Hibb’s Web

Topics: Organizational structure, Financial statements, Finance Pages: 5 (1391 words) Published: February 12, 2012
Hibb’s Web

The Uvex Corporation was a small family-owned medical center on the southwest coast and as the business becomes flourished, the company restructured the organization for better service for its patients. Since after reorganization, Alex Fuhrman was worked as head the administration of the cancer research and treatment division. Christopher Hibbs, previously worked as a bookkeeper for the city of Sacramento, and currently hired to be an accounting manager for the West Coast division. Frederick Fontaine, the Manager of West Coast, has found a memo on Hibbs’ desk about doubt Alex was the person who cause fund missing since Alex was the director of accounting and finance. The unavailable communication between Alex Fuhrman and Christopher Hibbs caused Alex commence a libel suit against Hibbs and the Corporation. Frederick needed to find a solution before nine o’clock the next morning.

There are several problems that causing the “Hibb’s Web” case deterioration. First, there are conflicts between functional structure and divisional structure after reorganization. Christopher Hibbs has to compile monthly statements for each department whereas he was hired as an accounting manager for the West Coast division. Also, instead showing the financial reports to the Frederick, Hibbs sent it directly to the executive controller of Uvex.

Second, inattention and failure of management was another problem in this case. When Hibbs want to make numerous changes to the accounting system that Alex installed, Frederick was not convinced that Hibbs was adequately qualified to alter the process. As the time passed and the department heads appeared placated, Frederick forgot his worries. Second example is when Frederick found the memo on Hibbs’ desk, which was a week after Hibbs sent the memo to controller. The controller did not take any action or investigation. The controller expressed a belief that Hibbs can solve the problem before the fiscal year-end. Another evident is when Alex and Hibbs were confronting each other, the controller and Frederick did nothing to reconcile their confrontation or any solution to the problem. They only kept silent and left the meeting. Third, unethical business behavior of Hibbs were shown when the department heads piled pressure on Hibbs to relieve the budget cuts. Hibbs succumbed to the pressure and decided to alter the centre’s methods for depreciation in order to understate the expenses. As result of all the fraudulent statements made by Hibbs, the profit was much higher than previous years. Hibbs was unable to reconcile the statement at the end of the year with the systems that Alex has instituted. Also when Alex was confronted the missing funds with him, Hibbs was remorseless, “well, you didn’t do such a hot job, Alex.” He was refused to write a retraction of the allegations that he has made.

The first problem was there are conflicts between functional structure and divisional structure after reorganization. There is a lack of fit between structure and task. Uvex was organized divisions according to different geographic regions. The regional medical centres should be managed by central support functions at head office which includes department of marketing, human resources, accounting and financing. In this case, Uvex’s regional medical centres were managed by individual department. Because of this improper organizational structure, it results Hibbs was working beyond the area of his job specification, which might adding pressures and stress towards him. There could also be possibility that Hibbs did not fully understand the organizational structure, which was why he sent the financial reports to the controller. There is a lack of fit between process and task based on the inattention and failure of management. Effective management is important to all organizations. Organizational tasks are divided into separate activities assigned to various individuals,...
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