Case 1 Rendell
MANAGEMENT CONTROL SYSTEMS
“Case Analysis: Rendell Company”
Prepared by:
Martinus Anggi Apriliawan
64-Int-A
MASTER OF MANAGEMENT
FACULTY OF BUSINESS AND ECONOMICS
UNIVERSITAS GADJAH MADA
2015
Rendell Company
Summary by: Martinus Anggi Apriliawan 64-Int-A
1. Introduction
Fred Bevins is the controller of the Rendell Company, a firm that has been profitable for 50 years, but has concerned over its organizational status of his divisional controllers that possibly affected the growth rate of the company to decline considerably.
The corporate control organization was responsible for financial accounting, internal auditing, and analysis of capital budgeting interest. Those functions are divided into each strategic business unit that corresponds to product lines that was led by divisional general manager and divisional controller as an assistant for budgets and performances reports.
Several concerns emerged within the company as functions are colliding and the system are deemed to be biased. Basic task such as budgets and performance reports are viewed as influenced by the relationship between the divisional general manager and the divisional controller. After careful study to another company in Martex, Mr Bevins enthused to reinvent Rendell’s organizational structure. One of the tangible change is to transform the relationship of controller to be more direct, divisional controller should report straight to him instead of the general managers. Nevertheless, arguments arose to reconsider the transformation as other employee such as his assistant, argues that general managers would be reluctant to have a direct relationship because the division controller is perceived as a “front office spy”.
2. Contextual Idea
Management control involves managers taking steps to help ensure that the employees do what is best for the organization. This is an important function because it is people in the organization who make things happen. Management controls are necessary to
“Case Analysis: Rendell Company”
Prepared by:
Martinus Anggi Apriliawan
64-Int-A
MASTER OF MANAGEMENT
FACULTY OF BUSINESS AND ECONOMICS
UNIVERSITAS GADJAH MADA
2015
Rendell Company
Summary by: Martinus Anggi Apriliawan 64-Int-A
1. Introduction
Fred Bevins is the controller of the Rendell Company, a firm that has been profitable for 50 years, but has concerned over its organizational status of his divisional controllers that possibly affected the growth rate of the company to decline considerably.
The corporate control organization was responsible for financial accounting, internal auditing, and analysis of capital budgeting interest. Those functions are divided into each strategic business unit that corresponds to product lines that was led by divisional general manager and divisional controller as an assistant for budgets and performances reports.
Several concerns emerged within the company as functions are colliding and the system are deemed to be biased. Basic task such as budgets and performance reports are viewed as influenced by the relationship between the divisional general manager and the divisional controller. After careful study to another company in Martex, Mr Bevins enthused to reinvent Rendell’s organizational structure. One of the tangible change is to transform the relationship of controller to be more direct, divisional controller should report straight to him instead of the general managers. Nevertheless, arguments arose to reconsider the transformation as other employee such as his assistant, argues that general managers would be reluctant to have a direct relationship because the division controller is perceived as a “front office spy”.
2. Contextual Idea
Management control involves managers taking steps to help ensure that the employees do what is best for the organization. This is an important function because it is people in the organization who make things happen. Management controls are necessary to