Charrington-bass case study

Essay by qingqing_caojj March 2009

download word file, 5 pages 4.0

Charrington-BassExecutive SummaryThe changes in finance department of Charrington-Bass Brewers into three sub-functions, has made an improvement in the sales performance of the company. This is achieved through coaching individual outlets with good financial knowledge to improve their own business performance. The company managed to create a link between finance and sales department, by creating new department: commercial. This commercial department is bridging the communication and understanding between sales and finance department.

IntroductionAfter the Beer Order restriction, the condition of individual outlets that sell Bass beers changed. These outlets have to be independent, yet lack the knowledge of business and financial operaton. Thus to address the needs to coach and improve outlets performance, Bass changed the organization structure in finance department, to achieve a win-win solution and be more customer focus.

Answer 1The reasons for changing the traditional organization of the management accounting function are:oThere is Beer Order restriction to limit the number of public house brewers owned.

Thus public houses were sold to independent operator, or large retail organization. They do not have production facilities and put pressure on company’s total margin.

oBass controlled the entire value chain, or doing macro management, it is difficult to manage economies of scale since there is more than one distributor depot in the same town. They also have individual management structures and non-standard local accounting & management information system.

oCompetitive pressure has caused over production and the need for merger. There is a need to redefine the task of finance function to be more aggressive and radical, to see the bigger picture of the whole business process.

oThe national beer consumption in Britain was falling, this gave pressure to brewers on their margin, and many retail organization demanded discounts on their purchases from brewers.

oBrewers as financier, giving loan ties to operators. Independent...