Galvor Comapany

In: Business and Management

Submitted By arjunnanda
Words 3085
Pages 13
1. Introduction
Galvor had been an independent company in the electronic industry of electronic measuring and test equipment since 1946, under the management of Mr. Latour, who was its founder and president. In 1974, Galvor was sold to Universal Electric (UE). Mr. Latour then became the chairman of the board of Galvor and Mr. Hennessy, from the UE, was deployed as Galvor’s managing director. As parts of the transformation process from a small independent company to a part of a multinational corporation (MNC), Galvor had to change its planning and control system to comply with UE.
2. Planning and control system for Galvor as an independent company:
The essential purpose of a company’s planning and control system is to make managers think long-term strategically, to provide a framework for budgeting, to allocate resources, to facilitate communication and coordination among different departments, and to evaluate managers’ performance. For an independent Galvor company, top management’s needs were quite simple. Management was, in essence, a personal thing. Mr. Latour, was intimately familiar with most aspects of the business, such as production, marketing. He would handle all financial matters, even routine jobs, make pricing decisions, and exercise overall cost control. Moreover, as a founder and owner of the company, he had the motivation to work hard and think long term in the company best interest. Besides, in the small Galvor where there were relatively few employees and the chief executive knew all or most of them personally, compensation administration would be informal. Raises were ad hoc, and merit increases would be based on performance evaluation by impression rather than by explicit ratings on predetermined factors of performance. Thus Galvor would only need simple, informal, and less-staff planning and control practices. Everyone essentially…...

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