The organizational philosophy of Martex with respect to the controller function is that divisional controller directly report to the corporate controller for transparency of information on budget issues. Let's discuss some strengths and weaknesses about Martex philosophy as following: Strengths:
-Divisional controller is empowered to perform intended functions -The decrease of asymmetric information between corporate controllers and divisional controllers -Promoting goals congruence since it reduces conflict of interest level between division and its headquarter Weaknesses:
-Goal incongruence between divisional controllers and divisional general managers may hamper divisions objectives -Divisional controllers maybe regarded as a spy rather than a part of the team
In my opinion, Rendell should retain its current organizational structure, but they should enhance their control system to avoid the weaknesses of current philosophy in order to implement the reliability of budget issues.
2,To whom should the divisional controllers report in the Rendell Company? Why? Answer:
I suggest that the divisional controllers report to divisional general managers in Rendell company,because this way could setup and improve better relationship between divisional controllers and divisional general managers, more importantly, in this way, the divisional general manager has complete responsibility for the. division. Furthermore, Rendell could resolve the issue of hiding fats in expense budget with improving the level of loyalty and analysis control system.
3, What should be the relationship between the corporate controller and the divisional controllers? What steps would you take to establish this relationship on a sound footing? Answer:
The relationship between the corporate controller and the divisional...