Bennington Home Products sells home products. It buys products for resale from suppliers all over the world. The products are organized into groups. A few examples of these groups are floor care products, kitchen products, tool products, and paper products. The company sells its products all over the world from regional offices and warehouses in every country where it operates. Because of differences in culture and taste, the product lines and products within those lines vary widely among countries. The regional offices have administrative staff that manage the operations, place orders to the corporate office, and undertake the usual office administrative functions, and they have sales staff that do the selling directly to stores within each region. The regional offices are evaluated as investment centers because they have responsibility for revenues, costs, and investment levels. The regional offices make suggestions for new products. The corporate office manages the regional offices and places the orders received from the regional offices with suppliers. The corporate office does the ordering for three reasons. First, the company believes that one ordering office eliminates duplication in ordering activities. Second, it believes that one office ordering for all of the regional offices gives the organization more power when dealing with suppliers. Third, it is believed that one office can develop the expertise to find and negotiate with suppliers of unique and innovative products.
Required
(a) Describe an appropriate system of financial control at the regional level.
(b) Describe an appropriate system of financial control at the corporate office level.
(c) Explain why the systems of financial control should or need not mesh.