H&R Block
H&R Block was formed in 1955 by two brothers, Richard Bloch and Henry Bloch, in Kansas, Missouri (Feinstein, 2011). Initially, the corporation provided its services in India, Australia, Canada, and the United States. The organization has created a website where consumers may obtain services such as tax e-filing, online tax preparation, and taxation software. The company's purpose is to help their customers reach their financial goals by serving as their financial and taxation partner.
Change in Strategy
Initially, the company's goal was to provide its customers with only taxation-related services. However, the company changed this strategy to being a company that offers exclusively all financial needs of its customers. The main aim why the company made this change is to ensure the revenue of the company was still intact during the offseason of tax preparation while at the same time keep their customers. To enable the diversification, the company had to purchase various companies and rename them. For instance, Olde Financial, based in Detroit was purchased to offer financial advice. Second, Option One Mortgage, located in Irvine was purchased to offer mortgage loans to the clients.
International Strategy
In its international strategy, the main aim of the company is to file a tax return for the citizens of the United States of America living in foreign countries, and they are willing to, file the U.S tax. On the other hand, the organization also serves foreigners living in the Unites States, and they want to file taxes in their home countries. As a result, the company did not come up with branches in each and every country to have its international presence, but it uses the already available branches to serve the international community.
Strategic Implementation
Strategic implementations enable a company to have a competitive advantage. There are several strategies that a company can settle to, however, H&R Block settled on mergers and acquisitions. The strategy is whereby the H&R Block purchased complimentary companies, changed their names, and made them a part of their operation. Some of the companies purchased are Olde financial and Option One Mortgage (Bettinger et al, 2012).
Influence of Governance and Ethics
Here, the paper will focus on the principles and policies used by the company that affect the business behavior of the company. The ethics of a company are usually determined through the ethical standards that have been set up by the society. Some of the ethical behaviors that are being practiced by the majority in the company include honesty and integrity. The culture was introduced into this company to all the levels of employees by one of the founders, Henry Bloch and H&R Block are one of the most ethical companies globally.
The Company Social Value
The aim of the company is to operate in such a manner that none of the employees or any other stakeholders will get harmed in the process. Therefore, the company had the obligations of considering what impacts would the society face for every decision that the management made and then decide whether or not it should be implemented.
Innovation and Diversification
Since it was founded, the H&R Block main aim was to help the citizens of the United States of America in tax preparation and this was in 1955. In 1980's, the company management already had the idea of diversification where flat tax was introduced and the company went ahead and acquired CompuServe company even though it lacked the resources required such as skilled labor to run the company. The company failed in this first attempt to diversify and later sold the company. A new CEO was hired in 1990's and he focused on diversifying, but with businesses that complimented H&R Block and he was successful and the company now serves other services rather than tax preparation. The presence of tax software services shows the level of innovation for the company.
Legal Limitations
The company has used a long time in developing its services to the customers. Therefore, the company management finds it as its obligation to conduct its operations within the parameters of the law. For instance, the law requires that the tax filing and returns remain confidential information to all the citizens. As a result, the customers served by H&R Block have the power to sue the company in the scenario where it violates the law. Therefore, the company ensures that no copies of the tax return have been made and the privacy of the customers is retained.
Evaluation and Control
The company has internal auditors that help with the evaluation of the company. The auditors have been given the responsibility of ensuring that it has assessed the performance of the company and the control measures that have been implemented. Additionally, the team of auditors ensures that it has come up with reports that shows the reviews of the company.
Strategic metrics
Currently, there have been significant delays that have been reported in the tax industry in the United States of America as the state government put measures to ensure that fraud in taxation has been minimized. Additionally, the revenue that the company earns decreased by $34.7 million dollars in 2016 for the H&R Block company as a result of the company diversification (the expenses) and the fluctuations in the strength of the dollar across the globe (Fairhurst, 2016). The non-GAAP also came up with measures that aimed to control the loss that the shareholders incurred per share and as a result, the company ended up purchasing more shares. All these changes impacted that tax filing process which now took longer than it has been the case in the past.
Key Financial Ratios
The profit margin was at 12% in 2016, which was a decrease of 3% compared to the profit margin that the company made in 2015, the total amount of profit was $374 million (Fairhurst, 2016). The total revenue of the company for the same year summed up to about $3 billion, which was a decrease of 1.3% from the previous year. The decrease was offset by the increase in the price and improved monetization (Fairhurst, 2016). The cost of operation in the company increased by 5.3%, making this increase to $121 million (Fairhurst, 2016). The cost of occupancy and amortization are the key factors that led to this increase.
References
Bettinger, E. P., Long, B. T., Oreopoulos, P., & Sanbonmatsu, L. (2012). The role of
application support and information in college decisions: Results from the
H&R Block FAFSA experiment. The Quarterly Journal of
Economics, 127(3), 1205-1242.
Fairhurst, D. J. (2016). Financial flexibility and short-term financing needs:
Evidence from seasonal firms.
Feinstein, D. L. (2011). The Importance of H&R Block: Brown Shoe Meets Merger
Simulation. Antitrust, 26, 5.
