Rendell Case Essay

3780 Words Jan 30th, 2013 16 Pages


Behauior in Organizations


Cmn 3-1
Rervonr-r- Coir,rpawy
Fred Bevins, controller of the Rendeli Company, was concerned about the organizational status of his divisional controllers. In 1985 and for many years previously, the divisional controllers reported to the general managers of their divisions. Although Mr. Bevins knew this to be the general practice in many other divisionally organized companies, he was not entirely satisfied with it. His interest in making a change was stimulated by a description of organizational responsibilities given him by the controller of the Martex Corporation. The Rendell Company had seven operating divisions: the smallest had $50 million in annual sales and the largest over $500
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Mr. Hodgkin, as controller, thought it essential that the corporate control organization play a more active role in the process ofestablishing budgets and analyzing performance. He personally took an active role in reviewing budgets and studying divisional performance reports and hired several young analysts to assist him. Mr. Bevins continued to move in the same direction after his promotion to controller. By 1985 the corporate organization was beginning to be well enough staffed so that it could, and did, give careful attention to the information submitted by the divisions. Divisional controllers reported directly to the divisional general managers, but the corporate controller always was consulted prior to the appointment of a new division controller, and he also was consulted in connection with salary increases for divisional controllers. The corporate controller specified the accounting system to which the divisions were expected to conform and the general procedures they were to follow in connection with budgeting and reporting performance. It was clearly understood, however, that budgets and performance reports coming from a division were the responsibility of that division's general manager, with the divisional controller acting as his staffassistant in the preparation of these documents. For example, the divisional general manager personally discussed his budget with top management prior to its approval, and

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