Evaluating the purpose of a company

Published:

The company's purpose is ensuring the growth and strength of KPJ over the years through creative and innovative strategies have enabled the organisation to move forward in driving standards and continuous innovation and in developing the community as KPJ's contribution towards the well-being of society. Developing the group's own human capital strength allows KPJ to be the best in all it does, particularly in caring for the healthcare, safety and the environment. With its unwavering commitment, KPJ is known for inspiring trust and accountability and standing firm on the principles of the Business "Jihad" such as integrity, uprightness and community spirit. The group's "Jihad" is the adherence to the right conduct and ethics to achieve business excellence. At the same time, KPJ remains focused on KPJ's corporate vision which defines the preferred provider in healthcare services and the corporate mission is delivering quality healthcare services to our customers.

Lady using a tablet
Lady using a tablet

Professional

Essay Writers

Lady Using Tablet

Get your grade
or your money back

using our Essay Writing Service!

Essay Writing Service

KPJ has a clear company purpose which was created by the esteemed directors by focusing on the principles of the Business "Jihad". I strongly agree that this is a good idea in the company purpose which gives the company a strong future where employees will inculcate the "Jihad's" spirit and to have the spirit to strive for the company in order to achieve better profits and lifting the company to greater heights. The Business "Jihad" was interpreted from the "Jihad" war where energy and motivational forces were harnessed, mobilized and channeled towards peace and prosperity that translate the best that Islam can offer in values and civilisational terms to the world we live in. In order to improve the company's purpose, employees from different management levels should constantly remind one another about the company's purpose at all times. Besides emphasising, employees should practice the purpose as "actions speak louder than words". It is useless when a good company purpose is being created and displayed in the company but not being practiced by employees. Therefore, it is vital to stress and practice the importance of the company's purpose to all employees so that investors and customers will have confidence in the company's services.

As KPJ continuously striving to achieve the vision and carrying out the mission, it will also continue to build on its core values which states the overall purpose of the company. The core values consist of 5 values which are to ensure safety for employees and customers to carry out the daily business activities. Employees delivering the services with courtesy with the ability to initiate first with a smile and be a helpful personnel to customers at all times. Performing duties with integrity will leave an impression to stakeholder that employees are exercising professionalism at all times and striving for continuous improvement which ensures quality assurance and the attitude of learning will build the confidence in stakeholder.

In conclusion, the employees of KPJ must play an active role in practicing the core values and reminding each other about the company purpose in order to strive to make the company grow in profits, prospect and human health quality.

[507 words]

References:

Johor Corporations (2010) 'Business Jihad Journey: The Corporate Waqaf route -

Why Waqaf?' Business Jihad.[Online].

Available at: http://www.businessjihad.com/ [accessed on 23rd April 2010].

KPJ Healthcare Berhad (2008) Annual Report 2008.[Online]

Available at: http://kpj.listedcompany.com/ar.html [Accessed 4th April 2010].

Describe the perceived corporate culture that the company practices. (Maximum 500 words)

(10 marks)

Corporate culture can be defined as organisation's system, of principles, beliefs, and values which make a company unique (Kurtz and Boone, 2007). In other words, corporate culture can mean by the character the organization. Daft states that culture is a pattern of shared values and assumptions about how things are done in the organizations. The values of a corporate culture will definitely influence the ethical standards within a corporation, as well as managerial behavior and most importantly all the employees. There are two levels of cultures that can be classified which are the visible and invisible

As for the visible level of corporate culture in KPJ, employees wear blue uniform which signifies the colour and identity of the company. On Saturdays, administrative employees are allowed to wear company T-shirts to work which makes working environment more relax and enjoyable. KPJ uses a slogan "care for life" to inform stakeholders that the company care for the society.

Lady using a tablet
Lady using a tablet

Comprehensive

Writing Services

Lady Using Tablet

Plagiarism-free
Always on Time

Marked to Standard

Order Now

The most significant level is the invisible culture which portrays the deeper values and shared understandings held by the organisation members. In KPJ, the corporate culture is based on the principles of Business "Jihad" and the core values that employees should fully understand and be passionate about the core business to deliver quality services to customers with safety, courtesy, integrity, professionalism and continuous improvement. This can be clearly shown when visitors or patients enter the hospital territory, employees of the company will come forward with a smile to greet and offer them the required assistance. This is called the Standard People Practice where the company is inculcating to the employees who will make the patients and visitors feel that someone is caring for them and making them feel valuable at all times. This will definitely build a reputation of loyalty and confidence in everyone who visits the KPJ Hospitals.

Corporate culture is typically shaped by managers of different managerial levels who operate and maneuver the whole company to greater heights. For instance, KPJ had been making profits throughout these years. This has clearly proven that employees are striving hard in obtaining high profits for the company with the aid of good corporate culture. The company has the strong beliefs for employees to continue their lifelong learning journey which the company provides various sponsorships and scholarships for employee to pursue their education around the world in order to improve their educational level such as degrees, masters and any other certifications. Moreover, every year the company allocates certain amount of remuneration as training cost where employees will have the chance to attend workshops and seminars to further improve in work related areas such as public relations, fire safety and corporate culture. For example, the Innovative and Creative Circle where employees need to generate new ideas in making more profits for the company and at the same time to maintain good relationships with stakeholders.

In conclusion, corporate culture plays an important role in shaping and moulding employees to have a better understanding and perspective of the company's purpose.

[501 words]

References:

Daft, R.L. (2008) New Era of Management. 9th ed. Mason: Thomson South-Western

KPJ Healthcare Berhad (2010) 'Control Environment' The Star.[online]

Available at: http://www.kpjhealth.com.my//index.php?option=com_contentHYPERLINK "http://www.kpjhealth.com.my//index.php?option=com_content&task=view&id=70&Itemid=82"&HYPERLINK "http://www.kpjhealth.com.my//index.php?option=com_content&task=view&id=70&Itemid=82"task=viewHYPERLINK "http://www.kpjhealth.com.my//index.php?option=com_content&task=view&id=70&Itemid=82"&HYPERLINK "http://www.kpjhealth.com.my//index.php?option=com_content&task=view&id=70&Itemid=82"id=70HYPERLINK "http://www.kpjhealth.com.my//index.php?option=com_content&task=view&id=70&Itemid=82"&HYPERLINK "http://www.kpjhealth.com.my//index.php?option=com_content&task=view&id=70&Itemid=82"Itemid=82 [accessed on 26th April 2010].

KPJ Healthcare Berhad (2008) Annual Report 2008.[Online]

Available at: http://kpj.listedcompany.com/ar.html [Accessed 4th April 2010].

Kurtz, D.L. and Boone, L.E. (2007) Contemporary Business 2007. 11th ed. London: Thomson South-Western

Extract the following information from the last 3 year's annual report.

Number of directors on the board

Number of Non-Executive Independent Directors

Evaluate whether the company practices good corporate governance. (Maximum 500 words)

(10 marks)

KPJ HEALTHCARE BERHAD

2006

2007

2008

Number of Non-Executive Independent Directors

7

7

7

Non-executive Chairman

1

1

1

Non-Executive Directors

3

2

2

Executive / Managing Director

1

1

1

Total Number of directors on the board

12

11

11

Corporate governance can be defined as the system of governing an organisation to protect the stakeholders (Daft, 2008). In 2008, KPJ has a total of 11 directors sitting in the board. The purpose of having seven

I do not think that KPJ by having seven Non-Executive Independent Directors will practice good corporate culture as most of the directors hold a certain amount of direct or indirect shares in the company and in the company's subsidiaries. I think that the decision made by them may be bias and not practically based on the principle of corporate governance. As the report can show how well the company is doing, but in actual fact the "many good deeds may just cover the bad deeds". If directors have shares directly or indirectly under the company or the company's subsidiaries, how could they manage to comply fully to the principles of corporate governance. There will definitely be some biasness in the decision making as most of the directors are the same people sitting in various company's board and classifying themselves as Non-Executive Independent Directors for KPJ Healthcare Berhad. It is like having the same group of directors in Company A, Company B and in Company C and classifying themselves as independent. According to the financial statement, it states that Non-Executive Independent Directors is to make independent judgment and act in the best interest of the company and its shareholders as they do not engage in any business dealings or other relationship with the company. I think that it contradicts the whole role of being a Non-Executive Independent Director.

Lady using a tablet
Lady using a tablet

This Essay is

a Student's Work

Lady Using Tablet

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Examples of our work

In order to make decision independently, Non-Executive Independent Directors should not hold any shares from the company direct or indirectly and even in subsidiaries. In order to have good practice of corporate governance, directors of other companies should be invited to attend the board meeting and to make decision as they have no relationship at all with the company to decide the company's decision makings such as remunerations of directors, or solutions as to solve company's matters. With this practice, it will provide the company and shareholders better safeguard. Besides having a foreign director of another company to attend the board meetings, sometimes it might be dangerous as that foreign director might be a competitor to the company and gives wrong decisions as the intention of destroying the company's growth. This can be another possibility of having a foreign director to participate in the board meeting. Therefore, the final decision is looked upon by the non-executive chairman, non-executive directors and the managing directors where they have the final authority to decide on the decisions made by the board.

In conclusion, corporate governance plays an important role as to govern the righteousness of the company and the shareholders. As to avoid cases such as Enron, HealthSouth and many companies who have ceased operations due to fraud from repeating, companies must be careful in nominating directors to be Non-Executive Independent Directors in the organisation.

[495 words]

References:

Daft, R.L. (2008) New Era of Management. 9th ed. Mason: Thomson South-Western

KPJ Healthcare Berhad (2006) Annual Report 2006.[Online]

Available at: http://kpj.listedcompany.com/ar.html [Accessed 4th April 2010].

KPJ Healthcare Berhad (2007) Annual Report 2007.[Online]

Available at: http://kpj.listedcompany.com/ar.html [Accessed 4th April 2010].

KPJ Healthcare Berhad (2008) Annual Report 2008.[Online]

Available at: http://kpj.listedcompany.com/ar.html [Accessed 4th April 2010].

Do you think the company should be more socially responsible? Explain your reasoning. Propose to the company what should be done to improve on its social responsibility. (Maximum 500 words)

(10 marks)

Yes, I strongly agree that company should be more socially responsible than just making profits. Making profits is the prime objective of most companies which cannot be denied by businesspeople. Corporate social responsibility (CSR) can be defined as the management's obligation to make decision and to take actions that will enhance the well-being and consumer satisfaction as well as the organisation (Daft, 2008). In other words, corporate social responsibility emphasises more on what the company can give back to the society rather than what the company can earn from the society.

With the KPJ's motto "Care for Life" has instill the spirit of the employees to deliver quality healthcare services to the society and the attitude of wanting to contribute more to society where KPJ created the "Klinik Waqaf An-Nur (KWAN)" in 1998 to serve the lower income group in the aspect of healthcare by providing outpatient treatment for only RM5.00 which is inclusive of consultations and medications. Currently, KWAN has eight clinics around Malaysia and the management is planning to open more clinics in the near future. This establishment is part of the Group's effort in making quality healthcare affordable to all walks of life.

KPJ has also involved in a television programme which is the "At-Tijarah" to help educate the society on health consciousness. This programme is linked to At-TIjarah Ramadan which is to help the less privileged in the community during the month of Ramadan by sponsoring and providing medical treatment to selected patients. Moreover, KPJ has contributed to the fund to assist patients who are seeking medical attention.

Every year during Nurses Day, the Nursing Service of KPJ hospitals will organise various fund raising projects such as jumble sales, food carnivals and other charity event in order to raise funds to help the surrounding neighbourhood like the spastic children homes, handicap children homes, orphanages and any other welfare homes. Doctors and management from KPJ hospitals contribute to a fund called "Perhatian" where every RM1.00 collected by New Straight Times will be matched by the management who needs financial aid for medical treatments. This can show that the different level of employees in KPJ cares socially in helping the society in one way or another.

KPJ also contributes back to the community by participating in outreach programmes such as participating in health campaigns to build health awareness in the society. Recently, KPJ had joint campaign with Reckitt Benckiser, manufacturer of pest control brand (Shieldtox) in combating the spread of dengue. To have further impact on the campaign, the two companies have organised an educational "gotong-royong" programme at various dengue prone areas as to reduce the cases of dengue among the society.

In conclusion, KPJ's social responsibility is closely related to the principles of sustainability which encourage the corporation to make decisions based not only on financial profit factor, but also to consider the immediate and long-term social and environment consequences of the company's activities. KPJ believes that corporate responsibility and doing business have to be mutually inclusive.

[500 words]

References:

Daft, R.L. (2008) New Era of Management. 9th ed. Mason: Thomson South-Western

KPJ Healthcare Berhad (2010) 'Dengue deadlier the second time' The Star. 20 March 2010 [online]

Available at: http://thestar.com.my/metro/story.asp?file=/2010/3/20/central/5875650&sec=central [accessed on 26th April 2010].

KPJ Healthcare Berhad (2010) 'Health care for the needy' The Star. 2 January 2010, http://thestar.com.my/metro/story.asp?file=/2010/1/2/north/5380432&sec=north [accessed on 26th April 2010].

KPJ Healthcare Berhad (2008) Annual Report 2008.[Online]

Available at: http://kpj.listedcompany.com/ar.html [Accessed 4th April 2010].

Kurtz, D.L. and Boone, L.E. (2007) Contemporary Business 2007. 11th ed. London: Thomson South-Western

Using the latest three year's financial statements, extract the key financial data of the company - as per the Microsoft Excel table format below:

KPJ HEALTHCARE BERHAD

2006

2007

Comparison between

2008

Comparison between

Comparison between

RM '000

RM '000

2006 &2007

RM '000

2007 &2008

2006 &2008

Sales

831,455

1,108,024

33.26%

1,267,305

14.38%

52.42%

Operating Profit (EBIT)

79,988

105,461

31.85%

132,585

25.72%

65.76%

Interest Expense

(19,928)

(20,206)

1.40%

(18,533)

-8.28%

-7.00%

Net Income (Net Profit)

40,962

74,237

81.23%

85,644

15.37%

109.08%

Cash

94,688

100,063

5.68%

106,162

6.10%

12.12%

Current Assets

255,294

433,066

69.63%

588,953

36.00%

130.70%

Current Liabilities

250,685

317,911

26.82%

352,070

10.74%

40.44%

Total Debt

614,603

650,088

5.77%

649,879

-0.03%

5.74%

Total Equity

487,282

554,570

13.81%

628,573

13.34%

29.00%

Net Asset Value

386,760

454,104

17.41%

518,329

14.14%

34.02%

Cash Flow from Operations

54,563

93,002

70.45%

123,950

33.28%

127.17%

Cash Flow from Investing

41,277

(37,033)

-189.72%

(61,258)

65.41%

-248.41%

Cash Flow from Financing

(90,288)

1,404

-101.56%

(52,294)

-3824.64%

-42.08%

Comment on the financial performance of the company during the last three years. (Maximum 300 words)

KPJ had made profits for the past three years. Compared from 2008 to 2006, profits have been increased by 52.42%. This is because sales have increased for the past three years due to the increase of hospitals in Malaysia and the total patients have also increased which contributed to the profits throughout these years. Moreover, this can be clearly shown by the net cash generated from operating activities which means that cash generated from the company's normal trading activities.

Current assets have increased 34.15% from 2006 to 2008. These include cash which also increased 12.12% from 2006 to 2008. The reasons for the increase in current assets throughout these 3 years are because of the increase of closing inventories, receivables, deposits and prepayments, cash and bank balances.

Current liabilities have increased 40.44% from 2006 to 2008 due to the increase of payables and borrowings where the company owes various trade payables such as suppliers. During these years, the company borrowed money from banks for company development projects. But with the increased of current liabilities, the company net asset value shows increasing figures throughout these three years which is 29% from 2006 to 2008. These figures are derived from the total assets minus the total liabilities to obtain the net asset value which defines the company's worth and the total equity of the company.

The company had made investments in 2007 and 2008 where the cash flow from investing activities which shows a negative value. In 2006, cash was generated from investing activities. This could be the possibility for the company to gain income from disposal of property, plant and equipment which the company had disposed one of its land in 2006. As for the negative figures for cash flow form financing activities shows that the company made investments.

In conclusion, the company's financial position and performance is good and healthy.

[310 words]

Do you think the company's sales and profits will continue to grow in 2010-2011? Explain. (Maximum 100 words)

(10 marks)

I think the company's sales and profits will increase and continues to grow in 2010 to 2011. This is because the company had announced in November 2009 that there will be a share split in the beginning of 2010. When a company announces that they will be splitting ordinary share into two without raising any new funds, it means that the company is making the share price more affordable for new investors to invest. Therefore, the company will have better financial status in the future for further continual improvements. This will definitely increase new investments, sales and profits for the company.

[101 words]

References:

KPJ (2009) 'KPJ Healthcare proposes share split' The Star. 29 December 2009, [online] Available at: http://biz.thestar.com.my/news/story.asp?file=/2009/12/29/business/5375549HYPERLINK "http://biz.thestar.com.my/news/story.asp?file=/2009/12/29/business/5375549&sec=business"&HYPERLINK "http://biz.thestar.com.my/news/story.asp?file=/2009/12/29/business/5375549&sec=business"sec=business [assessed on 25th April 2010].

KPJ Healthcare Berhad (2006) Annual Report 2006.[Online]

Available at: http://kpj.listedcompany.com/ar.html [Accessed 4th April 2010].

KPJ Healthcare Berhad (2007) Annual Report 2007.[Online]

Available at: http://kpj.listedcompany.com/ar.html [Accessed 4th April 2010].

KPJ Healthcare Berhad (2008) Annual Report 2008.[Online]

Available at: http://kpj.listedcompany.com/ar.html [Accessed 4th April 2010].

Track the closing share price of the company on a daily basis from 1 April 2010 - 30 April 2010.

Prepare a graph of the daily share price movements for your company. Information of the daily share price should be shown in a Microsoft Excel table showing Date and Closing Price.

KPJ Closing Share Price

01/4/2010

3.03

16/4/2010

02/4/2010

3.06

19/4/2010

05/4/2010

3.00

20/4/2010

06/4/2010

2.95

21/4/2010

07/4/2010

2.94

22/4/2010

08/4/2010

2.96

23/4/2010

09/4/2010

2.88

26/4/2010

12/4/2010

2.88

27/4/2010

13/4/2010

2.88

28/4/2010

14/4/2010

2.85

29/4/2010

15/4/2010

2.83

30/4/2010

Prepare a graph of the daily movement of the Kuala Lumpur Composite Index (FBM-KLCI). Information of the index should be shown in a Microsoft Excel table showing the Date and Closing Index value.

Kuala Lumpur Composite Index Closing Value

01/4/2010

1329.84

16/4/2010

02/4/2010

1335.94

19/4/2010

05/4/2010

1341.75

20/4/2010

06/4/2010

1344.37

21/4/2010

07/4/2010

1345.09

22/4/2010

08/4/2010

1332.93

23/4/2010

09/4/2010

1333.98

26/4/2010

12/4/2010

1339.61

27/4/2010

13/4/2010

1334.52

28/4/2010

14/4/2010

1335.89

29/4/2010

15/4/2010

1338.83

30/4/2010

Provide an overview of share price performance of your company. Explain any significant movement in your share prices and the share market with evidence from newspapers. (Maximum 200 words)

(5 marks)

The range of the closing value of KPJ Healthcare Berhad in April 2010 is 2.74 between 3.06. At the beginning of April, the trend of the graph is declining where the closing value on the 1st declined until the 19th of April and began to rise and maintain towards the end of the month. The overall trend of April showed a declining trend. There are no significant movements which show vast difference in the closing share price the range is 0.32 which is not that significant to the company's closing share price.

In the Kuala Lumpur Composite Index (KLCI), the highest closing value is 1346.38 and the lowest closing value is 1326.67. Both graphs showed similar trends where the KLCI is being used as the barometer of the whole market. The steepness of the graph is not as steep as KPJ shares is because KPJ is one firm in the industry where the KLCI consist of top 30 firms in Malaysia.

In conclusion, the share price of KPJ and the KLCI are solely based on the whole economic in business world where the current business world is facing with economic crisis where share values depreciate.

[195 words]

References:

KPJ Healthcare Berhad (2008) Annual Report 2008.[Online]

Available at: http://kpj.listedcompany.com/ar.html [Accessed 4th April 2010].

http://biz.thestar.com.my/marketwatch/

Conduct an Environmental analysis for the company selected. Evaluate the impact of the environmental forces on the company selected. (Maximum 500 words)

(10 marks)

Environment is the most important element which exist in the external boundaries of the organisation that have the potential to affect the organisation (Daft, 2008). Environmental analysis involves of many aspect such as legal-political, economic, social-cultural and technological which will give impact to the internal environment of an organisation.

The legal environment of the healthcare industry requires all healthcare institutes to comply with rules and regulations set by authority. This is to ensure that the healthcare industry to provide healthcare services safely to stakeholders. According to the Environmental Quality Act 1974 requires that scheduled waste to be managed by a registered clinical waste contractor with the Department of Environment. It is important for the hospital to comply with the requirements as hospital's chemical or surgical waste could be hazardous to the environment and to the society. Therefore, KPJ has to incur expenses to dispose waste in correct manner as to follow the principle of the company. In addition, KPJ focuses on the improvement of clinical outcomes by complying to the International Organisation for Standardisation (ISO) 9000 which centers in corporate governance and quality, Occupational Health & Safety Advisory Services (OHSAS) which ensures worker health and safety in the premises of the company and ISO 14000 which focuses in environmental management. To comply with all these requirements, it requires a lot of time, money and experts to deal with all the paper work and to manage and ensure that the whole organisation is complying with the requirements of the various standards. Sometimes, it might interfere with the main objective of the company which is to deliver quality healthcare services to customers as employees are too focus in obtaining these certification and neglecting to keep up in delivering caring and quality services to patients.

Technologies play a vital role in the current healthcare industry as to have the capability and resources to diagnose various new diseases in the healthcare environment. As to have these new technologies in the hospital, the company is required to have the finances to purchases these technologies to cater for the demand of the society. If the hospital is unable to cater the needs of the society, hence, the company will lose business to its competitors. Besides having the latest machineries, the company has to employ suitable experts such as specialise doctors and technicians to maneuver these equipments. KPJ has many competitors such as Pantai, Gleneagles and other private hospitals, the hospital has emerged has the largest network of hospitals in Malaysia. Therefore, it is important for the hospital to be advance and to be fully equipped with manpower and facilities to perform procedures by keeping up with technologies in order to cure various current mutating diseases such as H1N1.

In conclusion, the healthcare environment sets the minimum par standards for hospitals to comply. If the hospital like KPJ can lift up to the standards of the healthcare industry as they have achieved, the company will definitely be able to survive in different expectation of the various environments.

[500 words]