Private Fitness Inc Internal Control

Private Fitness Inc.

Group 4

Objectives of Private Fitness Inc.        

Risk assessment:        

1、Current situation        

2、New Risk        

①Risk        

②Risk level        

③Risk treatment[We will give more details later.]        

Solution        

1、 Management Structure(personnel and cultural control)        

2、Progress（Action control）        

①Between Rosemary and the non-instructor manager:        

②Among the manager, instructors and clients:        

③A whistle-blower program        

3、Motivation and punishment (Result control)        

Since Private Fitness Inc. is located in an upscale community and provides specific classes to customers, each instructor is valuable and we think Rosemary should forgive Kate and still employ her as an instructor. But Kate is not qualified for the manager position because what she did is a serious ethical problem. Rosemary should hire a non-instructor manager outside, considering the risk we analyzed that a person take instructor and manager position at the same time.

For the solution, our group first made a risk assessment and according to this, we will give details in the later part of the article.

Objectives of Private Fitness Inc.

First, we should identify the overall objective of the Private Fitness Inc., which is a small entity with only 5 employees, is to operate at a profit.

Second, we need identify that the problem that Rosemary need to face with is to resolve the fraud made by Kate, which both contributes to the dishonesty and motivation of herself and the available chance to make use of.

Risk assessment:

1、Current situation

First of all, Rosemary had to decide if she should fire Kate or not. Let us make an assessment.

The risk of forgiving her: She may steal money again and break rules, even destroy the club.

The risk of firing her: lose a valuable instructor and Kate’s marketing efforts, even friendship.

Comparing the risk of these two actions, we think the result of forgiving her is better and we can control the risk easily. To avoid this problem, we think Rosemary should forgive Kate and hire a non-instructor to become manager who can manager finance and monitor instructors specially and build a membership system.

2、New Risk

①Risk

If we hire a manager, the new problem and risk will arise. How can we avoid or solve them? We made another assessment.