Base on the Case Study please answer the following questions 1) What do you think of the
Question:
Base on the Case Study please answer the following questions
1) What do you think of the public nature of budget discussions at Real Madrid? What would be the consequences of doing this in a publicly traded company, say GE or IBM? How would it affect what you put in the budget?
2) Should it be used to evaluate Jos? ?ngel S?nchez?s performance? How would you judge his performance? Should S?nchez?s targets be stretched? What are the benefits and costs of stretch targets?
3) There is a stream of thought in business literature that recommends abandoning budgets. Do you think Real Madrid could or should abandon budgets?
4) What is the level of uncertainty in the budget? If this is high, would you recommend producing a budget?
5) Would you want to produce an activity-based budget for Real Madrid? If so, how would you do it?
Hala Madrid: Managing Real Madrid Club de Fútbol, the Team of the Century Introduction In June 2004, Carlos Martínez de Albornoz, corporate general manager for Real Madrid, a leading Spanish soccer team, was reviewing the Club's 2004-05 budget in preparation for a press conference scheduled by its president, Florentino Pérez. In the two previous years, members of the Spanish press had predicted a financial catastrophe for Real Madrid after the Club signed Brazilian striker Ronaldo and British megastar Beckham. However, after Florentino's¹ election as president in 2000 the team won seven official titles, including two Spanish "Ligas" and one European Champions League, and Real Madrid had become one of the wealthiest soccer clubs in the world. Despite these successes, poor team results during the last two months of the 2003-04 season² (including being eliminated from the European Champions League and losing a record five games in a row during the national competition) had left executives, players, and fans alike with a bitter feeling, just when Florentino was up for reelection. The 2004-05 budget challenge was to include the cost of acquiring new players who could recapture the support of the team's fans while avoiding the excesses that had nearly bankrupted the team before Florentino's arrival. Martínez de Albornoz thought of the decisions to be made during the planning process, knowing that Florentino would be probed on those decisions during his face-to-face with the press. Journalists enjoyed speculating on how many more player acquisitions³ the team would make and who would be the next star to join the Real Madrid "galaxy." Although the media touted Real Madrid as an organization with limitless resources, its management team knew that overspending would bring certain failure. Hala Madrid: Managing Real Madrid Club de Fútbol, the Team of the Century Introduction In June 2004, Carlos Martínez de Albornoz, corporate general manager for Real Madrid, a leading Spanish soccer team, was reviewing the Club's 2004-05 budget in preparation for a press conference scheduled by its president, Florentino Pérez. In the two previous years, members of the Spanish press had predicted a financial catastrophe for Real Madrid after the Club signed Brazilian striker Ronaldo and British megastar Beckham. However, after Florentino's¹ election as president in 2000 the team won seven official titles, including two Spanish "Ligas" and one European Champions League, and Real Madrid had become one of the wealthiest soccer clubs in the world. Despite these successes, poor team results during the last two months of the 2003-04 season² (including being eliminated from the European Champions League and losing a record five games in a row during the national competition) had left executives, players, and fans alike with a bitter feeling, just when Florentino was up for reelection. The 2004-05 budget challenge was to include the cost of acquiring new players who could recapture the support of the team's fans while avoiding the excesses that had nearly bankrupted the team before Florentino's arrival. Martínez de Albornoz thought of the decisions to be made during the planning process, knowing that Florentino would be probed on those decisions during his face-to-face with the press. Journalists enjoyed speculating on how many more player acquisitions³ the team would make and who would be the next star to join the Real Madrid "galaxy." Although the media touted Real Madrid as an organization with limitless resources, its management team knew that overspending would bring certain failure.
Expert Answer:
1 A budget is an accounting plan It is a formal plan of action expressed in monetary terms It could be seen as a statement of expected income and expenses under certain anticipated operating condition... View the full answer
Students also viewed these economics questions
-
What do you think of Naomi Kleins positions as espoused in No Logos? How would you respond to her propositions? Do you agree or disagree about her beliefs on the growth of corporate power?
-
What do you think of Cargill Kitchen Solutions' 20-minute job rotation approach? Would you want to work in such an environment, or one in which you performed the same tasks all day. Why?
-
What do you think of a diet program that allows for generous amounts of bread and rice provided that no butter or margarine is added?
-
If you were a hedge fund manager, which style would you employ and why? Describe this style and how it works. Why would you utilize it and under what macroeconomic conditions would this style work...
-
Should a forced-distribution system be installed to eliminate problems with personnel decisions? Explain your answer based on research.
-
Warm Hearth Bakery mass-produces bread using three sequential processing departments: Mixing, Baking, and Packaging. The following transactions occurred during January: Requirements 1. Post each of...
-
Although the ex post facto design and one group posttest-only design are nonexperimental research, how are these designs unique compared to the other designs designated as nonexperimental?
-
Corporate financial plans are often used as a basis for judging subsequent performance. What do you think can be learned from such comparisons? What problems are likely to arise, and how might you...
-
Indicate what is considered a disadvantage for Air Transportation mode?
-
The Tastee Bakery Company supplies a bakery product to many supermarkets in a metropolitan area. The company wishes to study the effect of the height of the shelf display employed by the supermarkets...
-
Some environmental improvements increase property values and, thereby, also increase property taxes. It's possible that jurisdictions can fund environmental improvements with the increased property...
-
A farmer who has fixed amounts of land and capital finds that total product is 24 for the first worker hired, 32 when two workers are hired, 37 when three are hired, and 40 when four are hired. The...
-
Q 0 1 2 3 4 5 6 7 8 Price 66.00 64.00 62.00 60.00 58.00 56.00 54.00 52.00 50.00 TR 0 64.00 124.00 180.00 232.00 280.00 324.00 364.00 400.00 TC 400 420 430 430 440 460 490 530 580 MR 64.00 60 56 52 48...
-
Thes. Queston 5 pis A consumer has initial real wealth of 50, current real income of 100, and future real income of 110. The real interest rate is 10% per period. The budget line is shown in the...
-
A series RLC combination that has L = 2.0 H, C =2.0 F, and R = 20.092 is driven by a generator that has a maximum emf of 100.0V and a frequency which can be varied. Find: (a) the resonate frequency...
-
3. Determine whether the following graph is bipartite. If it is, give the bipartition sets. If not, explain why not (you need to explain your answer to get full marks!) [5 points]
-
For Singapore Airlines (SIA), a unique event arose out of Covid-19. For two days (24th and 25th of October 2020), the airline launched a dining service on board a parked Airbus 380 named...
-
Find the equations of the ellipses satisfying the given conditions. The center of each is at the origin. Passes through (2, 2) and (1, 4)
-
A company is planning to purchase a machine to meet the increased demand for its products in the market. The machine costs 50,000 and has no salvage value. The expected life of the machine is 5...
-
A textile company is considering two mutually exclusive investment proposals for its expansion programme. Proposal A requires an initial investment of 7,50,000 and yearly operating costs of 50,000....
-
Royal Industries Ltd. is considering the replacement of one of its moulding machines. The existing machine is in good operating condition but is smaller than required if the firm is to expand its...
Study smarter with the SolutionInn App