This case takes us into Rendell Company which is currently having problems between the corporate controller and the divisional controller. The Rendell’s Company divisional controllers reports directly to the general manager of their divisions. Thus, experiencing some difficulties in executing its modern control techniques due to the relationship between the divisional controller and the corporate controller (Mr. Bevins) resulting in an added fat to the organization’s budgets.
Mr. Bevins and Mr. Harrigan assessed the advantages and disadvantages of the organization structure of Martex Corporation and whether their strategies can be applied and be implemented to Rendell Company in order to resolve the problem. Through the frameworks and issues, they concluded that while current setup at the Randell’s would cause some budgetary discrepancies, because of the lack of loyalty between the divisional controllers to the corporate controller, changing the organization structure of Randell Company and implementing the strategies of Martex Corporation would cause a difference between the divisional general manager and the divisional controller therefore resulting in an anxiety in their working environment, which is too costly as compared to maintaining the current setup.
Randell Company organizational philosophy is what you call a “Dotted Line Relationship”. Where the divisional controller reports to the divisional manager, and has what a dotted line relationship with the corporate controller. This means, the divisional manager is the divisional controller immediate boss. In essence the divisional controller is actually acing as an administrator. For example, as stated in the case, the divisional general manager personally discusses his budget with top management pri ...