Case 3-5 Digital Equipment Corporation

Case Summary Digital Semiconductor was a business unit of Digital Equipment Corporation. John Gavin, the DS group controller, wanted the finance department to find ways to add value and better support the division because the DS business strategy had many changes over the past five years and the division was still operating at a loss. History: The semiconductor division which was a part of Digital Equipment Corporation expanded rapidly in the 1970s. Digital was financially …

…flows system can be developed. Secondly, since there are 7 product lines, everybody would tend to compete for the more budgeted product line. This competition can be eliminated by systematic rotating of each product line to be in charge of different series of semiconductors. Thirdly, I would like to stress again on the importance of communication clarity. eliminate the central manufacturing and central services so balance sheets and statements of cash flows system can be developed.