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Landale PLC
Author(s):
Merchant, Kenneth A.
Van der Stede, Wim A.
Functional Area(s):
   Finance/Financial Management
   Management Control Systems
   Organizational Behavior
Setting(s):
   For Profit
Difficulty Level: Beginner
Pages: 11
Teaching Note: Available. 
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First Page and the Assignment Questions:
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?