Business Management Review Essay

EXECUTIVE SUMMARY

The following management review report assesses Dollarama Inc., a company located in Canada that deals with retail trade. This report therefore presents key findings and recommendations regarding the management of Dollarama through a review of the company’s structures in terms of its leadership, planning, control, governance as well as social

responsibility. The following report has thus taken into account the diversity in the company’s management structure at both the overall as well as within its divisions and stores that are set up across different locations in Canada.

This report has generated meaningful insights that define the management of Dollarama by identifying the short and long term plans, control and leadership of the organisation that is tailored to achieving its objectives. The report has found out that the company is grounded on well-structured governance that recognizes the importance of leadership that entails active participation of all players in the business. The customer as well has formed a centre of interest as most policies such as the organization of the business and the control also seek to uphold the significance of the customer in the business.

COMPANY OVERVIEW

Dollarama is a leading dollar store operator in Canada which deals with retailing of goods at more than eight hundred locations throughout Canada. This business was founded by its CEO, Larry Rossy in 1992 to emerge among the business giants of the present age in Canada. Its stores provide a wide range of goods that uniquely retail at most 3 dollars for a given product therefore making affordability its biggest strength in the business. Its stores are evenly distributed throughout Canada at convenient locations that include metropolitan areas, small and big cities as well.

The company has its headquarters in Montreal, Canada where most of its management operations are carried. The company, through discipline and proper management, has managed to source customized products for its customers from manufactures by having the name of Dollarama in their labels thereby marking their identity in creating a sustainable brand as a business entity.

The company has continued to experience tremendous growth throughout its history as a result of the increased business openings to different locations as well as high level standards when it comes to financial, social and legal accountability in its business environment.

GOVERNANCE

Board of directors

Dollarama’s governance is clearly defined to reflect its diverse needs and the interest of various groups that make up its composition. The top management involves its CEO, Mr. Larry Rossy who together with other eight members form the board of directors. Among these board of directors roles are demarcated to bring up different capacities which are three chairmen and the general members in the board.

Audit committee

Dollarama has a separate audit committee that is independent of the organisations management and staff in order to boost their independence and therefore offer a truthful and independent disclosure of the company’s assets, its operations, working and all other dynamics that necessitate disclosure about their level of openness within the business entity.

Dollarama’s audit committee is strengthened by the company’s chief auditor, PriceWaterHouseCoopers whose responsibility is to express an opinion on these consolidated financial statements based on audits conducted in accordance with Canadian’s generally accepted auditing standards. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the company’s financial statements which depends on the auditor’s judgment, including a clear assessment of the risks of material misstatement of the consolidated financial statements. The auditor ensures that the company is able to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. Additionally, in making risk assessments, the auditor considers internal control which is relevant to the entity’s preparation and fair presentation of financial statements in order to design audit procedures that help in giving an independent view of the company’s effectiveness of the internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management as well.

Compensation committee

 Its compensation committee is well structured to reflect the full representation of its entire staff that includes the management, the working staff as well as its subsidiaries that facilitate its operations in their supply chain. In fact it provides a guide on the duties and responsibilities of different workers thereby attaching compensation with the level of technical requirements, professional qualification needs and the essentiality of the tasks to the wellbeing of the business.

Shareholding of the business equity

Majority of the stake in Dollarama which amounts to above eighty percent of the company is owned through private equity following a private buyout in November 2004 that saw more than eight hundred and fifty million dollars’ worth of business equity sold. The rest is owned by the management who influence majority of the company’s decisions. Therefore the largest equity is owned by the institutional investors who were instrumental in the expansion of the business through the generation of additional financial capital.

Effectiveness of governance

Dollarama’s governance is well structured and well based on international standards that require the representation of all interest groups in a company in the company’s management. However improvements can be made to create better structured governance that give clear guidelines on the management to specify roles at each level thereby ensuring the duplication of roles and the omission of responsibilities even under dynamic management needs, are averted.

ETHICS AND SOCIAL RESPONSIBILITY

The company has a code of conduct and ethics that spell guidelines to all directors, officers, head office management, head office employees, warehouse management, distribution center management, field management and store management as well. This is meant to provide clear guidelines to enable the staff of the firm to maintain integrity, objectivity and reputation in the endeavor to portray a good business image that is imperative in shaping customer and employee relations as well.

Code of conduct and ethics

Generally the Dollarama’s code of conduct addresses the following concerns among others;

The protection of the proper use of Dollarama’s assets.

The compliance of laws and regulation both inside and outside the business environment.

Reporting and action on any unethical behavior.

Conflicts of interest that may arise among the businesses management, staff or the corporation as a whole.

According to the company’s code of conduct and ethics that does not discriminate neither between job status nor gender, serious legal consequences are spelt out as the repercussions of failure to comply with these guidelines. Therefore with proper communication and enforcement, Dollarama has managed to maintain an ethical and responsible workforce. Besides this, the management is dedicated to offering conducive environment that is free of harassment, discrimination, drug and substance abuses, insecurity as well as one that is enabling to workers to enable them advance their careers.

Social responsibility

It is notable that the company has gone great lengths in advancing its social responsibility which is seen as an indispensable aspect for the company’s growth. It has ensured a reliable product supply chain that meets safety standards as well as maintained a good image to the outside world through contribution to conservation measures in the society.

On the responsibility of  waste management and reduction, Dollarama has been a registered Industry Steward in Ontario, Québec and Manitoba since these programs were established requiring its members to contribute a certain percentage of the net costs of municipal curbside recycling according to the type and quantity of materials Dollarama provides to its customers. This in the end ensures that the company internalizes its externality to the society in the endeavor to achieve its goals.

Product safety has been among many, a key priority in the company’s objectives. The company has implemented various processes and procedures to monitor the safety of the products sold its stores. These mechanisms include among other things, product sampling, factory audits, and laboratory testing performed by independent third parties. This goes hand in hand with the company’s dedication to involve the expertise of Health Canada and the Canadian Food Inspection Agency in ensuring that high level food safety standards are maintained.

Dollarama has also ensured that its vendors comply to both quality and safety standards. Therefore vendors are required to comply with statutory laws in their environments by providing fair remuneration and working conditions to their employees, keeping away from discrimination and child labour as well as being responsive to any other ethical requirements for business today. This is achieved through periodic inspection by Dollarama in a bid to ensure compliance.

ORGANIZATION

Organizational structure

The company is organized in a team-based structure that appreciates the need for group work and lateral relations in solving problems. Decisions between different company divisions are broken down by bringing different employees together in solving an issue when need arises despite their different full time functional work responsibilities and the inherent hierarchical nature of organisations that require one to report to one’s senior employees.

This organization has taken into account the objectives of the company as well as its operations that primarily focus on the branding and retailing of the customized products. This allows the management to allocate responsibilities and duties among itself in order to facilitate the carrying out of routine procedures in the company efficiently through coordination, supervision and task allocation.

Management’s organization

The topmost management of the company is the board of directors who make majority of the key decisions in the entreprise. The board is rather independent as they do not form a major composition of the company’s permanent employees and thus under the CEO who is the senior most manager, the organization branches to middle level management who are responsible for the operations of the different divisions of the company which include the import division information and technology and communication, merchandising, logistics, finance, human resource among others. The divisional structure embraced in the company ensures that employees who are responsible for a given task are solely concerned with its implementation. Additionally, this fosters inter-divisional competition, specialization and improved employee morale.

However, this organizational structure may encourage rivalries among divisions as each strives to achieve its own interests thereby tasking the management with the responsibility of ensuring a close monitoring of work. Besides this, this form of organization could end up being expensive and costly to run owing to the duplication of resources and capital assets in the company.

However, under this research, one would expect to find a hierarchical organizational structure owing to the nature of the company that has its management spread over a wide area all over Canada. This should necessitate the top management to delegate majority of the work to different branch managers who would oversee operations as well as create a more straightforward and comprehensive management that has clearly defined responsibilities and levels of authority.

Effectiveness of the organizational structure

This organization is effective in that it allows consultation and also makes all employees proactive as it provides all with an opportunity to contribute ideas towards the growth of the company. Through synergy, the different divisions of the company are bound to make meaningful use of the different capabilities of its employees. Any improvements under this system therefore would only involve the distinction of authority among the different managerial positions that tend to lie across the same level of command and duties.

PLANNING

Dollarama has identified its strategic goals that help it in making of decisions regarding the company. It is a company composed of a chain of retail stores and therefore whichever decisions that it has taken have been centered on boosting sales through expansion, customer satisfaction and efficiency in human resource.  This has necessitated identifying targets on the basis of its market which is primarily the average middle and low income earner. It has identified convenience and accessibility as important factors in shaping the success of the company and therefore its goals focus on increasing the network of retail branches across Canada.

To achieve such strategic objectives, the company has employed a political, economic, social and technological approach as basis for making decisions that impact on the growth of the business both in the short term as well as in the long term. The political decisions that arise from authorities dictate the macroeconomic policy adopted and therefore the company has to adjust itself to cope and maximize on achieving its goals. Economic goals impact on the business directly and therefore this call for responsive strategic plans that take into account any unforeseen changes in the purchasing power or the supply of output by the market which would in the end affect the business negatively. Social aspects as well have made Dollarama to incorporate the society in its decisions as the welfare of the society greatly impacts on the performance of the business both in its image as well as its financial performance. Technology too forms the major concern of the company as it is vital in determining the productivity and efficiency of the business and so is its performance and competitiveness especially in the modern world where technology has been dynamic and where poorly coordinated plans would lead to losses.

LEADERSHIP IN DOLLARAMA

Key leaders

The following are Dollarama’s key leaders who are also among the board of directors in the company.

Larry Rossy-Chair of the Board of Directors and Chief Executive Officer

Michael Ross, CA-Chief Financial Officer and Secretary

Neil Rossy-Chief Merchandising Officer

Leonard Assaly-Senior Vice President

Geoffrey Robillard-Senior Vice President, Import Division

Leadership styles

Dollarama uses a Laissez-faire style of leadership in its administration. This involves a system where the worker has the ability to contribute actively towards the growth of the business as they are empowered to make independent decisions so long as one does not exceed his authority or move away from his responsibility (Lewin, Lippitt, and White in 1938).

This has been necessitated by the fact that the company has stores over a wide geographical area and thus the need for delegating duties and responsibilities across the network. This is explained by the company’s multiple leaders who serve in the company’s different divisions and locations but still have some of them sharing similar duties.

This leadership style has enabled Dollarama to respond to its workers through guidance and support where necessary through the monitoring of performance and the offering of constant feedback to its workers. The top level management has delegated duties to the different heads of different divisions who have been authorized to make decisions when there is need as well as seek collective opinion in making decisions that are bound to impact across the company’s divisions.

Effectiveness of the company’s leadership and an assessment of possible improvements

Dollarama leadership is effective in promoting interpersonal relations at work through the use of teamwork in making key decisions of the organisation. More so the inherent autonomy of the Laissez-faire leadership style that is used in the company ensures that there is a high level of job satisfaction and so is the level of productivity. Therefore, the company’s leadership offers a reliable mechanism of service delivery to the customer as well as inside the workplace by ensuring that there is a sense of responsibility towards one’s duty by everyone.

Improvements under this leadership would require Dollarama to invest more on its human resource in terms of skills, motivation and experience. This will ultimately ensure that the employees carry on with their delegated duties in a more informed manner that requires less supervision and in a more effective manner.

CONTROLLING

Dollarama’s control is basically concerned with coordination, resource allocation, motivation, and performance measurement which help in checking areas that need improvement and in turn take corrective actions and bring the entire system back to the set standards. The company has used customer feedback, quality control and productivity as notable benchmarks to streamline its control.

Customer feedback

Customer feedback is used to respond to the diverse concerns of Dollarama’s customers. The management has stipulated a code of conduct and ethics that it requires its workers to adhere to at all times. However some of those standards such as product quality, customer service as well as other ethical standards many not be met and as a result this is reflected through customer feedback thereby compelling the management to take corrective actions either through the realignment of their structures or dealing with an employee on individual terms.

Quality control

Dollarama being a store that retails a wide range of products, quality control becomes a matter of concern as this is a major consideration for the business’ customers. Declining product as well as service quality would lead to the loss of customers which would eventually lead to poor business performance. Therefore, the company has mechanisms under its social responsibility policy to carry out inspection on its suppliers of its goods to ensure that they comply with quality standards that entail safety as well. Within the business also, an approach to business sustainability has been developed that touches on product quality as a core requirement for the continued growth of the business. Incase quality is compromised legal and other corrective actions at managerial levels are taken to maintain the stipulated high quality goods.

Productivity

Productivity of the employees of the company is measured generally through financial performance as well as customer satisfaction and expansion. Through the increasing branches, the company has forecast a reliable growth trend that is much achievable through a productive and a motivated workforce. Therefore any decline in growth that is not attributable to an economic recession is a reflection of reduced labour productivity in the company. This can further be assessed through the performance of the different divisions through comparison and thus changes can be made as a corrective action if any of them is found to lag in performance as compared to the rest.

 

REFERENCES

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