Ferguson Case Study


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Q1 – Ferguson Case Study

Ferguson Case Study. The credit function plays a key role in the continuing business growth of Ferguson and its hallmark 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 best decision for the company.

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Initially, Ferguson decentralization strategy worked well for the growth. However with the increased competition and decline in construction activity the business model is not eh best. Adopting the Charlotte Pilot and creating a modified structure is the way to go. By modifying the centralized Charlotte pilot strategy, Ferguson will be in abetter position to monitor credit function on the ground while still leaving power to local credit managers to make urgent decisions. However for this strategy to be effective, John must install tools to manage systematic file updates and monitor decision making on the ground.

References

Craven, B. & Ingram, P (2008). Handling change at Ferguson: The credit function. New York: Columbia business School.