Target Corporation, otherwise considered as Target, faces significant competition within its business environment, which may impact on its capacity to deliver based on its set out goals and objectives. It has become essential for the company to set up several internal controls that seek to minimize risks for its stakeholders. In its annual report for the fiscal year ended February 2018, it was evident that indeed the company had invested heavily on specific internal controls as one of its strategic expectations aimed at improving its capacity to perform (Target Corporation, 2018). The first internal control that the company considers is a risk committee, which has been set up with the sole expectation being towards evaluating the business risks that the company is facing as part of its operations. The establishment of a risk committee acts as a guarantee that indeed the company is well positioned towards maximizing on its position within the business environment as a way of improving overall capacities to deliver.
The second internal control that Target considers as part of its approaches towards maximizing on its business performance is senior management. When focusing on the senior management at Target, one of the key aspects to note is that they remain as being well versed with the expected levels of performance for the company (Wilson, 2017). That means that the company is much more likely to improve on its capacity to deliver based on set out goals and objectives. Thirdly, Target uses internal auditors as part of its internal controls with the focus being towards ensuring that it can improve on its reporting capabilities (Target Corporation, 2018). Internal auditors play a critical role in ensuring that the company can make effective financial decisions that would minimize risks for the stakeholders.
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Opinion
In my opinion, I would argue that indeed Target Corporation’s internal controls are well positioned towards ensuring that the company can build on its capacity to establish itself as one of the notable companies in the consumer market. Regarding its idea of using a risk committee, I tend to believe that this was important for the company taking into account the number of risks that it encounters as part of its operations within the consumer market. I believe in the idea of using a risk committee as part of the internal controls, as the committee is in a much possible position that would enhance its capacity to meet set out standards. In the of Target, this would mean that the company would experience a significant reduction in some of the risks that it is facing as part of its operations within the consumer market.
Regarding the idea of using senior management, I would fault the company considering that this may create a significant challenge with regard to ensuring that the senior management is in a position that understands the business model. Target, as a business, focuses much of its attention towards projecting itself as a company that not only seeks to deliver on set out consumer expectations but also understands the business environment (Alexei, 2012). From that perspective, I am much more likely to be inclined to the fact that the company has not been able to build on its position as per expectations within the consumer market. I would support the idea of using internal auditors, as they help towards protecting the interests of the stakeholders from a financial perspective.
Internal Controls
From a personal perspective, I have been exposed to these internal controls while working as an intern at one of the local companies. Specifically, I have been exposed to the internal control on risk committee, as the company I was interning for had set up a risk committee with the sole intention being towards advancing its abilities to deal with the risks that it faces within the business environment. Additionally, the risk committee was also involved in the process of having to examine the business model that the company was undertaking with the sole focus being towards determining its efficiency. The evaluation of the risk committee was not only directed towards the business front regarding its delivery expectations but was also directed at the employees to help in identifying possible business risks that the company is likely to encounter.
During my internship at the local company, one of the critical factors that I'm able to note is that the company improved on its financial performance annually because it was well positioned towards minimizing some of the risks that it faced. Primarily, I am able to take note of the fact that the business was able to build on its capacity to deliver while reflecting on the fact that it sought to introduce new products in the consumer market regularly, which was a major challenge from a business perspective. From that perspective, I would argue that indeed the company’s adoption of a risk committee as part of its internal control was effective towards accomplishing some of its objectives.
Another essential internal control that I was exposed to as part of my internship at the company was senior management, which I must say is somewhat useful towards ensuring that companies work towards building their respective positions in the market. The senior management at the company played a key role towards defining overall performance for the company considering that it set up effective policies at measures aimed at maximizing on business performance. I must take note of the fact that the senior managers at the company sought to highlight the vital role associated with improving overall performance outcomes with the aim being towards achieving overall projections. The managers held regular meetings with the employees as a way of trying to identify new ways through which the company would be able to build on its capacity to achieve set out goals.
I would say that indeed the use of senior management as a key internal control was able to achieve its set out objectives considering that it provided the employees with the motivation that they required to build on their overall capacities. Additionally, the senior management created a new front through which to ensure that the employees can advance their respective capacities to build on total capabilities with regard to their varied roles and responsibilities. I was able to understand the general functioning of the company with the intention being towards building on what would be expected of me as an employee working within the lower positions. From that view, I would support the decision by Target Corporation to focus on the idea of using senior management as one of its key internal controls to build on its capacity to deliver positive results.
References
Alexei, S. (2012). Economic value added (EVA)–main indicator in measuring the value creation of the target Corporation inc. International Journal of Research and Reviews in Applied Sciences , 12 (1).
Target Corporation. (2018). Annual Report Pursuant to Section 13 or 15(D) of the Securities Exchange Act of 1934: For the fiscal year ended February 3, 2018 . Retrieved from https://www.sec.gov/Archives/edgar/data/27419/000002741918000010/tgt-20180203x10k.htm
Wilson, R. E. (2017). Target Corporation: Maintaining Relevance in the 21st Century Gaming Market. Kellogg School of Management Cases , 1-25.
