Citizen Company: Business Simulation Project Report ACFI5020

This project provides a comprehensive overview of the Citizen Company's performance within a business simulation exercise. It begins with a summary of the original strategies and plans, including training, technology updates, and material provision. The analysis then delves into the financial and business results, highlighting the need for funding and the overall profitability of the firm. The impact of the external environment, including political, legal, and technological factors, is thoroughly examined. Strategic plans for future improvements, such as licensing and technological updates, are also discussed. The project concludes with a summary of the learning experience gained from the simulation, emphasizing the understanding of operational environments, financial management, and the importance of adapting to external factors. The simulation results, including balance sheets and cash flow statements across multiple rounds, are incorporated to support the analysis, highlighting the team's financial decision-making and strategic adjustments in response to market conditions and external challenges. The project references the Nevada Executive Business Simulation, the course is Accounting for Managers (ACFI 5020) and Evaluation of Management Accounting (ACFI5006), Faculty of Business & Law, De Montfort University, Semester 1 2019/20, as outlined in the provided brief.

Summary of the original strategy and plan
Strategies and plans put in place by management of Citizen Company for manufacturing
process to achieve the set annual manufacturing goals incorporate plans like training of the
existing workers based on the latest technology adopted by the organization, availing enough
manufacturing machines and also the provision of raw materials required for the manufacturing
process.
Plans to ensure continuous running of the manufacturing process includes motivating the
working staff by rewarding them based on their performance to encourage most of them to work
independently without close supervision (Kuznetsova and Markova, 2017, pg. 456).
Training existing staff members with the required skills in the manufacturing process is
necessary to the department since it helps to avoid minor accidents which might occur due to
lack of basic skills from the operators while operating most of the newly acquired machines
(Prajogo, 2016, pg. 245). Training the staff also contributes to the quality output which is in
accordance with the customers’ taste and preference.
Technological update strategy by Citizen Company is required since it enables the
production of high-quality output. With updated technology, manufactured products and services
will be of high standard hence likely to attract many users in the market.
Provision of manufacturing materials on time by the organization plays an important role in
the manufacturing process since it facilitates the continuous flow of the manufacturing work
which is advantageous to the management body in terms of the output produced.

Summary of financial and business results
The financial requirement for the whole manufacturing process requires a huge sum of cash
to be allocated to the manufacturing department because the organization has to pay salaries to
the working staff and the maintenance cost of the manufacturing machines.
Operation fee and renewal of the operating license is also required to avoid work breakdown
due to the legislation requirement from the local government. The organization is expected to
pay operation fee to the government has agreed upon by the registrar of companies.
Extra cost like training cost for the workers is also incorporated in the financial analysis of
the business. The training process is necessary for the junior and newly recruited staff thus
depending on the complexity of the manufacturing work which requires specific skills hence it
cost the organization in hiring the expert to train the staff with required basic skills.
From the financial analysis, the organization will be expected to borrow money from
lending companies to successfully sponsor most of its manufacturing activities. Following high
expenses to be incurred by the organization to cater to the manufacturing process, loans and
other funding from the lending firms is required by the management.
The financial statement and the balance sheet for the whole manufacturing process reflect
the profitability of the business as the firm can pay off most of its liabilities. The business result
is profitability since the books of accounts from the finance department reflects positive values
the organization is retaining after paying off its liabilities.

Impact of the external environment upon performance
Political environment
These are factors which have affected the manufacturing process like political war and
instability in the region which has led to poor market response due to the fear of uncertainty
(Hamilton and Webster, 2018, pg. 322). The manufacturing process was altered by the political
instability thus following presidential election results which were not accepted by the whole
country. This led to the state of emergency rule by the government which restricted the
movement of both goods and people from one place to another. The organization was not able to
supply its products to the market resulting in loss of profit due to low customer turnout.
Legal environment
Legal environment related to the legislation set by the government in control of the
operational activities of the companies (Appiah and Possumah, 2017, pg. 357). The
manufacturing process has been affected by the legal environment set by local government
through regulation of its manufactured products in the market which has negatively impacted the
printability of the organization. Market entry fee set by the local government is too high for the
organization depending on the number of products offered to the market since they charge entry
fee depending on the type of product in the market. The profitability of the organization has been
reduced by the market entry fee charged by the government which is too high in terms of the
market response.

Technological environment
The manufacturing process has been affected by the frequent change in technology that is
technologically upgrading manufacturing machines hence the organization has been forced to
regularly update existing manufacturing machines in accordance to the latest technology adopted
by other competing manufacturing firms (Ajayi, 2016, pg. 157). By adopting newly invented
technology in the field of manufacturing, the organization has been forced to regularly replace
the outdated manufacturing machines which are very expensive and costly to the entire
management body. Regular technological change has influenced the performance of the
organization negatively since in most cases, the organization is forced to break the
manufacturing process while upgrading and replacing outdated machines which are costly to the
organization. With the breakdown of the manufacturing process, the organization has recorded a
huge loss of profit since the organization has to recall some of its products from the market
which were manufactured with the outdated technology. This is because most customers prefer
high-quality products hence they are not preferred by the market.
Economic
Government is still attempting to reduce debt levels resulting in cuts creating a cautious
economic market. Unemployment levels are slowly declining and helping towards economic
growth. Although this is slow progress. Economic instability factors are meaning progress is
slower and future economic stability is unknown.

Strategic overview of plans
Prior licensing of the operational activities of the organization will help to control legal
environment which has been a challenge to the manufacturing process since the organization is
regularly involved in emission of poisonous gases which are harmful to the nearby residents
hence through licensing the risk, government representatives will provide alternative strategy to
cub the emission rather than interfering with the activities of the firm.
Licensing the organization will also help to reduce government activities within the
organization like auditing and other activities which are costly to the organization as they
sponsor the whole auditing work. It also limits the operation breakdown process by the local
authorities during a compliance check out process.
Updating manufacturing machines according to the recent technology plays an important
role in ensuring a continuous manufacturing process as there will be no work breakdown in the
name of updating the technology used in manufacturing work. Previously, there have been
several breakdowns caused by technological upgrade process which has negatively impacted the
manufacturing process of the organization. With a regular technological update on the machines
and the manufacturing process, the manufacturing of high-quality products will be guaranteed.
Quality products are likely to attract a large number of users therefore the firm will increase its
profitability due to a large number of customers.

Recruiting staff members who are skilled and experienced in the latest manufacturing
technologies will help the organization to save on the extra cost incurred by training staff with
basic operational skill. The organization has been spending many resources on hiring experts to
induct newly recruited and junior staff on the use and operation of the technologically updated
machines. The idea of recruitment based on the skills and experience will control the issue of
accidents which might occur due to poor handling of the manufacturing machines. This is
possible since newly recruited staff have basic operational skills required to handle the machines.
Summary of learning experience
Learning experience gained from the task assigned that is manufacturing process in business
simulation is I was able to gain additional knowledge concerning the operational environments
that is both external and internal environment which might impact the performance of the
business.
The experience learnt from the factors impacting business has enable me to find the
alternative solution for such factors like technology, legal issues, economic and social
environment so as to ensure continuity and success of the business.
From the business simulation project, I have learnt that the organization can also borrow
funds from external sources like money lending organization to fund most of its project. Loans
obtained from money lending firms are to be paid upon the maturity period to ensure positive
credit rating from the creditors.
Adhering to legislative requirements by the management is important since it regulate
government involvement into the activities of the organization hence enables the organization to
operate smoothly without legislative limitations.

References
Ajayi, A., 2016. Impact of external business environment on organisational performance of small
and medium scale enterprises in Osun State, Nigeria. Scholedge International Journal of
Business Policy & Governance, 3(10), pp.155-166.
Appiah, M.K. and Possumah, B.T., 2017. External business environment and SMEs investment
in the ghanaian oil and gas sector.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Kuznetsova, S. and Markova, V., 2017. New Challenges in External Environment and Business
Strategy: The Case of Siberian Companies. In Financial Environment and Business
Development (pp. 449-461). Springer, Cham.
Prajogo, D.I., 2016. The strategic fit between innovation strategies and business environment in
delivering business performance. International Journal of Production Economics, 171, pp.241-
249.