MSM 630 Case Study Analysis Baseline profit for Number of gas accounts in 1990 How entry level salaries for management were determined Number of gas accounts transferred to hedge fund Appropriate raise for female accountant Corporate management style Accounting practices Profit structure Lines of communication

Baseline profit for During , Resources Unlimited Corporation reported quarterly profits of (listed in millions): $342, 267, 321, 157, 33, 349, 132, 289 From this available information, if accuracy can be assumed, the baseline profit for these years is: $200,000,000 (Taylor, 2013)

Number of Gas Accounts in 1990 In 1988, Resources Unlimited Corporation reported they held 32 gas accounts Based on the number of oil accounts estimated for 1990 and the assumption of direct variance between the numbers, the number of gas accounts for 1990 should be: 43 (Cooper & Schindler, 2011)

How entry level management salaries are determined Mean: $47,250 Standard Deviation: $8983

Gas Accounts Transferred to Hedge Fund Accounting offered a guess that 500 gas accounts could generate revenue to last 30 days After 6 days, the CEO transferred 100 gas accounts to a dummy hedge fund (6 days = 20% of 30) Bankruptcy occurred in June 1994

Salaries

Raise for Female Accountant Male accountant salaries: $50,000 $52,000 $55,000 Female Accountant salary: $32,000 Appropriate raise for female accountant would be: $20,128

Corporate management style Laissez-faire management style (Bolman & Deal, 2008) No action taken for memo’s received from Accounting Potential inaccurate data sent out Discrimination suit for unequal pay Idea to transfer to hedge funds as a “best guess” solution Bankruptcy Decisions seemed to be made on a whim

Accounting practices Accounting department attempted strategic planning regarding changes in industry and financial impact Ignored by CEO and didn’t seem to push the issue Didn’t review mean salaries for like jobs: shows non-involvement Plan for hedge funds was last ditch, desperate attempt to stay afloat temporarily: was not a strategic move

Profit Structure Profit structure based on industry deregulation and unregulated pricing Entire process too complex and too variable: Price of one commodity expected to move in opposition to the price of another Vicarious balance to this Dummy hedge fund attempted to lessen cash demands, but wasn’t attempted soon enough Unrealistic, unverified, and potentially falsified

Lines of communication Lines of communication flowed up form Accounting to CEO, but not back down Lines travel out to Wall Street form Accounting Lines appears to travel across equal channels Accounting and strategic planning division talked across, but not up or down to CEO or management

References Bolman, L. G. & Deal, T. E. (2008). Reframing organizations: Artistry, choice and leadership. San Francisco, CA: Jossey-Bass. Cooper, D. R. & Schindler, P. S. (2011). Business Research Methods. New York, NY. McGraw-Hill/Irwin. Taylor, C. (2013). How to Calculate a Baseline. eHow Money. Retrieved from com/ how_ _calculate-baseline.html Unknown. (2008). Guidelines for Preparing PowerPoint Slide Presentations. Retrieved from 03/ppguide.htm