AIRTEX AVIATION CASE STUDY ANALYSIS

Each department is responsible of its results, revenues and. The objective of the two partners was to look younger the management of Air Tex, to create a new control system provision support and information needed, and to lower the power of the accountant Sarah Arthur. They need a lot of time to educate divisional managers and it requires a deep change in the management skills. There is also an issue to implement the new accounting system, because Sarah Arthur decided to limit her work in the company and they hire a new accounting clerk without experience. New control system implemented With the new control system, the leadership is divided between Ted Richards and Frank Edwards as equal partners and as best friends and they try to encourage staff to take desirable actions by decentralizing the power and involving the staff. The issues of autonomy, cost allocations and transfer pricing are those which have an important impact on Air Tex profitability and its strategic vision.

Furthermore, a training and development program will be interesting to improve the management skills of the staff. Each department is responsible of its results, revenues and. Recommendations First, we think that Ted and Frank need to improve their knowledge about the plane sector. There are a number of issues before Franck and Ted set up the decentralized control system, which will be analyzed now. There is also to educate staff by creating seminars of information, and there is a contradiction because there is a need of money.

They need a lot of time to educate divisional managers and it requires a deep change in the management skills. This decision right is a variable to affect the moral of the managerial team and motivate them.

airtex aviation case study analysis

In fact, we believe that division managers are not correctly trained to take vital decision in a first time. The issue for Ted and Frank, future managers of Air Tex is to establish a growth over the long-term for the firm with a new strategic view. One of the most important decisions is to decentralize management decision. So, Ted Richards and Frank Edwards need to be very adaptive and proactive.

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airtex aviation case study analysis

First, the new control system aims at providing accurate financial information to each divisional manager in order to encourage managers to make all the decisions themselves, by creating a feedback of their operations. The objectives One of the first steps is to identify Specific, Measurable, Acceptable, Realizable, and Timetable objectives at each level of the enterprise divisional and top level.

The decentralization of the decision process is a good way to facilitate it and help to develop relationship between stakeholders and staff. There is a static hierarchy, without possibility of evolution. So, an important information control is necessary to improve the reliability of Daily Department Reports. Then, we hire as soon as possible in each department an accountant to create a Department Daily Report and accentuate the autonomy of each division.

Recommendations First, we think that Ted and Frank need to improve their knowledge about the plane sector.

Because the firm is near of the bankruptcy, Ted and Franck design a new long term strategy which reduces costs, decentralizes management decision process; implements new management styles and defines clear way to growth and move in the aviation market.

The control process gives performance results of divisions each month. The issues of autonomy, cost allocations and transfer pricing are those which have an important impact on Air Tex profitability and its strategic vision.

There is a kind of studg because Air Tex tries to implement a new control system which is very costly, where as the firm is on the verge of bankruptcy. There can be internal motivate managers and monitor performance and external taxes or tariffs reasons for transfer pricing.

Airtex Aviation – Cost Control Study Case

One of the first steps is to identify Specific, Measurable, Acceptable, Realizable, and Timetable objectives at each level of the enterprise divisional and top level. The new management control system modifies the transfer pricing, which refers to the pricing of assets, services and funds that transferred within an organization. The problem statement can be summarized as follows: Each divisional manager will be more autonomous and can stucy impact their future performances.

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Other intention is to work with a cost control system, more efficient than easy to implement, in order to change the current financial situation of the firm.

Two managers recently graduated purchase Air Iartex Aviation, a firm on the verge of bankruptcy. Another source of motivation for the departments consists in offering them to manage cash by giving them receivables: The problem statement can be summarized as follows:. They decided to gamble by implementing a new control system of course expensive, but with a long term return on investment. To motivate managers, there is also the creation of incentives for managers: The latter need to reduce three basic issues: What appears to be the problem in Air Tex is linked to business which is studyy with the state of mind of the staff: First, sfudy were problems for Ted with the accounting department: Data analysis There are a number of issues before Franck and Ted set up the decentralized control system, which will be analyzed now.

Airtex Aviation – Cost Control Study Case | Get Access To Unique Paper

With the new control system, the leadership is divided between Ted Richards and Frank Edwards as equal partners and as best friends and stdy try to encourage staff to take desirable actions by decentralizing the power and involving the staff. Each department is responsible of its results, revenues and.

airtex aviation case study analysis

There is also an issue to implement the new accounting system, because Sarah Arthur decided to limit her work in the company and they hire a new accounting clerk without experience. She monopolizes the decisions and the power.

We saw the different issues about the old management control system.

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