Table of Contents
Executive Summary 3
Company Overview 3
Initial Proposal of XL-4 3
XL-4 Opposiation 4
Strategic Planning and Decentralization of Profit Centers 4
Goal Congruence and Management Control System 5
Conclusion 8
Definitions………………………………………………………………….……………………………………………………………………………8
Case Questions………………………………………………………………………………………………………………………………………10
References …………………………………………………………….……………………………………………………………………………..19
Class Discussion Points …………………………………………. .…………………………………………………………………………….19
Multiple Choice Questions ……………………………………………………………………………………………………………………19…show more content… o Following through with Roget’s requirements of finding ways to decentralize their profit center and for foreign subsidiaries to take on a greater role through initiative and to develop their own authority within the company as a whole.
• The management control system for whether the project should be approved or not is only barely present, at best. By creating an atmosphere of competition and then allowing those members to dictate the direction of the project can only result in conflicts of interest. Where there are conflicts of interest that go unresolved and that stymie growth, it can only result in failure to achieve goal congruency through cooperation and growth of the business. Unbiased financial analysis must be performed, along with a good pinch of common sense.
Strategic Planning System
Key points:
• Top management style
o Roget SVP, Mr. Gillot - Did not take into consideration the benfits of the project, but rather fell to internal pressures and as a result missed out on an excellent investment.
• Director of Manufacturing in Belgium, Mr. Lavanchy – Recognized the potential of the XL-4 project and wanted the profits for his division, even if it meant less profit over all for the company.
• Effects of lack of formal strategic planning
o Pros
o Decisions would have been made quickly – XL-4 would have been produced, one way or the other,
