Studi kasus " Redell Company"

INTRODUCTION

Rendell Company is a company that produces profits for 50 years. At the end of the 1970s,
although the company continued to generate profits, growth rate decreased rapidly. James
Hodgkin became company president in 1984. Previously, James Hodgkin served as controller
and became vice president in 1983. When James Hodgkin became vice president, and Fred
Bevins who replaced him to become a controller, who previously was an assistant controller in
1981.

Rendell company has seven operating divisions: the smallest has annual sales of $ 50 million,
while the number of sales per year of the largest as much as $ 500 million. Each division is
responsible for manufacturing and marketing sections in each production sector. Although the
number of parts and components transferred between divisions, business volume is not large
division.
Organizational corporate controller in 1980 have a responsibility, especially in terms of (1)
financial records, (2) internal auditing, and (3) the analysis of the capital budget request.
Personally, as a controller Hodgkin take an active role in reviewing budget performance reports
and study the divisions and hire some people to help her analysis. While Bevins continues to
move in the same direction as the promotion of a controller. In 1985 the company began to be
filled by the organization of the staff members were either so as he is able to give careful
attention to the information conveyed by the division.
The controller division to report directly to the ranks of general manager of the division. But the
controllers are always encouraged to consult prior to the appointment of the controller division.
In addition, he also consulted in relation to the increase in the salaries of the controller division.
The special corporate controller function on the recording system in which the divisions are
expected to conform to the general procedures related to budgeting and performance reporting.
However, the implication is clear that the performance of the division of budget reporting is
accountability division general manager, division controller which acts as a staff assistant in
preparing the document.

COMPANY PROFILE
A.SEJARAH COMPANY
Rendell Company was founded in 1968 with the aim of providing high quality representation for
electronic markets in Illinois and Wisconsin.
Rendell Company has seven operating divisions: the smallest has annual sales of $ 50 million,
while the number of sales per year of the largest as much as $ 500 million. Each divisition
responsible to parts manufacturing and marketing in each production sector. A number of parts
and components in the transfer of the division, but the division between the business volume is
not large.
Fred Bevin was a controller at Control Division of the Company Rendell. Control Division is
responsible for internal financial accounting, auditing, and analysis of capital budgeting requests.
Fred Bevins was not satisfied because during this controller only division to report to work
atasaannya the Division General Manager. Division General Manager discuss the budget division
with top management and Control Division membicaraka only asked for technical stuff and he
treated as staff. Dissatisfaction with the actions of the General Manager of the Division Bevins
was inspired to make a difference by applying new ways've learned in Martex Company is
applying depiction duty and responsibility of the organization. The trick is a watchdog
organization saddled with the responsibility of setting standards and the cost of the company's
profits and take appropriate measures to see whether this standard has been met or not. Fred
Bevins as a corporate controller Rendell Company sangant organization is concerned about the
status of the controller in the corporate division. During this time the division controllers
reporting to the general manager of their division. Bevins wanted change control division
organizational structure, by observing the application of controls in other companies ie
companies Martex. Organization responsible for controlling company financial records, internal
auditing, and analysis of capital budget requests. In companies today there has been a budget
control system, but the reporting is done directly by the operating divisions to the top
management without in-depth analysis by the controlling company. Bevins and want a more
active role in the organization's control over the company in the process of budgeting and
performance analysis.
PROBLEM COMPANY

A.PERMASALAHAN

1. Rendell apparently having trouble implementing a more modern control techniques, due to a
poor relationship or mutual support between corporate control and division, which resulted in
additional costs for the company's budget repair it.

2. Randell has problems controlling corporation and the controlling role of the division where the
relationship information between both less transparent.

3. Randell want to change the role of the controlling organization to follow our company as
corporate controller roles at other companies, namely: Martex Company.

B.BUKTI CASE
William Harrigan is a manager at the headquarters of his former Rendell Company and a
division controller seniordi Rendell company for 25 years. Companies often ask the controller
division: Is your division can work well if the company cut the budget so $ x outside of
advertising? Are you sure division estimated cost savings on equipment is realistic? Although the
controller know the actual condition and he did not agree with the company's controller,
Harrigan should not say so. If there are irregularities in the division (budget surplus) and the
situation is bad then it will not make the news in the report on operations, so it makes the job
difficult Harrigan. But Harrigan did not make it as a problem because if he applied the method
claims (announcing the discrepancy) of Martex then Control Division will not be part of the
management group again.
PROBLEM FORMULATION THEORETICAL
Behavior in Economics Management control systems affect human behavior. Good management
control system in such a way as to influence behavior has a purpose that is consistent; meaning
individual actions undertaken to achieve personal goals will also help to achieve organizational
objectives.
A. Alignment of Interest
The main objective of the management control system is to ensure (as far as possible) a high
level of alignment purposes. In a process parallel to the goal, man is directed to take appropriate
action in accordance with their own self-interest, which is also in the interests of the company.

B. Informal Factors Affecting Alignment of Interest
Things to be considered by the designers of formal control systems are aspects related to
informal processes, such as work ethic, management style, and the surrounding buadaya, due to
organizational strategy effectively execute a formal mechanism must be in line with the informal
mechanisms.

1. External Factors
External factors are the norms regarding the expected behavior in the community, where the
organization is a part. These norms include attitude, which collectively often diseut as EOTS
work, which is realized through employee loyalty to the organization, tenacity, passion and pride
that dimmiliki by employees in performing their duties.

2. Internal Factors
a. Culture
The most important internal factor is the culture within the organization itself, together with the
values espoused living, behavioral norms and assumptions that are implicitly accepted and which
are ekspisit manifested at all levels of the organization.
b. Management Style
Internal factors which may have the most powerful impact on management control is
management style. Typically, subordinate attitudes reflect what they perceive as their superior
attitude, and the attitude of the boss in the end rests on what the attitude of the CEO.
c. Informal Organization
The lines on the organization chart describing the formal relationships, the shareholders
authorized the authority and responsibilities of any management.
d. Perception and Communication
In an effort to reach organizational goals, managers must know the goals and actions to be taken
to achieve it.

C. Type - Type of Organization
The strategy of a company has a considerable influence on the structure. In turn, this type of
structure will affect the organization's management control system design. Organizations can be
grouped into three general categories:
1. Functional structure, in which each manager is responsible for specialized functions such as
production.
2. Business unit structure, in which the unit manager is responsible for the activities of each unit,
and the business unit serves as a semi-independent sections thereof daro company.
3. Matrix structure, in which the functional units have a dual responsibility.

D. Function Controller
The person responsible for designing and operating management control system referred to as
the controller. The controllers normally run the following functions:
1. Design and operate information and control system
2. Preparing financial statements and financial reports to shareholders and other external parties
3. Prepare and analyze performance reports, lapora interpret these reports to the managers,
analyzed the program and budget proposals of the various segments of the enterprise and
mengkonsolidasikannna into the annual budget as a whole.
4. Conduct internal audit supervision and record control procedures to ensure the validity of the
information, set memasai safeguards against theft and fraud as well as running the operational
audit.

ANALYSIS AND EVALUATION

SWOT Analysis
1. Strength (power)
- Current regulations allow information to flow more efficiently.
- With control division reports directly to the manager of the division, enabling tactical issues to
be resolved more quickly and based on the latest information.
- Reports on the budget division and the purpose and performance of the division controllers to
the corporate controller provides more detailed information about the division.
- Assessment is more critical of operations helps to reduce swelling in the budget cost and easier
to implement a new control program.

2. Weekness (weakness)
- Difficult to implement changes in the organizational structure in a short time
- It is possible for the Division Manager to hide financial information with disabilities.
- The level of confidence in the information provided by the controller to control the Corporate
Division questionable shoes.

3. Opportunity (opportunities)
- Implementation of modern techniques in the corporate environment

4. Threats (threat)
- The occurrence of swelling budget
- Can occur concealment of the defective financial control division made between the manager
and the manager with his staff.

Prospects companies
o If the company wants to continue to grow, the management must trust the information provided
by the division controllers.
o If the system of control and management of the company is good and no further swelling in the
budget, the company then think of to make electronics more sophisticated than its competitors,
making it not only profits but also increase the company's growth rate.

RECOMMENDATIONS

Rendell Company can maintain the current organizational structure by implementing additional
control system to cope with budget problems. The control system are:

1. Implementing a centralized accounting system.
We can not force departments or divisions to change their accounting system because It will take
a lot of time and may be different from the needs of the division and this will lead to conflict and
inefficient. It would be best if developing the company's accounting system and make its
divisions to submit their data and information. There will be mistakes, but the company is going
to live with it.


2. Set a target or standard.
Comparing the cost of current with industry standards and the company to reduce obesity budget.
In addition to this comparison, critical or key variables can be examined more frequently to
achieve better control of the system.
1. Establish an incentive system like the Martex.
Corporate Controller should be more actively involved in the budget over the budget control
system can be improved or better yet formed.

CONCLUSIONS AND RECOMMENDATIONS

Conclusion
Because the accounting system has long been used by the company, the changes may not be
readily accepted by the division concerned. These changes may cause a malfunction in the
organizational structure in which the division controllers reporting directly to the company
controller will cause instability in the authority structure of the division. Thus, the control must
be given to preserve the power structure in each division. It is better if the company is facing the
problem of swelling in the budget rather than surrender to the commands in each division and
disrupt the front lines of authority. Babysitting control today will be better than turning into the
structure of Martex in achieving corporate goals and objectives.

Suggestion
- Corporate Controller should be placed under the supervision division controller
- Statements made should be trustworthy and unbiased.
- Rendell MARTEX not need to adopt the system, it could potentially change the direction of a
radical organization.

REFERENCES

http://lingglin99.wordpress.com/2012/12/23/sistem-pengendalian-management-2/
www.redellsales.com
http://allbestessays.com/Business/Rendell-Company/13642.html
http://wsmantri.blogspot.com/2012/03/studi-kasus-mata-kuliah-sistem.html
http://lusycahyamurti.blogspot.com/2012/06/tugas-spm-studi-kasus-rendell-company.html
Anthony, Robert N. Govindarajan, Vijay. Management Control Systems Twelfh Edition.
, 2007. McGraws-Hill Education (Asia).