Vershire

Vershire Company Case

Management Control System

Henrikus Galih Irawan|MM UGM Jakarta 31B International|15/391924/PEK/21370

Since Vershire Company is a company that producing goods to be sold and generate revenue, then Vershire implemented

revenue and expenses responsibility center within their organization as the control of company’s performance especially in

financial aspect. To attract the broad market of Vershire’s products, then the company established some divisions that focused

on certain product business holistically (selling and manufacturing). In addition, each division is responsible for the

profitability performance and this performance is determining the management incentives in division level.

1.

Vershire Company Problem in term of Management Control System

Vershire business strategy to develop several divisions as the business units is a good way to optimized

consolidated company’s performance such as total sales. However, in the budgetary control system, there

are several systems that basically could be improved to get the better result of the efficiency and effectivity

such as:

a. Basically in the company labor composition, there will be actually at least two kind of labor types that

are local hired labor (for non-core activity) and central hired labor (for core activity in which usually

recruited in the holding company level then distributed in business units). However, in Vershire

company case, a division general manager is not responsible for raising in related labor cost and it is

excluded in their performance measurement.

b. In the sales budgeting system, the combination of research staff at corporate headquarters and the

district sales manager can be ineffective. The research staff is supposed to forecast the sales precisely

using some fundamental tools while the district sales manager shall to come up with the idea on how

the sales forecast could be well achieved.

c. Lastly, performance measurement and also...