Rendell Case

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1. What is the organizational philosophy of Martex with respect to the controller function? What do you think of it? Should Rendell adopt this philosophy?

From the position descriptions of Martex stated in the case we can conclude that the organizational philosophy of Martex with respect to the controller function, especially in the modern business, has gone through a huge change. For organizational function, it emphasized the importance of directly reporting to the corporate controller in lieu of responsibility to the division manager, and for this position, it largely concerned with administrative function of an important managerial position as it relates to the control of costs and the profitable operation of the business as a whole. The Martex’s controller vertical structure appear to be relatively independent without being intervened by the division manager so that they can greatly contribute to improvements on controlling corporate cost and preparing divisional budget from the company-level management perspective. In my point of view, it is beneficial to corporate operation as a whole. But these is a point which should not be neglected that is sometimes the interest inconformity between division and corporate. Like what stated in the case, there is always a fat in the division budget, but if execute the Martex’s methods, the direct consequence of “unbiased source of information” will really show up? I doubt it. Given the intervention of the division manager from their own purpose, the accuracy of either data sources or analysis reports could not be guaranteed anymore. So in my position, I would be more in favor of rejecting this organizational philosophy in Rendell Company.

2. To whom should the divisional controllers report in the Rendell Company? Why?
The divisional controller should report to the divisional manager for now. The reason is that the control system structure should take corporate structure into account. If merely imitating the...
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