After selling the assets and replaced them with leased properties –as has been recommended in the cash flow recommendation chapter-, there will be some cash-inflows that would be sufficient to finance managerial necessities, like hiring more staff to prepare and maintain the courses in good condition. Nevertheless, profitability would not be stable if there are problems within the managerial level (Hansen & Mowen, 2003). Stuart Tagg, the Green keeper should be pleased with the possibility of additional staff.
However, there is also the issue of taking orders from ‘unequipped’ people for the job. Thus, I suggest that the green keeper is made equal to the management committee. Having the green keeper in the management committee –as an operational control- would enhance management view about the courses and preventing crucial issues to be overlooked. As a control tool, Stuart should be evaluated based on customer’s perspective. If the customer is displeased with the condition of the course, than it would be Stuart’s responsibility to find the existing ‘flaw’.
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Several years ago, it was reported that the country lacked golf courses. Nevertheless, the situation is now reversed. There are apparently too many golf courses with not enough market shares to survive (‘The Golf Industry Overview’, 2001). Reports also revealed that maintenance cost of the golf courses and the cost of producing golf-related equipment is constantly increasing, while the market does not experience the same rate of growth. Sales of golf products and memberships are reported to suffer as the game did not ‘grow’ as expected.
There are golf-equipment companies that gone bankrupt just several years after its inception. Brands and trademarks appear and disappear in short amount of time (Stogel, 2001). Considering this fact, management committee of the Holyrood golf club should be prepared for bad seasons in the future. Selling unnecessary assets and cost reduction methods will be growing in importance. Management should realize that there are some factors that are out of their control and the only solution available is to adapt to the external changes.
Efforts to re-awaken the industry like the Holyrood Classic golf tournament could be very much influential in determining the future of the club.
Hansen, Don R & Mowen, Maryanne M. 2003. ‘Management Accounting’. Southwestern, Ohio Kieso, Donald E. Weygant, Jerry. Warfield, Terry D. 2001. Intermediate Accounting. John Wiley & Sons, New York Stogel, Chuck. 2001. ‘Negotiating the Hazards –Industry Overview-‘. Brandweek [online]. Available at: http://www. findarticles. com/p/articles/mi_m0BDW/is_6_42/ai_70460303/search