AIRTEX AVIATION CASE STUDY ANALYSIS

Moreover, all the departments have a negative net income except the fuel line activity which employed unskilled employees. So, it decentralizes operations to make each activity a profit centre and group them by departments. It will be easy to implement it with the policy which consists in decentralizing the decision process. To move from a system where they are assisted and have without responsibility to a system which gives them more autonomy, take a long time. Because the firm is near of the bankruptcy, Ted and Franck design a new long term strategy which reduces costs, decentralizes management decision process; implements new management styles and defines clear way to growth and move in the aviation market. The decentralization of the decision process is a good way to facilitate it and help to develop relationship between stakeholders and staff. There is also an issue to implement the new accounting system, because Sarah Arthur decided to limit her work in the company and they hire a new accounting clerk without experience.

The problem statement can be summarized as follows: This decision right is a variable to affect the moral of the managerial team and motivate them. Ted and Frank faced a problem when they take decisions of acquiring the company because of a lack of skills: Each department is responsible of its results, revenues and. Finally, this new control system requires some additional costs, because each department can hire a new employee to deal with the Daily Department Report.

There are a number of issues before Franck and Ted set up the decentralized control system, which will be analyzed now.

airtex aviation case study analysis

In front of the discrepancies of the current control system, Ted Richards and Frank Edwards decide to implement a system which improves transfer pricing, cost allocation and autonomy. The decentralization of the decision process is a good way to facilitate it and help aviatikn develop relationship between stakeholders and staff.

Airtex Aviation – Cost Control Study Case | Get Access To Unique Paper

aigtex To move from a system where they are assisted and have without responsibility to a system which gives them more autonomy, take a long time. Finally, this new control system requires some additional costs, because each department can hire a new employee to deal with the Daily Department Report. This decision right is a variable to affect the moral of the managerial team and motivate them. That observation explained the controversy which appeared about the management of receivables by the divisions.

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With the new control system, the leadership is divided between Ted Richards and Frank Edwards as equal partners and as best friends and they try to encourage staff to take desirable actions by decentralizing the power and involving the staff.

Ted and Frank faced a problem when they take decisions of acquiring the company because of a lack of skills: An effort must be made to strengthen the links with stakeholders, in the goal to be in position to casse with them. The issues of autonomy, cost allocations and transfer pricing are those which have an important impact on Air Tex profitability and its strategic vision. To change it and implement a new system, Ted Richards and Frank Edwards took few key decisions on:.

Airtex Aviation – Cost Control Study Case

This entails again a lack of information and motivation, important causes of the issue. In fact, we believe that division managers are not correctly trained to take vital decision in a first time. Therefore, this case wonders about the difficulties to implement it and the steps to change the management style.

airtex aviation case study analysis

In the future, an incentive program more accurate can be developed to motivate and attract staff. Its autonomy is strengthened because managers can hire, fire and manage the salary schedule.

To change it analyss implement a new system, Ted Richards and Frank Edwards took few key decisions on: First, there were problems for Ted with the accounting department: Because the firm is near of the bankruptcy, Ted and Franck design a new long term strategy which reduces costs, decentralizes management decision process; implements new management styles and defines clear way to growth and move in the aviation market.

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AirTex Aviation Case by Thao Nguyen on Prezi

The objective of the two partners was to look younger the management airfex Air Tex, to create a new control system provision support and information needed, and to lower casw power of the accountant Sarah Arthur.

One of the first steps is to identify Specific, Measurable, Acceptable, Realizable, and Timetable objectives at each level of the enterprise divisional and top level. There can be internal motivate managers and monitor performance and external taxes or tariffs reasons for transfer pricing.

Data analysis There are a number airtxe issues before Franck and Ted set up the decentralized control system, which will be analyzed now. The issue for Ted and Frank, future managers of Air Tex is to establish a growth over the long-term for the firm with a new strategic view. She monopolizes the decisions and the power.

There is a static hierarchy, without possibility of evolution. So, it decentralizes operations to make each activity a profit centre and group them by departments.

Another source of motivation for the departments consists in offering them to manage cash by giving them receivables: The strategic view With new owners, the strategic view of AirTex Aviation must be redefined. Corporate Governance One of the most important decisions is to decentralize management decision. They need a lot of time to educate divisional managers and it requires a deep change in the management skills. What appears to be the problem in Air Tex is linked to business which is linked with the state of mind of the staff: They decided to gamble by implementing a new control system of course expensive, but with a long term return on investment.

So, an important information control is necessary to improve the reliability of Daily Department Reports.

airtex aviation case study analysis