Quality Answers

Weakness

- Biased information is provided by the division controllers to the corporate controller - Difficult to implement new programs]

-Hidden fats in expense budget.

Ans 3. What should be the relationship between the corporate controller and the divisional controller ? What steps would you take to establish this relationship on a sound footing ?

Analysis on Proposed control system

The relationship between the corporate controller and the divisional controller should be such that

- unbiased information is provided by the division controllers to the corporatecontroller - easily implement new programs- Corporate controller be more confident in reports given by the divisional controller. There should be no fats in the expense budget.

The following steps should be taken care of while implementing this relationship:

-This change should be suitable for diversified companies

-Division managers should not isolate division controllers from the management team

-Organizational change should not lead to dysfunction and inefficiencies

-Change should not lead to conflict between division mangers and division controllers

(Proposed Setup:

Strengths:

-Unbiased and objective reports on division budgets and performance from division controllers to the corporate controller.

-Corporate controller is more confident in reports given by the division controllers

-Minimized fats in expense budget

-Easier to implement new control programs

Weaknesses:

-Difficult to implement change in organizational structure

-Change