Case Atlanta Home loan
A. Control and Effects
Controls implemented by AI before he went back to school
* Telemarketers – their salaries consist of hourly wage and performance bonus based on leads produced. The performance salary has a motivational effect on amount of leads.
* Loan officer – Company paid the loan officers 40% of total loan revenue on they originated and 60% on loans Loan officer originated. The explicit allocation encourages loan officer to increase their revenue.
* Processors – AI have not electronic links to monitor the process of applications, but only track the number of credit inquires. The control may be ineffective because the number of ...view middle of the document...
* Ask a friend and police to fire all corporate employees. The control was invalid since Wilbur was on the spot and argued with police.
* Monitor bank account activity and called bank to stop payment on the checks
B. Issues and Recommendations
* Result controls: First of all, AHL lacks a clear direction as an organization and enough communication with its employees. This is also one of the reasons why most controls are right, but don’t work. Because the first step for controls is to define the desirable results or behaviors for organization. But AHL doesn’t express this result explicitly. Second, performance measurement is incomplete. Although a compensation bonus on telemarketers and a proportional revenue allocation on loan officer, the measurement just focus on the financial aspect. The measurement also should include the non-financial aspects. Finally, AHL ignores rewards to employees for the accomplishment of the desired results.
Recommendation: AHL should set up organizational direction and culture, codes of conducts and behavior, moral value. ...