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Curriculum Center Browse Bibliography Build EPacket Pricing Structure Distribution Process Management Control in Nonprofit Organizations
Forenna, Cittá di
Padovani, Emanuele
Young, David W.
Functional Area(s):
   Management Accounting
   Management Control Systems
Difficulty Level: Beginner
Pages: 5
Teaching Note: Available. 
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First Page and the Assignment Questions:
Some of the town’s local politicians just returned from a conference. They told me that they spoke with some of Ravorli’s politicians who told them that Ravorli’s citizens are extremely pleased with their waste collection service. They then said that all they hear from Forenna’s citizens are complaints, and that unless I can improve our waste collection service I should begin thinking about “my next career move.”

The speaker was Giovanni Verdi, city manager of Forenna, a small seaside town in Italy with about 20,000 inhabitants. He continued.

We collect almost five times as much waste as Ravorli. On paper, it would appear that we have only two-thirds of its population but in the summer months we have five times as many people here. We also have a much bigger geographic area to cover and a much lower population density. That makes the job tougher. Sure, our politicians get complaints. You can’t please everyone!

Mr. Verdi’s situation was not uncommon. He had learned from some other city managers that many of them were under pressure from their local politicians to improve their waste collection and disposal services. The problem was especially serious for many municipalities, including Forenna, in that there were very few vendors capable of providing the service (and available to do so). Moreover, those towns that had switched vendors had encountered considerable difficulty in managing the transition. He commented:

We’re kind of stuck with IU [Igiene Urbana] as a vendor. We’ve been using them for 12 years, and we would need a lot of time to negotiate a contract with another vendor. Besides, IU has developed some economies of scale with route structures and the like that I’m sure it would be unwilling to share with a replacement vendor. We no doubt would need to pay the new vendor for the time and expense of moving down the learning curve.


A brief summary of the characteristics of the two towns is contained in Exhibit 1. A more detailed description of each town’s characteristics, as well as its history of outsourcing waste collection and disposal, follows.


The municipality of Forenna was located along a 20 kilometer stretch of the eastern coast of the Emilia Romagna region of Italy. It occupied some 280 square kilometers, of which about one-third comprised ponds and lakes. The municipality included the main town, Forenna (which was about three kilometers from the sea), another smaller town, known as Little Forenna . . .


  1. What is your assessment of Mr. Verdi’s reactions to the criticisms of Forenna’s outsourcing of waste management and disposal? Do you agree with him? Do you think he is doing a good job?
  2. Please characterize as conceptually as possible the differences in the way the two municipalities manage their waste collection and disposal vendors. What are the strengths and weaknesses of each approach? Which approach do you prefer? Why?
  3. Would your preferred approach be appropriate for all outsourced services? If so, why? If not, for which services would it be inappropriate? What approach would you use for those services?
  4. Assuming Mr. Verdi wishes to keep his job, what should he tell Forenna’s politicians? What changes, if any, should he make in the way he is managing the municipality’s outsourcing of waste collection and disposal?