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Our Mission
To build a resilient community of Companies which can compete with the emerging e-commerce
businesses. Our purpose is to create digital structures for established corporations and business
institutions that suffered enormous losses due to the embryonic growth of e-tailers. The company aims
to design a clone structures for businesses to help them leverage their sales and profits with lesser
administrative and operating costs. This could be possible through giving customers online platforms
where they can buy and transact goods and services from our community of companies.
Our Vision
In the next three years, we will be globally recognized as the world’s leading digital infrastructure
provider.
Organizational Framework
Chuck S. Valdez
Chief Executive
officer
Balance Sheet
2014 2015 2016 2017 2018
ASSETS
Current Assets:
Cash 473,816.00 1,018,685.60 1,525,062.64 2,283,715.09 3,345,098.02
Accounts receivable 257,680.00 730,980.00 765,380.00 812,380.00 873,780.00
Notes Receivable 846,320.00 158,000.00 108,000.00 58,000.00 -
Total Current Assets 1,577,816.00 1,907,665.60 2,398,442.64 3,154,095.09 4,218,878.02
Property, Plant & Equipment (PPA)
Soft Wares 350,000.00 350,000.00 350,000.00 350,000.00 350,000.00
Less: Accum. Dep. (210,000.00) (245,000.00) (280,000.00) (315,000.00) (350,000.00)
Digital Equipments 1,150,000.00 1,150,000.00 1,150,000.00 1,150,000.00 1,150,000.00
Less: Accum. Dep. (690,000.00) (805,000.00) (920,000.00) (1,035,000.00) (1,150,000.00)
Delivery Equipments 100,000.00 100,000.00 100,000.00 100,000.00 100,000.00
Less: Accum. Dep. (60,000.00) (70,000.00) (80,000.00) (100,000.00) (100,000.00)
Office Equipment 38,000.00 38,000.00 38,000.00 38,000.00 38,000.00
Less: Accum. Dep. (30,400.00) (38,000.00) (38,000.00) (38,000.00) (38,000.00)
Furnitures & Fixtures 41,800.00 41,800.00 41,800.00 41,800.00 41,800.00
Less: Accum. Dep. (20,900.00) (25,080.00) (29,260.00) (33,440.00) (37,620.00)
Land 1,500,000.00 1,500,000.00 1,500,000.00 1,500,000.00 1,500,000.00
Building 5,500,000.00 5,500,000.00 5,500,000.00 5,500,000.00 5,500,000.00
Less: Accum. Dep. (125,000.00) (250,000.00) (375,000.00) (500,000.00) (625,000.00)
Total PPA 7,543,500.00 7,246,720.00 6,957,540.00 6,658,360.00 6,379,180.00
TOTAL ASSETS 9,121,316.00 9,154,385.60 9,355,982.64 9,812,455.09 10,598,058.02
Facts:
1. You are Witty P. dela Cruz in this in-basket exercise, your executive assistant is Ms. Rusella M.
Fuentes. Your secretary’s functions are limited only to transmission of communications letters,
making calls, serving coffee and snacks, taking notes during meeting and scheduling of meeting.
As the CFO, it is quite “unethical” in leadership to let Rusella perform your responsibility.
2. Chuck S. Valdez, the CEO is currently on official business in California, U.S.A. to meet Larry Page
and Sergey Brin of Google Corporation for possible partnership. You are assigned as the Officer-
in-Charge during the whole duration of Mr. Valdez’ absence. His schedule of return is January
05, 2020.
3. You have three hours left before your flight to Singapore in a very important meeting with the
major shareholders and Board of Directors of SM Holdings. SM is currently considering e-clone
Corporation to design digital structures for all its malls throughout the Philippines. They are also
considering e-clone for possible partnership. Wherein, Google Corporation is right now the
major consideration in the “prosperity basket” of the company. You are to prepare an
incremental report to be presented to the board meeting at 3:30pm today, before leaving for
Singapore. The company is currently considering the offer of both corporate giants.
3.1 Google Corporation Offers 500 Million Dollars for the 50% ownership for the e-clone
operations in United States and Europe.
3.2 Right now, Google Corporation has already 200 lined-up digital infrastructure jobs in the US
alone, wherein each job will give e-clone a profit of 10 million dollars each. The cloning
services as expected by Google will reach conservative estimate of 10,000 in 10 years’ time.
e-clone Corporation will become part of the Subsidiary of Google Corporation.
3.3 If the merger will be completed, Google Corporation and e-clone Corporation will have an
equal distribution of all the profits and voting rights. e-clone will be the company’s name
after the merger.
3.4 SM Holdings on the other hand is offering to buy 50% of the e-clone ownership for one
billion dollars.
3.5 If the company will accept SM Holdings offer, e-clone Corporation will only have 25%
ownership, while SM Holdings will also have 25% ownership, and Google will have 50%
ownership. This will negatively impact the power and capacity of e-clone in the voting
privileges and rights of the corporation.
3.6 e-clone is the only Company across the globe that offers digital infrastructure services. They
don’t want to reject SM Holdings’ offer, while they also want to accept Google’s offer.
Google’s influence in the corporate world will make it easy for e-clone to do business in the
two major continents in the world. While SM partnership will help increase profits in the
operation in the country.
3.7 The Board of Directors need the data before you will fly today for Singapore, so to be able to
decide how much percentage of ownership the company can afford to sacrifice.
3.8 Google will only accept 40%-50% ownership, take it or leave it, 400 million dollars for the
40%. While SM Holdings knowing that e-clone is currently on partnership negotiation with
the giant “search engine” is currently aiming for at least 20% ownership. e-clone
Corporation can’t afford to lost more than 50% of its ownership
3.9 Personally, you don’t want to grasp the two to avoid head-boggling decision scenario for
the company. However, the BOD wants to grab the two offers. The incremental analysis that
you will prepare and your recommendation will be the major bases for the decision of the
BOD.
4. Pinky S. dela Cerna, your Accountant is currently on sick leave, one of the tasks that she failed to
finish before she got sick was the financial statement analysis report for calendar year 2018,
which you need to bring in your meeting with SM Holdings on December 06, 2019.
Chuck S. Valdez
Chief Executive Officer
e-clone Corporation
Maasin City, Southern Leyte
Officer Valdez,
This refers to the Energy Conservation Strategy that our company is currently undertaking to support
the government’s effort on environmental conservation. Part of the strategy is to turn off all the air-
conditioning units from 4:00pm in the afternoon until 8:00am the next day.
Currently we are incurring delay in the processing of papers of our digital infrastructure commitments.
We have already pending 150 digital infrastructure jobs as of November 30, 2019. Specifically, the delay
is due to the slow processing of documentary requirements particularly in our department. Significant
number of employees had stopped rendering overtime work when the Company implemented the
Energy Conservation Strategy. Our Department and Technical Department are presently bombarded
with numerous complaints on service delivery.
Though, we don’t want to disappoint Ms. Witty P. dela Cruz as the champion of this strategy being the
one of the members of the Environmental Committee, we are also very concerned of our company’s
performance. As much as we want to abide this strategy, our company’s performance during the last
three months was very much affected.
Relative thereto, may we recommend a modification on this strategy so we will be able to encourage
again our key employees to render overtime work. We have already made a commitment to this 150
companies to finish our job on or before the end of January 2020, which is quite impossible to achieve if
we continue with this energy conservation practice.
I am also quite anxious, that this current glitches might affect the existing negotiation of the company
with Google Corporation.
Hoping for your consideration on this matter, May we also request for a meeting to discuss this matter
in the presence of all the executives next week.
Respectfully,
Adrian W. Wright
Chief Administrative Officer
Chuck S. Valdez
Chief Executive Officer
e-clone Corporation
Maasin City, Southern Leyte
Officer Valdez,
This refers to the overhead cost of Php300,000.00 and Php450,000.00 charged to our department during the 1 st
quarter and 2nd quarter respectively, which we find very impartial.
Our department is quite apprehensive because based on the cost variance data, as of the 3 rd quarter of 2019, our
department has already exceeded the 90% limit of Total Operating Cost Budget for 2019. Our evaluation and
verification showed that overtime cost for the 1 st and 2nd quarters had caused the overhead expense to increase.
We have also discovered that the cost driver used by the Finance Department in the distribution of overhead cost
is based on the number of space per square meter occupied by each department in the building premises. In
which, our office occupied the biggest space.
The overhead cost for 1st and 2nd quarters are presented as follows:
We would like to emphasize that 80% of the employees in our Department are working in the field, majority of
these employees just bring their paperwork at home or just work on their laptops in those areas where they are
assigned.
Relative thereto, our department find it more appropriate that the excess overhead cost shall be distributed using
the overtime cost as the cost driver. The cost incurred during the months of October to November 2019 for the
overhead were only Php1,000,000.00 and Php988,000.00 respectively. There was no overtime cost incurred for
these months due to the Energy Conservation Strategy implemented by the company since September 2019. The
caused in the decrease of overhead cost for the month of November was due to the damaged transformer, which
was not functional for a week.
Respectfully,
Violeta Q. Silang
Chief Technical Officer
Annex 4 – Human Resource Department Issue
November 28, 2019
Chuck S. Valdez
Chief Executive Officer
e-clone Corporation
Maasin City, Southern Leyte
This is relative to the current negotiation of our company with Google Corporation. As the merger is
almost 100% consummated we are very much anxious with the change this may cause to our existing
Human Resource Management. I know that you are currently aware of the clamor of employees
regarding the recent policies passed and implemented. Among others, we are also being threatened by
the recent sexual harassment complaint of an employee from Technical Department against one of our
Vice Presidents, employees are also complaining about the decision of the Board regarding the non-
giving of 15th, 16th and 17th month pays due to the substantial number of work backlogs, which could not
be wiped-out before the year ends. The energy conservation strategy is also severely affecting our
scorecards, many employees got sick because starting this month they were forced to render overtime
work for three hours without air-condition.
This company is very much aware that Google Corporation is regarded as one of the best workplaces in
the world. Just today, the CEO of Google, Philippine Campus had visited our office to check how we
currently manage our employees, one of the striking comments he made was we had a lot of
overhauling activities to do to fit the culture of Google in people management. Wherein, such comment
give me a face-numb because it is really true that we are at the moment managing our human resource
poorly. Presented below is the evaluation report handed by Google CEO for our consideration,
information and guidance:
Hope that you will give this matter your utmost concern.
Thank you.
Respectfully,
Mark T. Page
Chief Human Resource officer
Witty,
1. Finance
2. Technical
3. Human Resource
4. Administrative
Thank you.
Chuck