• To increase productivity: Developing employee skills might make employees more productive, hence the recent emphasis on public debate on the value of training.
• To enhance group learning: Employees work more and more in multi-skilled teams. Each employee has to be competent at several tasks. Some employees have to be trained to work together (i.e. team working skills).
• To reduce staff turnover: Reducing staff turnover, apart from cutting recruitment costs, can also increase the effectiveness of operations. In service businesses, such as hotels, or retail outlets, reductions in staff turnover can be linked with repeat visits by customers. As it is cheaper to keep existing customers than to find new ones, this can have a significant effect on profitability.
• To encourage initiative: Organisations can gain significant advantage from encouraging and exploiting the present and potential abilities of the people within them
  Alternative answers
• Recruitment and Training
  This is one of the major responsibilities of the human resource team. The HR managers come up with plans and strategies for hiring the right kind of people. They design the criteria which is best suited for a specific job description. Their other tasks related to recruitment include formulating the obligations of an employee and the scope of tasks assigned to him or her. Based on these two factors, the contract of an employee with the company is prepared. When needed, they also provide training to the employees according to the requirements of the organisation. Thus, the staff members get the opportunity to sharpen their existing skills or develop specialised skills which in turn, will help them to take up some new roles.
• Performance Appraisals
  HRM encourages the people working in an organisation, to work according to their potential and gives them suggestions that can help them to bring about improvement in it. The team communicates with the staff individually from time to time and provides all the necessary information regarding their performances and also defines their respective roles. This is beneficial as it enables them to form an outline of their anticipated goals in much clearer terms and thereby, helps them execute the goals with best possible efforts. Performance appraisals, when taken on a regular basis, motivate the employees.
• Maintaining Work Atmosphere
  This is a vital aspect of HRM because the performance of an individual in an organisation is largely driven by the work atmosphere or work culture that prevails at the workplace. A good working condition is one of the benefits that the employees can expect from an efficient human resource team. A safe, clean and healthy environment can bring out the best in an employee. A friendly atmosphere gives the staff members’ job satisfaction as well.
• Managing Disputes
  In an organisation, there are several issues on which disputes may arise between the employees and the employers. You can say conflicts are almost inevitable. In such a scenario, it is the human resource department which acts as a consultant and mediator to sort out those issues in an effective manner. They first hear the grievances of the employees. Then they come up with suitable solutions to sort them out. In other words, they take timely action and prevent things from going out of hands.
• Developing Public Relations
  The responsibility of establishing good public relations lies with the HRM to a great extent. They organise business meetings, seminars and various official gatherings on behalf of the company in order to build up relationships with other business sectors. Sometimes, the HR department plays an active role in preparing the business and marketing plans for the organisation too.
  Any organisation, without a proper setup for HRM is bound to suffer from serious problems while managing its regular activities. For this reason, today, companies must put a lot of effort and energy into setting up a strong and effective HRM.
                                                                                                                                                                                  (Any 2 points)

• Disclosure to audit committee – disclosing to the audit committee the nature and extent of the litigation
• Exclusion from audit team – removing specific affected individuals from the engagement team
• Additional reviewer – involving an additional professional accountant on the team to review work
• Resignation from engagement – if the litigation is at all serious, it may be necessary to resign from the engagement, as the threat to independence is so great.

• If managers do this, they are generally speaking, spending the owners’ money for purposes other than those they have authorized; sometimes it is the money of customers or suppliers that is spent and on occasion, the money of employees. By doing this, the manager is in effect, both raising taxes and deciding how they should be spent, which are functions of government, not of business. There are two objections to this:
   Managers have not been democratically elected (or selected in any way) to exercise government power
   Managers are not experts in government policy and cannot foresee the detailed effect of such social responsibility spending.
• Businesses do not have responsibilities, only people have responsibilities. Managers in charge of corporations are responsible to the owners of the business, by whom they are employed.
• These employers may have charity as their aim, but generally their aim will be to make as much money as possible while conforming to the basic rules of the society, both of those embodied in ethical custom.
• Maximizing wealth has the effect of increasing the tax revenues available to the state to disburse on socially desirable objectives.
• If the statement that a manager has social responsibilities is to have any meaning, it must mean that he is to act in some way that is not in the interest of his employers.
• Many company shares are owned by pension funds, whose ultimate beneficiaries may not be wealthy anyway.

• Demands of roles. It reflects the reality that both jobs are demanding roles and ultimately the idea that no one person would be able to do both jobs well. The CEO can then run the company. The chairman can run the board and take the lead in liaising with shareholders.
• Authority/Dominance by an individual. There is an important difference between the authority of the chairman and the authority of the chief executive, which having the roles taken by different people will clarify. The chairman carries the authority of the board whereas the chief executive has the authority that is delegated by the board. Separating the roles emphasizes that the chairman is acting on behalf of the board, whereas the chief executive has the authority given in his terms of appointment. Having the same person in both roles means that unfettered power is concentrated into one pair of hands. The board may be ineffective in controlling the chief executive if it is led by the chief executive.
• Conflicts of interest. The separation of roles avoids the risk of conflicts of interest. The Chairman can concentrate on representing the interests of shareholders.
• Accountability. The board cannot make the CEO truly accountable for management if it is led by the CEO.
• Board opinion. Separation of the roles means that the board is more able to express its concerns effectively by providing a point of reporting (the chairman) for the non-executive directors.
• Control over information. The chairman is responsible for obtaining the information that other directors require to exercise proper oversight and monitor the organisation effectively. If the chairman is also chief executive, then directors may not be sure that the information they are getting is sufficient and objective enough to support their work. The chairman should ensure that the board is receiving sufficient information to make informed decisions, and should put pressure on the chief executive if the chairman believes that the chief executive is not providing adequate information.
• Compliance. Separation enables compliance with governance best practice and hence reassures shareholders.

• Strategy
  Non-executive directors should contribute to, and challenge the direction of, strategy. They should use their own business experience to reinforce their contribution. The most critical need is for an environment in which effective challenge of the executive is expected and achieved in the boardroom before decisions are taken on major risk and strategic issues.
• Scrutiny
  Non-executive directors should scrutinise the performance of executive management in meeting goals and objectives and monitor the reporting of performance. They should represent the shareholders’ interests to ensure agency issues don’t arise to reduce shareholder value.
• Risk
  Non-executive directors should satisfy themselves that financial information is accurate and that financial controls and systems of risk management are robust.
• People
  Non-executive directors are responsible for determining appropriate levels of remuneration for executives, and are key figures in the appointment and removal of senior managers and in succession planning.

• Running the board and setting its agenda
  The chairman should ensure the board focuses on strategic matters and takes account of the key issues and the concerns of all board members. He should ensure the contributions of executives and non-executives are co-ordinated and good relationships are maintained.
• Ensuring the board receives accurate and timely information
  Good information will enable the board to take sound decisions and monitor the company effectively.
• Ensuring effective communication with shareholders
  The chairman should take the lead in ensuring that the board develops an understanding of the views of major investors. The chairman is often the public face of the company as far as investors are concerned.
• Ensuring that sufficient time is allowed for discussion of controversial issues
  All members should have enough time to consider critical issues and not be faced with unrealistic deadlines or decision-making.
• Taking the lead in board development
  The chairman is responsible for addressing the development needs of the board as a whole and enhancing the effectiveness of the whole team, also meeting the development needs of individual directors. The chairman should ensure that the induction programme for new directors is comprehensive, formal and tailored.
• Facilitating board appraisal
  The chairman should ensure the performance of the whole board, board committees and individuals is evaluated at least once a year.
• Encouraging active engagement by all the members of the board
  The chairman should promote a culture of openness and debate, by, in particular, ensuring that non-executive directors make an effective contribution to discussions.
• Reporting in and signing off accounts
  Financial statements in many jurisdictions include a chairman’s statement that must be compatible with other information in the financial statements. The statement provides an opportunity for the chairman to demonstrate that he or she is acting in the shareholders’ best interests, and to provide an independent view of the company’s affairs. The statement can also explain how the chairman is exercising his or her role and highlight other aspects of corporate governance that might be of concern to the shareholders.

Porter’s model identifies five competitive forces that affect performance and these are considered below with particular reference to the cruise and ferries divisions.
(i) The threat of new entrants
In both cruises and ferries, the threat of new entrants is restricted by the cost of entry, namely the acquisition of the shipping and facilities required to operate these very substantial vessels. If one considers outright purchase then this will be a significant deterrent. However, one must also consider that such vessels might be rented which makes access to the capital required more available. One might also consider that such vessels do exist all over the world and there is a possibility that competing companies might divert vessels that are not currently competing on GUSSIE PERRY Ltd routes to directly compete on GUSSIE PERRY Ltd routes. However, this threat should be related to the likely response that might come from incumbent firms within the industry.
One must also consider in this heading the extent to which a new entrant would gain access to the market. Unless such a new entrant has an existing name and reputation that is associated with this sort of marketplace then it is more difficult for them to attract customers to their services.
(ii) Competitive rivalry
Cruise liners and ferries are a high fixed cost operation. As such, one can only make profits if a company exceeds the breakeven volumes. All competitors in this marketplace will therefore be seeking to maximise their capacity, obviously without reducing prices to an extent that makes break-even capacity more and more difficult to achieve.
We have no details in the question as to how the marketplace operates, but one would expect a certain amount of price competition and, more importantly, significant non-price competition as well. Such non-price competition would include newer and higher quality vessels; improved port facilities to speed passenger and car throughput; customer loyalty schemes which may include links with other types of supplier (of which air miles would be a good example) but any such similar scheme.
(iii) The bargaining power of buyers
The buyers in this case are the passengers that use the ferries or cruise liners. Given that this is a very competitive market, then buyers do have significant power given that they can transfer to other suppliers if they do not like the price or the quality of the facilities offered by a particular company. Such power is effectively limited by the differences that exist between the companies and to the extent that companies cannot differentiate themselves by price or non-price competition then buyers are put in a weaker position. This market is probably better described as an oligopoly rather than a perfectly competitive market as for any particular route there will be a limit on the number of suppliers. To the extent that these companies do have unofficial albeit illegal agreements regarding price and facilities offered then the power of the buyers will be diminished.
(iv) The bargaining power of suppliers
Many suppliers will have little bargaining strength as they are themselves subject to very competitive markets. Thus suppliers of food, fuel, various fixtures or fittings on the vessels themselves, will be in highly competitive markets and GUSSIE PERRY Ltd will be able to take advantage of its own fairly strong position.
However, its labour force must also be considered a supplier in this context and it depends on the industrial relations within this particular industry as to whether the company is in a strong or weak position in this respect.Port facilities and landing fees may also be an area where the company is in a weak position vis-a-vis a fairly small number of suppliers. However, as with all suppliers there will be limitations implied by legislation which limits, albeit not very effectively, the ability of the near monopoly suppliers to abuse their position.
(v) Threats of substitute products or services
Substitute products for the cruise division will be alternative types of leisure holidays. Thus a fortnight’s holiday visiting several cities by coach or air may be a perfectly reasonable substitute to a fortnight’s holiday cruising on a liner. Similarly, the numerous fly/drive holidays that are available would also be substitutes. The company would have to do market research to establish what sort of customers chose their cruises, whether it was customers who just liked cruising and would not really consider the alternatives available or whether it was customers who considered all the possible alternatives and then made a decision in favour of one or the other. Such market research would be vital for the company to produce the correct marketing strategy.
In the case of ferries, there are possibly more obvious alternatives such as the Channel Tunnel for the West African and also the airlines. Different considerations will apply to passengers and freight. As regards freight, the decision will be based almost exclusively on cost and time. Thus to compete, ferries would have to demonstrate that they can offer a cheaper service which does not significantly increase the time of the journey. As regards passengers, non-price factors such as the facilities and general amenity of the ferry service may also be important.

Total turnover of GUSSIE PERRY Ltd increased from GH¢ 15,144,000 to GH¢ 17,460,000 – an increase of 15.3%.Profit increased from GH¢ 1,230,000to GH¢ 1,652,000 – an increase of 34.30%.
For the company as a whole, the return on sales may be calculated as follows:
Last year – GH¢ 1,230,000 ÷ GH¢ 15,144,000 = 8.1%.
This year – GHs¢1,652,000 ÷ GH¢ 17,460,000 = 9.46%.
Returning to the individual divisions, the following table expresses the various key financial measures.
Divisional assessment
Cruise
As regards the Return on Investment and Residual Income, one could really say that the cruise division had ‘encouraging results’. The returns from its investment is able to cover its cost of capital thus a positive Residual income. Turnover growth in Cruise division is 16.45% more than the Turnover growth rate of the company as a whole thus additional investment in this area might be productive. Although, without knowing the precise market conditions and the needs of this division as regards new shipping or other facilities, the financial performance of this division is very bright to make any firm judgements on investments and capital decisions.
Advise for Cruise Division
It will be advisable to approve and fund decisions for projects and programs of different types (for example marketing programs, recruiting programs, and training programs) for this division as a higher ROI means that investment gains compare favorably to investment costs.
Ferries
Ferries division shows an improvement of 6.55% in sales but 35.42% increase in profits, this is encouraging. It has a ROI of 26%, thus is covering its cost of investment. Capital and additional investments should be approved and encouraged at this division.
Advise for Ferries

Although there was low increment in sales, it translated into a high operating profits. The company should make efforts to increase turnover through company’s pricing policies, inventory management and investment in capital assets.
Bulk Shipping and Containers
In both containers and bulk shipping, the Chairman’s statement is fairly accurate in his pointing to disappointing results in this area. Both are not able to cover its cost of investment. Both Divisions has negative residual incomes.
Advise for Bulk Shipping and Containers
A negative residual income means that the division could have done better by another, risk-free approach. Some analysts refer to residual value as Economic Value Added. If your residual value is negative, you are not truly adding value to what you are doing. There will be no value added if more funds and investments are approved at this division.

• Aaron Yeboahs’ recent exposure to mission statements as part of the strategic management process provides a useful opportunity to evaluate their relevance and value to a small company such as GUSSIE PERRY. In some ways, Aaron is a ‘walking mission statement’. He epitomises the values, behaviour, strategy and purpose of why GUSSIE PERRY exists. Mission statements in defining the reasons why the firm exists, what it aims to achieve, how it aims to achieve its purpose and who it is in business for, can act as a powerful motivating force for the company. In strategic terms it may clarify the markets that the firm intends to serve, the products and services provided for those markets and the way they will be reached. In so doing it may define the boundaries of the organisation chosen by the top management.
• It may also specify the technologies to be used (perhaps important for GUSSIE PERRY and the competencies it will use to compete in its chosen markets. It is therefore a combination of ‘hard’ tangible drivers of the business and the ‘softer’ values and behaviours, which will enable the mission of the business to be achieved.
• Ideally, it should have relevance and resonance with all types and levels of employees. It expresses values and beliefs and in so doing will shape and influence the policies and standards adopted by the firm. They can profoundly influence the attitudes and behaviour of key stakeholder groups both inside and outside the firm and achieve a consistency of purpose for the stakeholders.
• By their very nature mission statements typically come at the beginning of the rational planning process and thereby facilitate consistent strategic decisions. However some commentators have argued that you discover rather than invent your mission.
• Aaron may now be in a position to develop a much more meaningful mission statement reflecting the origins of the company, his preferences, and the environmental conditions influencing the company together with its resources and associated competencies and capabilities.
• As the organisation grows and develops so its need for a formal mission statement may increase, enabling the direction of the company to be understood and for more detailed goal setting and planning to be done against a consistent framework.
• Its ability to communicate what the firm stands for both to stakeholders inside and outside the firm should not be underestimated. As such, development of an effective mission statement will take time and reflect changing conditions faced by the firm.
• Mission statements by their very nature are broad in their scope and intended to positively influence the many stakeholders linked to the company. Effective statements should be brief, adaptable to changing circumstances and clearly show the distinctiveness of the firm and its mission. Ineffective statements will convince nobody, have little or no impact on, or relevance to, what the firm does. They may be merely statements of good aspirations and intentions, and used for public relations purposes to justify actions already taken. Once created, good statements should be re-visited at regular intervals to ensure they are relevant to the environment the firm is operating in.
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• Understanding and managing environmental costs. Environmental costs are often hidden in overheads and environmental and energy costs are often not allocated to the relevant budgets.
• Minimise accidents and long-term environmental effects. Accidents and long-term environmental effects can result in large financial liabilities.
• Companies with poor environmental performance may face increased cost of capital because investors and lenders demand a higher risk premium.
• Environmental protection and ethical labour practices is now a key aspect of corporate social responsibility. Any steps they can take to protect the environment and its employee’s safety are considered both good for the company’s reputation and society as a whole.
•  Pressures on businesses for environmental and safety of employees are increasing.
• Short term savings through waste minimization and energy efficiency schemes can be substantial.
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The role of communication during strategy implementation is very critical to the implementation of strategy. Effective communication is needed for successful strategy implementation.
Communication is effective when it is directed to appropriate people who need to make certain decisions or use it to perform their routine tasks. Furthermore, it must be accurate, complete and timely and must convey meaning in a cost-effective manner.
(i) Strategy has to be communicated to all stakeholders. It is important that proposed strategy is known and understood by all especially managers and employees. Understanding the strategy will enable them to accept their roles and become committed to its implementation. Inadequate information on adaptive changes, insufficient instructions and poor feedback on performance can reduce the success of strategy.
(ii) Communication is required for planning, coordination and control.

• Management decision-making requires data for planning. Managers are at the center of a communications system, providing or receiving data planning and implementation.
• Interdepartmental coordination depends on information flows. All the interdependent systems for purchasing, production, marketing and administration can be synchronized to perform the right actions at the right times to cooperate in accomplishing the organisation’s aims.
• Through effective communication, employees receive instructions, rules and procedures in order to help them perform their tasks. Knowing what to do and why motivates and challenges them to their tasks and makes them more effective.
• Distributors and customers must be aware of changes in product characteristics and new products being introduced into the market. The organization must communicate the appropriate information on these issues to them in order to encourage the storage and use of the modified or new product.
• Shareholders must be informed of the introduction of a new strategy particularly as this may affect their dividends. The acceptance of the strategy by shareholders means that management has the authority to use their money in a desired manner and account for it.

Leadership involves influencing others to behave in a desired manner. Strategic leaders are needed to drive the organization towards the achievement of its strategies. Among others, strategic leaders must possess social skills, entrepreneurial skills and must be visionary.
Their importance in strategic management evolves the following functions:
i) They clarify the strategic intent of the organization by helping stakeholders to embrace change. They do this by setting forth a clear vision for the organization.
ii) Leaders shape and refine the organizational structure and make it function effectively to accomplish strategic intent.
iii) Leaders also shape organizational culture. They promote values and beliefs that are useful to the current strategy.
iv) They inspire confidence and energize their followers to enthusiastically achieve the organisation’s mission.
v) They assign responsibilities, allocate resources and supervise the performance of employees in a manner that helps the organization to achieve its strategic objectives.

Nature of competition in the industry refers to five forces analysis and in this particular case each of the forces will be examined.
Threat of new entrants
The competition in an industry get intense when the barriers to entry are weak hence many businesses are able to enter the industry. In the case there are number of factors that show that industry is easily entered.

• Capital requirements – given the fact that the industry has grown from one to over two hundred producers and the assertion that the capital requirements are generally low makes the industry highly competitive.
• Product differentiation/standardised product – the case suggest that basis of competition is price which implies that producers in the industry do not differentiate their products or in other words the product of the industry is standardised which will make competition very keen.
• Switching cost – it appears that consumers face very low switching costs since water is not any technical and sophisticated product. Hence consumers can easily switched from one producer to another without any major cost. This makes competition much more severe.
• Knowledge requirements – no special skill or knowledge is required to operate in this industry hence competition will be more intense.

Bargaining power of buyers
The group of buyer can be power or less power depending on a number of factors. In this particular the industry faces two buyer group – thus corporate buyers and bulk distributers. A number of factors in the case make the buyer groups power.

• Low switching costs – it will not cost buyers corporate and bulk distributors buyer groups to switch from one producer to another. This makes buyer group very powerful relative to the industry.
• Buyers face standardised/undifferentiated product – “all water be water”. This simply means that sachet water or bottle water from one producer is not much different from the next producer hence consumers are really indifferent as to which producer produces what. This makes buyer group very power.
• Threat of backward integration – from the case some bulk distributors are actually venturing into production by bypassing already existing producers and this makes the buyer group very powerful.
• Low profit margins – in the case bulk distributors clearly face low profit margins and so are very sensitive to price increases by producers of Pure Water.

Bargaining power of suppliers
The supplier group provide the inputs into the production process of the industry. There supplier group include the labour, providers of water and electricity. These supplier groups will be more powerful and hence intensify competition with the following conditions.

• Few or dominant supplier group – currently apart from the few producers who have their own water supply, most industry players depend on Alpha Mineral Water Ltd Water Company which is the sole supplier aside drilled bore hole. This makes powerful as it can afford to hike prices without much input from the industry.
• Limited alternative sources of supply – Currently bore hole drilling is the only available alternative for the industry. But since majority of the producers depend on TWC it may suggest that there could be challenges with owning one’s bore hole which may include locating favourable site and cost of drilling minimum required number of bore holes to supply sufficient water.
• Suppliers’ product is an important input to buyer’s business – without supply of raw water sachet and bottle water will not be produced. It is an indispensable input into the industry.
• Unionisation of labour – will make wage negotiation tougher and makes the labour supply input powerful.

Rivalry among existing firms
This force deals with how the exist firms in an industry contend for the market share. The case points a number of situation that give rise to intense competition among rivals.

• Declining/negative growth – since the industry is declining it will make the fight for remaining market share much intense.
• Equally balanced competitors – from the case it appears that there no one particular firm that dominates the market and since they all have fair share of the market each firm can respond to any price cut by the competitor.
• Many producers – there are over 200 producers in the industry and this makes them weak especially when they have not form any cartel or association to regulate the price.
• Low switching cost – the industry products have no or very low switching costs. This makes the competition keen since each producer would have to make effort to retain the existing customers so they are not taking over by other competitors.

Threat of substitute products
These talks about alternatives to the industry products. In the case it is clear that there are substitutes from imported sources, TWC and other water bodies.

• Availability of substitutes – there are readily available substitute sources to the industry. Some corporate clients are importing sachet and bottle water, TWC is available as well as other water bodies.
• Low switching cost – There is low switch cost in moving from the industry source to other sources available.