XYZ Automobiles Ltd: Business Analysis and Ethical Report

This report provides a comprehensive analysis of XYZ Automobiles Limited, examining its financial performance through various ratios, assessing ethical dilemmas related to a director's conflict of interest, and recommending strategic management approaches. The report evaluates the company's profitability, liquidity, and stability, concluding that the company is worth purchasing as a going concern. It also explores ethical issues, such as conflict of interest, and suggests ethical company culture considerations. Furthermore, the report delves into strategic management frameworks, including Porter's Five Forces, PESTLE analysis, and SWOT analysis, to identify and design the company's mission and vision. It also discusses implementation strategies, including effective communication, organizational culture, and information technology, along with performance indicators. Finally, the report recommends adopting an adhocracy culture and situational leadership style to enhance innovation, flexibility, and team-based management within the company.

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Business
Student’s Name
University Affiliation
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1b
i. Profitability: The company is making a fair net profit. The company is less
efficient at converting sales into real profits. The company is small in size and it is
less complex.
ii. Liquidity: The company is in liquid because it is very easy for it to convert it sale
into cash with no loss in the value. These 18 times liquidities allow the company
to access cash at any given time.
iii. Stability: The company is in a stable condition. This because the company is able
to convert sales into cash at any time. The company is also making reasonable
profit.
iv. Overall performance: The company is in a very good working performance.
This is because the company is able to make reasonable net profit. The company
liquidity ratio also tells that the overall performance of the company is good. All
the financial ratios tell that the company is in a very stable performance.
1c
The company is worth purchasing as “going concern”. This because all the
financial ratios tell that the company will still continue operating for a long time.
It will carry out its obligations, commitments and objectives.
1d
The company should be paid at least 30000.The company should receipt at least
three times the gross income of the company. This will be directly proportional to
the return on equity.

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2
Ethics are the most important in the company. The moral compass within the company
helps in guiding the decisions and conduct. Ethics refers to the levels of right and wrong
that describes what the human must do in reference with rights, benefits to the
community or the society specific virtues or fairness. The ethical value at risk is moral
corruption. John smith is already known to some staffs. This will compromise the fair
selection because of the pre-informed decision.
Ethical company culture must always consider a number of factors which will bring
positive changes to the business. Personally, I will take time to evaluate and know more
about John smith. I should have considered the following options
 Stakeholder balance
 Driven Values
 Integrity Process
 The effectiveness of leadership and
 Long -term perspective.
3a
Strategic management is the main framework to determine the intelligence level of know-
how within the company. This should be achieved by using different approaches such as
concepts, themes and gaining understanding of the key constructs. This framework helps
in reflecting principles, objectives and structure that helps in realizing techniques that
will fit together. The highest level of strategic management is the framework. By making
good use of strategic management framework., XYZ automobiles limited have every

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reason to come up with operational implementation. This will help the company to
understand its operation and measure its performance over the time.
3b
It is very clear that XYZ Automobiles Limited comes up with a strategic plan to identify
and design the company’s mission and vision statements. This is very important in
measuring the growth of the company. Different models affecting the company can draw
after understanding the vision and mission of the company. These models include the
following:
 Porters Five Forces. This is one of the major tools for the comprehension of different
forces that figure both fare and unfair competition that XYZ automobiles faces. These
forces are easily identified and its solutions are formulated.
 PESTLE Analysis.: This represent some of the external factors which in any means
affect the company. This enables the company to determine and examine these factors
basing on economic factors, technological, political, social, licit factors and the
environment
 SWOT Analysis. This enables the company to measure its weaknesses, strength and
opportunities. This assures the management the chance to predict the current position of
the company.
3c
The goals for most businesses must be measurable, realistic and specific the intentions to
achieving them must directly proportional to the target. All plans laid out by the
management must be communicated to all staffs of the company. This will significantly
improve the company’s performance.

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3d
Implementation of the company’s strategies depends various factors. These includes the
following:
 Effective communication
 Culture of the organization
 Training of all the members of staffs
 Management’s dedication to providing required resources and
 Information Technology.
Training of staffs periodically as well as educating them on their duties and roles in line
with achieving the set targets, correct communication within the company, well arranged
organizational structure, culture which is refined and implementation of current
information technology will boost the company.
3e
XYZ Automobiles Limited should create indicators to monitor their performance index.
The following can be used by the company to measure the progress:
 Quality measures: This measures the reality of the effectiveness of the company
expectations. It shows accuracy in improvement. For instance, auditing with expected
accuracy.
 Outcome measures: These are final result which tells if the expectation was met or not.
For example, increase of interns’ absorption and any application to raise the yield rate.
 Project measure: It tells the progress of a given project over a given time. It is normally
expressed in percentage.
4a

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Adhocracy culture should be adopted by the ABC Automobiles Limited Company.
This culture is based on vision, innovativeness and new resources which will ensure
increase in the productivity of the company. ABC Automobiles Limited Company
should invite members of staff in brain storming of realistic goals. The board of
directors should be able to take calculated risks.
4b
Since a rigid structure may impede the output and general performance of the workforce of ABC
Automobiles Limited Company, the company will design the following structures for the
implementation of the adhocracy culture:
 Creation of a Task Force Team: For each of the company’s set objects, the task force
ensures that the staffs work with the common zeal of achieving the newly highlighted
goals and aims of the company. The task force will be saddled with the onus of
coordinating the activities of various subunits in the company which is instrumental in
achieving the company’s goals. The task force may then be disbanded on the completion
of a specified task.
 Creation of Committee: The Company in a bid to ensure the optimum performance of the
company will also create a committee which will supervise the overall implementation of
the company’s goals. The committee basically has the stability, consistency, and
continuity which the task force lacks. The permanent committee may be created to allow
diverse input of the committee members addressing each challenge as they surface and
ensuring the implementation of the same.
In achieving the company goals and objectives and sustained optimum performance, the
company must ensure each worker in the company has the sense of belonging to the company’s

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vision and consider themselves as integral parts of the company’s overall goal achievements,
understanding their different roles and consider how their little inputs make up the important
parts of the bigger picture.
5a
. The situational leadership style is flexible and allows the board of directors to tweak and twist
the company’s operational plans, goals, mission and strategies based on the factual relativity of
the company’s situation at a given time.
The situational leadership is best implemented from the acquisition phase up till the moment
where the company is well positioned in the market and financial stability is achieved. The
company may then transition to a transactional leadership style which allows the board of
directors to be more direct in their approach since the company has attained the needed stability.
5b
Utilizing a team-based management approach, XYZ Automobiles Limited Company will also
benefit from group motivation and performance. Basing on high group performance,
cohesiveness and motivation will result in a positive productivity. Cohesiveness will always tend
to raise as a result of small size of the group, group goals and individual. The group is considered
to be having a very high status in the company. Rewards are always base on the group rather
than individual. In addition, groups compete amongst themselves in the company.
References
Angelopoulos, P. & Mourdoukoutas, P. (2001). Banking risk management in a globalizing
economy. Westport, CT: Quorum Books

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Frederickson, H. & Ghere, R. (2005). Ethics in public management. Armonk, N.Y: M.E.
Sharpe
Stowe, J. (2007). Equity asset valuation. Hoboken, N.J: John Wiley.

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