Financial Analysis of Bevan Industries

Financial Analysis of Bevan Industries Bevan Industries’ current cost of capital From the given information, the cost of capital for Bevan Industries comprises of the cost of debt, the cost of preferred stock, and the cost of common stock. A combination of all these three components constitutes the current cost of capital of the firm. This is also known as the firm’s Weighted Average Cost of Capital (WACC). Discussed hereunder is the step by step calculation of Bevan Industries’ current cost of capital (Barber, 2004). Cost of Debt (Cd) Cd = I (1 TR) Where I is the Interest Rate on Debt TR is the Tax Rate Cd = {(30,000,000 X 0.06) / 25,000,000} X (1 – 0.28) = 0.072 X 0.72 = 0.05184 = 5.184% Cost of Common Stock (Ccs) Based on the given information, the cost of common stock is calculated using the formula Ccs = Cd + risk premium rf = (20 X 8) / 160 = 1 (rf is the risk free rate) Ccs = 5.184 + 0.75(1) = 5.934%. Cost of Preferred Stock (Cps) Cps = {preferred stock dividend/ market price of preferred stock (1 – flotation cost)} In this case, there is no flotation cost, thus = (0.04 X 100) / 20 = 20% Weighted Average Cost of Capital (WACC) is given by the sum of the above components. WACC = Cd + Ccs + Cps = 5.184% + 5.934% + 20% = 31.118%. 2. The new financial requirement The working capital falls by about 15m, while the additional investment costs 75m. Total additional cost = 75m 15m = 60m. From the initial conditions, the total investment is given by 30m + 100m + 160m = 290m Total investment = 290m 60m = 230m. 3.The three proposed financing options Weighted Average Cost of Capital (WACC) can be found using the formula below (Barber, 2004). WACC = (Md/V) X k (1-T) + (Mp/V) X {Dp/Pp(1-Fp)} + (Mc/V) X {g + Dc(1+g) /Pc(1-Fc)} Where V is the firm’s total value given by the sum of the debt, the preferred stock and the Common stock. Md is the market value of the debt; Mp is the market value of the preferred stock; and Mc is the market value of the Common stock. k is the current market interest rate; and T is the tax rate. Dp is the annual dividends for the preferred shares; Pp is the market price of the preferred shares; and Fp the flotation costs of preferred shares. Dc, Pc, and Fc are the dividend, market price, and flotation costs of common stock respectively. First option (debt) Cost of debt = {(100m X 0.06)/230m} = 2.6% Second option (common stock) Cost of Common stock = 100m/230m = 43.48% Third option (Preferred stock) Cost of preferred stock = 100m/230 = 43.48% Weighted Average Cost of Capital is therefore given by the sum of the above three components WACC = 2.6% + 43.48% +43.48% = 89.56%. The advantages and disadvantage of each of the proposals made by the bankers From the bankers’ pieces of advice to Phil Bevan, three basic financing opportunities are presented. Basically, he is faced with a dilemma of either considering Common shares stock, preferred stock or debt financing to aid stabilize the business. However, before a decision is made, he should be in a position to understand the cost associated with each. This implies that he will scrutinize each proposal’s merits and demerits, but with cost of the capital, flexibility, risk the proposal is associated with, control and timing as the basic guidelines. Capital management definitely guides business owners to attain sole objective of an optimal capital structure (Dewatripont and Tirole, 1994). For instance, cost of capital is a cornerstone for measuring the profitability’s of varied investments (Harris and Raviv, 1991). It is thus essential to identify the merits and demerits, with reasons, of each proposal before a recommendation is made. This is discussed as under. Debt Issue Issuing corporate debt is one method of financing different business activities. These activities encompass business expansion or need to carry out research and development. An organization’s debt is signified by bonds. Bonds are future instruments sold to the willing investors. Phil Bevan is likely benefit from accepting Hiram J. Pipesucker’s proposal of debt financing in the following ways. Interest payments are tax deductible The interest charged on debt issued is tax allowable. This implies that its cost is likely to be cheaper as compared to other sources. Often, when an organization issues stock, it pays taxes on the income generated. This leads to a higher liability in form of tax to be paid (Harris and Raviv, 1991). When debt is issued, however, interest is paid to debt holders. Interest has to be paid to the bondholders annually. Debt issue thus has an advantage of due to the fact that the interest paid is tax-deductible. This generally translates to a larger savings in form of tax to be paid by the business to the bondholders. The allowable tax reduces interests to be paid hence increasing profitability. Debt issue avoids dilution of earnings per share or control within the business Debt issue does not interfere with the control of the business, i.e. it at all times avoids the dilution of earnings per share. If Phil Bevan adopts the proposal of issuing debts to raise its capital, he shall have avoided a likelihood of change of control or ownership. It therefore presents the owner with an opportunity to maintain its control as the earnings per share is maintained and not diluted. Long term financing approach Debts issue is a long term approach to raising finances. If Phil Bevan is for the opinion that he invests in a project with duration more than 20 years from beginning to the end, issue bond or debt is the best option to for the business to obtain long funding. On this premise, if he gets a loan from the financial institution, say a bank, the repayment terms and the duration of the loan will be optimally determined by the bank. Besides, Phil Bevan is privileged to choose the terms and the time period of bond maturity. The maturity date is such a time he is to pay back bondholders the principal amount. The date to maturity is always a long term period. Debt issue cost is fixed and the amount of principal repaid does not change overtime Debt issue is also advantageous due to the fact that the principal amount does not change overtime but remain fixed until the date of maturity (Heinkel and Zechner, 1990). This is beneficial as the owners can plan optimally to repay the principal before the maturity date reaches. The repayment terms are usually better on new debt issues than when compared business loans. Lower level of returns to the investors Usually, debts issue presents a lower rate of return to the investors as opposed to the common stock. This implies that if Phil Bevan considers this proposal, it shall have reduced to the amount to be paid to the investors hence profitability. However, debts issue has the following demerits to a business when used as a source of financing. Adds more risk to the business If Phil Bevan considers the proposal of debts issue, he may place the business in a risky position. This is due the fact that debt issue has restrictions on the limit of how much debt to be used. Basically, it presents a frontier as to how much debt can be used to finance the business. It is worth noting that an excess use of debt may plunge the business into bankruptcy. Compulsory maturity date Debts issue as source of finance has as well a disadvantage maturity date. This implies that the capital invested must perform and provide returns faster enough and this return must be passed over to the investors. It carries fixed charges Regardless whether a business has profitable cash flows or not, a fixed charge is imposed to the business. This may plunge a business into financial crisis in events that the fixed charged cannot be met due to lack of earnings. Common stock and retained earnings The cost of common stock and retained earnings is the rate of return an investor requires to make demands to make a common stock investment in the business. As opposed to debts issue, it does not generate tax benefits due to the fact that dividends are paid after taxes (Heinkel and Zechner, 1990). If Phil Bevan adopts Rollo Strauss proposal to invest in common stock, he is likely to experience the following benefits: Common stock financing is devoted to the business and the intended projects. Those who invest in the business only realize their investment in situation where the business has better earnings or cash flows. This is only in an event of market flotation or a sale to fresh investors. There is the advantage of skills that come along with equity finance. For instance, angel investors and venture capitalists do come into the business with valuable management skills, acquaintances and knowledge that improve the business performance. This implies that Phil Bevan is likely to benefit from investors strategic decisions and decision making. Common stock financing does not entail fixed payments When a business uses common stock as source of finance, the fixed payments demanded by investors cease to exist. In other words, it implies that dividends are only to the investors when earnings are available. As opposed to the debts issue where payments have been made regardless of presence of cash flows or not, common stock financing has an advantage of varying payments. Payment can for example be made when the business makes better earnings. Lastly, the invested capital is not being repaid. As opposed to the debts issue where the principal has to be repaid fully after the maturity period, common stock is beneficial to a business due to a reason that it has no maturity date on the securities and thus the invested capital can be necessarily not be refunded. The finance is there to stay in the business. Common stock financing, however, have the following disadvantages to a business which uses it as a source of finance. Dividend payments to shareholders are not tax deductible Often, when an organization issues stock, it pays taxes on the income generated. This leads to a higher liability in form of tax to be paid. On the other hand, when debt is issued, interest is paid to debt holders. Interest has to be paid to the bondholders annually. Debt issue thus has an advantage of due to the fact that the interest paid is tax-deductible (Harris and Raviv, 1996). This generally translates to a larger savings in form of tax to be paid by the business to the bondholders. The allowable tax reduces interests to be paid hence increasing profitability. This however is not applicable to the issue of stock. This signifies that it may prove expensive for the business. This makes its issuance cost higher than that that of debt. Dilutes the earnings per share to shareholders If Phil Bevan adopts the proposal of issuing stocks to raise its capital, he should be prepared for change of control or ownership. It therefore presents the owner with an opportunity of not being able to maintain business control as the earnings per share is diluted. It is time consuming and costly in the long run Issue of stock is often characterized with unnecessary procedures that make it appear demanding. It is always demanding, costly and takes a lot of time to fully effect. Venture capitalists for instance would demand to know the background of the business which many businesses are not for as they can always source for funds without the scrutiny. Preference stock Barry Nicebloke presents Phil Bevan with the proposal of using preferred stock to finance his business. This is a special equity security, having both properties of an equity and debt instrument. Often, they have no voting rights but do carry dividends. It presents a business with the following advantages when used as source of finance (Myers and Majluf, 1984). Avoids dilution of the earnings per share to shareholders Some forms of preferred stock issue do not interfere with the control of the business, i.e. it at all times avoids the dilution of earnings per share. If Phil Bevan adopts the proposal of issuing preferred stock to raise its capital, he shall have avoided a likelihood of change of control or ownership. It therefore presents the owner with an opportunity to maintain its control as the earnings per share is maintained and not diluted. He can thus make strategic decisions that affect the business for success. Preferred stock does not carry fixed charges A fixed charge is imposed to the business depending as to whether the business makes better earnings or not. Dividends are often marked as a percentage of a par value and preference shares dividend can at times be negotiated as floating. The major disadvantage of preferred stock is that interest payable is not tax deductible (Myers and Majluf, 1984). The interest charged on preferred stock issued is tax allowable. This implies that its cost is likely to be cheaper as compared to other sources. Often, when an organization issues debt, it pays taxes on the income generated. This leads to a higher liability in form of tax to be paid. This generally translates to a larger savings in form of tax to be paid by the business to the bondholders. The allowable tax reduces interests to be paid hence increasing profitability. This however is not applicable to the preferred stock issuance. From the presentation above, Phil Bevan should accept Hiram J. Pipesucker’s proposal which is about using debts issue as source of finance. This is basically applicable in this case due to the fact that this source of financing enables him benefit from benefits of tax allowable on interest’s payments, assured level of control of his business without external disturbance and due to the reason that it presents lower returns to the investors. Debt financing is thus recommended. Assessing whether the advice given by each of the bankers is in the best interests of Bevan Industries and why such advice should be treated with caution. Consideration on whether to accept the proposals given by bankers should be made to the flexibility, timeliness and cost of each proposal. Besides these, the business’ economic conditions, market conditions, operating conditions and financial conditions presented by each proposal should be checked and scrutinized. For the Bevan Industries, Phil Bevan, the CFO, is concerned that his capital structure is not as efficient as it might be. In particular, he is concerned about the amount of the business funded by short term debt and that his overall gearing level is quite low. This scenario presents him with different opportunities. The proposal of debts issue might be of weight but is disqualified forthright. This is because, as per the business needs, debts issue is applicable for long term financing but Phil Bevan is concerned about the amount of the business funded by short term debt. Debts issue proposal is not appropriate as it results in a more business financial risk. Phil Bevan is not ready to take the risk. Current levels of exceptional debt will impact on the amount of finance raised. Higher levels of debt as well as the preferred stock will result in wider variations to earnings per share. This is because they come forth with higher fixed obligations that must be paid. For instance, he must be ready to pay the interest to debt holders and fixed dividends to preferred stock holders. He is thus likely to incur more financial risks as opposed to his desired need to improve short term debt and balancing gearing ratio. On the other hand a proposal to undertake common stock issue may be applied. However, it as well has effect of earnings per share on the business or control influence. Due to the fact that Phil Bevan is concerned with the control level of the business, if he goes for this proposal, he is deemed to diluting the control level which he is not for. Reference Barber, J. R., 2004. â€Å"Cost of Capital with Flotation Costs.† Quarterly Journal of Business and Economics, Vol. 43, 2004. Retrieved at http://www.questia.com/googleScholar.qst?docId=5009214076. Dewatripont, M., and J. Tirole, 1994, â€Å"A theory of debt and equity: diversity of securities and manager-shareholder congruence,† Quarterly Journal of Economics 109, 1027-1054. Harris, M., and Raviv, A., 1991. â€Å"The theory of capital structure,† Journal of Finance 46, 297-355. Harris, M., and Raviv, A., 1996. â€Å"The capital budgeting process: incentives and information,† Journal of Finance 51, 1139-1174. Hart, 1995. Firms, Contracts, and Financial Structure, Clarendon Press, Oxford. Heinkel, R. Zechner, J. (1990), The Role of Debt and Preferred Stock as a Solution to Adverse Investment Incentives, Journal of Financial and Quantitative Analysis 25 (1): 1–24 [p. 2] Jensen, M., and W. Meckling., 1976. â€Å"Theory of the firm: managerial behavior, agency costs and ownership structure,† Journal of Financial Economics 3, 305-360. Kieso, D. E., Weygandt, J. J., and Warfield, T. D., 2007. Intermediate Accounting (12th ed.), New York: John Wiley Sons, p.  738 Modigliani, F., and Miller, M., 1958. â€Å"The cost of capital, corporation finance, and the theory of investment,† American Economic Review 48, 261-297. Myers, S., and Majluf, N., 1984. â€Å"Corporate financing and investment decisions when firms have information that investors do not have,† Journal of Financial Economics 13, 187-221. Rosenbaum, J., and Joshua, P., 2009. Investment Banking: Valuation, Leveraged Buyouts, and Mergers Acquisitions. Hoboken, NJ: John Wiley Sons. Scharfstein, D., and Stein, J., 2000. â€Å"The dark side of internal capital markets: divisional rent seeking and inefficient investment,† Journal of Finance 55, 2537-2564. Stein, J., 1997. â€Å"Internal capital markets and the competition for corporate resources,† Journal of Finance 52, 111-133. Subrahmanyam, A., and Titman, S., 1999. â€Å"The going-public decision and the development of financial markets,† Journal of Finance 54, 1045-1082. Tirole., 2006. The Theory of Corporate Finance, Princeton University Press. Yee, K. K., 2000. Aggregation, Dividend Irrelevancy, and Earnings-Value Relations. Contemporary Accounting Research 22 (2): 453–480.

Chen Tu-hsiu The Way of Confucius and Modern Life

Chen Tu-Hsiu, The Way of Confucius and Modern Life This essay discusses the main differences between traditional Confucian values and modern values. Confucian society seems backwards compared with modern society. In the traditional Confucian society, wives must obey every man in the family before she makes any decision on her own. She even obeys her sons. This would never happen in the modern world, especially in the West. Women and men cannot even talk to each other in a normal fashion unless they are already married, or being set up to be married. The author claims that a sister cannot even ask her brother-in-law a question. It is believed to be inappropriate for a woman and a man to speak, and there is even some mention of women covering their faces. Similarly, the author states that in traditional Confucian societies, the children always obey their parents even as adults. In Western society, the grown children are independent and lead their own lives. It is possible to respect ones parents, and love ones parents, without obeying their rules. Other issues that the author discusses include gender roles and norms. Women in Confucian society had no rights. They would ultimately have to serve their in-laws even if they did not like them. In Western society, the wives do not have a position of subservience to anyone. Similarly, a widow can choose to remarry if she wants to. In Confucian society, a woman is forced to do the chastity of widowhood, which means that

HRM Challenges at Wimbledon

Questions: 1. Define and discuss staffing requirements.2. Analysis and proposal strategies for good HR practice. Answers: Introduction Wimbledon tennis championship, which started in the year 1877,is one of the four grand slams in the world of tennis and is held by All England lawn tennis club (AELTC). England hosts the event every year where the grand slam is divided into 5 main events- mens singles, womens singles, mens doubles, womens doubles and mixed doubles. The singles prize money for the event increases every year by an average of 7 % with 2015s prize money being around 1900000 pounds (Germain, 2015). The venue along with the hospitality needs is prepared in advance in an event of such a large scale where the key to a streamlined event is human resources at the core of the event. With the main event witnessing ever increasing audience and security parameters rising exponentially, Human resource management assumes a central position in an event such as Wimbledon. Spanned over two weeks, human resource productivity, staffing as well as sources of recruitment are some of the challenges that a HRM is struck with. 1. Staffing requirements at Wimbledon Wimbledon, which has a seating capacity of 15000 in the centre court, needs a well-rounded staff to handle the event. The staffing of the event is mainly cornered around the security staff, technical staff, customer information agents, caterers, special requirement assistants, servers and other miscellaneous staff (Apostolescu, Antony Srinivasan, 2015). To effectively manage the crowd as well as the event in general, the various staffs at the Wimbledon are divided into specific functions such as security, hospitality, technical team, food service and other assistance teams depending on the requirement. Security is further bifurcated into various levels depending upon the importance of individuals that the security is securing. VIPs and players need high-levelsecurity whereas the crowd can be managed effectively using ordinary security standards. The food management teams are divided into the catering services meant for crowd visiting Wimbledon courts, catering service for high profil e visitors and food service for the players. The technical teams are required to manage the event broadcasting, event handling, lighting as well as other technical needs of the Wimbledon. In addition to these,ground-handling teams are also required in the event where the chief role is to prepare, maintain as well as repair the courts in case of any damage to the court. It is very important for the ground team to maintain the standards of the courts as well as seating of the court as Wimbledon is a high stake event. Staff is also required for management of the parking facility and ensuring safe entry as well as exit of the spectators in the court. Medical facility also assumes paramount importance inn Wimbledon where the key role involves ensuring medical safety of the individuals present in the court as well as off the court (Jones, 2014). In case of any emergency, medical staff should reach the location as soon as possible so as to avoid any critical situation in the event. Hospita lity team also plays an instrumental part in the smooth function of the event as safe and comfortable stay of the players, associated staff as well as guests in the event is important for the overall success of the game. High standards are maintained in the hospitality function at Wimbledon, as it is one of the most prestigious events in sports. HRM challenges in Wimbledon Challenges related to recruitment pose a bottleneck in the harmonious functioning of the event. Issues such as where to recruit, whether to hire or outsource and how to extract productivity out of the employee constantly baffle management team of Wimbledon (Gallagher, 2013). Recruitment The task of recruitment in the event is based on three criterion- cost of hiring, efficacy of hired employee vs. outsourcing and importance of the function in context (Letens, 2013). If the function in context in Wimbledon is of high priority such as hospitality and security, the usual option is to go for hiring of the employees as such a function can make or break an event such as Wimbledon. Technical teams are usually outsourced to technical agencies which are at a better position to handle the event rather than hiring the employee, developingthe technical competency, cost of equipment as well as testing the expertise of the employees in the event itself (Larson, Getz Pastras, 2015). It is of huge risk if the employees are not competent enough therefore to mitigate the risk, the function is outsourced. The ground teams are hired in Wimbledon as the maintenance and preparation of the courts is a continuous function. The pool available at Wimbledon for prospective hiring is quite lar ge making it difficult to skin out the desired employee base/ outsourcing agency. Retention of employees The HRM professionals of the event constantly face the issue of retention of the talent at Wimbledon as the employees being high performing are under the threat of getting poached. Retention of employees is a fine balance between the Wimbledon culture, employee satisfaction and incentive structure at the event (Corbridge, 2010). Lack of experienced professionals, short availability and high switching costs makes retention of employees a big challenge for management. Productivity For the efficient functioning of the event, the workforce working at all levels at Wimbledon needs to be productive in their own standards while making it important that they do not get burnt out. Poor working ethics, obsolete practices as well as inability to cope up with the fast pace of the event can significantly lower the standards of the event (Pedersen Thibault, 2014).This can result in both monetary as well as long term reputation loss for the HRM of the event. Health, safety and security Maintenance of healthy working environment in an event where the average daily footfall crosses 40000 becomes challenging for the HRM professionals. In addition to the health of the individuals, such events are constantly under the threat of attacks from various terrorist groups making is hard for the management to ensure safety (Masterman, 2014). To ensure safety at such a large scale from such international threats is a challenging task for the HRM as a better equipped security force is both hard to secure and financially taxing. Diversity Healthy diversity at the event adds to the ambiance at the venue which in itself is a challenge as merit along with diversified backgrounds is a hard combination to get. Therefore to choose diversity at workplace, HRs sometimes have to tradeoff between merit and sex ratio or in some cases have to take longer durations and larger ample size for selection. The recruitment needs to be holistic in its approach whereas it should not compromise on merit at any instance of the procedure and should focus on varied sources of recruitment. (Chester, 2015). 2. Strategies for HRM professionals at Wimbledon A strategic approach to the event keeping in mind the best possible outcomes as well as worst possible outcomes of any situation is the key to a successful event of such scale and magnitude as Wimbledon. Strategies to tackle recruitment/staffing related challenges It has been observed over the past editions of Wimbledon that the recruitment has been initiated long before the event where the hiring along with overbooking of staff in situations of emergency or traffic overload is done. To keep a buffer of staff in all functions with focus on security and general management is an advisable practice for the event management team at Wimbledon as any fluctuation in the traffic can jam the functioning of the teams (Chan, 2003). The sources of hiring for Wimbledon have always been sports agencies, which have prior experience with Wimbledon or any other grand slam. Other prominent sources of the workforce for Wimbledon are the event management institutes around the globe that train individuals to effectively conduct events at all scales. The payroll assumes a significant spot in the motivation list of any individual and with the Wimbledon being the most prestigious event in tennis; high payrolls should be there to attract talent from across the world t o England. The contracts with the employees are made very dynamic and fluid so as to allow flexibility in the work and attract as much talent as possible. As a rule of thumb, 40% more than the hired staff should be overbooked on contractual basis to allow a cushion in case of any emergency or significant rise in the traffic (Thomson, SchlenkerSchulenkorf, 2013). Since the human resource play an instrumental part in the success of Wimbledon, proper training session should be carried on before the actual event with emphasis on the failure scenarios that may arise in the actual event. The option of outsourcing should also be looked at positively by the management team of Wimbledon as the option can significantly reduce costs, introduce expertise in the system, reduce liabilities of the management team and ensure smooth operations during the event. It is advisable to go for outsourcing in function such as food catering, vendor management, technical tem and other accessory function, as outsourcing is both a cost effective and less taxing option for the HRM professionals (Nissen, 2007). The issue of team management is allocated to the external party in outsourcing while still being objective. A huge risk associated with outsourcing arises in case of non-compliance with the quality standards of the event, which can result in huge losses both financially and operationally. Strategies to tackle productivity related challenges The issue of productivity that is faced by event management teams can be handled efficiently by using strategies such as mock drills, team building and free communication. Most of the times in events such as Wimbledon, employees feel burdened with a singular line of orders originating from the top right to the bottom. In such a situations, employees need communication channels with the management where they can effectively project their thoughts, suggestions and feelings about the job (Jay, 2013). In functions that require huge co-ordination such as security and hospitality, team-building exercises can significantly lower the risks of breakdown and can also motivate them to produce more than anticipated (McEvoy, 2012). Setting of clear guidelines can also work in favor of the HRM professionals as in sports events; an unclear line of commands can trigger dissatisfaction among employees. Employee engagement is also necessary to increase the productivity as with certain level of engagem ent, the objectives can be attained faster and efficiently. Wimbledon is seen as the biggest event of the year for the employees and can be effectively projected as a showcase of talent and prestige rather than a sports event. A strong incentive structure at place can motivate the employees to achieve their goals and carry on the event in the best possible manner. Strategies to tackle health/workplace related challenges Maintenance of accurate records, deployment of medical facilities in the Wimbledon courts and following of proper safety legislation can lower the health issues that may arise in any sports event. Courses aimed at personal safety should be held before Wimbledon, which should be aimed at set protocols that an employee is supposed to follow to ensure healthy work environments (Harveston, 2002). In events such as Wimbledon, any small mistake can trigger huge health problems, which can fail the event entirely. By following the previously set ground rules in the event, health can both be ensured and promoted. The diversity of the workforce, which is necessary to maintain harmony in the system, can be ensured by proper documentation of the diversity data at the time of recruitment. Recording of any form of discrimination in the system with proper corrective measures should be done at all levels in the event. Conclusion In conclusion it can be said that the challenges associated with Wimbledon in terms of staffing, recruitment and HRM can be managed with a strategic approach. To arrive at a structural approach to tackle problems, the HRM professional first need to identify the issues that can arise in the event of such scale which in this case are retention of employees, productivity issues, health and security. Next, the management of the Wimbledon needs to allocate the challenges to the party who is in the best position to handle them in the shortest possible time. Security, technical support and catering are some function that can be outsourced along with the responsibilities and risks associated. Finally, the management of Wimbledon should keep a buffer for any possible rise in the level of risk at the event such as in case of employee recruitment, the management should keep a 40% overbooking buffer under its belt for emergency situations. (Sorokina, 2015). The key to a successful Wimbledon event lies in the harmony between all the functions operating in the background as well as foreground, a clear line of actions, motivated and competent workforce and an objective at all levels that adds value to the Wimbledon in general. References Apostolescu, P., Antony, J. M., Srinivasan, P. (2015).U.S. Patent No. 9,111,092. Washington, DC: U.S. Patent and Trademark Office. Buller, P. F. McEvoy, G.. 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