Operations management takes into account the management of risks and threats in a business. Control systems, both internal and external, allow a firm to ensure they manage and prevent the adverse effects of particular problems. Sands Hotel and Casino is an operating unit of the Great Bay Casino Corporation (GBCC). Sands has put in a control system to meet problems and threats that face the company.
Problems at Sands and their Controls
Sands Hotel is a large company in revenue and employee base. The company’s revenue is mostly in cash during wagering and in the hotel. One major problem that Sands is exposed to is misappropriation of cash by employees. In a way to curb this, Sands has a very large size of finance staff contrary to most corporations. Since there is a high inflow of cash, many finance staffs help in proper cash control and recordkeeping. There was also a strict separation between the operations and finance departments to ensure effective working of these departments (Havard Business School, 1994).
Delegate your assignment to our experts and they will do the rest.
In a casino, there are chips and cash used in wagering. Cash and chip control can be hard to implement especially in a busy casino like Sands. As a way to ensure proper and effective cash and chip control, Sands also used individual accountability, formal transfer procedures, and tight security in the countrooms as the controls. In the Blackjack game, for instance, there was one dealer per table who sold chips to customers, dealt cards, took losing wagers and paying the winning wagers. Individual accountability of the cash and stocks in the game were on the dealer in each table. Individual accountability was also on the staffs that had direct dealing with cash. The dealer had to answer to any theft or loss of cash and stock. When they were off for their break, the transfer was also procedural to prevent any blame game (Havard Business School, 1994).
Another control was on the games played in the casino. Dealers were exposed to so much money on the tables creating a threat of money loss. Sands put in place controls to ensure no misappropriation were licensing the casino personnel, placing standards on the tasks done in the casino, strict surveillance, and supervision of the gaming tables. In New Jersey, the regulating body of the gaming industry was New Jersey Casino Control Commission (NJCCC). Sands only employed personnel licensed with this body to ensure that all the employees were clean from any violations and crimes. Standards put in place helped prevent events of money theft on the gaming tables, for instance, dealers did not wear clothes that had pockets. These standards were a way to boost supervision and surveillance of the personnel (Havard Business School, 1994).
Control Strategy on Key Casino Roles
Blackjack dealers are in charge of selling chips, dealing cards, taking losing wagers, and paying the winning wagers. These dealers handled cash and stock for the casino during working hours. They also needed to have experience for them to be effective in their work. The controls put in place for this role are of a surveillance characteristic. The controls strategically surveil the cash handling, job effectiveness, and overall performance of the blackjack dealers (Kachru, 2005).
The control strategies for the blackjack pit boss are implementation controls. The pit boss was in charge of supervising and monitoring the blackjack tables. They also had to approve credit and make policies in the blackjack game. The core objective of the role was supervisory and policy-making hence their jobs were mainly on the implementation of controls. The vice president of casino operations was above the supervisory personnel like the pit boss. The role of the VP was to keep customers happy, resolve special issues, and improve operations. The control strategy for this role is special alert because it oversees any special event that would cause a rapid assessment of the company’s controls (Kachru, 2005).
The Control System
Stephen Hyde is justified to be proud of the Sands’ control system because the income statement indicates very high revenue from gaming. The master game report (Exhibit 12) shows a high average ratio between monthly average credit drop and table win (579.308 and 262.356 respectively). Sands, though having made losses in 1980 and 1981, the company had a high net income in 1982 of $14,022,000. The net income was an increase of 337% from -$5,906,000 in 1981 to $14,022,000 in 1982 (Havard Business School, 1994). This improvement shows that the control system was working for Sands leading to more revenue and net income.
Application of Sands’ Controls to other Firms
The control of cash, supervision, and surveillance are controls applicable to firms in other industries. Every firm has the cash to handle and a finance department in charge of the cash and other finances. Companies can implement hiring more finance staff and separating the operations from recordkeeping. This control will help improve accountability and effectiveness of the two departments. Cash handling should also have accountability and transfer policies to prevent the risk of theft or losing money.
Supervision and surveillance are applicable all round to ensure a safe workplace and instill integrity in people. For instance, public corporations can have surveillance systems to ensure no corruption or bribes. Supervision and surveillance also help a firm increase the productivity of employees by reducing time wastage and increasing meeting deadlines. Monitoring results can help back up the control system to ensure the controls achieve their objectives.
Conclusion
Control systems are important in the achievement of company objectives. Sands has a very effective control system that enabled the achievement of company goals. The company was able to improve their performance through putting controls in cash management, gaming operations, and overall operations of the firm.
References
Havard Business School. (1994, June 14). Controls at the Sands Hotel and Casino. Retrieved April 14, 2018, from Havard Business School Website.
Kachru, U. (2005). Strategic Management: Concepts and Cases. New Delhi: excel Books.
