53892570 General Appliance Corporation
By: Arian Malek Esmaeili
The Organization y Decentralized, Divisional Organization y 4 Product divisions
y y y y 4 Manufacturing divisions
6 Staff offices
Each division and staff office is headed by a V.P.
Staff personnel have no line authority in a division
75% of the manufacturing sales is made to the product divisions, Parts made by the manufacturing division is designed by the product division.
Transfer Prices y The divisions are expected to deal with one another as
though they were independent companies. y Parts transferred in pre-negotiated prices y If the divisions could not agree on a price they could submit the dispute to the finance staff for arbitration.
Source Determination y The product division doesnǯt have the power to decide
whether to buy parts from within the company or from outside without the permission of the manufacturing division. y The purchasing staff; taking the manufacturers side in almost every case y Price settlement compared to outside prices y In case of new parts the divisions authorities are switched. Stove Top Problem y Unit sold from the chrome products division to the y y y y y electric stove division
Quality decrement in late 80s
The presidents re-action
New added operations and new price per unit
Objections and negotiations between the divisions
Finance and engineering staff reviews
Thermostatic Control Problem y The electric motor division y The laundry equipment division y The refrigeration division y Monson controls corporation y 1985-1987 several appliance companies including the G.A.C. built or expanded their own facilities y Surplus of production capacity in independent companies y Declining price level y Disagreement on 1988 prices within G.A.P Ȃ submission to finance staff
Thermostatic Control Problem II y Electric motor divisionǯs statement y Laundry equipment divisionǯs statement y Refrigeration divisionǯs statement y Finance and purchasing staff review
Transmission Problem y y y y y y y y y y
The
The Organization y Decentralized, Divisional Organization y 4 Product divisions
y y y y 4 Manufacturing divisions
6 Staff offices
Each division and staff office is headed by a V.P.
Staff personnel have no line authority in a division
75% of the manufacturing sales is made to the product divisions, Parts made by the manufacturing division is designed by the product division.
Transfer Prices y The divisions are expected to deal with one another as
though they were independent companies. y Parts transferred in pre-negotiated prices y If the divisions could not agree on a price they could submit the dispute to the finance staff for arbitration.
Source Determination y The product division doesnǯt have the power to decide
whether to buy parts from within the company or from outside without the permission of the manufacturing division. y The purchasing staff; taking the manufacturers side in almost every case y Price settlement compared to outside prices y In case of new parts the divisions authorities are switched. Stove Top Problem y Unit sold from the chrome products division to the y y y y y electric stove division
Quality decrement in late 80s
The presidents re-action
New added operations and new price per unit
Objections and negotiations between the divisions
Finance and engineering staff reviews
Thermostatic Control Problem y The electric motor division y The laundry equipment division y The refrigeration division y Monson controls corporation y 1985-1987 several appliance companies including the G.A.C. built or expanded their own facilities y Surplus of production capacity in independent companies y Declining price level y Disagreement on 1988 prices within G.A.P Ȃ submission to finance staff
Thermostatic Control Problem II y Electric motor divisionǯs statement y Laundry equipment divisionǯs statement y Refrigeration divisionǯs statement y Finance and purchasing staff review
Transmission Problem y y y y y y y y y y
The