Case 4 2 New Jersey Insurance Company
New Jersey Insurance Company
1. In what ways does Mr. Somersby control the operation of the sections of his division? In what ways does top management control the operations of the law division?
Mr. Somersby controls the operation of the division by requiring reports from each section of his division. Which such reports he was able to monitor the performance as well as the expenditures of each section. The law division has about five sections to which two of them seem more crucial than the others. This is because such section handle accounts that can either make or break the financial status not only of their division but of the company as well. Because of the importance of such sections, Mr. Somersby conducts conferences with the sections in order to determine if there are any problems during their operation and to prepare for future developments.
The top management controls the law division by monitoring the financial standing of the division through the required reports that they acquire. They screen discrepancies and questionable differences in cost through comparison with the division’s previous financial report. They are able to do because of the established standard they have set from their years of experience [most of the employees have been retained due to their costly training. Thus, hiring of new employees are avoided unless needed] and frequent transactions in their “routinary” operation. They require the division to set budgets, and monitor their projected costs from their incurred cost. The same goes to Mr. Somersby. When large deficits are detected they questions such occurrence in order to justify the incurred cost or to make certain actions for the situation to desist.
2. What possibilities for improving control, if any, do you think should be explored?
Since budget plans seems to be crucial in their company, they should try to establish more definite parameters for their reports especially for the corporate loan division. They should
1. In what ways does Mr. Somersby control the operation of the sections of his division? In what ways does top management control the operations of the law division?
Mr. Somersby controls the operation of the division by requiring reports from each section of his division. Which such reports he was able to monitor the performance as well as the expenditures of each section. The law division has about five sections to which two of them seem more crucial than the others. This is because such section handle accounts that can either make or break the financial status not only of their division but of the company as well. Because of the importance of such sections, Mr. Somersby conducts conferences with the sections in order to determine if there are any problems during their operation and to prepare for future developments.
The top management controls the law division by monitoring the financial standing of the division through the required reports that they acquire. They screen discrepancies and questionable differences in cost through comparison with the division’s previous financial report. They are able to do because of the established standard they have set from their years of experience [most of the employees have been retained due to their costly training. Thus, hiring of new employees are avoided unless needed] and frequent transactions in their “routinary” operation. They require the division to set budgets, and monitor their projected costs from their incurred cost. The same goes to Mr. Somersby. When large deficits are detected they questions such occurrence in order to justify the incurred cost or to make certain actions for the situation to desist.
2. What possibilities for improving control, if any, do you think should be explored?
Since budget plans seems to be crucial in their company, they should try to establish more definite parameters for their reports especially for the corporate loan division. They should