Find Related Questions by Tags, levels, etc.
At the last Management meeting of Cool Hearts Ltd, which is a fast-moving consumer product firm with outlets throughout the country, it came out that sales and other targets were being missed as a result of the failure of top managers to involve subordinates in decision-making. You have just joined the company as an Organizational Analyst and have decided to submit a proposed solution to the problem to your Board at its next meeting to be held in two weeks’ time.
Required:
Explain the following:
i) Centralization (2 marks)
ii) Decentralization (2 marks)
iii) THREE (3) advantages Cool Hearts Ltd would gain from decentralizing its operations. (6 marks)
Find Related Questions by Tags, levels, etc.
BOK is an autonomous division of Large Plc. BOK carries out large engineering jobs to individual customer specifications. The manager of the division will retire within next year, and Henry Femi, the CEO of Large Plc., has used a recruitment agency to identify a suitable successor, Mary Tako. Henry believes that Mary has excellent relevant experience in another company in the country and has offered her a 4-year contract position at BOK. The terms of the offer include a generous compensation package linked to the profit earned by BOK during the 4 years. Henry believes that BOK has been a very successful division and that a high-calibre manager, such as Mary, has great potential to continue to expand that success. In order to impress Mary on the recent success of BOK, Henry provided her with the following comparative financial data about the recent performance of the division (Table 1):
| 2018 | 2017 | |
|---|---|---|
| Turnover | 27,000,000 | 26,000,000 |
| Net profit | 5,600,000 | 5,200,000 |
| Bad debts | 132,000 | 130,000 |
It can be assumed that the inflation rate in each of the two years was 3% per annum.
Mary indicated that she would need some additional information before deciding on whether to accept the employment offer. The following is an extract from a balanced scorecard (Table 2) which was prepared at Mary’s request:
| Theme | 2018 | 2017 |
|---|---|---|
| Customer theme: | ||
| Number of customers | 120 | 100 |
| Average revenue per customer (₦) | 225,000 | 260,000 |
| Market share | 9% | 8% |
| Internal process theme: | ||
| Percentage of jobs completed with errors | 3% | 4% |
| Average job completion time (days) | 5.5 | 7 |
| Learning & growth themes: | ||
| Staff turnover rate | 10% | 5% |
| Training expenditure (₦) | 1,000,000 | 1,000,000 |
Required:
a. i. Analyze the change in the financial performance of BOK between 2017 and 2018 using the information provided in Table 1. (3 Marks)
ii. Evaluate the change in the performance of BOK between 2017 and 2018, using the information contained in the balanced scorecard (Table 2). In addition, discuss the significant reasons why this analysis may be more relevant than your answer to part (ai) in helping Mary to decide whether or not to accept the offer. (13 Marks)
b. Mary has indicated that she would only be willing to accept the employment offer if she can be convinced about the potential for growth in the division. As the outgoing manager, you are required to provide her with an analysis of BOK’s competitive position and growth prospects based on the information provided. (4 Marks)
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
At the last Management meeting of Cool Hearts Ltd, which is a fast-moving consumer product firm with outlets throughout the country, it came out that sales and other targets were being missed as a result of the failure of top managers to involve subordinates in decision-making. You have just joined the company as an Organizational Analyst and have decided to submit a proposed solution to the problem to your Board at its next meeting to be held in two weeks’ time.
Required:
Explain the following:
i) Centralization (2 marks)
ii) Decentralization (2 marks)
iii) THREE (3) advantages Cool Hearts Ltd would gain from decentralizing its operations. (6 marks)
Find Related Questions by Tags, levels, etc.
BOK is an autonomous division of Large Plc. BOK carries out large engineering jobs to individual customer specifications. The manager of the division will retire within next year, and Henry Femi, the CEO of Large Plc., has used a recruitment agency to identify a suitable successor, Mary Tako. Henry believes that Mary has excellent relevant experience in another company in the country and has offered her a 4-year contract position at BOK. The terms of the offer include a generous compensation package linked to the profit earned by BOK during the 4 years. Henry believes that BOK has been a very successful division and that a high-calibre manager, such as Mary, has great potential to continue to expand that success. In order to impress Mary on the recent success of BOK, Henry provided her with the following comparative financial data about the recent performance of the division (Table 1):
| 2018 | 2017 | |
|---|---|---|
| Turnover | 27,000,000 | 26,000,000 |
| Net profit | 5,600,000 | 5,200,000 |
| Bad debts | 132,000 | 130,000 |
It can be assumed that the inflation rate in each of the two years was 3% per annum.
Mary indicated that she would need some additional information before deciding on whether to accept the employment offer. The following is an extract from a balanced scorecard (Table 2) which was prepared at Mary’s request:
| Theme | 2018 | 2017 |
|---|---|---|
| Customer theme: | ||
| Number of customers | 120 | 100 |
| Average revenue per customer (₦) | 225,000 | 260,000 |
| Market share | 9% | 8% |
| Internal process theme: | ||
| Percentage of jobs completed with errors | 3% | 4% |
| Average job completion time (days) | 5.5 | 7 |
| Learning & growth themes: | ||
| Staff turnover rate | 10% | 5% |
| Training expenditure (₦) | 1,000,000 | 1,000,000 |
Required:
a. i. Analyze the change in the financial performance of BOK between 2017 and 2018 using the information provided in Table 1. (3 Marks)
ii. Evaluate the change in the performance of BOK between 2017 and 2018, using the information contained in the balanced scorecard (Table 2). In addition, discuss the significant reasons why this analysis may be more relevant than your answer to part (ai) in helping Mary to decide whether or not to accept the offer. (13 Marks)
b. Mary has indicated that she would only be willing to accept the employment offer if she can be convinced about the potential for growth in the division. As the outgoing manager, you are required to provide her with an analysis of BOK’s competitive position and growth prospects based on the information provided. (4 Marks)
Find Related Questions by Tags, levels, etc.
Elevate your professional expertise across key business domains with our comprehensive training programs
Follow us on our social media and get daily updates.
This feature is only available in selected plans.
Click on the login button below to login if you’re already subscribed to a plan or click on the upgrade button below to upgrade your current plan.
If you’re not subscribed to a plan, click on the button below to choose a plan