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Atlanta Home Loans

Essay by   •  March 24, 2012  •  Essay  •  916 Words (4 Pages)  •  4,319 Views

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Case Atlanta Home Loans Study:

1) Controls that were implemented before going to school:

 Results controls- Al paid telemarketers a performance bonus for each lead produced. Such an incentive motivated employees to generate, on average, four new leads per person per day. The loan officers would receive 40% of the total revenue that AHL originated and an extra 60% on loans they originated by generating their own leads. Such performance measures focus on the output of the employee and so are results controls oriented.

 Action controls- Al monitored the activities of the employees through credit inquiries and loan applications. Al also monitored ratios and trends to see whether or not loan processors and officers maintained a certain trend over time to make sure they weren't neglecting their jobs.

 I didn't find any personnel/cultural controls since all the employees worked from home.

Controls that were implemented after going to school:

 Action controls- Al monitored AHL from California and learned that Joe, his partner, went to the office minimally. He went in four times over a span of 2 weeks. Joe also took a significant batch of loan files from the office. Al held Joe accountable by replacing him with Wilbur Washington. Joe was no longer a managing partner and lost his right to the funds he invested in AHL until he brought back the loan files. Al also monitored employee head count, tracked number of leads, credit inquiries, loan applications funded, office expenses and bank activity. By tracking such actions, Al tried to hold employees accountable for desired or undesired actions. Such was the case when Al tracked the activity in his Bank Of America account and found four checks written without his permission and had bounced. He took away authority from Letitia and Wilbur in issuing out any more checks. However, they ignored him. Another action control is the written partnership and licensing agreement between Wilbur and Al. Acceptable and unacceptable actions were defined in the agreement. Also, Al had all of AHL's corporate mail forwarded to his California address so he could oversee the company's overhead expenses to make sure Wilbur was doing his job. He also called employees 3-4 times a day to monitor their emotional state. Administrative control- leaving check-authorization to Letitia.

 Results controls- Wilbur would receive commissions of 100% on all loans closed less a licensing fee of $5K or 10% of all revenue, whichever was greater. Wilbur gets rewarded for generating good results.

 Cultural control- Employees now work at the office and have developed a culture and bond. As a group, they refused to leave when they were getting fired.

2) I don't feel that Al's business

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