Essay on Case Study

1608 Words Jan 3rd, 2012 7 Pages
Case Study

Synopsis of the Situation / Key Issues / The Problem
--Founded in April 2002 by Albert (Al) Fiorini, Atlanta Home Loan (AHL) was a mortgage lending and financing co. based in Atlanta, GA.
--After beginning operations in his home, Al's business grew rapidly; by summer he employed 8 loan officers, all of whom telecommuted.
--In June 2002, Joe was admitted to an MBA program in California and was faced with 3 choices for AHL: sell it, shut it down, or find someone to run it. As it was a profitable business with considerable growth potential – it had 90 loan applications in the pipeline, constituting 300K in potential revenue – Al chose the latter option.
--Based only on initially favorable judgments, including 20 years
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This involves 4 steps: (1) Defining the right performance dimensions, (2) Measuring performance, (3) Setting performance targets, and (4) Providing rewards/incentives.
--Al must also implement action controls, the most direct form of management control because they involve taking steps to ensures that employees act in AHL's best interest by making their actions themselves the focus of control. Forms of action controls include behavioral constraints, preaction reviews, action accountability, and redundancy.
--In light of the small number of employees, Al could have success in implementing cultural controls, which are designed to encourage mutual monitoring, a powerful form of group pressure on individuals who deviate from group norms and values.

Positive and Negative Results
--Defining clear performance dimensions that are congruent with AHL's established goals should shape employees' views of what is important.
--Clear performance measures will emphasize to employees what is important and enable them to strive toward meeting AHL's goals.
--Performance targets can stimulate action (improve motivation) by providing conscious goals for employees to strive for, and allow employees to interpret their own performance.
--AHL can derive motivational value from linking any valued rewards to results that employees can influence. If AHL can tailor its reward packages to their employees' individual

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