Hcc Industries Essay - 1127 Words

HCC industries, a manufacturing company that produces hermetically sealed electronic connection devices along with microelectronic packages, is headquartered in Encino, California. Considering their highly sophisticated product line, one of HCC’s main clients was the U.S Military and government funded aerospace programs. HCC is made up of four distinct operating divisions: Hermetic Seal, Sealtron, Glasseal, and Hermetite. The divisions are highly decentralized and completely autonomous of each other. They all have different customer bases, different product lines and even different accounting systems. The divisions are also profit centers, by definition; each was responsible for their sales, costs, and bottom line. Each division also†¦show more content†¦Bonuses under the stretch method are based on annual performances, but payments are made every quarter. And each quarterly bonus payment is only at 80% actual in order to save management from paying out bonuses that m ay not be actual. Opponents to this budgeting technique cited that targets were too optimistic, and that rewards were based on complex and subjective measures. And because managers could still receive a small bonus at 60% of budget, bad habits started to form. In late 1986, HCC CEO Andy Goldfarb met with divisional managers and announced a new budgeting philosophy. The Minimum Performance Standard (MPS) was created to let divisional managers set their budgeting goals at a level they felt was 100% attainable. However, Goldfarb asked each manager to set their targets at levels above what they were currently producing at. The MPS plan was accompanied with a change in incentive plan, in whereby a pool was created that paid 20% of the amount exceeded actual over budgeted PBT (profit before taxes). In addition, 25% of the amount they exceeded the target would be added to the bonus. This allowed managers to see exactly where their bonuses were coming from. If their shipments were at 98% of the budgeted, they would receive close to 100% of the bonus pool set aside for that particular measure. If a manager met only 4 or 5 measurements, then his/her bonus collection would be directly in proportion to that. However, COO Al BergerShow MoreRelatedHcc I ndustries988 Words   |  4 PagesHCC 1. Evaluate the decision to use â€Å"minimum performance standard† (MPS) targets instead of â€Å"stretch† targets HCC has changed from ‘stretch’ performance targets to ‘minimum performance standards’. This was because the stretch targets didn’t work very well. The ‘stretch’ targets are doing a good job in companies that have a great understanding of their markets and that can influence the market. HCC however is too small to do marketing and market research, so it hasn’t enough information about theirRead MoreHcc Industries3850 Words   |  16 Pagescorporation work properly to achieve the objectives and give them incentives by bonus related to performance. From this point of view, the budget system should be reasonable, achievable, and also have some challenge to ensure the hard working. HCC Industries was using â€Å"stretch† performance targets until 1987. The main idea of using â€Å"stretch† targets was to motivate managers to perform at the highest level possible by setting aggressive targets with probability of achievement between 75 % and 80 %Read MoreEssay on HCC Industries2633 Words   |  11 PagesContext    HCC   Industries   is   a   small   publicly   owned   company   headquartered   in    California   that   has   four   divisions   across   the   United   States.   Three   divisions    manufacture   and   sell   hermetically   sealed   electronic   connection   devices   of   various    types,   while   one,   Hermetite,   produces   microelectronic   packages.   HCC’s   divisions   are    very   self- ­Ã¢â‚¬ contained   and   independent.   ARead MoreCase Hcc Industries2151 Words   |  9 Pagesmanagers for review and approval. Targets that are provided by the division managers tend to be more accurate and have a positive impact on employee morale because they know they can achieve the targets. They also get the feeling of autonomy. In the HCC case however, the implementation of the bottom-up approach goes wrong. Division managers prepare the budgets and feel good about it but in each division the corporate managers adjust the budgets dramatically. The way in which the corporate managersRead MoreCase Hcc Industries2159 Words   |  9 Pagesmanagers for review and approval. Targets that are provided by the division managers tend to be more accurate and have a positive impact on employee morale because they know they can achieve the targets. They also get the feeling of autonomy. In the HCC case however, the implementation of the bottom-up approach goes wrong. Division managers prepare the budgets and feel good about it but in each division the corporate managers adjust the budgets dramatically. The way in which the corporate managersRead MoreConstruction Industry Profile1595 Words   |  7 Pages PART- A INDUSTRY PROFILE PART-A INDUSTRIAL PROFILE |Indian Construction Industry is highly fragmented. There are mostly |[pic] | |unorganized players in the industry which work on the subcontracting basis. As| | |the construction activity being labour intensive, construction companies have | | |been mainlyRead MoreFords Vision Statement : Ford6350 Words   |  26 Pagesorganization to reach its higher performance levels. Both areas assist in the overall foundation that Ford’s strong beliefs stand on. Both mission and vision statement are factors that solidify the success and strategic direction in the automotive industry. 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The cavern is being constructed under a Rs 375 crore (US$75.5 million) contract by Mumbai-based Hindustan Construction Company Ltd (HCC) for Indian Strategic Petroleum Reserves Limited, a subsidiary of the Oil Industry Development Board under the Petroleum Ministry. Located at a hill named Dolphin’s Nose, the cavern is being constructed on land belonging to the Eastern Naval Command in Visakhapatnam (usually abbreviatedRead MoreHccw Management1222 Words   |  5 PagesHCC Management Team Bargaining Information Your team represents HCC management in bargaining sessions with the UCPW Local 14. The team is expected to negotiate an agreement that will allow the company to achieve its strategic goals over the next three years. Your team will use the following items to formulate its initial demands and for negotiating a new collective bargaining agreement: Item 1. Strategic Goals and Forecast of Factors Affecting the Firm’s Competitive Position Strategic