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MG665-2009 Lesson 8 Assn2

MG665-2009 Lesson 8 Assn2 - for standardized financial...

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26 Jan 2009 Lesson 8, Assn 2 Case Exercise for “ Hammermill Paper Company” To All Division Managers: Due to the relentless expansion of Hammermill Paper Company, addressing company- wide budget controls and projecting financial performance have become nearly impossible. To maintain the continued growth of our company, centralized financial planning must be adopted among all divisions so that our company can improve its bottom-line , which affects not only the continued survival and prosperity of our business, but also of our shareholders. This change will be gradually introduced in phases once we have reached a consensus. Currently our plan for centralization involves the following: 1. Change to organizational structure: each business will report to a vice- president at headquarters who will assist in planning short-, medium-, and long-term finances. 2. Division managers will plan a minimum of 3 years of projected expenses and profits. 3. Training programs
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Unformatted text preview: for standardized financial reporting will be held at a manager’s discretion. Note: Future centralization of non-financial operations is out of the question. We do not want to invade any division managers’ area of expertise in running their business how they see fit. Our goal is to strengthen the bond that we currently have with decentralized divisions in order to increase awareness of the viability of different divisions. Measurements, including Return on Assets, are currently in the air in order to determine risk and profit ratios. Better information regarding how our entire business runs will allow us to better levy capital and investments while eliminating unwieldy expenses. You have been invited to the Meeting for Policy Negotiation on January 29, 2010 to learn, discuss, and offer your recommendations or concerns regarding this change. Thank you for your continued support. Signed: CEO...
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