Page 148 - DMGT402_MANAGEMENT_PRACTICES_AND_ORGANIZATIONAL_BEHAVIOUR

Unit 7: Controlling

Notes
result is that the financial position of the company has been badly shattered. So much so,
even the bills for supplies already made are not being paid in accordance with the terms
stipulated in the purchase orders. The suppliers, having made unsuccessful attempts with
the Accounts Department, are playing hell with the purchase officers.
Supplier ‘A’: (Extract from a Letter)
“We regret that our above bill has still not been paid even though the supplies were made
over a month ago and, as per the agreed terms, full payment was to be made within 2
weeks from the date the supplies are effected.” (Neither this letter nor the numerous
subsequent reminders are replied to.)
Supplier ‘A’: (Extract from another Letter)
“It is indeed a matter of surprise and regret that the payment against our above bill, now
overdue by over 4 months, has still not been released. We have sent countless reminders,
which have not been acknowledged. We fail to appreciate such an attitude from a firm of
your repute. We are sorry to advise that unless our payment is released immediately, we
shall have no other alternative but to discontinue all further supplies and hand over the
case to our legal section for realization of our dues together with interest accrued thereon.”
Supplier ‘B’: (Local Firm-during a Personal visit to the Office)
“You tell me to go to your accounts department and they tell me to come to you. Well, I am
not concerned with your internal affairs. You placed the order and your man collected the
materials from our godown. What you do is your business, but you better get me my
payment, or....”
Accounts
“I don’t have a note printing press. How can I pay until and unless the machines are sold
and money realized?”
Sales
“How could I know that the money market would suddenly become so tight? All these
industries had expansion plans, but now they have either been deferred or cancelled.
Anyway, I am sure, it is only a temporary phase.”
Production
“Either we should close down this factory or the shops should be fed with the materials
they need. Today this is not there, tomorrow that is not there, and then I’ll be criticized for
not achieving the production target. I am not bothered with your suppliers or their bills.
I must have the materials to run the factory.

“The problem cannot, I consider, be attributed to any lack on my part, yet I am the one
most directly affected. Not only am I the natural target of suppliers’ abuses, but also I am
the one who will have to confront difficulties in future procurements, because no one
wants to deal with bad paymasters.”
Questions
1. (a) What are the factors which are within the control and outside the control of
the men and the companies concerned?
(b) Are they doing substantially something about matters they can control?
2. (a) What is the role of the “boss” towards these departmental members?
(b) What role can each department head play? What can each one do to help the
boss play a better role?
Source: Parag Diwan, Management Principles and Practices, Excel Books.

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