Management Control System Case Study

Clarkson Lumber Company’s biggest problem by far is the fact that Mr. Clarkson had agreed to buy out Mr. Holtz for $200,000 with semi-annual installments of $50,000. It wasn’t necessarily a bad idea for Mr. Clarkson to buy out Mr. Holtz altogether, but the $100,000/year of payments is an unrealistic amount for Clarkson Lumber at this point in time. Between 1993 and 1995, there hasn’t been a year where they have realized more than $77,000 in net income, so the payment of $100,000/year is clearly unrealistic and a sure problem for the company. Another problem, which isn’t nearly as important as the former, is that net income is growing

Since Turner has reported only 66% of the $500,000 worth of savings requested in the form of C-Holds, which are general line item reserves that are not spent and usually reported as savings, I think it would be too risky for the senior management team to give the OK to release the $500,000 to the owner. There is still 5 months left in the project and they would have to be extremely conservative in their C and E hold spending. Before the owner conducted any business with them, it should be assumed he knew of their reputation as being extremely careful and conservative. If the project had a 90-95% completion rate, there would be much more confidence in releasing the savings.

Since the business does not have enough funds to continue paying its long-term financial obligations, as repayment of debt Angela has decided to exchange Wheeler’s accounts receivable for an $80,000 corporate note payable by the corporation. The remaining assets will be distributed to Angela and she will assume personal liability for the other accounts payable. Furthermore, Wheeler will distribute the real property to Angela, who will assume personal liability for the

The lecture addresses a federal trial of Ken Lay and Jeff Skilling the two men who use to run the American energy, commodities and services company, Enron. Major corporate fraud targeted small investors that inevitably lead to their savings being wiped out.

Joan brings this info to the board of directors and they accept. Unfortunately, Bob’s airline goes bankrupt in three years, defaults on the loan and the bank can only recover $150 million.

Organizing involves the creation of an organizational structure within the company. During this function the main focus is the management of duties and how information is passed along within the company (Erven, 2008). Managers use this stage to delegate authority among fellow employees with the intent of maximizing resources in the best way possible. The chain of command witnessed by this author within her current employment indicates many levels of management, with all co-existing well and working together to discover new and creative ways to solve problems.

Dentistar, Inc. was formed in 1985 to provide dental and orthodontic services to subscribers of their prepaid dental plans. This report examines the western region’s office, located in Los Angeles, and its issuance of excessive manual checks that resulted in multiple bank overdrafts. Results indicate that only minimal efforts have been made for internal control measures in this office and companywide, and that weaknesses have allowed the Finance Coordinator to embezzle funds. There are many issues to be addressed, and several remedial actions to be taken to prevent these types of losses going forward.

Each division is operating independently with its own division manager. Also, each division’s performance had been judged on its profit and return on investment (ROI). The company policy of decentralizing responsibility and authority for all

We have learned the characteristic of decentralization which clearly goes against the grain of a micromanager, but according to White (2010), eliminating hierarchy and shifting responsibility to the lower levels; thereby, expanding on the staff's capabilities which in turn will create

Ted received a call from his boss, Townsend “Sandy” Beech, the head of his four-person deal team and founding member of the firm. Sandy requested Tad, on a Friday afternoon, to review three presentations for possible buyout targets. Tad was to make a presentation at the partners’ meeting on Monday morning, recommending only one (1) investment and detailing the strengths and weaknesses of all three.

Gioe Melaney is the general director of Southern Toro – a subsidiary company included in the distribution system of Toron Coporation in Galveston, Taxas.

It was Friday, June 5, 1998, and Bob O’Connor was headed home for the weekend. He knew it would be a busy one, for he had many decisions to make. He had been trying to raise capital for his Company – the RBS Group, a software firm – for almost a year. He felt like he was finally nearing the end of this process, but now more issues had arisen. First, his prospective investors wanted to increase the amount of their investment. While he would be happy to have the extra money, he felt that the valuation on RBS was already lower than he had hoped, and he was reluctant to take more money at this price. Second, he had received a draft

Jimmy is the CEO of News Corp. His son, Johnny, runs Television Inc. One day Jimmy suggests that Johnny sell Television Inc. to News Corp. Jimmy and Johnny work together to radically inflate the value of Television Inc. Jimmy brings a proposal to the Board of Directors to buy Television Inc. for $500 million dollars even though the corporation is only worth $2 million. The board of directors diligently examines the transaction, but due to clever forgeries, the board does not discover the radical inflation of the corporation. Jimmy never discloses his relationship with Johnny. The sale goes through, and it is shortly discovered that Television Inc., is practically worthless.

This paper determines the effects contextual factors have on the design of Management Control Systems. The paper firstly discusses what is meant by “Management Control Systems” and what is expected of “Management Control Systems”. Contingency-based research is outlined and five key contextual variables are identified for discussion. The five factors (external environment, technology, structure and size, strategy and national culture) are assessed to determine their impact on design and implementation of management control systems.

The purpose of this case study is to describe and analyse the features of the management control system (MCS) of University of Southern California (USC). Before commencing the analysis a brief background of USC is provided.