Corporate Accounting Report: RFG Strategies, Agency Problems Analysis

This report delves into corporate accounting, focusing on the strategies employed by RFG to enhance its performance and the agency problems encountered within the company. The report examines the transformation of business activities, the closure of unprofitable franchise stores, staff redundancies, and the rationalization of centralized functions as key strategies. It also analyzes the agency problems arising between franchiser/franchisee and manager/shareholder relationships, highlighting potential conflicts of interest. The conclusion emphasizes the importance of corporate accounting in recording financial transactions and assessing company performance, while the recommendations suggest implementing employee rewards and leveraging leadership practices. The report provides a comprehensive overview of corporate accounting principles, strategic approaches, and the impact of agency problems on business operations, supported by relevant references.

Corporate
Accounting

Table of Contents
QUESTION 5...................................................................................................................................1
Strategies used by Management of RFG to improve its performance.........................................1
QUESTION 6...................................................................................................................................2
Agency problems between franchiser/ franchisee and manager/ shareholder relationship.........2
CONCLUSION................................................................................................................................3
RECOMMENDATIONS.................................................................................................................3
REFERENCES................................................................................................................................4

Corporate accounting can be defined as a technique of recording business information in
relevant accounts to analyse actual financial results. This part of the report covers two questions
of the project which are 5 and 6. Both of them are based upon strategies used by management
and agency problems faced by frachiser/ franchisee relationship and manager/ shareholder
relationship of a public company.
QUESTION 5
Strategies used by Management of RFG to improve its performance
For all the business entities it is very important to focus on the areas of improvements so
that long term business goals could be achieved. RFG is an Australian company which is mainly
based in Queensland and executing its business successfully (Domino, Wingreen and Blanton,
2015). Management of the enterprise is using different strategies to improve its performance and
increase profitability. Detailed analysis of all of them is as follows:
Transformation in activities of business: In order to improve the performance
managers of RGD are making transformation in the business activities so that all the tasks which
are complicated could be performed in appropriate manner. Currently the organisation is
focusing on such commercial operations which are not able to generate profits for it. In order to
develop the organisation managers have planned to close them so that possibility of losses could
be reduced.
Closing unprofitable franchise stores: There are various franchise stores of RFG which
are not able to generate profits for the organisation. In order to improve the performance
management planned to closing them off. With the help of this strategy the company will be able
to reduce losses which are taking place due to such stores which are not able top create profits.
Staff redundancies: In RFG the rate of staff redundancy is very high in order to reduce it
management is providing challenging tasks to the employees. With the help of this strategy
performance of the organisation could be enhanced because when workforce will be engaged in
their work then the rate of it could be reduced (Maas, KSchaltegger and Crutzen, 2016).
Rationalising centralised function: For all the business entities it is very important to
focus on their centralised functions as it can help to attain all the business goals. In RFG
managers are rationalising all its centralised functions such as customer service, productivity
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analysis, supply chain management etc. With the help of it performance could be improved as it
helps to operate business in systematic manner.
All the above described strategies are used by management of RFG in order to improve
performance of the company. All of them will be effective for the organisation because main
goals of them is to make sure that all the negative aspects get reduced and business goals could
be achieved. As currently various franchise stores of the enterprise are not able to generate
profits therefore management took decision to close them. With the help of it performance could
be enhanced because it can result in reduced in possibility of losses in future. One more strategy
regarding decrement in staff redundancies is also formulated by managers in order to enhance
employee engagement. It can help to improve the performance by enhancing productivity of
workforce.
QUESTION 6
Agency problems between franchiser/ franchisee and manager/ shareholder relationship
Agency problem can be defined as the conflict of interest between two parties due to
differences in their thoughts and mind sets. In most of the companies such types of issues are
taking place because sometimes both the parties do not agree to same concept (Agency problem,
2015). Agency problems affect specific relationships such as manager/ shareholder, franchiser/
franchisee etc.
The relationship of franchiser and franchisee may cause same agency problems as
between manager and shareholder of a public company because there could be a conflict of
interest in both of them. Management in the companies work as agent for shareholders and they
are supposed to formulate such decisions which may enhance their returns. If they are not able to
do the same then conflict may take place between them.
This type of problem can also take place in the relationship of franchiser and franchisee
because the franchisee work as an agent for franchiser. Main responsibility of it is to enhance
sales of the company in the area where the franchise business is executed. If it is not able to do
the same then conflict may take place between these two parties because the contractor in this
case expect too much form the other party (Schaltegger and Burritt, 2017).
Main purpose of organisations behind opening franchise all around the world is to
enhance awareness of its products and increase the sales for the business. If franchisee cannot
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perform the tasks of executing business appropriately then it can result in agency problem. Some
conflicts regarding registration law may also take place between franchiser and franchisee. If all
the clauses in the contract are not according to the law then the holder can take strict action
against the contractor (Schaltegger, Etxeberria and Ortas, 2017).
In order to deal with all such types of issues it is very important for franchiser and
franchisee to communicate with each other on timely basis and try to work collaboratively so
that goals of both of them could be achieved.
CONCLUSION
From the above project report it has been concluded that corporate accounting a
technique which is used to record financial transactions in appropriate books. With the help of it
stakeholders can assess that performance of the company is good or not. While formulating final
accounts it is very important for organisations to follow all the principles such as going concern
which reflects that business will be continued in upcoming years. In order to analyse profit and
loss for the companies financial statements could be analysed by internal and external
stakeholders. There are various strategies which could be used by management to improve
performance these are transformation in activities of business, closing unprofitable franchise
stores etc.
RECOMMENDATIONS
It has been recommended to the management of RFG to implement strategies such as
rewards to employees for their work and leveraging high impact leadership practices. With the
help of them performance of the organisation will be improved and all the long term goals could
be achieved successfully.
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REFERENCES
Books and Journals:
Domino, M. A., Wingreen, S. C. and Blanton, J. E., 2015. Social cognitive theory: The
antecedents and effects of ethical climate fit on organizational attitudes of corporate
accounting professionals—a reflection of client narcissism and fraud attitude
risk. Journal of Business Ethics. 131(2). pp.453-467.
Maas, K., Schaltegger, S. and Crutzen, N., 2016. Integrating corporate sustainability assessment,
management accounting, control, and reporting. Journal of Cleaner Production. 136.
pp.237-248.
Schaltegger, S. and Burritt, R., 2017. Contemporary environmental accounting: issues, concepts
and practice. Routledge.
Schaltegger, S., Etxeberria, I. Á. and Ortas, E., 2017. Innovating corporate accounting and
reporting for sustainability–attributes and challenges. Sustainable Development. 25(2).
pp.113-122.
Online
Agency problem. 2015. [Online]. Available through:
<http://ordnur.com/tag/agency-conflict-definition/>
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