Central Issue/Theme

1. Evaluate Robinson Brothers Homes’ land acquisition process.

2. What suggestions do you have for improving it, if any?
3. If Harry Hepburn adds “a little optimism” to his projections, is he acting unethically?
4. What types of MCSs do the company have in place?
5. Preaction review is specifically presented
Should this review be tighter?
6. What other controls should be in place for this case?
7. Where is the decision authority?

Key Facts
Key Assumptions
Class Answers:
IRR doesnt warrant investment
"Spin" on project
Keeping a team in place
Nepotism
Market /stock price declining - tight controls of the corporation
Division goal is not in line with Corporate goal

Critical Problems/Variables
Additional Questions
The Platinum Pointe Land Deal
Overview of the case
Central Issues/Themes
Key Facts
Key Assumptions
Critical Problems/Variables
Possible Solutions/Alternatives
Additional Questions
Review
Class Answers:
Loosen corporate controls?
Trust the numbers
Present the report as is, with additional information on reasoning for pursuing the deal
Change the building types
Re-assess the controls that are in place
Class Answers:
Tight controls on IRR required by company
Projected $100m+ in revenue
Does not meet the requirements of the internal controls
New line of homes
No comparables in Carlsbad
Action control is in place
Class Answers:
Numbers represent corporate history and gained knowledge
Metrix designed in "good times"
May not fit "bad times"
Assuming that this project would save the jobs in the division
Jackson would receive approvals
Unbalanced risk

Possible Solutions/Alternatives
Class Answers:
How risk is determined
Jackson may not be able to fill their end
Problem with the control systems in place
Misplaced/unbalanced priorities
When were controls implimented or last reviewed
Division code of conduct/corporate code of conduct
Measuring severity, not probability