Empire Glass Garbage

Empire Glass Garbage - 1 Empire Glass Company Introduction...

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1 Empire Glass Company Introduction Empire Glass Company is an organization that is focused in several different product divisions in Canada. As a decentralized organization each product division performs the management functions that any independent organization would perform. The glass products division produced various types of food and beverage bottles used for milk, alcoholic beverages and soft drinks. The bottles were produced in various sizes, shapes and colors. Over the last few decades there has been an increase in competition meaning costs need to be controlled tighter to remain competitive. This case analysis will focus on the budgetary control system of the glass products division and determine if the manufacturing divisions should be considered profit centers. Management Control System and Budget Process As a decentralized organization, the vice president of each division was responsible for making the necessary business decisions and reporting to the executive vice president and president on their performance. Christopher Bart (1988) explained that “managers dislike having to deal with them, budgets are nevertheless essential to the management and control of an organization… budgets are one of the most important tools for leading an organization toward its
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2 goals.” Empire Glass uses performance measures to tie a division’s performance with their goals and projected budget. The budget process begins in May when the divisions submit their division’s sales outlook, revenues and capital requirements for the next fiscal year. The vice president is also asked to give a summary of trends expected over the next two years but nothing to specific at this time. After the budgets are submitted, the division is then to give a detailed statement on sales and revenues based on their feel for the market.
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This note was uploaded on 04/04/2011 for the course ACCT 5230 taught by Professor Szendi during the Spring '10 term at Kean.

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Empire Glass Garbage - 1 Empire Glass Company Introduction...

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