Nilesh Sohanlal

T00542767

Q.1) Identify the devices (controls) that Al Fiorini used to control his business both before and after he went back to school. Classify each control as a result, action, or personnel or cultural type of control.

Action Control

Before he went back to school Albert (Al) Fiorini monitored the activities of his loan offers by tracking the number of credit inquiries each requested. Al closely monitored the loan application/lead ratio depending on the skill of the loan officer. After he went back to school Albert (Al) Fiorini Not letting Wilbur as a new partnership to sign the check written against AHL’s main bank account and Al must approve all outflow of cash from his company. Al also order to Wilbur and Letitia not to write any more checks without his permission. Al tracked the employee head count, number of leads, credit inquiries, loan applications funded expenses and bank activity. By monitoring these actions Al can hold employees accountable for desired actions or undesired actions. Al also had been monitoring the activity in the Bank of America (Bank of America) account over the internet from Los Angeles.

Result control

Albert (Al) Fiorini must define the right performance dimensions because the goal that are set and the measurements that are made shape employee views and cultural of what is important to do for the organization. Moreover, Al must be explaining about AHL’s dimensions on which result are desired such as profitability, customer satisfaction and growth of the company.

Setting performance goals is really important because, Albert (Al) Fiorini can be the target as the indicators for the performance for his company and the target should be specified for every performance dimension that is measured. By this element employee will know what the target or objective must they achieve and how they can get or achieve it.

Albert (Al) Fiorini should reward and recognize employees work which help employees to work towards company’s goals. Rewards may be in form of salary increases, bonuses, promotions, and any incentive to appreciate their employees. By this way, rewards can be encouraging and motivating for employee to achieve company’s objective. Moreover, al also can change the behavior and culture in their management

Q.2) what went wrong? Did Al use the wrong types of controls? Did he use the right types of controls but fail to design or implement them properly? Or was just unlucky:

AHL lacked direction because they had no corporate goals or code of ethics to direct employees. This created motivation problems as well as they had no objectives to aim for the organization. In strategic aspect, Albert (Al) Fiorini should provide a good surround to employees. Al should have created a vision and mission statement. He should have also developed a strategy to achieve the goals and objectives of the company. And also reward and recognize their work, to let employee’s works for him more unprejudiced and loyal. This would have given all employees a sense of direction and perhaps even motivated them to achieve company goals and objectives. Employees should also be educated in corporate strategy, goals and objectives so that they can understand better what to do and how to do it.

An honest and ethical culture should also be developed to encourage employees to do the “right” thing at all times.

In this case, Al did use the right action control but he failed to implement it properly. We can see from the case, Al has refused the request of Wilbur for authority to sign checks written against AHL’s main bank account. But he left with Letitia (his office manager) four signed checks with blank amount written against the AHL’s main bank account. So, in this situation, the action control is not properly implement because his employee can issued money from AHL’s bank account with four signed checks that Al left with his employee to their personal account even there are no permission from Al.

Albert (Al) Fiorini did not properly set up personnel controls. A personnel control builds on employees’ natural tendencies to control and motivate themselves. In this case Al did not properly set up personnel controls toward his company. It happens when Al did not do proper selection and placement of employees very well. Al did not find the right people to help him to look after his company when he is going to study. He just simply believes in Wilbur and being partner with him because of his experience. So, Al should have planned for good personnel control which is to select the right people to help him to look after his company before he goes back to continue his study.

Q.3) what should Al Fiorini do now? Why?

The major problem in this case is the codes of conduct are not implemented properly in the organization between Albert (Al) Fiorini and his partner. Al should take seriously about having these codes of conduct. In this case, one of the problem is Al do not mention the integrity of record and compliance with accounting procedures until Wilbur make that mistake without Al’s consents. The specific of employees conduct also not clear and there are no specific responsibility to the partner about what they can do and what they cannot do. Al should set the limitation action for the employees. It is for make sure the employee know their position and for sure the employee not dare do something out of their responsibilities.

Another way that Al can do is apply the appropriate of action control. They should have separation of duties to easier the process of management goes smoothly. It is also indirect prevent the redundancy problem. We can see from this case about the decision making in the organization are redundant where both Al and Wilbur make their own decision. They do not trust to each other. The way to settle this problem is they should have given trust to each other and Al should not give all the use and privileges of AHL to Wilbur. It is especially in decision making. In the beginning of agreement, Al should mention restriction for Wilbur to make some of decision in the company. Other than that, Al also can do pre action review to make sure the employee make a good job and follow the organization policies. It will prevent issues for the organization.

In other hand, Al should learn from the past experience so that he will not repeat the same mistake because before this Al tend to make a quick judgement and sign agreement without considering the pro and cons of the agreement. So in order to prevent this from happen again, Al could implement personnel control in their business. These controls ensure that employee will control their own behavior as well as will control each other behaviors. This control builds on employee natural tendencies to control and motivate themselves. So to implement this control there are three methods that can be applied which first selection and placement. The second method is training. The third method is job design and provision of necessary resources. It will make sure that the job is designed to allow motivated and qualified employee a high probability of success. In addition, to keep the employee motivated to do their job, the employee could include equipment, staff support or the other needs to support them.

Finally Albert (Al) Fiorini make sure that action control is implemented properly and followed by each and every employee in this way every employee will work as per organization goals.

References:

Kenneth, A., & Wim A., V. (2012). Management and control. In Management and control

systems (3rd ed., pp. 22-26). England: Pearson Education Limited.

http://www.slidefinder.net/m/management_control_systems_chapter_action/slides_h03/10275357

http://business-law.lawyers.com/small-business-law/Breach-of-Partnership-Agreements-and-Expulsion.html