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Albert (Al) Fiorini should continue running his business of Atlanta Home Loan (AHL)
which is mortgage lending and financing company. He needs to fight to regain
control over AHL perhaps only about $25,000 worth of equipment left. In other to
get back his business Al can apply elements of results controls which require four
steps.
First, Al must define the dimensions. He must defining the right performance
dimensions although is critical because the goals that are set and the measurements
that are made shape employees’ views of what is important. In this case Al must
defined AHL dimensions on which results are desired such as for profitability,
customer satisfaction or product defects. This dimension will help company to
achieve the target.
Third elements are setting performance targets for employees to strive for.
Performance targets or standards are another important results control system
element. In a results control system, target should be specified for every
performance dimension that is measured. In this case Al can choose two basic ways
to affect behaviour. First, stimulate action by providing conscious goals for his
employees to strive for but most people prefer to be given a specific target to shoot
for. Or second Al can allow his employees to interpret their own performance. So Al
can run his business by setting the performance targets for employees to achieve it.
The last elements in results control are providing rewards to encourage the
behaviours that will lead to the desired results. Rewards included in incentives
contracts can be in the form of anything employees value, such as salary increases,
bonuses, promotions, job security, job assignments, training opportunities, freedom,
recognition and power. Al can rewards his employees by anything employees values
as to appreciate them with the effort that they give to the company. Punishments
are the opposite of rewards. They are things employees dislike, such as demotions,
supervisor disapproval, failure to get rewards earned by peers or at the extreme the
threat of dismissal. Sometimes, Al maybe needs to give punishment to his
employees to give them lesson as what mistaken that they have done.
Action Controls
Besides from results control, Al must take an action control as the most direct form
of management control because they involve taking steps to ensures that employees
act in the organization’s best interest by making their actions themselves the focus
of control. Action controls take any of four basic forms.
Next the preaction reviews involving the scrutiny of the action plans of the
employees being controlled. Reviewers can approve or disapprove the proposed
actions, ask for modifications or ask for more carefully considered plan before
granting final approval. In AHL, Al can form of preaction review during planning and
budgeting processes characterized by multiple levels of reviews of planned actions
and budgets at consecutively higher organizational levels.
The last one is redundancy which involves assigning more employees (or
machine) to a task than is strictly necessary at least having back up employees (or
machine) available also can be considered an action control because it increases the
probability that a task will be satisfactorily accomplished. In AHL Al can assign more
back up computer since his business running by using telemarketers because his
worked from their home using telecommuting systems.
CASE SUMMARY
Atlanta Home Loan (AHL) was a mortgage lending and financing company based in
Atlanta, Georgia. Albert (Al) Fiorini founded the company in April 2002 with an initial
investment of about $40,000. He started operating the company from his home.
AHL’s business grew rapidly in its first quarter of operation. By the summer of 2002,
eight loan officers, all of whom worked from their homes. Telecommuting was
convenient for the employees because Atlanta was a large city with heavy traffic.
Joe Anastasia was one of AHL’s loan officers. Although Al had known him only about
two months, his initial judgements about Joe were quite favourable. In July 2002, Al
and Joe reached a verbal partnership agreement. Joe would invest $8,400 which
was used to rent an office and to purchase some office equipment and Joe and Al
would share AHL’s profits equally. However, Joe showed a bad attitude to Al when
he didn’t show up for the meeting with new landlord and could not find him for two
days. Al not comfortable with Joe so he made a deal to terminating their agreement
but since Al need to go to Los Angeles so he desperate to find someone to run the
company, Al give one chance to Joe. So Al and Joe reinstated the previous
agreement. However, Joe went to the office only four times after Al left and Joe took
a large batch of loan files home and did not return to the office for three days.
Later the month, when Joe found what happening he wanted his $8,400 investment
back but Al refused until he returned all of AHL’s lead and loan files in his
possession. In late September, Wilbur hired a new processor but Al noticed him that
his processor to loan officer ratio was too high but Wilbur angry and want to do with
his own ways without Al. At the time Wilbur took over the operation of AHL.
Al decided not trust Wilbur and asked a friend to act as his agent to fire all the
employees in AHL but all them refused to go. Al called the police but Wilbur told the
police that he was the owner not Al, the police just left. On October 15, Wilbur
opened a new account at Citizens Bank & Trust (CBT) where he did his personal
business and where he knew personally. Wilbur wired the funds being held in AHL’s
corporate name at the offices of the closing attorneys into this new bank account. Al
discovered the second bank account and called bank personnel and informed the
manager that Wilbur had opened a fraudulent account with CBT but CBT refused to
freeze the account or return the money. Then, Al called the FBI but they did not
interest with the case. Wilbur renegotiated a lease with the landlord and establishes
AHL as his own company. Al suspected that Wilbur had used all his means of
persuasion to mislead the employees in order to break their bonds with Al. At the
last, Al lost at least $15,000 in licensing fees lost his company. At the end, Al was
forced to sell his home.