Case Rendell Essays

Case Rendell Essays Case Rendell Essay Case Rendell Essay The corporate control organization was responsible for uncial accounting, internal auditing, and analysis of capital budgeting interest. Those functions are divided into each strategic business unit that corresponds to product lines that was led by divisional general manager and divisional controller as an assistant for budgets and performances reports. Several concerns emerged within the company as functions are colliding and the system are deemed to be biased. Basic task such as budgets and performance reports are viewed as influenced by the relationship between the divisional general manager and the divisional controller. After careful study to another company in Marten, Mr. Veins enthused to reinvent Roundels organizational structure. One of the tangible change is to transform the relationship of controller to be more direct, divisional controller should report straight to him instead of the general managers. Nevertheless, arguments arose to reconsider the transformation as other employee such as his assistant, argues that general managers would be reluctant to have a direct relationship because the division controller is perceived as a front office spy. . Contextual Idea Management control involves managers taking steps to help ensure that the employees do what is best for the organization. This is an important function because it is people in the organization who make things happen. Management controls are necessary to guard against the possibilities that people will do something the organization does not want them to do or fail to do something they should do. Changes in mechanisms and practices wi ll usually have immediate and direct effects on the effectiveness of Macs. If all employees could always be relied on to do what is best for the organization, here would be no need for an MASC.. But employees are sometimes unable or unwilling to act in the organizations best interest, so managers must take steps to guard against the occurrence, and particularly the persistence, of undesirable behaviors and to encourage desirable behaviors. Employees, particularly managers, are also prone to make decisions that serve their interests, but not those of their organization. They tend to overspend on things that make their lives more pleasant, such as on office accoutrements and other perks. They often engage in gamesmanship such as earnings management to make their performance reports look good even when they know the actions they are taking have no economic value to the company and, in Some cases, are actually harmful. And they sometimes tend to be excessively risk averse and reluctant to make even good investments because of fear that if the investments do not pay off, they may lose their job. 3. The Case of Rendered Company 3. 1 Organizational Philosophy of Marten The organizational philosophy of Marten in regards to the Management Control System is that the company has a more direct approach towards the relationship between divisional controller and corporate controller as the controlling bodies with report unswervingly to each other in order to establish a transparency of information on business performance issues. With the nature of this philosophy, corporate controller feel more confident in the reports given by divisional controller. However, there will be a tendency of biased information and lack of quality in the decision regarding to issues in the organization. As a result, divisional controller will lean its loyalty towards corporate controller and possibly there will be decreasing trust of the managers. Rendered should carefully resolve this inevitable issues before implementing Marten philosophy in the organization. As mentioned before, changes in mechanisms and practices will usually have immediate and direct effects on the effectiveness of Macs. Workers might feel over stepped and if high level of distrust occur within the team, it could lead to a bad working atmosphere and in turn disrupt the companys business performance. . 2 Divisional Controller Report With the aim to retain organizational stability and its efficiency, Roundels divisional controllers should report to divisional general manager. The existence Of good organizational structure that enables manager and controllers connection will support them to resolve tactical issues within the organization. The probable mistrust among workers is a dire problems that need to be avoided at all cost, therefore Rendered should improve current system instead of implementing new and untested alteration. 3. 3 Corporate ND Divisional Relationship As mentioned before the relationship between the corporate controller and the divisional controller should be such that there will be no biased information by the division controllers to the corporate controller. As result, there Will be confidence in reports given by the divisional controller. All of this can be applied if there is good communication within the organization. With this in mind, division managers should not isolate division controllers from the management team in order to establish a good work environment. By cautiously these steps, Rendered will assuredly establish this relationship steadily: more communication corporate controllers and divisional controllers engage divisional controllers and the corporate controller into a corporate discussions/connection-building assemble periodical meetings to review the effectiveness of companys MASC. 3. Responsibilities To resolve preceding issues in Rendered, corporate and divisional controllers should be straightforwardly responsible in budgets and performance reports for the companys benefits. If Rendered would like to further unravel budget issues, the company may implement supplementary control system, noted that it will not disrupt current dynamics in the organization. 4. Conclusion From the disposition of Mr. Veins to adopt Martens system in the company that stated in the case we can conclude that the organizational philosophy of Marten with respect to the controller function, emphasized the importance of directness report to the corporate controller from the responsibility of the division manager. The system can greatly contribute to improvements on monitoring corporate cost and preparing divisional budget from the company- level management perspective. Yet the consequences of the implementation should not be mistreated since there might be an interest of inconformity between division and corporate. Therefore the consideration should be whether the change is necessary or instead improvement of the current system that need to take place. Enhancement in aspects such as communication and quality of the reports should be taken into consideration for all functions that held responsible with the intention of sustaining business performance as whole.