McS - National Tractor and Equipment Company

National Tractor Case Study

Executive Summary

Management control decisions should be based on both historical and present information that might indicate impending problems to the organization. With National Tractor's problem of fluctuating sales and profits, information gathered to alleviate the problem were analyzed. Trends were established based on historical information and were assessed whether it posses the capability of warning the company to address the given issues. After evaluation of the information provided, it was found out that some of the information was not used properly. Some of the information provided (that might have been an important indicator) was ignored resulting to a further decline in sales and loss of leadership on market share position of the company. Had such information were assessed properly, problems in achieving the company objective might have been minimized or even avoided. In conclusion, it was recommended that the company should seriously monitor its key indicators with respect to competitors that will lead to further improvement of quality control, investments in product development and upgrade of facilities in order to address issue of lost sales due to poor quality, limited variety of tractor types, and decreasing profits due to increasing warranty costs. It is also recommended that the company establish measurement tools such as allowance for warranty expense and target increase in sales in order to be forewarned for any impending problem that may arise.

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