Target Corp

Target has a Capital Expenditure Committee (CEC) made up of five executive officers. The committee determines which projects best-fit target’s future store growth and capital expenditures plans in excess of $100,000. For a project to get to the CEC it meant that it was economically attractive. It usually took 12- 24 months to develop a proposal before it got to the CEC. The development of these proposals were handled by Real estate managers assigned to the geographic region, Target planned to develop in. These proposals required certain expenditures, that weren’t recoverable if the project got rejected in addition to sunk emotional costs. The real estate managers felt significant disappointment if their projects got rejected. I think for all the work they put in if the CEC decides to reject a proposal there should be some kind of remuneration and also let them know the flaws of their proposals. This will encourage them to work harder and come up with much better proposals that will benefit the corporation.

The committee consisted of key executive members that could give advice in line with Target’s capital expenditure goals. The over all objective of the committee was to meet the company’s capital expenditures goal, which is to open approximately 100 new stores each year.

The committee was made up of the President, Chairman/Chief Executive Officer, Chief Financial Officer and Executive vice presidents for stores and property development. This was a good strategy because it had the CFO with expertise on the financial standing of the company and it also had the executive vice presidents of property development and stores. These members had the expertise and experience to assess the proposals since majority of the proposals dealt with building new stores or upgrading old ones. The committee was in charge of approving capital project requests. If there were high disagreements within the committee, the CEO made the final call. Projects of over $50m required...