North Country Auto
North Country Auto, Inc..
North Country Auto, Inc.. is a company that also is authorized dealer for service for several brands of cars such as Ford, Saab, and Volkswagen. North Countru Auto has two partners, namely George Liddy and Andrew Jones. Andrew Jones is the owner of Country Auto Noerth first since the company was founded, while George Liddy joined the last few years. When George Liddy joined, the company experienced a change in management control systems company.
North Country Auto, Inc.. has five departments or business units, namely New Car Sales, Used Car Sales, Service, Parts, and Body Shop. Before Mr. Liddy joined the company, North Country Auto, Inc.. all departments and business units operate as one business entity (centralized). Each business unit managers are rewarded with a fixed monthly remuneration and bonuses are determined subjectively by the top management on the performance of each manager.
Mr. Liddy assume that the system does not provide motivation to managers and employees to work better for the company. Therefore, Mr. Liddy made changes by implementing a decentralized system of relationships and responsibilities of business units-units in the company's existing business. By implementing decentralization, the business units were given the trust as a profit center ( profit center ) and operate as if they were stand-alone company.
These changes have an impact on changes in the reward system or the incentives provided. Every manager in addition to obtaining basic salary berifat fixed, also get a bonus in accordance with the performance department, for example based on the percentage of gross profit. Thus, each department manager of weeks to do better motivated primarily to improve the performance of their departments. It is an advantage and a weakness for the new system. Occurs goal congruence due to the implementation of this decentralized system.
Case Question Answer:
1. Computing the profitability of the transaction described
North Country Auto, Inc.. is a company that also is authorized dealer for service for several brands of cars such as Ford, Saab, and Volkswagen. North Countru Auto has two partners, namely George Liddy and Andrew Jones. Andrew Jones is the owner of Country Auto Noerth first since the company was founded, while George Liddy joined the last few years. When George Liddy joined, the company experienced a change in management control systems company.
North Country Auto, Inc.. has five departments or business units, namely New Car Sales, Used Car Sales, Service, Parts, and Body Shop. Before Mr. Liddy joined the company, North Country Auto, Inc.. all departments and business units operate as one business entity (centralized). Each business unit managers are rewarded with a fixed monthly remuneration and bonuses are determined subjectively by the top management on the performance of each manager.
Mr. Liddy assume that the system does not provide motivation to managers and employees to work better for the company. Therefore, Mr. Liddy made changes by implementing a decentralized system of relationships and responsibilities of business units-units in the company's existing business. By implementing decentralization, the business units were given the trust as a profit center ( profit center ) and operate as if they were stand-alone company.
These changes have an impact on changes in the reward system or the incentives provided. Every manager in addition to obtaining basic salary berifat fixed, also get a bonus in accordance with the performance department, for example based on the percentage of gross profit. Thus, each department manager of weeks to do better motivated primarily to improve the performance of their departments. It is an advantage and a weakness for the new system. Occurs goal congruence due to the implementation of this decentralized system.
Case Question Answer:
1. Computing the profitability of the transaction described