MediGO Drugstore: Investigating Cash Variances Through Action Research Inquiry in an Early-Stage SME
For early-stage SMEs, every cent counts. In retail pharmacies, where margins are often thin and transactions are frequent, even small cash variances can quickly become a managerial concern.
At a glance
Location
The Philippines
Year Founded
2021
Industry
Community Pharmacy
Employees
17 (2026) 3 (2021)
Abstract
One month into the operation of his newly established community pharmacy in September 2021, Christian Timoteo faced a critical operational challenge. Recurring cash variances between recorded sales and actual cash on hand began to emerge, with a consistent pattern of overages. Despite investing in a point-of-sale (POS) system and providing initial staff training, these discrepancies persisted, raising concerns about financial accuracy, operational reliability, and customer trust.
Adapted from Christian Timoteo’s Master’s thesis, Managing Sales and Inventory Variances in a Community Pharmacy (De La Salle University, 2022), this case study follows Christian as he applies an action research inquiry approach to systematically investigate the root causes of recurring cash variances. Through data analysis, staff discussions, process mapping, and hypothesis testing, the inquiry reveals that the issue stemmed not only from individual human errors but also from broader systemic weaknesses, including the absence of standardized operating procedures, insufficient documentation, weak internal controls, and inconsistent cashiering practices.
Following the implementation of corrective measures, the pharmacy recorded a 99.11% reduction in cash variances within one month, demonstrating the effectiveness of evidence-based problem solving, process improvement, and organizational learning. The case highlights the importance of root cause analysis, operational controls, and the interaction between systems, processes, and human behavior in early-stage SMEs.
Key Topics: Action Research, Root Cause Analysis, SME Operations Management, Internal Controls, Cash Management, Process Improvement, Evidence-Based Decision Making, Retail Operations Management, Business Process Standardization, Organizational Learning
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