Control Systems – Rendell Company Report

T6Rendell Company * ingrediental controllers report to general managers from 1985 onward * 7 Distinct business units with their own profits, sales * 1980 collective controllers creditworthy for 1) financial accounting 2) internal auditing 3) analysis of capital budget * Reports went at a time to top management from divisions * Mr.Hodgkin wanted to mulct a more spry role in establishing budgets and analyasing performance (would personally review budgets and study divisional performance and hired analysts to help) * Divisional managers discussed their budget with top management with divisional controller present * Divisional controllers primary responsibility was to divisional managers as opposed to merged controllers so Bevins thought he wasnt acquiring enough clear info on performance of units * Harrigan Divisional controllers shouldnt be front office spies if they want to have good running(a) relationships with managers and help them with the control functions * Corporate co ntrollers shouldnt put divisional controllers in awkward positions regarding more data/opinions on financials. Questions 1. What is the organizational philosophy of Martex with heed to the controller function? What do you think of it? Should Rendell adopt this philosophy? * Divisional controllers report to collective controllers Responsible for establishing cost and profit standards and ensure fit through * Not intended to take initiative away from DMs * much formal line relationships as controllers work physically separate from division managers * Set of formal policies, goals, practices that employees (managers) are aware of before beginning in the orgnization * Accounting brass controlled by controller division so systems are not tailored to each BU * Divisional managers at Martex like this system because it gives them an unbiased partner with relevant information, controller can do demote analysis and there is little argument about cost reports I think this model works fo r Martex because of the existing culture that has been developed near this model.People in the organization are comfortable with this type of hierarchy. At Rendell the slopped culture gives more power to divisional managers and gives them dedicated cater running(a) under them. The feelings towards corporate are more adversarial so any transfigure in the controller function entrust feel like a corporate spy as opposed to better communication. This philosophy will not work with Rendells culture. It will lead to more trustingness on informal organization and poorer communication with corporate. 2. Who should the divisional controllers report to in the Rendell Company? Divisional controllers should report to both management and corporate controllers bandage ensuring DM are aware of this responsibility. 3.What should the relationship be between the corporate controller and the divisional controllers. DC should report to CC to the extent that it ensures corporate directives are im plemented properly without harming DCs and DMs. DCs should communicate that corporate initiatives are be followed/met within their divisions. 4. Would you recommend major changes in the basic responsibilities of either the corporate controller or the divisional controller? Divisional controllers need to play a stronger role as opposed to being a staff like assistant to DMs. However, having them as a direct report to CCs would fight with the existing culture between DMs and DCs.