Grand Jean is a company which has been in business for many years and manufactures various types of jeans. It is one of the largest clothing manufacturers in the world with dominant product – blue denim jeans. The demand for firm’s product over the years has been stable due to reasonable price and good quality. Grand Jean uses an outsourcing strategy in production by contracting with independent manufacturers to expand supply to match growing global demand.
At corporate level, Grand Jean Company is a single industry firm, whose main goal as the whole is to maintain its leadership in the market as a manufacturer of jeans and also is to increase firm’s profitability and growth. The goals of the company are different from the company’s marketing organization goals and the company’s 25 managers of manufacturing plants goals. The reason so, is because the marketing department is treated as a “Revenue Centers”, while the firm’s 25 plants are treated as “Expense Centers”. The goals of “Revenue Center” are to sell manufactured goods and to maximize revenue. Furthermore, marketing department is responsible for making product demand forecasts which are used to set sales unit and sales dollar targets. Whereas, the goals of “Expense Centers”, manufacturing plant, are to meet the budget, achieve cost efficiency, achieve good product quality, and reach the quota that is assigned to each plant. In Grand Jean’s case, the “Expense Centers” would be considered as an Engineered Expense Centers because their input for the most part can be measured in monetary terms and the $ amount of input required to produce one unit of output can be determined.
Some of the weaknesses of the current management planning and control system for the manufacturing plants and the marketing departments include: o The reward system is not fair. Personnel located at corporate headquarters are awarded