Rendell presentation

1. 1. Rendell CompanyBy: Abeer Edgar Luminita

2. 2. Presentation & Overview of the Case - Edgar Organizational Structure - Edgar
Described Issues- Edgar Proposed Solution - Luminita SWOT Analysis Current State
- Luminita SWOT Analysis Martex System Luminita Case Questions & Conclusion
Abeer
3. 3. Rendell Company
4. 4. PresidentJames Hodgkin 50 years in business Corporate Office: Controller
Financial Accounting Fred Bevins Internal Auditing Budget Analysis Seven Divisions:
Divisional General Manager Responsible for Manufacturing and Marketing of specific
product line Preparation of budgets Divisional and performance Controller reports
5. 5. The Divisional GM and his Controller were responsible for the preparation of budgets
and performance reports. The Corporate Controller thought that he was not getting frank
and unbiased reports from the Divisions due to the organizational structure of the
company.
6. 6. The Corporate Controller believed that Divisions were not reporting accurate
information to Corporate. He thought that if Divisional Controllers reported directly to him,
he would be better informed.
7. 7. Problem: Some difficultiesin implementing itsmodern techniques Problem: Added fat to
the organization budgets Solution: Change to Martex organizational structure
8. 8. Strengths: Weaknesses:- Current setup is more efficient; - Biased information is
provided by - Better relationship between the division controllers to thedivision managers
and divisional corporate controller. controllers. - Hidden fats in expense budget.-The
current set-up allows tactical - Difficulties to implement newissues to be resolved more
easily. control techniques. Rendell Company Current State Threats: Opportunities: Ability of Divisional GM to conceal financial flaws Martex System - Lack of empowerment
to Divisional controllers
9. 9. Weaknesses: Strengths: -Difficult to implement change in-Unbiased and objective
reports on division organizational structure budgets and performance from division
-Change may not be suitable for diversified controllers to the corporate controller.
companies -Corporate controller is more confident in -Division managers might isolate
division reports given by the division controllers controllers from the management team
-Minimized fats in expense budget -Organizational change may lead to-Easier to
implement new control programs dysfunction and inefficiencies -Change may lead to
conflict between division mangers and division controllers Rendell Company Martex
System Opportunities: Threats: Current System Outside Competition
10. 10. 1. What is the organizational philosophy of Martex with respect to the controller
function? What do you think of it? Should Rendell adopt this philosophy? Transparency
of information on budget issues. Advantages and Disadvantages Rendell Company
should retain its current organizational structure with additional control systems to
address budget issues
11. 11. 2. To whom should the divisional controllersreport in the Rendell Company? Why?To
the divisional general managers of RendellCompany.The current setup is more

efficientNew programs are difficult to implement andthere are hidden fats in the expense
budget.
12. 12. 3. What should be the relationship between the corporate controller and the divisional
controllers? What steps would you take to establish this relationship on a sound footing?
Unbiased information is provided by the division controllers to the corporate controller
and to easily implement new programs. Corporate controller is to be more confident in
reports given by the divisional controller.
13. 13. 4. Would you recommend any major changesin the basic responsibilities of either
thecorporate controller or the divisional controller?Basic responsibility of the corporate
controller:- Establish the management control system, strategic plans and budgets,Preparing financial statements and financial reports- Evaluate the performance per
division- Developing personnel in the controller organizationBasic responsibility of the
divisional controller:- Implement the strategy setup by the corporate controller- Evaluate
the performance of the department within the division
14. 14. THANK YOU