An introduction to financial and management accounting case study work

Case #3 – Brandon Hair – 30 MarksBrandon Hair, managing partner of the venture capital firm of Hair and Brush, was dissatisfied
with the top management of Make-It-Work, a manufacturer of car tyres. Hair and Brush had
invested $25 million in Make-It-Work, and the return on their investment had been below
expectations for several years. In the last meeting of the board of directors of Make-It-Work,
Brandon exercised his firm’s right as the major equity investor in Make-It-Work and fired the
CEO. He then had the board of directors appoint as the new CEO.
Brandon adopted an aggressive management style, and at the first management meeting as CEO
he fired three of the managers on the spot to send a message that he was in control. He revoked
the current budget and ordered management to submit new budgets ensuring that it included a
50% increase in sales volume. In addition, he emphasized that no excuses would be entertained if
the new budget targets were not met.
Tricia Kennedy, an accountant working for the production manager at Make-It-Work, discovered
towards the end of the following year that her boss was not discarding defective tyres returned by
customers, but was instead shipping them to new customers to avoid booking the losses. As a
result of the push to increase volume, quality control had dropped and returns of tyres by
customers were as high as 25% of the new shipped. When Tricia asked her boss about the issue
of sending defective tyres to new customers, she was told to mind her own business, and this was
necessary to meet the new targets set by Brandon.
Required:
Prepare an 8-page case report using the Case #3 Rubric format below. In your submission, be
sure to answer the following.
a) Is Brandon using budgets as a planning and control tool?
b) What are the behavioural consequences of the way budgets are being used at Make-It-Work?
c) What, if anything, should Tricia do?
Case #3 (Brandon Hair) – Rubric
Assignment Component
Point
Available
Points
Earned
Page 1 – Title Page
1
1
Page 2 – Executive Summary
1
1
Page 3 – Findings
3
3
Pages 4 – Case Evaluation
4
4
Specific Criteria/Components
Include class section number, the case # and case title, full names of all members of the group,
group number and due date of assignment.
Clear explanation (half a page maximum) of the case problem and what is the aim of this
assignment.
This should be a minimum of 3-4 paragraphs. Provide background information and the most
relevant facts. Isolate the issues.
This is where you perform your analysis and lay the basis for the solutions and
recommendations to follow. Isolate the sections of the study you want to focus on. In it, explain
why something is working or is not working.
Page 5 – Proposed Solution
5
5
Offer realistic ways to solve what isn’t working or how to improve its current condition.
Page 6 – Recommendations
5
5
Talk about the strategy that you should choose. Explain why this choice is the most appropriate.
Page 7 – Implementation
10
10
Explain how to put the strategy into action. Be sure to set clear goals, determine roles and
responsibilities, how the plan is to be monitored and what success looks like.
Page 8 – References
1
1
All sources properly cited including specific AME e-book used and Assignment document (Case
#3)
Total +A4:D13
30
Case #3 – Brandon Hair – 30 Marks
Brandon Hair, managing partner of the venture capital firm of Hair and Brush, was dissatisfied
with the top management of Make-It-Work, a manufacturer of car tyres. Hair and Brush had
invested $25 million in Make-It-Work, and the return on their investment had been below
expectations for several years. In the last meeting of the board of directors of Make-It-Work,
Brandon exercised his firm’s right as the major equity investor in Make-It-Work and fired the
CEO. He then had the board of directors appoint as the new CEO.
Brandon adopted an aggressive management style, and at the first management meeting as CEO
he fired three of the managers on the spot to send a message that he was in control. He revoked
the current budget and ordered management to submit new budgets ensuring that it included a
50% increase in sales volume. In addition, he emphasized that no excuses would be entertained if
the new budget targets were not met.
Tricia Kennedy, an accountant working for the production manager at Make-It-Work, discovered
towards the end of the following year that her boss was not discarding defective tyres returned by
customers, but was instead shipping them to new customers to avoid booking the losses. As a
result of the push to increase volume, quality control had dropped and returns of tyres by
customers were as high as 25% of the new shipped. When Tricia asked her boss about the issue
of sending defective tyres to new customers, she was told to mind her own business, and this was
necessary to meet the new targets set by Brandon.
Required:
Prepare an 8-page case report using the Case #3 Rubric format below. In your submission, be
sure to answer the following.
a) Is Brandon using budgets as a planning and control tool?
b) What are the behavioural consequences of the way budgets are being used at Make-It-Work?
c) What, if anything, should Tricia do?
Note: You must use Times New Roman (size 12), and a line spacing of 1.15 for this
assignment
Case #3 (Brandon Hair) – Rubric
Assignment Component
Point
Available
Points
Earned
Page 1 – Title Page
1
1
Page 2 – Executive Summary
1
1
Specific Criteria/Components
Include class section number, the case # and case title, full names of all members of the group,
group number and due date of assignment.
Clear explanation (half a page maximum) of the case problem and what is the aim of this
assignment.
Page 3 – Findings
3
3
This should be a minimum of 3-4 paragraphs. Provide background information and the most
relevant facts. Isolate the issues.
This is where you perform your analysis and lay the basis for the solutions and
recommendations to follow. Isolate the sections of the study you want to focus on. In it, explain
why something is working or is not working.
Pages 4 – Case Evaluation
4
4
Page 5 – Proposed Solution
5
5
Offer realistic ways to solve what isn’t working or how to improve its current condition.
Page 6 – Recommendations
5
5
Talk about the strategy that you should choose. Explain why this choice is the most appropriate.
Page 7 – Implementation
10
10
Explain how to put the strategy into action. Be sure to set clear goals, determine roles and
responsibilities, how the plan is to be monitored and what success looks like.
Page 8 – References
1
1
All sources properly cited including specific AME e-book used and Assignment document (Case
#3)
Total +A4:D13
30
Introduction to Financial and Management Accounting
Case Analysis Suggested Guide/Format
(Hint: make your report to look professional).
Case analysis is an effort to find the best possible solution to a research problem. Case analysis can have
an indeterminate set of outcomes, or solutions. Your role in studying a case is to discover the most
logical, evidence-based ways to address a research problem.
As the Ivey School outlines:
“A business case study “is a description of an actual situation, commonly involving a decision, a
challenge, an opportunity, a problem or an issue faced by a person (or persons) in an
organization.”1 Cases contain relevant data about an issue facing the key decision-maker in the
case, as well as background information about the organization. Cases may vary in length; the
current market prefers eight or fewer pages of text and 15 or fewer pages in total length, including
images and/or exhibits.
A case “allows (the student) to step figuratively into the position of a particular decision
maker.”1 Cases allow students to put themselves in the place of actual leaders and decisionmakers. Students are able to analyze situations, develop alternatives, choose plans of action and
implementation, and communicate and defend their findings in small groups and in class. Cases
are used to test the understanding of theory, to connect theory with application, and to develop
theoretical insight. Cases are one of the best ways to enable students to learn by doing.”
https://www.iveypublishing.ca/s/case-writing-resources/the-case-writing-process
Preparing the case:
1. Read and examine the case thoroughly. Understand the background and the likely issues that are
presented to you.
2. Focus your analysis. Identify 2-5 key problems. Why do they exist? How do they impact the
organization, situation? Who has the responsibility for fixing the problems.
3. Uncover possible solutions/changes needed. Do outside research. What works elsewhere? Has
this problem been solved in other companies? Brainstorm this as a group.
4. Select the best solution. Consider strong supporting pros and cons. Is the solution realistic given
the parameters – or constraints – of the company.
Producing the case analysis:
1. Once you have a rough draft, have somebody that didn’t write the draft read through the rough
copy to see if it makes sense. Often the writer thinks they have laid out something clear in their
minds, but it doesn’t translate well to the written word.
2. Is your thesis statement clear and direct? Don’t be wishy washy. In a terse statement, what and
how are you proposing?
3. Remember, you are producing a business recommendation. This has to look professional and look
like you have put effort and work into the outcome.
4. Charts and diagrams are great resources to demonstrate your ideas.
5. According to the Ivey School, the current market prefers 8 or fewer pages of text and a total of 15
or fewer pages including appendices.
Case Analysis Layout
Title Section
Include class section number, the case # and case title, full names of all members of the group,
group number and due date of assignment.
Executive Summary
This section should be able to stand alone if needed. If I have no time to read anything but the
executive summary, I should be able to discern the problem you’re addressing, the challenges you
faced and the recommended solution, in a matter of a few paragraphs. Remember: you are writing
this summary AFTER you have completed the rest of the case analysis.
Finding
This should be a minimum of 3-4 paragraphs. There can be tables involved. You need to be able
to show me that you have read and understood the issue at hand. If mistakes have been made,
what are they? If there is a challenge/opportunity that has not been met, what is it. This is where
you set the stage for the work you are about to show me. Lay it all out for me to see.
Case Evaluation
This is where you have the bulk of your tables, your financial statements, your spreadsheets. This
is where you perform your analysis and lay the basis for the solutions and recommendations to
follow. In brief, you need to provide all of the evidence for what you’re about to suggest. Work
through the entire case. Lay out the facts as you see them. Point out issues, or errors that have
been made. Do the analysis here.
Proposed Solution
Offer realistic ways to solve any problems, or issues you have uncovered. This is a good space to
outline how you are going to address opportunities that have been addressed in the Findings, or
the Evaluation. These have to be realistic assumptions given the company in question.
Recommendations
Talk about the specific strategy you are going to choose. Explain why this is the most appropriate.
If you have three steps, be sure to highlight all three steps. I should have no doubt about what you
are recommending and why.
Implementation
You’ve laid out the problem. You’ve analyzed possible solutions and outcomes. You see what a
good and reasonable recommendation is. Now lay out the clear steps the show how you are going
to put this recommendation into action. If any steps are predicated on any other steps, make sure
they are in the right order. If there are hurdles involved in any of the implementation steps,
identify them. Make sure the goals are clear. Make sure the responsibility is clear. Think about
monitoring and follow-ups if needed. What does the perfect outcome look like?
References
Provide all citations using correct terminology. See the help I provided about doing this!