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This paper is exclusively exclusively submitted to Supriyadi, M.Sc., C.M.A., Ph.D. Management Control System Course
GADA! MADA "#$%&'S$T( ) M*A ) $#T&'#AT$+#A CAS CA SS December, 2016
By:: By
Ahmad Fahmi Mubarok Case 10-3, Galvor Company A. Pro Proble blems Galvor Company is a family business that founded in 1946. Main business of the
company is buying parts and assembling them into high quality, moderatecost electric and electronic measuring and test equipment. Galvor reach the pea! gro"th rate of sales around #.# million franc in 196$ to 1# million franc in 19%1. &he bottom line of Galvor also gro"ing %.'( times in the same period )196$ to 19%1*. +o"ever, in pril 1 st, 19%4, Galvor sold the business to -niversal lectric )-* for /4.( million "orth of -0s stoc!. fter acquisition process there are numbers of compliance that establish by Galvor company company.. taff taff num numbers bers,, language language barriers barriers )2rench )2rench and nglish nglish*, *, differ different ent ccount ccounting ing 3rincip 3rinciples les and tandar tandards, ds, problem problemss "ith "ith the internal internal records, records, and lac! lac! of professi professional onal !no"ledge and training. ll of those factors are quic!ly needs to response by - +ead uarter as a parent company. 2rom the case insight "e conclude that Galvor faces problem to create synergy and meet standard of multinational company li!e a - do in their business process.
B. Reas Reaso onin ning trategic planning system is nothing more than a structured process that organi5es and
coordinates the activities of the managers "ho do the planning. t has t"o ma7or functions8 to develop an integrated, coordinated, and consistent longterm plan of action, and to facilitate adaptation of the corporation to environmental change. &here are si issues on "hich a choice
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must be made "hile designing a strategic planning system. :ith each issue the proper choice for large companies "ill be different in most cases from the one for small companies. &he issues 1. #. ;. 4. (. 6.
are8 Communication of Corporate Goals Goaletting 3rocess nvironmental canning ubordinate Managers0 2ocus Corporate 3lanner0s
udgeting
C. Case Analysis -0s planning system is not effective as it is applied to Galvor. t is a very infleible,
detailed system that required too much time and too many resources for a business unit the si5e of Galvor. 2urthermore, evidence of its ineffectiveness at Galvor includes? financial reports are not providing value to the operating business unit. &he "or!ing relationship bet"een the Managing @irector of Galvor )Mr. +ennessy* and - eecutives )Mr. 3oulet* in Geneva are not doing "ell enough. Mr. 3oulet corresponds "ith Mr. +ennessy via tele "hen problems are identified. Mr. 3oulet requested very detailed information to Mr. +ennessy regarding inventories and sales levels compared to the budget. Mr. +ennessy argue many of the variances on three policy changes that appear to be driven by the corporate headquarters. Mr. +ennessy is 7ust going through their leadership style in Galvor and believes he is being over controlled? he is 7ust doing the best to lift up Galvor Company. &he thing that ma!es the relationship "orsens bet"een Mr. 3oulet and Mr. +ennessy is the communication process that only according to their report correspondence via teles and the conversation seems to be directing in order to gain sales not helpful or give solution to problem that appear in Galvor Company. D. Conclusion & Recommena!ion &he lists of factors belo" are the guidance about ho" the Ae" Management
ystems and &echniques that required establishing by Galvor in order to shifting their business process that suitable for -0s as their parent company. Converting from simple to Centrali5ed ystem structure. 3lanning and controlling ystem. • •
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Galvor needs to change and adopt itself to the current parent company. perts for the ne" subsidiary. -niform reporting and controlling system. nformal "ay of Communication.
