galvor company
DESCRIPTION
case on galvor companyTRANSCRIPT
![Page 1: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/1.jpg)
Galvor Company
![Page 2: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/2.jpg)
Galvor Company founded in 1946 by M.
George Latour Was involved in:
Fabrication Buying Parts Assembling them into High quality, moderate
cost electric and electronic measuring and testing equipment.
Introduction
![Page 3: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/3.jpg)
Growth began after 1960. From 1960 to 1971 sales grew from 2.2 million
new francs to 12 million new francs. (1 new franc = $ 0.2)
On April 1974, Galvor was sold to Universal Electric Company for $4.5 million worth of UE’s stock.
Continued…..
![Page 4: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/4.jpg)
M. Barsac-Galvor’s controller M. Boudry-Universal’s European controller David Hennessy- Galvor’s Managing Director
People and post
![Page 5: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/5.jpg)
Working Style in UE
Business plan preparation
annually by each operating units.
6 month lag period and then two year projection
Projectio
n for a
long
period (5
year) SalesNet IncomeTotal assetsTotal employeesCapital expenditures
Acts asPerformance evaluation
for unit manager
![Page 6: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/6.jpg)
Controller
BarsacAge 34
Data ProcessingPerrier – 8
peopleAge 32
Internal Control
Systems and Procedures
BlancAge 32
Chief Accountant
DussexAge 32
LegalVacant
General AccountingParel – 6 people
Age 21
Billing and Customer Accounts
Mme. Cardinaux – 12 people
Cost AccountingMathez- 12 people
Age 25
Organization of Controller’s Department (January 1997)
![Page 7: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/7.jpg)
Geneva sets 2 year tentative objectives
January
Objectives negotiatedJanuary To
April
Objectives approved by Geneva and US Headquaters
May
Galvor prepares the Business Plan
June - July
Business Plan Timeline
![Page 8: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/8.jpg)
Meetings in Geneva for the review of the Business Plan.August
Approval Of the Business PlanSeptemb
er
Requests for major Business Plan changesOctober
Budget for the following year due
November
Business Plan Timeline
![Page 9: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/9.jpg)
Overstaffed Language Different Accounting Principles and Standards Problems with the internal records Lack of professional knowledge and training
Problems
![Page 10: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/10.jpg)
What is your overall assessment of the
effectiveness of Universal Electric’s(UE’s) planning system as it is applied to Galvor?
Question-1
![Page 11: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/11.jpg)
Single controller-Tax specialist Heavy burden in both Time and money Initially no such system existed Lack of employee training Spending 80% of their full time in reporting. Language Problem Different Accounting method Size Vs Cost
Continue….
![Page 12: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/12.jpg)
Identify, in as much detail as possible, all of
the new management systems and techniques that UE has required Galvor to establish. In particular, trace the various steps Galvor goes through in preparing its long-range as well as annual plans.
Question-2
![Page 13: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/13.jpg)
New Management Systems and Techniques
required Converting from simple to Centralized System
structure Planning and controlling System GALVOR need to change and adopt itself to the
current parent company Experts for the new subsidiary Uniform reporting and controlling system INFORMAL WAY of COMMUNICATION
Continue….
![Page 14: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/14.jpg)
Geneva sets 2 year tentative objectives
January
Objectives negotiatedJanuary To
April
Objectives approved by Geneva and US Headquaters
May
Galvor prepares the Business Plan
June - July
Steps Galvor has gone to prepare long range as well as
annual plans
![Page 15: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/15.jpg)
Meetings in Geneva for the review of the Business Plan.August
Approval Of the Business PlanSeptemb
er
Requests for major Business Plan changesOctober
Budget for the following year due
November
Continue..
![Page 16: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/16.jpg)
What is your evaluation of the effectiveness of
the working relationships between Hennessy and UE executives in Geneva? What do you infer from the telexes about Hennessy’s autonomy as a managing director?
Question-3
![Page 17: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/17.jpg)
Authoritative working relationship Considerable autonomy.
Continue
![Page 18: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/18.jpg)
Look at the system from Galvor’s viewpoint.
Suppose Galvor were an independent company. If you were a consultant to Galvor, how would the management planning and control practices you would recommend for the company differ from those imposed by UE?
Question-4
![Page 19: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/19.jpg)
Simple, Informal, De-centralized Less-staff planning Proper cost allocation should be done Reporting should be done Quarterly Training in both language
Continue….
![Page 20: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/20.jpg)
Look at the system from UE’s viewpoint. How
can UE’s imposing planning and control practices different from those required by an independent Galvor be justified?
Question-5
![Page 21: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/21.jpg)
Continue….
Galvor No really workable financial
statements for 2 years and no reporting system
Secrecy of financial reports has been maintained ( No data has been shared even to Top management appointed by UE)
Financial Data – Only balance sheet and statement of income once a year
UE Monthly Reporting System Every decision is taken by Top
management Monthly Reports-
Statement of preliminary net income
Statement of income Balance sheet Statement of changes in
retained earnings Statement of cash flow and
many others
![Page 22: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/22.jpg)
Continue…..
Galvor
No planning and controlling System
UE
Tight Planning and Controlling System
![Page 23: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/23.jpg)
To what extent should a large international
organization, such as UE, rely on a comprehensive system of financial reporting and control to achieve its strategic objectives?
Question-6
![Page 24: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/24.jpg)
UE has to rely on the financial reporting
system. Company has number of subsidiaries along
with more than 300 product lines. Do Quarterly reporting
Continue….
![Page 25: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/25.jpg)
What specific changes, if any, would you make
in UE’s planning systems? In its other management systems? If the management processes need improving, how would you change them?
Question-7
![Page 26: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/26.jpg)
The reporting norms should be made easy Forecasting should be done for a reasonable
time period
Continue….
![Page 27: Galvor Company](https://reader035.vdocuments.mx/reader035/viewer/2022081416/55cf9caa550346d033aa9ec9/html5/thumbnails/27.jpg)
Thank You….