Ferguson Essay

635 Words3 Pages
Q1 What role does the credit function play in Ferguson’s strategy? The credit function plays a key role in the continuing business growth of Ferguson, and it is the hallmark for superior client service. It is charged with the task of lending construction materials to constructors. In lending, the credit function must ensure that credit is only granted to credit-worthy customers. It is the responsibility of the credit officers to evaluate customers to determine their credit worthiness. The branch-located credit managers collect the necessary information that helps the company in extending credit to them. The credit function must also ensure the lent out credit is recovered when time is due. The credit function must have an organization structure that allows it to make the best decision for the company. Q2 What cost savings do you predict from the Charlotte Pilot? The centralization pilot program has advantages over the usual decentralized structure in terms of saving cost. In declining economic environment and increased competition, centralization has the potential to reduce the dormant staff especially the multiple credit managers who are allocated the same branch office. In addition, centralization will ensure that Ferguson rides on the informal performance ranking. Duplication of duties occasioned by decentralization consumes much of Ferguson revenue and thus the intended centralization will eliminate this weakness. In addition, centralization will eliminate the persistent inconsistencies where information is available in some branches while missing in others. Q3 What structure would best allow credit to fulfill its role in the strategy? The structure best suited for Ferguson is an automated centralized system that would eliminate inconsistencies and improve the turnaround time in all branches. Centralization would also eliminate employees’ redundancies
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