Question

The Government has recently launched a new and innovative transport system in the country, which is managed by the Metro Express Co Ltd. The CEO of the company is aware That a big Challenge lies ahead in managing d new company and to run it efficiently.

The Chairperson of the Board of Directors has stated, at the first meeting, that "Managing an organisation requires Various skills and the ability to organise various resources. All these tasks must be executed with an understanding of how actions influence The organisation, both internally and externally."

Furthermore, the Board of Directors of the Metro Express Co Ltd has stressed that one of the significant influences on how an organisation is managed in the system of corporate governance.

The CEO has been informed that you are enrolled for an MBA course and he has been appointed you to advise him manage the company.

You are requested to advise him on:

(I) all these factors he must consider, including accounting information, to manage decision making process ofthe company;

(II) how to structure the corporate governance of the organisation.

Answer 1

1) To deal with effective management of a company managing a transport infrastructure, it is essential to have separate functional departments managing the organization. For example, there should be departments of Operations that deal with running the infrastructure, Marketing for promoting the infrastructure and generating demand. Also Finance and Accounts department is needed to have prudential financial control over running the company. Moreover, HR should also be a separate function to effectively manage the manpower required to run the company in an efficient manner. Necessary policies on the freight structure needs to be placed to have sound pricing mechanism and grow the business in a sustainable manner. Financial control also needs to be ensured to have prudent revenue recognition practices and allocate capital and resources effectively to ensure sustainable growth.

2) As mentioned previously also, the organisation needs to be structured in the form of departments with each department heads reporting to the Managing Director. The MD of the company in turn is accountable to the board of directors which include independent directors and thus an effective control with impartial conduct is ensured.