The strategy elements can be analysed into three broad categories

• Strategic management-How the entity intends to generate and preserve Value in terms of the following : strategy and objectives; business model
• Business Environment-The internal and external environments in which the entity operates – i.e. Trends and factors; Principals risks and uncertainties; Environmental, employees, social, community and human right matters.
• Business performance and position-How the entity has developed and performed and its position at the year end – Analysis of performance and position; Key performance indicators (KPIs); Employee gender diversity

Good corporate governance is important for any organisation. The benefits that derive for private sector structures easily transpose to those in the NGO sector.

• In as much as good governance leads to increased returns of profits for private organisations, the existence of controls, risk management and appropriate supervision ensure financial stability within the NGO. This finance related goal can be considered through the ability to continue to provide value for money, achieving entity goals and ensuring economic and efficient operations so as to meet needs both today and into the future.
• Risk reduction through governance regulation has a particular resonance when considering the risks inherent in operating in poorer regions around the world. These risks may be political or physical and may manifest themselves in negative publicity or unexpected costs.
• Good governance assists private organisations in attracting investment. This is equally true for NGOs. Those that wish to support such worthy causes such as governments or private individuals will feel more assured that their money is being put to good use if the organisation is well governed through appropriate structures for board operations and internal control.
• The scenario identifies the increased commercialisation of the venture. This would include the use of professional management teams who understand and support governance apparatus used in the private sector. This alignment to their management style provides a positive working environment for management, a known structure within which to operate effectively. It is also true that the use of such management will make the implementation or imposition of such a regime easier to deal with for an NGO going through such a transition.
• The existence of governance regimes includes the inherent need to adhere to the underlying governance concepts of integrity, justice, even handedness and probity amongst others. Since these will be fundamental ethical belief with the NGO, the implementation of additional levels of governance regulation is smoothed or made easier.
• Overall, the benefits of good governance are within the word itself. To govern is to command and implicit in this is the ability to command in a beneficial way. The requirement is to attempt to balance the level to which commercial governance regulation is necessary or sought. It is of benefit to the extent to which it does not compromise the ability to offer the service in the most effective way. Clearly to embrace the concept without regard to this qualification would be inappropriate.
  Alternative solution
• To ensure adherence to and satisfaction of the strategic objectives of the organization, thus aiding effective management.
• To minimize risk, especially financial, legal and reputational risks, by ensuring appropriate systems of financial control are in place, systems for monitoring risk, financial control and compliance with the law.
• To promote integrity, that is straightforward dealing and completeness.
• To fulfill responsibilities to all stakeholders and to minimize potential conflicts of interest between the owners, managers and wider stakeholder community.
• To establish clear accountability at senior levels within an organisation. However, one danger may be that boards become too closely involved with day-to-day issues and do not delegate responsibility to management.
• To maintain the independence of those who scrutinize the behaviour of the organisation and its senior executive managers. Independence is particularly important for non-executive directors, and internal and external auditors.
• To provide accurate and timely reporting of trustworthy/independent financial and operational data to both the management and owners/members of the organisation to see them a true and balanced picture of what is happening in the organisation.
• To encourage more proactive involvement of owners/members in the effective management of the organisation through recognising their responsibilities of oversight and input to decision making processes via voting or other mechanisms.

Code of ethics may usefully draw upon the underlying principles of good governance or existing codes such as the IFAC code for accountants. Blending the most appropriate elements from a variety of sources is a difficult skill to apply in practice but necessary for the creation of a worthy document.
Below are the fundamental principles that should be included in code of ethics
A professional accountant is required to comply with the following fundamental principles:

• Integrity
  A professional accountant should be straightforward and honest in all professional and business relationships.
• Objectivity
  A professional accountant should not allow bias, conflict of interest or undue influence of others to override professional or business judgments.
• Professional Competence and Due Care
  A professional accountant has a continuing duty to maintain professional knowledge and skill at the level required to ensure that a client or employer receives competent professional service based on current developments in practice, legislation and techniques. A professional accountant should act diligently and in accordance with applicable technical and professional standards when providing professional services.
• Confidentiality
  A professional accountant should respect the confidentiality of information acquired as a result of professional and business relationships and should not disclose any such information to third parties without proper and specific authority unless there is a legal or professional right or duty to disclose. Confidential information acquired as a result of professional and business relationships should not be used for the personal advantage of the professional accountant or third parties.
• Professional Behavior
  A professional accountant should comply with relevant laws and regulations and should avoid any action that discredits the profession.

International strategy
Explanation
Multinational companies that are confronted with low cost pressures and low pressures for local responsiveness pursue “International Strategy”. An international strategy is based on diffusion and adaptation of the parent company’s knowledge and expertise to foreign markets. Country units are allowed to make some minor adaptations to products and ideas coming from the head office, but they have far less independence and autonomy compared to multidomestic companies. The primary goal of the strategy is worldwide exploitation of the parent firm’s knowledge and capabilities. All sources of core competencies are centralized. This strategy type is ethnocentric since the foreign activities only secure the home-country company. A strong dependence of the foreign subsidiary on the resources of the home country is a consequence.
Risks associated with international strategy
i. Different activities in the value chain typically have different optimal locations. The international strategy, with its tendency to concentrate most of its activities in one location, fails to take advantage of the benefits of an optimally distributed value chain.
ii. The lack of local responsiveness may result in the alienation of local customers.
iii. The firm’s inability to be receptive to new ideas and innovation from its foreign subsidiaries may lead to missed opportunities.

Explanation
The multinational companies facing low pressure for local adaptation and responsiveness but high pressure to lower cost pursue “Global Strategy”. Companies that pursue a global strategy focus on increasing profitability by reaping the cost reductions that come from economies of scale and location economies; that is, their business model is based on pursuing a low-cost strategy on a global scale. A global strategy emphasizes economies of scale due to the standardization of products and services, and the centralization of operations in a few locations. These companies try not to customize their product offerings and marketing strategy to local conditions because customization, which involves shorter production runs and the duplication of functions, can raise costs. Instead, they prefer to market a standardized product worldwide so that they can reap the maximum benefits from economies of scale.
Risks associated with Global strategy
i. A firm can enjoy scale economies only by concentrating scale-sensitive resources and activities in one or few locations. Such concentration, however, becomes a “double-edged sword.” Thus, decisions about locating facilities must weigh the potential benefits from concentrating operations in a single location against the higher transportation and tariff costs that result from such concentration.
ii. The geographic concentration of any activity may also tend to isolate that activity from the targeted markets. Such isolation may be risky since it may hamper the facility’s ability to quickly respond to changes in market conditions and needs.
iii. Concentrating an activity in a single location also makes the rest of the firm dependent on that location. Such dependency implies that, unless the location has world-class competencies, the firm’s competitive position can be eroded if problems arise.

Explanation
Multidomestic strategy is the reverse of global strategy since the company faces high pressure for local responsiveness and adaptation but with low pressure to lower costs. A firm whose emphasis is on differentiating its product and service offerings to adapt to local markets follows a multidomestic strategy. Decisions evolving from a multidomestic strategy tend to be decentralized to permit the firm to tailor its products and respond rapidly to changes in demand. This enables a firm to expand its market and to charge different prices in different markets.
Risks associated with Multidomestic
i. Decreased ability to realize cost savings through scale economies.
ii. Greater difficulty in transferring knowledge across countries as a result of localization of core competences.
iii. May lead to “over adaptation” as conditions change. In many industry segments, a variety of factors, such as the influence of global media, greater international travel, and declining income disparities across countries, may lead to increasing global standardization.

Explanation
Transnational strategy is adopted by company that simultaneously faces both strong cost pressures and strong pressures for local responsiveness. In essence, companies that pursue a transnational strategy are trying to develop a business model that simultaneously achieves low costs, differentiates the product offering across geographic markets, and fosters a flow of skills between different subsidiaries in the company’s global network of operations. As attractive as this may sound, the strategy is not an easy one to pursue because it places conflicting demands on the company.
Risks associated with Transnational strategy
i. The choice of a seemingly optimal location cannot guarantee that the quality and cost of factor inputs (i.e., labor, materials) will be optimal. Managers must ensure that the relative advantage of a location is actually realized, not squandered because of weaknesses in productivity and the quality of internal operations.
ii. Although knowledge transfer can be a key source of competitive advantage, it does not take place “automatically.” For knowledge transfer to take place from one subsidiary to another, it is important for the source of the knowledge, the target units, and the corporate headquarters to recognize the potential value of such unique know-how.

• Factor Conditions/Endowments – The first dimension in Porter’s model is the factors of production. This dimension refers to the inputs necessary to compete in any industry – labour, land, natural resources, capital, and infrastructure (such as transportation, postal, and communication systems). There are basic factors (for example, natural and labour resources) and advanced factors (such as digital communication systems, technological and scientific know-how and a highly educated workforce). Other production factors are generalized (highway systems and the supply of debt capital) and specialized (skilled personnel in a specific industry, such as the workers in a port that specialize in handling bulk chemicals).
  Advanced factors tend to give countries more competitive advantage than the basic factors of production. If a country has both advanced and specialized production factors, it is likely to serve an industry well by spawning strong home-country competitors that also can be successful global competitors. Since West African countries are more endowed in basic factors of productions and less endowed in advanced factors they are likely to be less competitive when compared to other advanced economies such as Japan, United States, France, etc.
• Demand conditions – refer to the demands that consumers place on an industry for goods and services. Consumers who demand highly specific, sophisticated products and services force firms to create innovative, advanced products and services to meet the demand. This consumer pressure presents challenges to a country’s industries. But in response to these challenges, improvements to existing goods and services often result, creating conditions necessary for competitive advantage over firms in other countries.
  Countries with demanding consumers drive firms in that country to meet high standards, upgrade existing products and services, and create innovative products and services. The conditions of consumer demand influence how firms view a market. This, in turn, helps a nation’s industries to better anticipate future global demand conditions and proactively respond to product and service requirements.
• Related and supporting industries – enable firms to manage inputs more effectively. For example, countries with a strong supplier base benefit by adding efficiency to downstream activities. A competitive supplier base helps a firm obtain inputs using cost-effective, timely methods, thus reducing manufacturing costs. Also, close working relationships with suppliers provide the potential to develop competitive advantages through joint research and development and the ongoing exchange of knowledge.
  Related industries offer similar opportunities through joint efforts among firms. In addition, related industries create the probability that new companies will enter the market, increasing competition and forcing existing firms to become more competitive through efforts such as cost control, product innovation, and novel approaches to distribution. Combined, these give the home country’s industries a source of competitive advantage.
• Firm Strategy, Structure, and Rivalry – Rivalry is particularly intense in nations with conditions of strong consumer demand, strong supplier bases, and high new entrant potential from related industries. This competitive rivalry in turn increases the efficiency with which firms develop, market, and distribute products and services within the home country. Domestic rivalry thus provides a strong impetus for firms to innovate and find new sources of competitive advantage.
  This intense rivalry forces firms to look outside their national boundaries for new markets, setting up the conditions necessary for global competitiveness. Among all the points on Porter’s diamond of national advantage, domestic rivalry is perhaps the strongest indicator of global competitive success. Firms that have experienced intense domestic competition are more likely to have designed strategies and structures that allow them to successfully compete in world markets.

• 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.