Hello Essay

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Black Manufacturing Company Revisited Part I Mr. Black had promoted Lee High to vice president of finance. Lee had practically been running the firm for several years during which time sales and profit had been declining. On November 15, Mr. Black announced that his son, Trafalgar Black, would take over as owner and president on January 1. Trafalgar was a graduate of Hamline’s MBA program and for several years had been working for a large consulting firm as a marketing specialist. In their private discussions, Mr. Black told his son that the problems in the family firm were marketing rather than financial, so the situation was ready-made for Trafalgar. Mr. Black, it seems had been completely taken by Lee High. When Trafalgar arrived on December 1, and began to read various internal report, he realized Black Manufacturing did not have a cash budget, and there didn’t seem to be much in the way of financial planning. Trafalgar asked Lee about this. Lee’s response was the Black Manufacturing ran on the basis of several well-developed decision rules, and budgets weren’t necessary because if the firm ever ran out of funds, Mr. Black simply deposited $10,000 or $20,000 in the bank. Trafalgar’s response was clear: “My father is a millionaire, but I am not!” Lee indicated he didn’t know much about budgeting, but he would get an assistant to work up some “stuff.” Trafalgar decided to call his old friend Crofton Brockley. Brockley was in charge of several large budgeting projects for a consulting firm, and Trafalgar knew Crofton to a recognized expert on budgeting for small companies. Fortunately for Trafalgar, Brockley wasn’t busy that week and was able to fly down the next day. Crofton spent two days going over the accounting records, interoffice memos, and everything else he could find. On Friday morning, Trafalgar found the following note on his desk:

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