Managing Financial Resources
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Managing Financial Resources
Economic Issues in Corporate Governance and Logistics
Various economic issues are plaguing the quality operations of every organization in either domestic or international market. The economic issues and problems are arising due to the level of globalization. The most affected areas are the corporate governance and logistics. Corporate governance has a broader economic perspective and plays an important role within the organization. At a time when risks are available and recognized, there is a possibility for corporate accounting fraud scandals. The concerns of the corporate governance are on the appropriate allocation of the resources and sound decision-making especially in investment for the overall the financial development.
The usefulness of information is usually the basis of the effective corporate governance and the internal control procedures. However, the presence of complexities among the innovative financial instruments can affect the generation of information. Through avoiding the distortion of information, the issues in the internal control can be resolved. In the consideration of the control techniques being employed within the internal system, the conflict of interests and problems that may occur can be easily detected. The significant implications and functions of the financial sector remain in the center of corporate governance, as well as the transparency of all the related financial reports. Moreover, in the strategic action of the organization in facilitating the corporate governance can be an effective aid of the organization in achieving the growth of the activities (Walkner, 2004). For example, the limitation provided by the leaders to avoid the over-spending is an immediate to avoid the financial issues of the organization. Therefore, as an answer, an anticipated transparency in reporting to detect the early financial wastage and avoid the deeper risks in the performance of the firm.
On the other hand, the logistic activities, which is also linked to the economic development, and trade and transportation patterns, is also part of the economic issues of an organization that actively participates in the international trade. The global logistics issues in the international trade affect the transaction of the organization and its relevant networks. The international trend and constraints changes the flows and pattern in the world trading system. The changes in the global economy might be the result of the generated information technologies and is very useful as the model for the global commerce. In addition, the technologies advances and the use of the computer and communications, which are the most popular innovations, allowed the introduction of the transportation technologies. In fact, the new markets for the labor, materials, and services when combined with the technological approach are more efficient and competitive in the globalized market (Browning, 2006). However, the growth in the logistic approach remains in the center of challenge in the global trade and only through the appropriate monitoring and management; the challenges can be turned into opportunities.
In the complexity of the globalized market, there is a great impact in the financial system such as managing the financial resources and sound decision-making. Organizations should address the various affected areas of the globalization to avoid the negative impacts.
Decision-making Techniques: Planning and Budgeting
The success of the business depends on the various accomplishments and continuous efforts to strengthen the business efficiency and effectiveness in the market. Most of the time, the business leaders or managers are expected to provide the quality solution in terms of comprehensive planning and budgeting. Through the appropriate decision-making techniques, the present situation’s issues can be resolved and polish the future actions and objectives of the organization. The participation of the information, as well as the key individuals, to cope the various business issues is an effective collaboration technique for a quality decision. Through the application of the expertise, skills, and opinions, both people and data are effectively coordinated towards the creation of a decision. In addition, planning is considered to be a linked aspect of budgeting. And because of the involvement of the resources, there should be a comprehensive approach in making decisions. Moreover, the continuous decision-making process is professed to have a continuous planning and budgeting support.
The decision-making processes should consider the involvement of the individuals that can truly affects the link of planning and budgeting. Decision-making bodies should highly emphasize that in the middle of planning and decision-making; there is an appropriate evaluation of the requirements. Decision-making techniques can be employed through evaluating the requirements, and assessment of the risks involved in the system. The decision is incorporated in the internal and external business environment thus, making it more sensitive towards the future concern, opportunities, and development. In decision-making, the response can be effective is the individuals are aware on the challenges that the entire organization might meet in the future. The internal decisions can create a significant effect in the organization and its existing policies; therefore, there should be an increase focus on the management (Ventana Research, 2008). For the recent years, there growing numbers of businesses that improved the areas in planning and budgeting and it is possible for the other organization to provide a comprehensive approach in crafting their decisions. And basically, a sound decision is generated based on the application of reliable data. The sources of information such as the annual reports and the financial information are considered as part of the strategic decision-making.
An organization that highly values the structure of human interaction can turn the decision-making process as an important key towards the productivity. With the use of the decision-making and its approach, there is a foreseeable effectiveness in facilitating or promoting the high valued transaction of the organization and yet, minimizing the challenges and the constraints. Information or data, as said earlier, can be used to have a better chance in making decisions. In fact, the partnership of the people such as the interaction of the organizational managers to their shareholders in making decisions onto those large projects is much easier (Browning, 2006). It is possible if there is a system of voting which encourages the insight of the organization. The voices of both small and big investors/shareholders are important in making sound decisions in the matter of investment and other concerns (Walkner 2004). Along with the reliable information and transparency of the reports, the capability of the organization in promoting the general growth is one of the successes in making sound decisions and targeting the economic development.
It is important that people understand the role and the importance strategic planning and budgeting. It is clear that planning means the preparation of the actions according to the time and purpose of the organization, as part of the integral organizational structure and cycles should be part of the on-going process. The strategic planning is considered as the key responsible in long-term operations of an organization. The planning aspect affects the overall organizational process as well as the participation of the individuals. Planning aspect is also considered as the fundamental component of the performance management that helps in the alignment of the operational priorities that can enhance the coordination of the various departments within and across the organization. Planning is also a program for a specific activity which is, somehow, part of the design of the organization to achieve their objectives.
Meanwhile, budgeting is the applied term for the resource allocation that can be used in the fulfilling the provided plan. The appropriate designation of the resources is based on the plan and therefore, there should be accompanied monitoring processes. The creation of the statement of the financial position of the organization is part of budgeting with regards to expenses, revenue, allotted resources, and span of activities. It should be practiced and be subject for review to assert the cycle of budgeting and understanding the center of its concern. Companies in today’s globalization already adopted several techniques to gain the advantages in budgeting. And the success of the organization is pre-determined to be part of the ongoing planning of the organization. The significant factor of the organization is to manage all the aspects involved in budgeting and go-along with the proposed action. Basic as it seems but still hard to execute because of the lack of knowledge and skills.
Appropriate decisions are needed in aligning the organization and ensuring that the plans and budgets are coordinated with the activities involved in the organization. The business propellers and managers should bear in mind that planning and budget are important partners that should be taken seriously. Planning and budgeting are effective factors towards the long-term goal of the organization. Indeed, if the organization values the essence of the long-term decision making therefore, it is advised that the major concentration of the managers should be allotted in the partnership of planning and budgeting (Ventana Research, 2008). And because the planning and budgeting are closely related and has the core function of financing, the organization can create a decision wherein the availability of the resources are matched with the objectives and strategy such in controlling the costs more effectively and increasing the operation efficiently. The structure of planning and budgeting should be placed in higher participation in creating decisions.
Browning, J., (2006). Logistics and Socio-Economic Issues in Global Trade, Logistic in Global Commerce, [Online] Available at: http://www.princeton.edu/~ina/gkg/confs/browning.pdf [Accessed 16 April 2010].
Ventana Research (2008). Planning and Budgeting. Improving Effectiveness through Best Practices and Technology [Online] Available at: http://www.adaptiveplanning.com/docs/AP_Ventana_Research_Planning_and_Budgeting_White_Paper.pdf [Accessed 16 April 2010]
Walkner, C., (2004). Issues in Corporate Governance, European Economy: European Commission for Economic and Financial Affairs, [Online] Available at: http://ec.europa.eu/economy_finance/publications/publication750_en.pdf [Accessed 16 April 2010].