Landale PLC |
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Finance/Financial Management |
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Management Control Systems |
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Organizational Behavior |
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Beginner |
11 |
Available.
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$9.00
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In January 2002, Patrick Kirk, vice president/controller of Landale
PLC, appointed a committee, called the Finance & Accounting
Strategy and Training (FAST) committee, to review the effectiveness of
the company's Finance and Accounting Development Program. The program,
which had been in place since 1990, was a job rotation program designed
to enhance the skills of Landale's finance and accounting professionals
so that the corporation could select its controllers from among a set
of competent internal candidates.
While most people considered the program to have been successful, a
number of issues had arisen over the 11 years of its existence. These
included questions as to what jobs should be included as rotational
assignments, how fast individuals should be rotated through various
jobs, what constituted the optimal recruiting mix, how large the
program should be, whether formal training should be a part of the
program, and whether the program should have a purpose broader than
development of just controllers. The FAST committee was asked to review
the program, present recommendations about each of these issues, and
develop a written program charter by September 2002.
THE COMPANY
Landale PLC (Landale) was founded in 1938. The company took its name
from the highly successful Landale brand of laundry-cleaning product
that its founder had developed. Over the years, Landale managers
expanded their product offerings, both internally and through a series
of acquisitions, so that the company's fortunes would not depend on
just one product.
In 2002, Landale, headquartered in London, was a large, diversified,
international company with over 65,000 employees and annual sales of
over $12 billion. The company's principal business still involved the
development, manufacture, and marketing of premium quality household
products that were sold in grocery stores and other retail outlets.
Some of these products were also marketed to wholesale customers, such
as restaurants, schools, and hotels. But the company also manufactured
and sold a broad range of other products, including crop chemicals,
food and food processing equipment, fuel additives, and tobacco
filters. Landale marketed its brands in 93 countries and produced its
products in 57 manufacturing facilities located throughout the world.
It also participated in joint ventures located in Saudi Arabia, Spain,
Egypt, Colombia, Argentina, Malaysia, and the Dominican Republic.
Landale's performance over the years had been good, with a long-term
earnings growth rate in excess of 10%. However, in 2001, Landale
suffered disappointing earnings primarily because of a £90 million
write-off. It had launched an expensive roll out of a new personal care
product that failed miserably. While analysts noted the failure, which
caused an end to a significant string of double-digit annual increases
in earnings, they gave Landale's management credit for taking risks and
challenging competitors even larger than themselves. One analyst
observed, “They [Landale managers] are not afraid to take on the big
cats. They are fearless, and tenacious.”
Assignment
1. Evaluate the Landale Finance and Accounting
Development Program. What changes would you make to the program, if any?
2. How should the FAST Committee address the issues that had arisen?
3. Why should the finance and accounting functions of
Landale have a development program when none of the other functional
areas within Landale has one?
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