Carolina Wilderness Outfitters B1 PDF

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Carolina Wilderness Outfitters B1...

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CAROLINA WILDERNESS OUTFITTERS (B.1) Mark Tomkin, head of apparel for the Texas region, faced a dilemma of his own. Going into last year’s budget development cycle—and knowing CEO Ann Dawson was pushing for a big year—Tomkin had committed to a 10 percent increase in sales and in profits for the year. When his boss Rocco Merli saw Tomkin’s plan, Merli was happy Dawson’s message had gotten through. Merli believe that 10 percent was aggressive, maybe too aggressive, but he wanted to give Tomkin a chance to prove himself. Tomkin started the year determined to hit plan, but soon saw trouble: the economy and the weather were better than reported, yet he was barely able to keep up. Then, the Texas camouflage regulation that had been going nowhere was signed into law, and this would hurt sales. Tomkin and his team worked hard and managed to hit their numbers. During this first quarter-end meeting, Merli congratulated everyone for their efforts and singled out Tomkin and his team for their exemplary performance. During the second quarter, Tomkin continued to push his team, but he began to believe that the effort was not sustainable. Searching for ways to meet target, he realized that he could avoid writing off a growing quantity of excess and obsolete inventory. To do so, he argued that the lag in sales was temporary and that the inventory would be sold later in the year. Tomkin convinced himself that these steps were within company policy, and he suspected more experienced managers took such actions regularly and that adjusting to new situations is what successful managers did. In the third quarter, Tomkin realized he could not meet his numbers without making accounting entries he knew to be false. He was familiar with the internal controls at CWO, and he believed that he was friendly enough with the accounting support staff to convince someone to make the entries. He planned to reduce the reported cost of goods sold by recording as receivables the volume rebates that the CWO expected to earn if purchase for the full year from some of the vendors hit certain levels. While it was unlikely that SWO would hit those levels now that sales were softening, no one had much insight into the issue, and he would not be questioned when he asserted that the rebate was as good as in the bank. Tomkin did not like the idea of misleading his boss, but did not want to disappoint him either. The day Tomkin walked into accounting to get entries made, Koster was the only one there. Tomkin always joked with the staff, but he could not recall Koster joining in the fun. He thought about coming back later, but decided to push ahead and ask her. “Mr. Tomkin,” she replied, “I know it’s hard to get the vendors to send in what we need, but I can’t make entries without documentation. We used to do that sort of thing, but times have changed and if there is trouble, I don’t want it coming back on me.” Tomkin was surprised, and somewhat frightened, by her response. He thought about coming back in a few days and asking someone else. Maybe he could find another way out, but as the end of the quarter drew near, Tomkin was running out of time to put any plan into action. The pressure he felt was increasing, it was deeply affecting his overall mood, and he was definitely losing sleep over it. One hope had kept him going. Tomkin believed he had learned some lessons this year, and that during the upcoming budgeting planning process for next year, he could submit a proposal that would not be as aggressive as what he faced in the current year, but would be aggressive enough to get Merli’s approval. This would give him the * opportunity to fix it....