CFO PROJECT PAPER

Introduction

TJ Maxx is a fortune 500 company that is at position one hundred and thirty two in the recent rankings. The latter company dwells on provision of home fashions and apparel within the United States. The organization boasts of two thousand five hundred stores located throughout the world. Additionally, it has one hundred and thirty thousand associates. (TJ Maxx, 2009)

As of 2007, the company recorded revenue of nineteen billion dollars. It is an off price retailer that could benefit from corporate governance assessment and a forensic financial analysis. The paper shall give a comprehensive report based on CFO roles within this company.

Analysis of TJ Maxx in the context of e-business
TJ Maxx is at a unique position in which it can take advantage of some of the changing roles of technology within the business arena. The company can embrace both technology and traditional roles in order to enhance its overall position within the retail sector. (PWC, 1999)

It is imperative for the latter company to realize that some of the major drivers of change at the onset of the dot com era have not changed in the current years. Consequently, the following issues need to be given special attention
• Technology in flows
• Globalization of markets
• Availability of capital

One of the challenges that the TJ Maxx CEO needs to embrace is the role of strategic alliances. In order to remain competitive in the retail sector, it will be instrumental for the latter company to look for ways in which they can maximize these shareholder values through retention of flexible partnerships. The company has tried its best to forge associations with other partners but much is yet to be done in terms of improving the flexibility of these partnerships. Additionally, greater precedence ought to be given to improve the quality of those partnerships.

The company is yet to adopt a window versus wall approach to it. This can be seen by their approach towards their code of ethics. The latter company needs to prepare associates for these rules by training them prior to entry into the organization. Additionally, they can look into implementation of this code of conduct through their associates by creating a go between.

The latter approach has been applied by a series of retailers within the US and outside. Certain retailers normally have associate hotlines in which they can hear the perspectives of their associates with regard to the code of conduct. This can add greater flexibility within the organization and can also improve the relationship between the company administration and the associates.
For any company to succeed in the business arena, then there must be an integration of five major aspects that are as follows;
1) Roles
2) Structures
3) Information
4) Culture
5) Resources (eCFO, 2001)

The latter company has gone a long way in integrating these five issues. However, more can be done to boost TL Maxx’s position within the fortune 500 list. First of all, while the company may be an equal opportunity employer, it is yet to carry out tangible day to day changes that can utilize its organizational culture as an asset. In other words, the firm needs to examine some of the elements of its culture that may be impeding its progress. In this regard, it should be noted that the world has become technology oriented. Consequently, more and more companies are moving towards leaner organizational structures. This means that the company needs to assess which numbers of employees are actually in a position to create the greatest value for the company while at the same embracing technology in carrying out these tasks. (PWC, 1999)

In other words, TJ Maxx should look into its composition and orderliness in order to assert that they are coping well. Besides this matter, it is also essential for the latter company to look into the roles of each of its employees, managers and also its board of directors. It is imperative for all the three parties to have a unanimous strategic direction.

This means that the entire group needs to be moving in one direction. The latter company has relatively succeeded in this matter. However, more is yet to be done in terms of boosting some of the stated needs. This is because TJ Maxx usually treats the Boards of director’s needs as separate and distinct from those of the managers and its associates; this is an aspect that needs to be re-examined. Greater integration of their roles needs to be done.

Information is a crucial part of the e-business era. For any organization to succeed, its leaders must receive adequate information to equip them to make crucial decisions. This also means that the company under consideration must also instate processes and procedures that can allow adequate monitoring of both external and internal processes. Also, greater precedence needs to be given to the knowledge acquisition of an organization’s leaders. The latter group ought to be equipped with adequate information in order to ensure that members of the organization adhere to laws and regulations.

T J Maxx has tried to establish a solid information base. However, greater improvement can be done through the use of information technology. For instance, it can create alternatives in which its stakeholders can update company databases. Consequently, such employees can be better equipped to handle most of the challenges inherent in the company. Also, greater precedence needs to be given to the following values;
• Accountability
• Responsiveness
• Transparency

All the latter issues can be incorporated into the organization’s corporate governance through all the five issues that may be available to TJ Maxx. (eCFO, 2001)
Lastly, while TJ Maxx may be a tangible goods producer, attention should not just be given to those products alone as sources of capital. In fact in the age of e-business, the most important assets are the intangible ones. TJ Maxx is yet to fully embrace this concept. The company has not yet exploited the full value that these assets can offer to the company. For instance, its employees are some of the most important assets within their organization. However, the latter groups are yet to be fully utilized. The company can instate training programs that can assist these groups in making the most of their circumstances.

In addition to the latter matter, it is also important for TJ Maxx to invest in its consumers. The consumer is one of the most important assets to them. It should be noted that as a clothing retailer, this company has a unique opportunity to analyze the opinions and preferences of its consumers.

While the company has provided a platform in which consumers can be informed about their favorite purchases, more can still be done to boost the company’s relationship with its consumers. First of all, it can create a situation in which consumers can communicate directly with TJ Maxx representatives through the internet. Other retailers have introduced such a program but this company is yet to follow suit. By doing this, then they will be boosting the relationships with their customers in a relatively hassle free way i.e. at the comfort of the consumer’s home. Besides this, the company will have moved with the times by utilizing relevant technology to make the most of their intangible asset. (PWC, 2001)

Lastly, there is a need for a paradigm shift within this company’s approach to business processes. Like most retailers, the company has used past successes in order to make decisions that will affect its future. However, the current situation does not relate the kind of challenges that the latter group may be facing. It needs to be more forward looking.

Using technology in the company’s business
The first thing that TJ Maxx needs to realize is that even the latest state of the art technology can be utterly useless when there is no way of ensuring that that piece of technology is meeting business needs. In others words, technology should serve the corporation and not the other way around.

There are a number of challenges that TJ Maxx needs to identify and then implement. It should look for ways in which it can enhance its performance. Potential areas that may need change include the process of accessing business information from one particular area. Additionally, the latter company should also look for ways in which it can allow access to the latest technology without having to change theory software and hardware. Lastly, there is a need to integrate some of these components so as to promote a number of support functions. (PWC, 2001)

There are several alternatives in which TJ Maxx can improve the utilization of technology in its businesses and at the same time solve some of the latter problems. First of all, it could look for ways in which it can adopt ERP programs. Here, the company will go a long way in ensuring that employees can access information relatively easily through limited IT resource inputs.

Secondly, the latter company can utilize business intelligence. In this regard, the company should work on collecting all the data necessary for carrying out certain business functions. After carrying this out, it should then focus on establishing comprehensive data analysis an organization.

This aspect should then be followed by clear instructions on who should be allowed to update information. The most effective way of achieving the latter is by assigning different responsibilities to different individuals thus implying that the data base is always up to date and that this can be used well.

Managing resources
There are changing ways of handling resources in this era of information technology. These days, resources are managed by identification of the best way to add value to the organization’s processes. In this regard, greater emphasis is normally given to the issue of attracting resources and allocating them in the most value driven way possible. (Weston & Weave, 2001)

Some of the ways in which TJ Maxx can adequately manage resources is by going through a four step process. In the first phase, ideas are generated about what the company requires in terms of its resources. Here, greater emphasis is given to the process of establishing focus groups and gathering competitive intelligence. Some of the ways in which this company can carry the latter out is by looking at competitor reports, forecasts, products and services. Also, it can target consumers who represent the target group for its products and then establish the needs within the firm. In terms of resource attraction, the latter company can create a forecasting team whose major function will be to identify issues that will arise in the future and then come up with ways of solving them.

The second phase is known as the appraisal phase; when doing resource allocation, TJ Maxx can establish ways in which it can prioritize all the proposals that had been made in the earlier phase. In resource attraction, it can examine all the risks involved both within and without the organization. This also means that an identification of the constraints should be done. In the executing phase, the company can look for ways in which they can manage portfolio based projects. In terms of resource attraction, this phase ought to be achieved through the use of flexible project managements

Maximizing value through mergers and acquisitions
Mergers and Acquisitions can provide TJ Maxx a unique opportunity to maximize its revenue, offer new investment prospects and also establish ways in which it can tap into new opportunities and investments. (eCFO, 2001) After an analysis of the latter company’s history, one can see that this corporation has not been fond of mergers and acquisitions. Perhaps one of the reasons why the organization has been shying away from the latter method is that the current recession could be causing them to do so. However, this mentality should not be the driving force for making its decisions. In fact, mergers mad acquisitions could offer TJ Maxx a solution to some of these problems. (Weston & Weave, 2001)

One area that could accommodate mergers and acquisitions relatively well is its foreign businesses. The latter company could establish more branches in other parts of the world through mergers and acquisitions. The latter strategy has worked for many western based corporations setting up shop in Asia and the same strategy can work for TJ Maxx. In this regard, the latter company can identify some of the top performing retailers in targeted foreign countries and then establish partnerships with them.

Evaluating prospects and measuring performance
In order to ascertain that a particular company knows where it is headed, than it is imperative for that company to carry out adequate performance measures in order to ensure that prospects are easily evaluated. The latter equation is particularly useful when carrying out this task
Shareholder value = Corporate value – Debt

Corporate value within the latter organization is created through two major initiatives that include Future Cash Flows and current ones. These issues should be merged with shareholder expectations of the future and also with economic profits as laid out in these respective areas.

As it can be seen in the equation above, corporate value is one of the most fundamental aspects of this kind of organization and a corporate governance assessment is therefore crucial in this regard. The latter company boast of a steady shareholder value increment over the past few year as seen in its financial representation below

(TJX, 2009)
Corporate governance assessment
Before getting into the intricate details of the corporate governance assessment of TJ Maxx, it is essential to first understand some of the basics about the latter term. Corporate is regarded as one of the most important parts of an organization’s structure.

This issue usually entails the creation of relationships with shareholders, the board of directors and also the corporation under consideration. Consequently, the key thing behind corporate governance is that there should be sound institutional arrangements that can assist in handling shareholder and internal personnel relationships. Corporate governance allows companies to define their goals and have a means of achieving them. These are the issues that will govern the corporate governance assessment being carried out for TJ Maxx. (PWC, 1999)

Upon looking at the policies and procedures within this company, it can be asserted that the TJ Maxx Company has a medium level of corporate governance. This is because the corporate governance structures do exist but execution of some of these policies and procedures is yet to be achieved within this respective company. If the corporate governance structure of the company was to be graded, then it would lie somewhere between sixty to seventy percent.

Some of the reasons for settling on such a number include the fact that stakeholder roles at TJ Maxx are a priority list. Following closely is the issue of board of director’s responsibilities. Transparency within this company is of a medium level as was seen in the “data loss” issue that the company was facing recently. The latter scandal cost the company and showed that much is yet to be done to improve this company’s standing in the latter category.

It should also be noted that there is a significant relationship between a companies’s ranking in the Fortune 500 list and the level of its corporate governance structures. When one looks at other companies, it can be seen that there is relationship between corporate structures and company performance. Since TJ Maxx is at position one hundred and thirty, then this implies that more is yet to be done to improve its corporate governance structures. (TJX, 2009)

Adequate corporate governance structures need to indicate a respect for shareholder rights. In this regard, there should be concern for the following;
1) A right to know internal information
2) A right to vote
3) Other rights

The most fundamental shareholder right is the right to vote. This aspect is an acid test in most companies and almost all fortune 500 companies have instated this right. Consequently, the ultimate test is seen in a company’s ability to pass or allow other rights.

Given the level of transparency within this organization and the investment in information, then there is average investment in corporate control. The reason for this assertion is that there have been minimal instances of insider trading that have been reported by the latter company. Part of the reason for this result is that the company has well written and well understood rules on trading internally. Consequently, the company has been able to minimize occurrence of such negative practices by making their principles and procedures relatively clear.

Besides the latter matter, the company has also tried its best in promoting transparency and disclosure. This can be seen by the fact that the following have been instated;
• Disclosures on rules and regulations
• Disclosures of shareholding details
• Disclosures on managers and director’s shareholdings
• Annual reports on financial results
• Reports on operations
• Director’s reports on trading in company stocks

Some of the challenges that the latter company can work on include the issue of providing adequate and timely information to their respective shareholders. Additionally, this company also needs to work on some the non compliance cases that affect related party transactions. In close association with the latter matter is the fact that it is relatively difficult to be able to identify any beneficial ownership within this company; such an aspect is crucial on corporate governance assessment and one ought to deal with it adequately.
Most of the time, the company has done relatively well in breaking down its relative shareholdings. However, there is still room for improvement in this arena because the information is not as widely accessible as it should be. In other words, issues of transparency come into the picture here. (PWC, 2001)

The issue of disclosing shareholding for both managers and directors is also a very important one. Companies need to put themselves in a position where these matters are aired out in the open. TJ Maxx has tried instituting such mechanisms. However, there are stronger obligations for the managers within this organization compared to their respective directors. This means that more firmness should be introduced in this regard.

Auditing is an important aspect of any company’s corporate values. Since TJ Maxx usually goes out of its way to ensure that they conduct annual audits, then it can be said that this company has improved its overall service provisions. However, there are certain loopholes that could affect this company s laid out by SEC.
The company has a very strict policy on making partnerships with certain categories of individuals; however, some of its auditors may not be as top notch as they should be. More investment needs to be done in terms of finding out information about a particular auditor without rushing into an arrangement with them so quickly. This company could analyze some of the auditors that other Fortune 500 companies have invested in and then look for ways of entering into a partnership with them.
It should also be noted that in certain situations, there are companies that may not pay specific attention to corporate social responsibility regulations. This can be detrimental to that company’s corporate values owing to the fact that this is the basis upon which one can carry out specific rules and their respective outcomes. TJ Maxx is yet to give this component special attention since there is no consideration given to evidence that indicates non compliance among some of these organizations. (TJX, 2009)

A company cannot boast of sound corporate governance structures when there is lack of adequate consultation between its leaders; the board of directors. In order to improve the latter issue, TJ Maxx should work on improving the number of meetings that these board of directors have.

In close association with the latter matter is the issue of heightening the quality of meetings that these individuals carry out. One way in which the company can improve is by offering a forum in which questions and answers within those meetings are written down. This information can then be made available to auditors or CFOs in subsequent years. Also, the company needs to ensure that resolutions are reached within those meetings.

However, care should be taken to ascertain that members are not forced to make those decisions. Instead, they need to understand that this matter is totally in their hands.

All in all, it can be said that the TJ Maxx Company has medium levels of the following aspects of corporate governance
• Duties of the board
• Information and transparency
• Stakeholder roles in corporate governance
• Equal shareholder treatment
• Respecting shareholder’s rights to vote

The latter company has tried in this arena but its level is yet to reach those of other top one hundred Fortune companies. If it could work on these rough edges, then it can go a long way towards improving its respective performances. Also, it should be understood that there are certain scenarios in which most of these issues are already working well but there is a need to understand how they are working.

How intangibles can drive value
Regular updating one’s information can go a long way in ensuring that stakeholders under consideration understand the goings on in this company. The company has tried its best by establishing relationships with its clientele. It usually does this by creating a passionate experience in their stores. This makes most of its clients more interested in finding out how new products and services within this organization. (eCFO, 2001)

However, regardless of this interest, more can be done to take advantage of the most valuable intangible asset within this company i.e. the customer. First of all, this company can adhere to certain relationship marketing tactics. For instance, it could provide a telephone service in which consumers can inquire about TJ Maxx’s services. It could listen to some of the complaints being aired out and work towards improving its service levels.

Secondly, the latter company needs to offer incentives to clients who keep coming back. In other words, it can promote membership into the TJ Maxx community through product or price discounts. This can go a long way in making those consumers come back. Additionally, the level of customer service in their stores is okay but it is not “cut throat”. Some companies such as Starbucks normally train their employees for a period of six weeks on how best to treat their clients. Good customer service should never be underestimated and no company should settle for average results alone. Currently, the company does not offer such alternatives to its consumers and this could be hindering them from tapping their full potential.

Another vital asset within this company is its brand. Currently, the latter organization has been dwelling on the concept of being a cost cutting institution. (TJX, 2009)Also, this same message is what has been communicated to a series of individuals within the corporate arena. In order to ensure that it is performing well, then there is a need to improve the latter branding strategy. This company can achieve this by combining the following approaches
• Financial brand analysis
• Market brand analysis

A combination of these two methods is what it in fact known as an economic based approach to marketing. Most of the time, market based approaches can work for those companies that have been dwelling on so much of cost analysis. This has been the case for TJ Maxx because it has always operated with a lean structure. Complementing this methods with market based branding can boost this organization’s performance levels owing to the fact that the company will be estimating future performance by looking at how it performed in the past.

Other intangible assets available to this company include its intellectual property. The latter company has not been very effective in this arena. It was faced with one of the biggest class law suits in the history of retail companies because of the fact that it lacked the ability to protect it intellectual property. The company should not just treat intellectual property as an aspect to be handled by its legal department or its IT team alone. Instead, there should be adequate training and information dispensation given to all members of its organization. This can go a long way in ensuring that everything is up to standard and that all the matters facing this particular group are handled responsibly and well.
There should also be a better way of offering rewards to employees within this company. This is mostly because the latter matter has solicited a lot of scrutiny from experts who assert that offering stock options to boost performance in a company can target all the wrong people and can therefore lead to impediment of production.

Instead, the latter company needs to work on offering its employees certain job motivating incentives. For instance, by providing their associates with opportunities to grow within the organization, then they can transfer knowledge while at the same time encouraging greater innovation. (PWC, 2001)

TJ Maxx can achieve the latter goal by borrowing some practices from other companies in the retail industry. A company such as Walmart normally offers its employees an opportunity to move from a branch in one section of the world to another in a different continent. What this does is that it offers employees newer challenges thus minimizing repetition of work. Also, it goes a long way in enriching organizations owing to the fact that knowledge from one side of the company can be transferred to another. Both employees and the corporation can benefit through such a venture. Therefore, the TJX Company in UK could transfer some of its employees to the US and vice versa. (TJX, 2009)

The virtual organization and the network enterprise
Since consumers are increasingly getting interested in the restoration of relationships with their service or product providers, then TJ Maxx should reflect this aspect in its business management tactics. However, the latter organization is yet to achieve this. There is still much that needs to be done in terms of offering consumers custom made designs. The clothing and apparel industry provides TJ Maxx with such a good opportunity owing to the fact that most of the products they offer are in high demand. Consumers will be more attracted to their offerings if they could incorporate their voices and opinions. For instance, if a customer would like a bag with longer handles, then the company should work on offering them just that. They can solicit such opinions through an online chat service in which their representatives communicate with clienteles twenty four hours a day.

Besides this issue, it is often common to find that a number of retail stores have instituted self service mechanisms. These can go a long in making transactions faster and can also save the company a number of labor costs that they would have to spend if they were utilizing this manual labor.

While the latter matter may seem like a very good idea, it is important to note that consumers would still like a personal touch when buying some of their commodities. In other words, it is essential for this company to use self services in some sections of their work that may not be very crucial to the core business. For instance, when paying for items self service can be used. However, there should be some sales persons within the store who can guide consumers through the process of choosing apparels or other commodities.

It should be noted that TJ Maxx is yet to achieve the potential that it is capable of getting in terms of creating virtual networks for its products. For instance, this company can use virtual technologies to deal with its supply section. In this regard, it should look for the most appropriate way of responding to client needs such as through the Just In Time system.

Since companies have moved from being product driven to being consumer driven, then
TJ Maxx can ensure that its respective clients are in need of a certain commodity before it can source for the commodities from its suppliers. In close relation to this fact is the issue of supply chain logistics. The latter company needs to boost its responsiveness through IT in other parts of its production chain.
Networking does not merely apply to the production section alone – it also refers to the relationship that a certain company possesses with its consumers. This means that sales and customer relationship marketing ought to embrace e-business. TJ Maxx is yet to fully tap the company’s potential in this regard.

Firstly, the latter company can embrace online selling in a different manner. It could make its internet advertisements more lucrative and could also boost actual sales online by choosing good courier services to deliver their products. The most important aspect of online selling is its speed. If consumers can merely click and buy, then it is essential to understand that they would like their commodities delivered to them as fast as possible. Usually, this is the point where most companies fail. (PWC, 1999)

They may place so much attention in acquisition of consumers but following through the sale may be another challenge altogether. What TJ Maxx ought to do is to conduct adequate research on delivery of services before selecting companies to do it for them. Consumers have large forums in which they can discuss the services offered by specific companies and if something negative is being said about TJ Maxx’s customer relationship management, then this could lead to a detriment of their overall performance.

Moving from budgeting to forecasting
It should be noted that most companies assume that the best way to deal with their respective assets is through budgeting and this is the same approach utilized by TJ Maxx, the latter organization usually examines its past performance records and then uses them to make a budget for the next year. (TJX, 2009) Experts assert that this approach may not hold water in the current age of information technology. TJ Maxx ought to move with the times. In other words, the company should consider doing business forecasting rather than budgeting.

There are a number of pre-requisites that are required in order to ensure that this method actually works. In other words, TJ Maxx ought to examine whether it has any of these qualities in order to boost success of the strategy. First of all, a company should have well laid out strategic goals and should possess stakeholders that are committed to it. Since the latter utilities are already in place within the latter organization, then it can be said that TJ Maxx is at a good position to implement some of these matters relatively well.

The second thing that the latter company needs to ensure exists within its organization is an alignment of these measures within the company with some of the aspects that drive value in this company. In other words, before forecasting can become a crucial part of this organization they need to ensure that all their intangible assets can be adequately measured and that the members of the organization understand this alignment process. TJ Maxx is yet to achieve that latter issue; however, it can start by making changes in various departments so as to accommodate these changes one step at a time.

Business cycles are also very important in implementation of forecasting strategies. TJ Maxx’s administrators fully understand their business cycles. Consequently, they are in a position where they can change the way things are handled by looking at its business cycle and establishing mechanisms that can assist the company in the process of understanding its kinds of procedures and processes.

There should be mechanisms that can link both internal and external processes within this company. So far, TJ Maxx has already instated the latter arrangements and can therefore go a long way in promoting business forecasting procedures within this organization. (TJX, 2009)It should also be noted that there can be particular instances in which possessing a mindset for achieving business forecasting is also essential.

Business forecasting will entail the use of information technology because it is only though IT that companies can update information as quickly as possible. The sales, production team and all other stakeholders will be involved in the process and will definitely assist in carrying this matter out. Shown below are some of the things that TJ Maxx ought to work on in terms of boosting its forecasting tools

Forecasting tool
Status within the organization
Promoting a forecasting mindset
Not instated
Alignment of measures to drivers
Partly instated

Highlighting business cycles Instated

Links to strategic goals Instated

Linking external and internal processes Instated


Most of the challenges facing companies that may be shifting from the traditional budgeting approach to a more modern forecasting approach is in the flexibility and responsiveness of the company under consideration. For this method to work, there should be adequate access to information within the company. This also means that the groups under consideration must be able to handle technology adequately. This implies that there will be certain ways in which one can handle most of these matters by looking at the way the organization is arranged. In other words, data management will be a crucial aspect in the success of this endeavor. Also, there will be a need to introduce the “what if” component in which effects are analyzed and effective procedures are sought. (eCFO, 2001)

Conclusion
TJ Maxx is doing relatively well in a number of the CFO roles. However, the company is yet to tap its full potential because of failure to seal some of its loopholes. The paper has examined some of the challenges that TJ Maxx is undergoing and has offered tangible solutions to them. Most of the challenges in this company have been brought on by possession of a traditional mindset in the use of information technology, carrying out mergers and acquisitions, management of resources, defining shareholder value and carrying out CFO roles in this era. Consequently, if the latter organization were to change this mindset, then TJ Maxx may improve its ranking in the Fortune 500 listing and it may also tap its potential.

Referencese

CFO (2001): The CFO’s role in the age of e-business
Weston, J & Weave, S. (2001): Mergers and acquisitions, New York: Mc GrawHill
PWC (2001): Sustaining value in the New Corporation, New York, Wiley and Sons
PWC (1999): Architect of the Corporation’s Future, New York: Wiley and Sons
TJ Maxx (2009): Official Website, retrieved from http://www.tjmaxx.com/ accessed on 12th February 2009
TJX(2009): Shareholder Policies, retrieved from http://www.tjmaxx.com/shareholder_policies.asp accessed on 12th February 2009



The author of this article is a holder of Masters in Business Administration (MBA) from Harvard University and currently pursing PhD Program. He is also a professional academic writer. ResearchPapers247.Com>