Handling Change at Ferguson: Credit Function Essay example

1444 Words Jul 23rd, 2011 6 Pages
Handing Change at Ferguson: The Credit Function

Executive Summary John Culbert is given the difficult task of selecting the best approach that will capitalize on opportunities to increase the performance efficiency of the credit function without disrupting its current customer-oriented culture. His main challenge is the lack of a comprehensive system to evaluate the gains from centralization and the problems it could potentially create vis-à-vis the current status quo. Hence, we suggest a basic framework for him to evaluate the costs and benefits associated with changing the structure of the credit function. Given that the change is mandated by his managers, there are high potential cost-savings, and low risks associated with
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Further, credit is always evolving with economic activity and it is important to ensure effective information sharing among credit managers to ensure that knowledge and crucial lessons on successful managing of troubled credits are properly disseminated for everyone’s benefit.
Thirdly, we estimate that the risks associated with implementing the restructuring plans, were they not to work as expected, are relatively low. For example, some credit managers might see centralization as counterproductive and this could lead to stifled motivation and lower performance. Local credit managers tend to be highly driven, often competitive individuals, and some of them might view the extra layer between them and the regional managers as an nitiative that restrains their career development and leave the company. Furthermore, local branch general managers (GM) might view the SMCM as a threat to their direct authority over the branch credit manager. This is especially true if certain low-performance managers are laid-off as a result of reducing functional redundancies. Branch GMs might find this particularly disruptive to their goals of increasing sales, as they lose relationships that they have found accommodating to their business goals thus far. Therefore,

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