STUDENT ___NAYANKUMAR HARISHBHAI SHAH ___ DATE ____31 JAN’ 2011____

STUDENT ID NUMBER _______082141____________ DEPARTMENT

_________________
EMAIL ADDRESS ___abhilash1109@hotmail.com__________________________________
BATCH NO. _MBA(PT) 2008-2011 COURSE NO. FM-656
SUBJECT ___MANAGEMENT CONTROL SYSTEM
ASSIGNMENT TOPIC _RENDELL COMPANY
FACULTY/MENTOR _____PROF. PARAG
RIJWANI______________________________________

INSTITUTE OF MANAGEMENT
Nirma University
Sarkhej-Gandhinagar Highway,
Ahmedabad - 382 481
 RENDELL COMPANY

Problem :

How should Rendell resolve the current reporting relationship problem of the corporate
controller and divisional controller to achieve goal congruence?

Is the controller relationship of Martex better than that of Rendell current organizational
relationship ?

Objective:

To achieve profitability and growth

Ans 1

The organizational philosophy of Martex with respect to the controller function is that
divisional controller report to the corporate controller for transparency of information on budget
issues.

Advantages of Martex structure

- unbiased information is provided by the division controllers to the corporate

controller
- Corporate controller is more confident in reports given by the divisional controller

Disadvantage of Martex structure

- Delay in decision making in the organization. No quality decision making exist on

budget issues.

Ans 2

I suggest the divisional controllers report to divisional general manager in Rendell company.

Analysis on control system

Strengths

- Current setup is more efficient

 - this setup resolve tactical issues much easily because of better relationship between
division mangers and divisional controllers.

Weakness

- Biased information is provided by the division controllers to the corporate controller

- Difficult to implement new programs

Ans 3.

Analysis on Proposed control system

- unbiased information is provided by the division controllers to the corporate

controller
- easily implement new programs
- Corporate controller is more confident in reports given by the divisional controller

Ans 4.

Basic responsibility of the corporate controller

(1) Establish the management control system, strategic plans and budgets
(2) Preparing financial statements and financial reports
(3) Evaluate the performance per division
(4) Developing personnel in the controller organization

Basic responsibility of the divisional controller

(1) Implement the strategy setup by the corporate controller

(2) Evaluate the performance of the department within divsion

Suggestion on additional management control system

Rendell implement additional control system for budget issues.