RELY Cleaning Services, Inc., was started a number of years ago by Rick Ely to provide cleaning services to both large a

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RELY Cleaning Services, Inc., was started a number of years ago
by Rick Ely to provide cleaning services to both large and small
businesses in their home city. Over the years, as local businesses
reduced underutilized building maintenance staffs, more and more
cleaning services were subcontracted to RELY. RELY also expanded
into other building services, such as painting and local
moving.
RELY maintains a pool of skilled workers who are contracted to
perform the noncleaning services because these services do not
recur on a day-to-day basis for the individual buildings. Many of
RELY’s full-time employees have been with the firm for a number of
years. Five zone managers are each responsible for furnishing
recurring nightly cleaning services to several businesses. In
addition, the zone manager sells and schedules noncleaning service
jobs for the company’s central pool of skilled employees. Informal
meetings are held periodically to discuss RELY’s performance,
personnel allocations, and scheduling problems. RELY’s budgeting
and planning have been done by Ely, who also manages variations
from budgets.
Ely recently decided to retire and sold the business to Commercial
Maintenance, Inc. (CMI), which provides similar services in a
number of metropolitan locations that surround RELY’s business
area. After news of the sale, several of RELY’s long-term employees
appeared resentful of the change in ownership and did not know what
to expect.
CMI’s senior management met with RELY’s managers and announced that
George Fowler would become president of RELY and that RELY would
continue to operate as a separate subsidiary of CMI. Furthermore,
in accordance with CMI’s management philosophy, a
responsibility-accounting system is to be implemented at RELY.
Also, in line with other CMI subsidiaries, a participatory
budgeting process is being considered. However, no decision will be
made until an evaluation of RELY’s existing policies, operational
culture, and management is completed. In view of the significant
change in management philosophy, CMI has taken considerable time in
explaining how each system operates and assuring RELY’s managers
that they are expected and encouraged to participate in both the
planning and implementation of any of the systems that are to be
adopted.

Required:
Two new initiatives are being considered at RELY Cleaning Services,
Inc.
• Responsibility-accounting system
• Participatory budgeting system
For each of these new approaches:
1. Identify at least two behavioral advantages that could
arise.
2. Identify at least two potential problems that could arise.
3. Discuss the likelihood that the new approach will contribute to
the alignment of organizational and personal goals.
(CMA, adapted)