AIRTEX AVIATION CASE STUDY ANALYSIS

Indeed, the figures in the balance sheet for Air Tex aviation appear to be very disorganized. How can Air Tex grow in the first five year-period? 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. The control process gives performance results of divisions each month. We saw the different issues about the old management control system. The issues of autonomy, cost allocations and transfer pricing are those which have an important impact on Air Tex profitability and its strategic vision. To change it and implement a new system, Ted Richards and Frank Edwards took few key decisions on:

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. Then, Ted felt a problem linked to the personnel work ambiance, their seriousness and more over their professionalism. Key Decision Criteria We saw the different issues about the old management control system. The issues of autonomy, cost allocations and transfer pricing are those which have an important impact on Air Tex profitability and its strategic vision. So, there is a difficulty to understand how Sarah Arthur built the financial statement and to replace an employee with an important role in the functioning of Air Tex. 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. 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.

The decentralization of the decision process is a good way to facilitate it and help to develop relationship between stakeholders and staff. 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.

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In fact, we believe that division managers are not correctly trained to take vital decision in a first time. Each divisional manager will be more autonomous and can directly impact their future performances.

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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 stkdy, and to lower the power of the accountant Sarah Arthur. They decided to gamble by implementing a new control system of course expensive, but with a long term return on investment. Its autonomy is strengthened because managers can hire, fire and manage the salary schedule.

airtex aviation case study analysis

This entails again a lack of information and motivation, important causes of the issue. What appears to be the problem in Air Tex is linked to business which is linked with the state of mind of the staff: Therefore, this case wonders about the difficulties to implement it and airtrx steps to change the management style.

Each division is an autonomous profit center. Get access to this section to get all the help you need with sttudy essay and educational goals. With new owners, the strategic view of AirTex Aviation must be redefined.

The issues of autonomy, cost allocations and transfer pricing are those which have an important impact on Air Tex profitability and its strategic vision. It provoked a lack of information for the departments and of a motivation because they are not involved in the decision making process.

airtex aviation case study analysis

Data analysis There analysus a number of issues before Franck and Ted set up the decentralized control system, which will be analyzed now. That observation explained the controversy which appeared about the management of receivables by the divisions.

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 cae decentralizing the power and involving the staff.

Moreover, all the departments srudy a negative net income except the fuel line activity which employed unskilled employees. To change it and implement a new system, Ted Richards and Frank Edwards took few key decisions on: We saw the different issues about the old management control system.

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Moral Each division is an autonomous profit center. Furthermore, a training and development program will be interesting to improve the management skills of the staff.

Airtex Aviation – Cost Control Study Case

The problem statement can be summarized as follows: Each department is responsible of its results, revenues and. Corporate Governance One of the most important decisions is to decentralize management decision.

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.

One of the first steps is to identify Specific, Measurable, Acceptable, Realizable, and Airtdx objectives at each level of the enterprise divisional and top level. Get Full Essay Get access to this section to get all the help you need with your essay and educational goals.

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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. In the future, an incentive program more accurate can be developed to motivate and attract staff. One of the most important decisions is to decentralize management decision.

Two managers recently graduated purchase Air Tex Aviation, a firm on the verge of bankruptcy. So, an important information control is necessary to improve the reliability of Daily Department Reports. This resolution suggests limiting the power of the accountant. Then, we hire as soon as possible in each department an accountant to create a Department Daily Report and accentuate the avitaion of each division.