GALVOR COMPANYGALVOR COMPANYGALVOR COMPANYGALVOR COMPANY

Company Background

• Founded by M. Georges Latour in 1946

• BASIC OPERTION:- Acts as a fabricator, buying parts and assembling them

into HIGH-QUALITY, MODERATE-COST ELECTRIC and ELECTRONIC MEASURING and TEST EQUIPMENT.

• From 1960 to 1971 SALES GROWTH almost 6 times (2.2 million ------- 12 million)

• UNIVERSAL ELECTRIC COMPANY purchased GALVOR for

$4.5 million in 1st April 1974.

Major changes after 1st April 1974

M. G. Latour(Chairman)

David Hennessy

(MD)

Reporting to EU

Preparation of Report

&Supervising

Internal accounting function

Working Style in UE

Business plan preparation for operating unit

Acts asPerformance evaluation

for unit manager

6 month lag period and then two year projection

Projectio

n for a

long

period (5

year)

SalesNet IncomeTotal assetsTotal employeesCapital expenditures

Problem in GALVOR

Need a very strong centralized controlling system Supported by a proper Business Plan & Reporting System. Employee of GALVOR Struggled a lot adapt the new process. Mode of Communication and exchange Rate is a major cause

of concern More time required for planning not for reporting Accounting principle and practice is different in both the

Countries

Galvor’s performance in July and August (1976)

Actual July Budget

Variance Actual August Budget

Variance

Inventory 2010 1580 430 2060 1600 460

Sales to date

3850 3900 50 4090 4150 60

( All figures in $000s)

Galvor’s performance in September

Forecast Actual Variance

September 1973 2175 202

October 1928 2175 247

Exhibit 4 & 5

Exhibit 2

UE’s viewpoint

• Planning and controlling System• GALVOR need to change and adopt itself to the current

parent company• Experts for the new subsidiary• Uniform reporting and controlling system

WHAT GALVOR need ?•INFORMAL WAY of COMMUNICATION

•No Budget ONLY if then for Shorter period

•FORCAST for

Multi meter Panel

meter

Electronic instruments

Recommendation

Implementation of standard cost System. Independent work to Departmental Head Not inducing budget so early Employee retention Should spend lower cost for Smaller units

( product line) Implementation of product Planning Standardization of product design according to

the market

Thank YOU