Galvor Company Case Analysis
...re, developed over many years under the leadership of its former president Mr. Latour. Mr. Latour personally took care of much of the business planning prior to 1974 before the absorbing company took over management of Galvor. Business decisions all came from him with no adequate reports and workable financial statements to start with from the previous years. UE’s planning system was not effective as it was applied to Galvor. It was a very inflexible, detailed system that required far too much time and too many resources for a business unit the size of Galvor. For instance, Mr. Barsac, the controller, and his chief accountant spent 80% of their time working on the system and accomplishing reporting requirements for the corporate head office. When Galvor was purchased by Universal Electric, it was transformed from an independent company to a division of the absorbing company with the characteristics of a profit center. As a business unit, certain business functions like accounting procedures, functional activities, and other corporate services are ideally patterned to the parent company. In the case of Galvor, adapting to the system of UE was difficult because they do not have adequate personnel to handle the volume of work as required by the headquarters. Secondly, the people in the controller organization lack the necessary know how and training to handle the requirements of the job. Accounting principles and practice in France are different from that of the United States. Furthermore, the task of converting all internal records of Galvor from its functional currency to the reporting currency (which are kept in Francs to dollars...