Brealis Case Study

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Borealis Case
Advanced Managerial Accounting
Universidade Nova de Lisboa

Borealis Case

Introduction Borealis is one of the largest petrochemical companies in the world. Output from its productions can be found in a wide set of everyday products, from diapers, food packaging and house wares to cars and trucks, pipes and power cables. When it was formed in Denmark in 1994 as a joint venture between two Nordic oil companies (Statoil of Norway and Neste of Finland), it inherited most of its processes, systems and people from the various subsidiary companies. Nonetheless, to the new management team, it felt like in the new company a break with the past was not only seen as desirable but also as crucial …show more content…
If there was no planning and no targets, employees and managers would never know if they are above or below what they could produce and what is expected of them. This process of ensuring that the actual performance acts in accordance with the plans is well revised, given that over the course of the fiscal year, each division is expected to file regular reports on its progress towards meeting the proposed targets. As said previously, annual targets are defined and fixed at the beginning of the year, and the values at which the financial controller came up with are to remain until the end. This means that any account is susceptible of changes during the period
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Borealis Case

no matter what happens, whether prices variations or quantities sold. Only doing this it is possible to keep the controlling device, comparing the exact plan with the actual performance. This consists of the Variance analysis, allowing companies to track where the main deviations from what was planned had their roots. Aligned with controlling is the evaluation of performances, meaning that it also states what will happen to individuals´ compensation if targets are missed or surpassed. More specifically, managers, responsible for their centers, are required to achieve the budgeted targets for the operations under their control. Summing it all up, the rational
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