Management Control System

MANAGEMENT CONTROL SYSTEM

ASSIGNMENT NO. – 2

Case Study – Grand Jean Company

SUBMITTED TO : SUBMITTED BY :

Ms. SHONALI GUPTA RAJAT SINGLA MBA 3RD SEM

UNIVERSITY BUSINESS SCHOOL,

PANJAB UNIVERSITY, CHANDIGARH

1. How would you describe the goal(s) of the company as a whole? Is this, or are these, the same as the goal(s) of the company’s marketing organization and the company’s 25 managers of manufacturing plants? Explain.

Ans. The main objective of the company is to increase profitability and achieve high growth. The company is striving hard to achieve cost effectiveness and achieve high level of quality.

Now, the goals of the company’s marketing organization and company’s 25 managers of manufacturing plant are different.

The marketing division is treated as a “Revenue Centre” so the goal of the company’s marketing organization is to maximize revenue and sell what is produced. They are evaluated on the basis of meeting the set sale unit and sales dollar targets. Also, they are responsible for making demand forecasts which are used to decide the production levels of each plant.

Whereas, the manufacturing plant have the goal to just meet the budget figure and fulfill the quota allocated to each plant. Since they are considered as an expense center and there is no immediate monetary reward to compensate for increase in responsibilities or requirements, they are not concerned to achieve higher efficiency and thus, want to exceed the targets.

2. Evaluate the current management planning and control system for the manufacturing plants and the marketing departments. What are the strengths and weaknesses?

Ans. By 1989, the company was one of the world’s largest cloth manufacturer.

Following are the Strengths:

a) The company has been profitable for a long time.

b) The company has 25 manufacturing units of its own and 20 independent contractors producing efficiently and reliably for...