Case 10-3: Galvor Company Chu, Krizia (00-50183) & Hernandez, Sherry (00-51151)
Problems / Challenges:
• What are the management systems imposed Universal Electric to Galvor after its acquisition in 1974?
• Is UE’s highly detailed and extensive reporting system applicable and effective at Galvor?
• What measures should be taken by both Galvor and UE to establish a system that will stay true to UE’s objectives of “leaving no stone unturned” but will yield timelier, more applicable and less expensive reporting system that Galvor and its mother company UE will benefit from.
Recommendations / Solutions:
• UE credits its success to its extensive financial reporting that allows them to focus on critical areas/departments, view beyond the problems at hand and consider long-range objectives, strategies and solutions. This also allows them to use reporting system as an effective training and educational device that the management will benefit from. Upon acquiring Galvor, one of France’s major firms, UE imposed the same system it uses in the US. As stated in the case, Galvor submits 13 different reports are submitted monthly; all are extensive and follow a strict deadline. Aside from that, there are 12 additional reports to be submitted quarterly, semiannually, and annually.
• The system imposed by UE has major advantages as it allowed Galvor to see all possible cracks and misgivings in its operations. The focus of these reports is to see any variances of the forecasted and the actual figures. However, Galvor has a hard time keeping up with these reports. People at Galvor have become ambivalent to the new system imposed. According to Barsac, controller assigned to Galvor by UE, language, strict deadlines and the conversion rates serve as major hindrances in the transmission of information. Moreso, the accounting system used in France is different from what is used in the US. Cost of producing such reports is also Barsac’s concerns as Galvor...