Fidelis Ltd.
Strategic Planning Audit
Fidelis Ltd. is a mid-sized, closely held Canadian corporation that designs and manufactures paper day
planners. The owner, Ms. Samson, has been running this business for almost 15 years now. The company's
head office is located in a suburb of Vancouver, British Columbia. There are two plants, one located near
the head office and the other outside Calgary, Alberta. Sales and distribution centres exist across the
country in 15 locations in order to maximize service to customers
Fidelis offers a wide range of products, from a simple pocket planner to
a deluxe planner. These products
are sold in bookstores, department stores, and discount stores. All retailers are served by the company’s
distribution network and a network of licensed distribu,tors.
Fidelis has always been very profitable, but in recent years the growing popularity
of electronic
day planners
has had a negative impact on Fidelis' sales. The company does focus on planning but
somehow neglected to foresee the impact of
this emerging trend and there was no feedback from the field
highlighting the issue. Ms. Samson is convinced that this trend may be
irreversible and isn’t sure what
alternatives are available to the company or whether they should launch an advertising campaign that
points out the
disadvantages of electronic day planners, and to concentrate the company’s efforts on trying
to build sales of the
firm's high-profit deluxe day planners.
As an independent Management auditor, Ms. Samson has approached you to give her a proposal that
would help determine where
the planning breakdown has occurred so that the
next strategic planning
cycle, which must occur immediately, can ensure not only commitment from all participants but can
ensure that workable options are clearly identified. In order to
secure the ultimate engagement you prepare
some notes for a presentation next week.
5
Required:
Prepare the notes ensuring that the following is covered:
Identify
risks of the
strategic planning function
.
Identify
some possible causes for the breakdown in the planning process at Fidelis.
Identify
the processes to be reviewed that make up strategic planning.
For
each process provide at least
two of the most crucial audit procedures to be applied during the
management audit and explain its importance given Fidelis current situation.
Sharing (transfer):
Contractual risk transfer to other parties, including insurance. Risk financing: Form of
risk sharing, involving contingent arrangements for the provision of funds to meet or modify the financial
consequences should they occur
Avoid:
An informed decision not to be involved in, or to withdraw from, an activity, in order not to be
exposed to a particular risk. Eliminates uncertainty
Accept:
An informed decision to tolerate or take on a particular risk. Take no active measures.
