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Grand Jean Company
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Grand Jean Company
Founded in the 19th =entury, the Grand Jean Company survived the large economy crises in 1929. It became =ne of the largest clothing companies in the world around 1989. Its main =roducts are pants for men and boys. But also women pants are produced there. With =he “wash-and-wear”, bell-bottom and flare leans and modern =asual pants, the company was market leading. The company owns 25 plants for =anufacturing with an output capacity of 20.000 pants per week. However, this =roduction is not enough to satisfy the demand on the market. As a result of that, the =ompany decided to employ independent manufacturers. Last year, these =ontractors produced one third of the total sales. Grand Jean is a functional organization. The plant divisions are considered as expense centers. The =lants are wanted to produce a certain amount of pants, which is given by the =arketing staff, every year. The quotas depends on the result, the plant has =eached in the previous month. Because there are 5 different products, the company =as introduced 5 marketing centers considered as revenue centers. At the =nd of each year, all plant managers are evaluated on a scale from 1 to 5. The =onus they get in addition to their normal wage, depends on the grade, they =ere given by the Vice President of Production Operations and his two chief =ssistants. The received grade is multiplied with 10.000 $. That results a maximum extra =ayment of 50.000 $.
What are the main problems in the management control =ystem?
Grand Jean has a functional organization and it causes several disadvantages: there is no real way to determine the...