Atlanta Home Loan Case
1.)Types of controls Al Fiorni used:
-By not letting Wilbur sign the checks he administered an administrative constraint on him. This allowed for Al to approve the outflow of cash from his company. -Al was smart to forward the corporate mail to California because it allowed him to have an idea of the overhead expenses the company was incurring. -Although Al was not monitoring the day to day operations of the company he monitored tracked the employee head count, number of leads, credit inquiries, loan applications funded expenses and bank activity. By monitoring these actions Al can hold employees accountable for desired actions or undesired actions. 2) What went wrong?
A lot went wrong. Even the controls that Al implemented above he left loopholes which weakened them significantly. Even though he would not let Wilbur sign the checks he left four unsigned checks with Letitia which in turn defeated the purpose of him not allowing Wilbur to sign the checks. In this case, he did use the right action control but he failed to implement it properly.
When Al monitored the day to day operations of the company from afar he was doing the right thing but he also did not implement it efficiently. Al should have communicated to all the employees how he was monitoring their actions. Not only to catch wrongdoings but also to reward the employees for exceptional work. This would have prevented undesirable actions if employees would know that they would be held accountable for their actions. This would have also spurred good behavior if they knew there was a reward for such behavior.
Al Fiorni did not properly set up personal and cultural controls. I believe his biggest mistake was not preparing his company for his departure in a timely manner. Because he was in such a rush to get to California he was not able to ensure the personal control of employee selection and placement. Al should have devoted a...
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