Woolworths Limited Involvement Operation †Myassignmenthelp.Com

Question: Why Should Woolworths Continue To Operate Gaming Machines In Australia? Why Should Woolworths Not Continue To Operate Gaming Machines In Australia? Why Should Woolworths Continue To Operate Gaming Machines In Australia? Why Should Woolworths Not Continue To Operate Gaming Machines In Australia? Answer: Introduction Woolworths Limited has the largest interest in the Australia in the operation of poker gaming machines. Also, Woolworths operates in the retail liquor market, supermarkets and the petrol and finance industry. The introduction of gaming machines has tremendously increased the company's revenue amid a considerable public and legal outcry because of failing to fight the problem of addiction. The current speculation is whether or not Woolworths has to exit the industry. Woolworths next goal in gaming is to limit the number of bets down to $1 against the current $10. The action aims to attract low-income gamblers to get a wider market coverage to raise the revenues from gambling creating more income for the stakeholders. The idea of altering of gaming machines to take a $1 is a recommendation of the productivity report of 2010 that widely described other gambling products in the market which did not have bet limits. The legislation has controlled any form of alteration of gaming machines to the manufacturers only(Devon, 2016). The Agency Theory Approach The agency theory supposition describes the management of a company as an agent to the shareholders. The approach aims to solve the challenges arising from conflicting views between Woolworths limited as an agent of various parties(Boateng, 2017). Areas of conflicts of interests have been experienced significantly with how the companys business and the manufacturers of gaming machines and also the government view the issue of operating gaming machines. Woolworths Limited has an agent responsibility to some entities namely the public, the government, the employees, suppliers, and the lenders among others. All the principals have varying interests to the business of Woolworths that may differ with one anothers from time to time(Wolfswinke, 2017). Firstly, the operation of gaming machines has boosted the profits of Woolworths. Gaming machines in the Australian gambling industry are fed with a money amounting to $11.5 billion, and the quantity is worth flowing into our revenue. The Australian Leisure and Hospitality Group (ALH) gets 80% of revenue from gaming with the 2016 financial accounting year gaining up to $4.11 billion(Breen, 2017). The government has put plans underway on amending the Australian Gaming Machines Act so that an operator will be only allowed to introduce features that are: Less addictive, Lowers the frequency of losing by players, and Less harmful. The business has tried to be on the toes to be at the peak of competition. The existence of any firm in our case Woolworths Limited is through effectiveness in competition in the gambling industry to grasp a significant market share and increase its power of control in the industry. The regulators are even ready to offer their support in the process. A few legal suits have been filed in the recent past against Woolworths' competitors for deceptive design indicating how delicate it is to alter machines without validation by the manufacturers(Carvalho, 2017). The government has precise restrictive laws on the manufacture and operation gaming machines A big challenge arises on problem gambling that causes 40% of the total losses on bets as reported by the productivity commission report. The legislation of the government plainly stops everyone else but the manufacturers on altering the working of poker machines. The government moreover claims that the machines will be evidenced-based if operated at $1 minimum bet. Woolworths alongside with the manufacturers has recently been hauled through by law for not making attempts to gaming machines not as much addictive(Ramachandra, 2017). The manufacturers have refused to reduce bets on their machines to $1 because of their interest on the is capitalizing the sales, increase efficiency, cut costs to increase revenues. The manufacturers have thrown back a hard haul claiming that trying to limit the amount to be placed into a poker machine would add extra costs amounting to more than $3 billion that will probably increase the costs of purchasing the devices by operator firms. The process would also consume more time than the average duration and thus be inefficient. The Stakeholder Theory Approach The stakeholder theory describes the relationship between the company and the shareholders. The existence of the business is based on the shareholders as providers of capital for business. The goal of Woolworths management according to the stakeholder theory approach as stewards of the funds entrusted to them solely to create profits(Freeman, 2017). In their thinking, the stakeholders of a company deliberate on conducting business on one objective rather than diverging energies to different purposes arguing that it may strain the business's resources of finance, time, human resources and efforts of innovation all of which when put at one point may give more revenues. Concentrating on the interests of the shareholders alone is historic and makes the business to be run on short term goals to ensure that the stakeholders have value for their money. Shareholders want to see their investments giving them more income as dividends. More investment and operation of gaming machines in Australia will reap an income that is higher than the current $4.11 billion. Shareholders are the most important party in the firm as an operator of gaming machines in Australia as providers of capital. Apart from shareholders the company interest in receiving dividends, the company at large requires profits(Hermass, 2017). More gaming revenue will enable the firm to expand operations through more investments and increase its competitive edge in the industry by being able to conduct marketing strategies sufficiently, compensate employees and fund research and development(Paul, 2017). The business has a role in safeguarding the moral ethics for the general public. Corporate social responsibility has to be considered at full length to strengthen the reputation of the company. Woolworths Limited has a role to play in creating a solution to problem gambling in the same way it is trying to increase the market base and industry control(Zarestk, 2017). We have to reduce the losses arising from addiction. Involvement in corporate social responsibility is a revolution that has been seen to shape the industry from one point to another by creating player loyalty and is, therefore, a necessary cost of business operation. Running a business on short term goals basis overrides the principle of the perpetual existence of the firm. Every business should be managed at an unforeseen future time. Short term profit goals are always shortsighted and can even make accounts to be manipulated to create fictitious profits. Even though profit alone is the concerns to the shareholders, the complete business unit is run by very many subunits that come together to make the company. The management has to coordinate smooth functions in all dimensions to create healthy internal and external environments. The departments of accounting, the human resource, finance, procurement, legal team, business research, and internal auditing must work in a coordinated function. Overlooking one area is a disjunction that will place a gap in the flow of money from the point an investment is made to the point when a single unit of profit is realized. The above explanation explains how different principles get involved in the affairs of a firm rather than the shareholders alone. Various interests in the business of Woolworths' gaming machines operation are created and have to be taken care of efficiently(Freeman, 2017). The shareholders of Woolworths limited especially the majority ones are against the $1 bets as proposed. Shareholders have little or no knowledge of the management of the business, and this is the reason why they have entrusted the management of their money to Woolworths. The investors view it as a loss trying to reduce bets from $10 all the way to $1. Decision making is a part of the shareholders and their decisions: major shareholders must be heeded to by the management. The first idea of the board to cut down of the bets was to cover the gambling market to the low-income earners, and yet the shareholders still want to get the highest value for their money. Investors do not have a clear understanding of the link between limiting the bet amount to incomes at all. With stand, they still want to see their money paying them back even though they investment options available to the management. Conflicts such as this is a cause of war which will eventually limit any growth of income(Lowic, 2017). Share values will automatically fall. The small value of investments will be unattractive to new investments and even make the current shareholders pull out their investments. Involvement of shareholders in management will demean the role of management in running the business(Lanon, 2017). Recommendation My recommendation is to Woolworths is to continue operating gaming machines in Australia and align the interests to minimize conflicts of interest. Restrictions in the industry by the government have to be abided with by the government. The Government of Australia has a duty to protect the rights of the citizens, and this is the reason why it gets involved in the affairs of the gaming machine operators. Failure to keep the government regulations will make the company being forcefully stopped from operating in the industry. The company should at its best minimize the problem of problem gambling and addiction to reduce exploitation of the general public. The management has to effectively describe to the stakeholders the importance of lowering the minimum bets to $1 to align their interests. Conclusion In conclusion, the conflicts between the various industry players have been elaborated. It is seen that the biggest fight comes from the government, followed by the management, the manufacturers, and the general public. The industry is still less developed as Australia is still ranked lower in the world for maximum bets in poker machines with a slow speed in growth. The young stage of the Australian industry attracts loopholes for misunderstandings from various principals as each one seeks to gain control in the industry. It is no reason for Woolworths to stop operating the gaming machines in Australia. The success of every business entity comes from persistence. Time has to pass to efficiently develop and change appropriately in a move to adapt to the environment. With time the industry will be streamlined with time to a mature development stage. References Boateng, A., 2017. The influence of internal corporate governance mechanisms on capital structure decisions. Review of Accounting and Finance, 3(17), pp. 44-47. Breen, H., 2017. A REVIEW OF RESEARCH INTO PROBLEM GAMBLING AMONGST AUSTRALIAN WOMEN. An International Female Perspective on Treatment and Research, 1(1), p. 235. Carvalho, L., 2017. 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