CASE-3 ATLANTIC HOME LOAN:
I. Determine which category the case fits into:
This case is diagnostic in nature and Albert Fiorini failed in checking the management failures. Based on the case facts, supposed to identify the lapse in control measures and propose solutions to them. II. Describe the case
This case is talking about the illegal takeover of company “Atlanta Home Loan” by Albert’s partner cum manager Wilbur Washington. a. What are the facts of the case?
Albert Fiorini (Al) founded a company named “Atlanta Home Loan” (AHL) in April’02. Recruited several staffs to take care of operations.
After six months, in Sept’02, AL left to complete his MBA. Before leaving, started looking for someone to run his business. Impressed by Joe’s (one of AHL’s loan officers) performance, Al offered him a partnership. Joe accepted the same and reached a verbal partnership agreement. Afterwards Al found that conduct of Joe is not good for the company, parted his ways from him. He hired one manager also who lasted only for three days. Joe took away several loan files which did not got closed since August. Joe was also reluctant into returning those files to AHL. This resulted into a great loss of revenues to the AHL. In desperation, he entered into another written partnership agreement with Wilbur. In desperation, Al gave him all the management rights expect signing authority for checks. Wilbur without consulting Al used signed checks for himself and Letitia (Office Manager). Because of lack of fund, checks got bounced. Al got infuriated by Wilbur behavior. When Al enquired, Wilbur lied to him that this fund was meant for the payment towards salary to employees. After further investigation, Al got to know that Wilbur lied again. Al spoke to personnel’s of BofA and instructed them to stop payment of checks and transfer the money to payroll account from checking account. As baking staff from BofA were not aware about Wilbur legal capacity, they released the payments against the checks and also Wilbur was able to transfer all the money from payroll account to checking account. Al sent his agents to fire all the staffs from his office. Al got to know that Wilbur has claimed himself as owner of the company. Al and Wilbur entered into legal battle to claim funds and authority. This resulted in to significance loss of money and time at the Al end. b. What has to be decided?
Lapse while making decisions about partnership agreements and selection of people. Control measures to be taken to control results and action.
Al should continue his fight to regain control over AHL or not? 2. Who are the players?
Al, Joe, Wilbur, Letitia, Banking personnel of BofA
3. Where is the case happening, and is that important? in other words, are there issues with This case is dealing with people.
4. When are deadlines important? are there deadlines?, if yes, how do those deadlines impact the issues? (this may indicate a sequence for the decisions required in the case) Questions: -
1. Identify the devices (controls) that Al Fiorini used to control his business both before and after he went back to school. Classify each control as a results, action, or personnel/cultural type of control. Al defined the dimensions to measure the performance of the employees. These measures were not sufficient to measure other factors. Al must have defined AHL dimensions on which results are desired such as for profitability and customer satisfaction. This dimension would have helped company to achieve the target. Action controls could be controlled through having better control over banking transactions. Finally that concern only led to this situation. There is a great scope of improving on personnel/culture control front. Since beginning, he lost his control on his employees or partners because he took his decisions in haste. He would have planned all those in better manner. He would have invested some more time into finding right person. When he was not sure about...
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