Purchase Solution

You are concerned about the company's largest division - lux

Not what you're looking for?

Ask Custom Question

You are concerned about the company's largest division - luxury - because cost has been increasing much faster than revenue for the last 3 years. However, the head of the division, who reports directly to the CEO, believes that increased cost is simply a result of internal charge backs for what he terms as "overhead." On many occasions, he has stated that "IT and HR are hiring too many people and driving up my costs."

Discuss with the CEO how the structure of the company impacts the cost of the luxury division. Be sure to discuss how changes could be made to incentivize the head of the three areas to work together to control costs.

Purchase this Solution
Solution Summary

You are concerned about the company's largest division - luxury - because cost has been increasing much faster than revenue for the last 3 years. However, the head of the division, who reports directly to the CEO, believes that increased cost is simply a result of internal charge backs for what he terms as "overhead." On many occasions, he has stated that "IT and HR are hiring too many people and driving up my costs."

Discuss with the CEO how the structure of the company impacts the cost of the luxury division. Be sure to discuss how changes could be made to incentivize the head of the three areas to work together to control costs.

Solution Preview

Whenever costs drastically increase in any one area, it should be immediately suggested (usually privately) to the CEO that the area be analyzed. There could be several things actually going on, either intentionally (fraud, theft), or unintentionally, as it sounds in this case. The head of the division "believes" he or she knows the reason for the costs, ...

Purchase this Solution
Free BrainMass Quizzes
Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Motivation

This tests some key elements of major motivation theories.

Organizational Behavior (OB)

The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

View More Free Quizzes
Related BrainMass Solutions

  • Coordination

    148347 You are concerned about the company's largest division You are concerned about the company's largest division--luxury--because cost has been increasing much faster than revenue for the last 3 years.

  • Company's largest division

    273919 Company's largest division You are concerned about the company's largest division--luxury--because cost has been increasing much faster than revenue for the last 3 years.

  • Local Entrepreneurship and Wealth Creation

    The three largest exporters, the United States, Uzbekistan, and Australia are, in themselves, 50% of world exports. Countries of Western and Central Africa account for about 15% of world cotton exports, Mali being in lead.

  • Legality in Hotel Management

    As such, Hotel Lux could argue Peree and his new place of employment are directly, and possibly intentionally, soliciting Hotel Lux customers. Hotel Lux would argue this negatively affects the business interests of Hotel Lux.

  • The Effect of Accounting Transactions on Liquidity Ratios

    Lux declares a $5,000 cash dividend to be paid during the first week of the next reporting period. 6. Lux purchases long-term investments for $10,000. 7. Accounts payable of $9,000 are paid. 8.

  • Market Value of Company's Liabilities, Equity

    (BIT: LUX, NYSE: LUX) is the world's largest eyewear company. Its best known brands include Ray-Ban, Persol and Oakley, Inc.

  • Organizational Structure

    You are concerned about the company's largest division--luxury--because cost has been increasing much faster than revenue for the last 3 years.

  • promoting products

    You are a territory manager for the cardiology division of a major medical device company.

  • Mission, Vision, and Values

    Identify the organization for which you would like to complete or are considering completing a strategic plan. You may focus this study on a specific department, group, division, or function, within the organization. b.

View More Related Solutions