Chapter several. Financial Responsibility Centers
In August 2002, a costs dispute arose between the managers of some of the divisions of Zumwald AG. Mr. Rolf Fettinger, the company's managing director, had to decide whether to intervene inside the dispute.
Zumwald AG, headquartered in Cologne, Germany, produced and sold a range of medical diagnostic the image systems and biomedical check was tools and instrumentation- The prepared into 6 operating divisions. Total total annual revenues were slightly more than в‚¬3 billion. Zumwald managers ran the organization On a decentralized basis. The managers of each division were allowed significant autonomy in case their performances were at least On prepare. Performance was evaluated, and management bonuses were given, based on each division's achievements invested of budgeted targets for retum (RolC) and growth. Even the 'Ompany was partly built-in, managers were to source their particular from exterior suppliers in the event they so chose. Mixed up in were 3 of the the Imaging Systems Division (ISD), the Heidelberg Division (Heidelberg), and the Electric Components Section (ECD).
ECD sold application-specific integrated circuits and subassemblies. ECD was originally set up as a attentive supplier to other Zumwald divisions. in the last decade its managers had identified external markets for some of the division's vroducts. Because of this, ECD's managers received profit center responsibility.
1, 2001, ISD designed a new ultrasound image resolution system, called the ~ 7 3H~~~~ were high for ~ 7 a few.. The new system offered users advantages in processing acceleration and cost, and it was a little while until up much less space. ~ ~ my spouse and i d technical engineers participated in the design ~ l b ~ ~ ~ of ~ 7 3 although ~ ~ i deb ~ was e ~ ~, m b intended for the full expense of the time their employees used on this pro, ect. managers ~f~~~ the specifications had been set, solicited bids intended for the materials needed to create X73 parts. Heidelberg was asked to bid to provide the...