operation
According to Mr Lam, the company’s most basic objective is to survive, and secondly, to be profitable. The company is adopted to be flexible in the extremes of the market environment, to change accordingly to the market requirements. They also make it an objective to come up with new designs frequently and maintain the quality of their multimedia bags. Increasing their market share is important too, for Mascotte has a lot of competing companies in the market. An increased market share is an increased profit, and the profit can improve their products and production costs. Mr Lam frequently empathized about the most important aim, to make a profit, as well as successfully maintaining the survival of the company. Thus this is a profit-oriented company. In being flexible with the company structures, they can keep up with their rival companies and rise again should their original concepts of the company fail.
I inquired about their mission statement, and he informed me that the objectives are their mission statement. He feels that the current objectives of his company are successful in running the company efficiently as well as being cost-effective.
The Different Types of Organisational Structure
Cultures can affect the company, in the way it operates, it’s objectives, and it’s efficiency. They are the shared beliefs, the policies, and personality of the organisation. Different companies have different cultures, and if it is compatible with their objectives and structure, then the company will be more successful in it’s operation. There are a few different types of cultures, and the main ones are power, role, task, or person culture.
A power culture is usually found in small organisations, since there are fewer people. Individuals hold the power in the organization rather than a group. Decision-making can be quickly done and this type of culture reacts well to threat in the organization. The disadvantages of this type of culture is that it cannot support too many staff or it will collapse, since there is a lack of challenge and a feeling of suppression in the organization.
A task culture is a culture where people in organizations work together to complete a task or project. The advantage is that there will be more opinions, ideas, and views, since more people will have the ability to determine how a job will be done.
In a person culture, there are no hierarchies. Each individual has freedom and direction to work as he/she likes. This type of culture is usually found in non-profit organizations, since the organisation only serves the interests of those within it.
The role culture, which defines clearly the responsibility of each individual/department. The business would be divided into various functions, and then under each function there would be a hierarchical ordering of offices. There are defined communication lines and the position is the main source of power. This structure is common in big companies.
And finally, there are also backward facing or forward looking cultures.
A backward looking organsiation is traditional or ethical in it’s operations, conservative in attitude and a risk avoider. They do not change much and are governed by previous practices, controlled by traditional management levels who have been in the organisation for a long time.
A forward looking culture is the opposite of a backward facing culture. The organisation is likely to be flexible in it’s structure and changes accordingly to the environment and market. They are prepared to take risks and seek change.
An Analysis of Mascotte’s Culture and it’s Influences
‘Our culture? We like to be a family, everyone who works in our organization. We develop a progressing and healthy growth in the company. A Chinese culture, perhaps. We like to care about the employees in our company. A step-by-step growth.’ – Mr Lam, Director of Mascotte
After looking at the company’s objectives, it’s structure, and management styles, I determined that Mascotte has a role culture, and a forward looking culture. However, they do also care about the employees in the company, which makes it possess a little of the person culture. Mr Lam mentioned about ‘a Chinese culture’, so perhaps it would also have a little of an ethnical culture. Mascotte is innovative and flexible, which makes it a forward looking culture, able to adapt to changes and ready to take risks for the survival of the company. Mascotte also has it’s organsiation divided into various departments, and under each department there is a hierarchical line of officers. It seems to work by logic and rationality, and each person’s job is clearly defined. Therefore there is a strong role culture in Mascotte.
On the next page there would be a chart explaining how each factor in the world/environment influenced the company’s culture.
So how does the culture of Mascotte helps the company in reaching it’s objectives successfully?
Let’s review Mascotte’s objectives
- To maintain survival and upkeep of the company
- To make a profit
- To be flexible in it’s policies and running of the company according to market requirements and trends
- To face the competition and overtake it’s rival companies
- To be innovative in it’s products and product design
- To keep the company in a healthy operation
And it’s culture…
80% role culture and forward looking culture
10% person culture
10% ethnical culture
Mascotte’s forward culture helps to achieve the objectives of the company. A forward culture is prepared to take risks, to be innovative, and this helps to achieve the objective of Mascotte being a flexible and adjustive company. As Mascotte is a medium/large sized company, a role culture would suit the company better than a person or power culture. Every employee’s job would be clearly defined and that would help to keep the company in a healthy operation. A person and ethnical culture helps to ensure than the employee’s needs are met and therefore would the company is likely to have a lower staff turnover, which would help to meet the survival and upkeep of the company. Staff that has worked in Mascotte longer would also be adapted to the objectives of the company and works according to the company’s objectives.
I conclude that the culture of Mascotte is helping the company to meet it’s objectives successfully.
Organisational Functions of The Company
Mascotte has the following departments under management level:
- Sales Department
- Marketing Department
- Accounting Department
- Shipping Department
- Manufacturing
Sales Department The sales department works closely with the marketing department and they make sure that the customers want to purchase Mascotte’s bags for it’s quality and design. They manage the sales of Mascotte’s products. There is also an international sales department which focuses on achieving projected export sales goals of the multimedia bags to foreign markets.
Marketing Department This department deals with identifying, anticipating, and satisfying customer requirements in a profitable way. They are focused on the consumers’ wants and needs. The department carries out research on the multimedia bags market and decides on factors such as advertising, packaging, and pricing.
Accounting Department The main function of this department is to keep records of sources and use of funds, profit and loss account, etc. This department is divided into 2 parts. The financial controller and his subordinate’s jobs are to keep records of all financial events in the company and calculate the profits, annual figures, and other accounts. The accounting executive in Mascotte’s accounting department is responsible for analyzing figures of the company and present information or predictions accordingly. They help to evacuate the company’s performance and set targets to improve performance.
Shipping Department/Manufacturing They are responsible for processing the raw materials into finished goods effectively. There is a quality control in the company to ensure that the bags Mascotte produces are up to standard. This department is responsible for the designing of the product, storing goods, shipping the finished goods, etc. They also process orders from customers and making sure that the goods are delivered on time.
How do the company functions affect the company’s objectives?
Each employee in Mascotte, no matter what department, is clear about the objectives of the organization and they work in conjunction to succeed the objectives. Mr Lam had said that every department is ‘conscious to avoid mistake, cost effective, and comes up with economic ways of manufacturing to help achieve the company objectives.
There is a clear set of objectives for the company but no department objectives, so this might cause some conflict for the departments to work together successfully. For example, the accounting department may try to limit the funds for the shipping/manufacturing department, when they are trying to come up with new designs which requires more funds.
The various departments are having more success working together for the company since the use of ICT. It makes the same information available for all the departments and helps to integrate the functions of the company more successfully.
Since the various staff has been employed by Mascotte for a long time, and some are family members, I believe that it is easier for the different departments to work together. The reason for that is they have a clearer understanding of Mascotte’s culture and objectives and accordingly to achieve the objectives of the company.
Conclusion & Bibliography
After examining the company structure, objectives, cultures, and functions, I decided that the company is in healthy operation and meeting it’s objectives successfully. I have taken a look at their product catalogue and I think that the designs are a little lacking compared to their rival companies. Mascotte is a company surviving because of the rival companies in the market, and they are constantly changing the policies and structure of the company to keep up with their rival companies. That is a smart choice in my opinion.
Sources
http://www.mascotte.com
http://www.boom.com.hk
Dave Needham, Rob Dransfield, AVCE Advanced Business, Heinemann, 2000
And thanks to Mr Lam, director of Mascotte, for his time for the interview
Done by Jessica Lam
A VCE Business Studies Unit 1
12 M