X plc has in recent years been forced to restructure. It has considerably reduced its size, as its former main business in electrical engineering has largely become obsolete because of technological advance. There remains a sound but much smaller business in specialist elec- tronic equipment. This electronics business, like the former electrical one, is a global business, with manufac- turing, service and sales in a large number of countries. Operations in different countries vary in size. Some undertake sales and servicing and may have fewer than 10 employees, others manufacture and may employ up to 200 people. Head office structures, procedures and control systems still reflect a much larger, stable, prosperous past. The detailed systems of planning, budgeting and reporting, with a require- ment for head office approval for a wide range of actions, reflect a “financial control” style of management. The current requirement is for a control system to match a smaller, fast- changing business. Requirements To explain and justify the minimum central control system required to ensure that effective control is maintained in the global business. Your explanation should: Specify the decisions which will be retained for head office Describe the minimum reporting system required for control State the criteria for the performance evaluation of individual country operations and their managers Discuss the main problems anticipated in evaluating the performance of individual country operations and those of their managers.
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