Unlike the organizational philosophy followed by Rendell Corporation, the method followed by Martex Corporation in relation to the controller function is such that all divisional controllers are required to report directly to the corporate controllers of the entity. This method is based on the rationale that it promotes the flow of transparent information, which is related to the budgets of different divisions. There is a major and significant difference in the organization of controllers in both Rendell Company and Martex Corporation. In Rendell Company, all controllers representing their respective divisions, i.e. Divisional Controllers, are required to report to their respective Divisional General Manager, who in turn have to report to the Controller. On the other hand, in the case of Martex Corporation, all Divisional Controllers are required to report directly to the Controller of the Corporation (Daft and Marcic 201-210; Pearce and Robinson 88; Mondy 305-308).
Based on the review of the organizational structure for Controllers in Martex Corporation, it can be observed that such organizational structure would be effective in providing impartial information by the Divisional Controllers to the Corporate Controller of the organization. In addition to this, such an organizational structure empowers the Corporate Controller to rely on the matters presented before him by different divisions. Moreover, as noted in the case of Rendell Company, there are fats in the budgets of divisions; these fats can be controlled by way of maintaining and upholding such an organizational structure. Lastly, the structuring of Controllers reporting responsibilities, in the way as maintained by Martex Corporation, enables the introduction of new control related programs relatively easily (Daft and Marcic 201-210; Howatt 33; Pettinger 144-145; Pearce and Robinson 88-90).
However, for Rendell Company, it is recommended that the existing structure related to the Controller in the company shall be retained, as suggested by Mr. Harrigan in his comments. The reason behind this recommendation is the shortcomings associated with the Controller structure followed by Martex Corporation. One of the biggest limitations associated with the Controller structure maintained by Martex Corporation is that it causes a delay in the corporation’s decision-making process and also results in a lack of appraising budget processes. Moreover, it is not easy to implement this organizational structure and there may also be a possibility that the introduction of such change may result in an unfavorable situation for Rendell Company. It can also be argued that if managers representing their respective divisions are empowered to report directly to Controller, they may try to sideline the Divisional Controllers, and if they chose not to do so the Divisional Controllers will become less relevant in the divisional decision-making process. Moreover, for Rendell Company, introducing such an organizational structure may also result in inefficient organizational performance and decision making, which may result in differences between managers and Controllers in the Divisions. Keeping apart these shortcomings, however, it is still recommended that the company shall look upon its budget-making systems and then explore limitations associated with the budget-making process (Mead 45-60; Mullins 101-130; Pearce and Robinson 88-90; Daft and Marcic 201-210).
It is suggested that the Divisional Controllers in Rendell Company shall persist on the current organizational and reporting structure in the company and they shall report to the General Managers and respective Divisional Managers. The basic reason behind this suggestion is that following such reporting structure enables the resolution of major divisional issues in a more efficient and effective manner as there is a proper chain of command or a hierarchy followed under the existing organizational structure. Moreover, as discussed earlier, any change in the existing structure, which results in allowing managers to report directly to the Controller would subvert the authorities and role of Divisional Controllers (Mondy; Pearce and Robinson 88; Howatt 35-40; Daft and Marcic 201-210).
There shall be a cooperative, sincere, and coordinating nature of the relationship between the Corporate Controller and Divisional Controllers. In this regard, there are various areas, which require consideration for improvement, which would, in turn, result in fostering such a relationship. First of all, there is a need to take measures, which enable the availability of impartial information for decision making pertaining to the required areas of importance to the Controller so that he is able to introduce new strategies and can have more reliance on the information presented to him for the sake of decision making on corporate matters (Mullins; Daft and Marcic 201-210; Mead 45-60; Pearce and Robinson 88).
With regard to the steps required for developing such a relationship, the following are the recommendations presented:
- Budget fats shall be removed so as to render transparent information and decision-making process;
- The relationship developed shall be such that it does not undermine the authorities and responsibilities of interested parties;
- There shall be an increased focus on strengthening the position of Divisional Controller so that his powers and authorities are not undermined; and
- There shall be no step taken that raises conflicts between any two or more managerial levels in the company (Pettinger 144; Mondy 305-308).
First of all, Rendell Company shall make efforts to strengthen its budget-making system so as to bring transparency in the information presented to higher levels of management for decision making. This could help the company to present more realistic figures and reduce variances. Better predictions of future requirements will be possible. This improvement shall be brought by retaining the existing organizational system, as suggested earlier (Mondy 305-308; Pearce and Robinson 88). In light of this, the following are the recommendations for changes in the basic responsibilities of the Corporate Controller and Divisional Controllers:
Changes Recommended in the Responsibilities of Corporate Controller
- The Corporate Controller shall be made responsible for having oversight on managerial affairs of divisional matters and coming up with plans for improving information processing and budget presentations. This may require the Controller to direct Divisional Controllers and General Managers to introduce certain monitoring procedures which would result in effective monitoring of each Division.
- The Corporate Controller shall also look into the process of financial statements presentation and preparation and shall come up with his recommendations for the improvement of the financial statements preparation process.
- The Corporate Controller shall also take measures to ascertain the performance of each individual Division of Rendell Company. In this regard, the Controller shall set up appropriate procedures so as to obtain information that is relevant in performance assessment (Pearce and Robinson 88; Daft and Marcic 201-210; Howatt 33).
Changes Recommended in the Responsibilities of Divisional Controller
- The Divisional Controller shall enforce measures to ensure transparent production and processing of information for decision making.
- In addition, Divisional Controller shall also enforce measures taken by the Corporate Controller.
- Lastly, each Divisional Controller shall appraise the activities and performance of his respective Division (Daft and Marcic 201-210; Pearce and Robinson 88; Pettinger 144).
References
Daft, Richard L. and Dorothy Marcic. Understanding Management, Mason: Cengage Learning, 2010. Print.
Howatt, William A. Leadership vs.MANAGEMent, London: Way with Words, 2008. Print.
Mead, Richard. International management, Oxford: Blackwell Publishing, 2003. Print.
Mondy, Wayne R. Human Resource Management, Pearson Education, 2012. Print.
Mullins, Laurie J. Management and Organisational Behaviour, London: Prentice Hall, 2005. Print.
Pearce, John A. and Richard B. Robinson. Strategic Management, New York: McGraw Hill, 2005. Print.
Pettinger, Richard. Introduction to Management, London: The McMillan Press Ltd, 1997. Print.