Galvor Company Case

Aryani Deboranty K.
Group 1 Corina Heidy I.
Hendra Panca
Jumran
Galvor’s Background
 One of the major French electronic industry company
 A family company founded by M. Georges Latour in 1946
 As a fabricator – buy parts and assembly them into high
quality, moderate-cost electric and electronic measuring.
 Sales growth from 2.2 million new francs in 1960 to 12
million 1971
 Latour believed in complete ownership and was
personally involved in operations.
 In 1974 was sold to UE for $4.5 millions of UE’s stock
 Latour retained as chairman of Galvor board.
Problems in Galvor

 Require lots of resources (time allocation and new

personnel).
 HR problem (limitation in English and low level of
well-trained staff).
 Galvor have to submit the same report like bigger
operating unit.
 Difference accounting standard between France
and US.
 Different currencies and limitation of local system.
Organization Chart in UE

UE HQ
UE HQ EUROPE
USA BOUDRY
GALVOR BOARD
Controller
POULET
LATOUR Manuf. Director 4 FOR 7 SP
Fin RES Lin
Chairman TER e EC
anc
Galv Ma IA
ial or nag
An Pro
LI
ers
HENNESSY aly duct (LM ST
Managing Director sts LM
) S
UE’s Working Style
Business plan Acts as
preparation for Performance evaluation
operating unit for unit manager
6 month lag
period and
then two year g
projection l on
r a )
n f e ar
o
y
c tio (5
roje riod
P pe Sales
Net Income
Total assets
Total employees
Capital expenditures
Schedule of Business Plan
Galvor prepared BP Budget for the
following year due.

J F MA M J J A S O N D
Objectives negotiated.
Approval of BP

a e a p a u u u e c o e
nb r r y n l gp t v c
Geneva sets 2 year tentative Meetings in Geneva.
objectives for operating units. Review of BP.

Requests for major BP

Objectives approved by changes submitted.
Geneva and US HQ.
Galvor’s Performance
Galvor’s performance in July and August
Actual July Variance Actual August Variance
Budget Budget
Inventory 2010 1580 430 2060 1600 460
Sales to 3850 3900 50 4090 4150 60
date

Exhibit 2

Galvor’s performance in September and October

Forecast Actual Variance
September 1973 2175 202
October 1928 2175 247
Exhibit 4 & 5
( All figures in $000s)
Please Give Your Opinion
Conclusion
 UE can implement historical standard for Galvor
because it is quite easy to implement and less costly.
 UE need to develop employment standards for its
operating unit.
 UE can implement ERP system for all or its subsidiary in
order to pursue the comprehensive requirement.
 The new UE’s implementation system for Galvor should
be developed step by step.
 UE should provide help and solution for the company
like Galvor which still newly implemented the UE’s
system