1) Identify the controls that Al Fiorini implemented to manage his business both before and after he went back to school.
2) Did Al use the wrong types of controls? Or did he use the right types but fail to implement them properly? Case Study: Atlanta Home Loan
Case Study: Atlanta Home Loan
Synopsis of the Situation:
Atlanta Home Loan was a mortgage lending and financing company based in Atlanta, Georgia. The company’s founder, Al Fiorini, had many years experience in the mortgage market, and he oversaw eight loan officers and four telemarketers. It was a profitable business with growth potential, so Al decided to find someone to run the business while he went to school to earn his MBA. His first attempts at partnership were unsuccessful, but he eventually found his new partner Wilbur Washington, who had a successful background in the mortgage business. Al began monitoring the company remotely and everyday keeping in touch Wilbur and the other employees. Al and Wilbur first quarreled over the hiring of a new office processor before a much bigger problem came up. Wilbur wrote pre-signed company checks without Al’s permission and they bounced. Even though Al spoke with a bank to transfer funds into a payroll account, to which Wilbur didn’t have access, Wilbur still managed to transfer money back to a general account. Al was frustrated and attempted to limit Wilbur’s power, but he was still able to open an account at another bank. Al called bank to freeze the account but the bank refused. Wilbur gained a signing authority with this second account. Al contacted the police and FBI with little success. Finally, Al asked the Georgia Department of Banking and Finance to withdraw AHL’s mortgage financing license. In the end, Al lost his business and his credit rating suffered due to large bills incurred during his struggle with Wilbur. Key Issues:
* Limited behavioral constraints: There should be physical constraints to limit access to...