Framing the control problem: Lululemon Ltd.
The Brief
Your team has been asked to prepare a report framing the control problems within the organisation Lululemon Ltd. Your report should identify and explain the main problems faced by the managers of the organization, providing a theoretical basis for understanding how and why these problems occur as well as the possible dysfunctional consequences for the organization and its employees.
You have been provided with access to case material relating to Lululemon. It is expected that your team will engage with this material, as well as gathering your own information about the company. In both the case material and further information you collect, various people may provide opinions about what they see as important issues faced by the company.
While these opinions may be a useful starting point for your analysis, the aim of your report is to provide a management accounting perspective, by using existing management accounting research and theory to frame and explain the control problems.
It is expected that at a minimum your report will:
Based upon management accounting theory identify 3 control problems faced by the management of Lululemon. These problems must be framed by management accounting theory, i.e. it is insufficient to simply identify general criticisms or problems of Lululemon. It is also expected that you provide sufficient background information about Lululemon so the reader can understand your explanation of its problems.
Apply management accounting theory to explain the basis for how and why these 3 problems occur.
Explain what dysfunctional consequences may arise from these 3 problems for the organization and/or its employees.