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Riordan Manufacturing (RM) is a global company wholly owned by Riordan industries and provides its services worldwide in areas which include California, Georgia, Michigan and China. RM employs 550 people with revenues in excess of $1 billion and projected annual earnings of $46 million. The ethnic demographics for the senior management comprise: 70% Caucasian; 11 % black; 8% Hispanic; 9% Asian and 2% native Indian. The company projects annual earnings of about $46m and produce a variety of products with plastics. RM’s pecuniary data, along with historical information, is evidence to their financial status and health of the company. They operate three branches in the US and moved one to China in order to save cost. Presently, the company has many issues ranging from logistics to finance and it’s time to identify these issues and look for ways to solve them. Based on COSO outlines, there are key concepts regarding internal and external controls of RM that needs attention.

There are great opportunities out there for RM to increase its profit margin and expand more in coming years if the proper foundation is laid for the company to grow. There are series of legal issues that may emanate in RM’s practices if care is not taken. RM’s employee handbook is bereft with information like corrective action plan before exercising their “at will” rights besides, the employee handbook contains a clause that says, “However, this handbook cannot anticipate every situation or answer every question about employment”. The jury can misinterpret the clause in so many ways and even though RM reserves the right to decide on the conditions of employment, their employees are still protected under many laws which can be easily violated. It is imperative for RM to understand that the court of law can consider the handbook as an implied contract depending on the issue at hand and contracts should be unambiguous. Ethnic diversity, employee evaluation, sexual harassment, etc are also some of the issues that require proper attention. Nonetheless, RM is doing a good job in areas like employee motivation through incentives, career development, benefits, etc. The incentives offered are rather too low and this may affect the productivity of their employees. However, productivity measures, other than company-wide ones, almost always allow compensation for disruption beyond the control of the individual group, and there is a large discretionary element in these incentives which allow the employees, supervisors and management to adjust the figures in such a way as to produce the answer they think is correct (Accel Team Development, 2008).
RM’s evaluation process is strictly behavioral. Rating employee’s productivity of labor through their behaviors will produce a very mechanistic approach to performance evaluation and increase the chances of prejudice. A supervisor who doesn’t like a dutiful employee because of the way he smacks his lips can rate that employee low simply because of that factor. RM should ensure measurement is conducted the way work is designed and allow employees to evaluate each other in order to compare with their supervisor’s report.

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