Search Hcc Industries Case 1. A problem with the stretch targets is that they were quite optimistic, what implies that they were really tough to get. The result of this was that there came a culture where it was OK to miss your target. Another problem was that they were too subjective and complex to communicate to the middle managers.
How to Write a Summary of an Article? Case Hcc Industries 08 Fall 08 Fall 1. Derived from the case, we think corporate managers have too much control on the targets.
General managers give corporate managers an estimate of the targets they can achieve but in all the divisions, targets were adjusted. For the general manager of Sealtron this was very discouraging.
So indeed, management control on targets has Case hcc industries but maybe too much. On the other hand, division managers now have more control on the bonus pool, they can decide which subordinates share in the bonus pool.
Bonuses are Case hcc industries based on how good you actually work but on how good the general manager believes you work. So maybe the control on targets has to be reduced a little bit and the control on the bonus pool has to be made more objective. Secondly, the planning and budgeting processes have to engage in long er -term thinking.
In the MPS system they want to improve this. The problem however with the MPS system is that there is too much focus on operational planning, targets are set on short term. Targets are the main focus of the company, even if you have to take measures that are disadvantageous towards the future.
For example, in the Sealtron division the general manager hired some people that he thought would be useful for the company on the long term.
But because the main focus lays on achieving the targets, Lou Palamara was afraid that he had to lay off some people that he will likely need in the future.
So the MPS system still supports rather the short term, there is no engagement in long-term thinking. Then the third purpose is to achieve coordination. The purpose of the company was to create a bottom-up approach. In this approach division managers prepare the budgets and then forward them to the corporate managers for review and approval.
Targets that are provided by the division managers tend to be more accurate and have a positive impact on employee morale because they know they can achieve the targets.
They also get the feeling of autonomy.
In the HCC case however, the implementation of the bottom-up approach goes wrong. Division managers prepare the budgets and feel good about it but in each division the corporate managers adjust the budgets dramatically. The way in which the corporate managers change the budgets is perceived as dictatorial.
No general manager feels confident with the new adjusted budgets. And as said before, even some corporate managers doubt whether the proposed budgets are feasible.
So the dictatorial adjustments from the CEO are rather perceived as a top-down approach, in which budgets are prepared by corporate managers and imposed on the lower managers.
So again, if we look at all the divisions together, the company is missing the last purpose of planning and budgeting processes. Should HCC managers have expected that the MPS target-setting philosophy would be equally effective in all four operating divisions described?
No, they should not think so. The new MPS budget system has both advantages and disadvantages, which do not have effect on every division to the same extent and thus result in the difference of the effectiveness of the MPS target-setting philosophy on different divisions.
So Hermetic Seal was more likely to make a correct expectation about their future and make an achievable, as well as challenging, budget, which is the key of the MPS.
Mike, the manager of Hermetic Seal, who was looking for a large bonus, would make more conservative budgets to ensure that he could always meet the targets.HCC Industries case analysis, HCC Industries case study solution, HCC Industries xls file, HCC Industries excel file, Subjects Covered Budgeting Control systems Goal setting Incentives Management by objectives Planning systems by Kenneth A.
Merchant, Lourdes Ferreira Sourc. 08 Fall 08 Fall 1. Evaluate the decision to use “minimum performance standard “ (MPS) targets instead of “stretch” targets. We evaluate the decision to use “minimum performance standard” targets by looking at how good this new target system achieves the four purposes of planning and budgeting processes.
As a conclusion, it is evident that a lack of appropriate and accurate information concerning the market is the main problem in the HCC Industries Case study. A . HCC industries, a manufacturing company that produces hermetically sealed electronic connection devices along with microelectronic packages, is headquartered in Encino, California.
Considering their highly sophisticated product line, one of HCC’s main clients was the U.S Military and government funded aerospace programs. Case Hcc Industries. 08 Fall 08 Fall 1. Evaluate the decision to use “minimum performance standard “ (MPS) targets instead of “stretch” targets.
We evaluate the decision to use “minimum performance standard” targets by looking at how good this new target system achieves the four purposes of planning and budgeting processes.
Alan regardbouddhiste.com Case 2: HCC Chloe Chan Due: October as they feared that their subordinates would leak information to competitors. This caused the corporate staff a great deal of stress and frustration.
it is unsurprising that management viewed Hermetite’s general manager.g.