Costing Methods Financial Essay

Costing Methods

Costing Methods in Financial Management – The globalization resulted in excessive heights of competition which compelled businesses to the concepts of products and prices. The differentiation strategy works well when the companies charge the lowest prices possible for their products. Business organizations can practice the differentiation in their products by working the quality of their products and implementing some of the marketing approaches like after sale services. With that in mind, the business must conduct market research to ascertain the specific market cost of the products and services then they aligned their products upon the established prices.

Therefore, the standard costing methods remain outdated at this point, and business firms installed more strategic costing procedures. Some of these strategic costs applied by contemporary businesses consist of target costing, life cycle costing, and the Kaizen costing. This report seeks to describe and discuss target costing, life cycle costing, and kaizen costing with their examples and make conclusion and recommendations about the application of three costing methods.

Introduction to Costing Methods

The contemporary customer is a vocal consumer who has the market knowledge thereby posing a stiff competition in the market. The increased competition compels companies to embrace marketing strategies which may make them meet the level of competition trend. As a result, to remain relevant companies must redesign their processes to maximize product quality at reduced costs. Company businesses must work with price reduction as a way to remaining gain the market share in a competitive environment. Therefore, for the realization of the above strategies a company cost detection mark it as the better option.

Therefore, cost methods used by the firm act as significant strategic tools for opportunities identifications that guarantee cost reduction and product quality improvements.  The report describes and discusses target costing, life cycle costing, and kaizen costing as the modern cost management techniques which the company can use to sustain a competitive market environment.

Target Costing

The target costing is a modern cost management technique that has ide coverage usage by most managers. According to Cooper, target costing relates to Functional Cost Analysis as well as Value engineering to align the products and services to match the market dynamics (Cooper 2017). The onset of cost management according to this cost method is at the development stage where the product attributes that match the next generation get incorporated with the intention of generating the required return on investment.

The whole process entails market segmentation to identify the most reliable segment to target and customize the products and services to meet the prevailing conditions. Also, the company must study the convenience of the rival firms in the same segment to deliver the same quality at a cheaper cost. The company proceeds to the next by filtering its activity which is relevant for the delivery of the already established product attributes.

With that in mind, the identified relevant activities are subject to costing to gauge their total costs against the anticipated returns. In the event of any variation, functional costing and value engineering get into play for cost reduction strategies to get employed without compromising the required product quality. The latter process gets continued in line with the market pricing spirit until the best cost is established then the company proceeds to invest in the production of the product required (Talebnia et al. 2017).

Furthermore, functional Cost Analysis together with the Value Engineering techniques help the inter-processes teams to creatively identify the best ways to install the alternative cost reduction product designs without charging the recommendable market features of the product (Talebnia et al. 2017). This is important when analyzing costing methods in the management of finace.

Also, for the company to achieve the maximum value engineering techniques, the company must go through two significant steps by performing some of the radical design changes at the development stage so long as the product is capable of delivering the required service. Second, the use of different design teams may get considered for cost reduction purposes (Talebnia et al. 2017).

According to hart, target costing offers the following advantages to any committed firm (Cooper 2017). First, helps the management with the required knowledge to the development of products and services that are market-oriented through the firm’s strategic objectives, they develop products are following the tastes and preferences of the customer regarding functionality and the delivery method.

Second, it forms an essential element of product development teams, while giving products that are flexible to dynamic costs and life cycle changes and services that are relevant in their application context.

Third, the target costing supports activity-based costing through well-presented costing data during the specific developmental stages. Finally, target costing provides market-driven product features by ascertaining the use of simple, relevant, and user-friendly products. The development teams use simple language to prevent time wastage during costs evaluation (Cooper 2017). 

Life Cycle Costing

The method of life cycle costing considers not only the initial cost of a company asset but also the costs involved over the useful life cycle of the same assets for a rational investment decision (Moreau & Weidema 2015). The life cycle technique confirms the significance of valuing the asset by considering the total ownership costs to provide a viable management decision making. The information about the whole life cycle of an asset can offer some insights such as; future required resources, investment evaluation, and supplier appraisal, resources accountability, improved system design, and asset economic life assessment.

The complexity of the asset in the question determines the kind of life costing approach to get applied, and the annual costing can ask directly approach as opposed to complex computerized processes of future costing. The life cycle costing involved the analysis of the entire asset life span cycle by considering the initial acquisition costs, operating costs, loss of failures, repair cost, preventive costs, and maintenance costs. Other expenses include interest rates, depreciation, present value, and discount rates.

According to Nasik, the life cycle analysis is possible in a spreadsheet with the fair, necessary cost values because it only entails adding up of the respective costs and other rates like discount and interest (Daylan & Ciliz 2016). The costs involved by finding the summation of all the expenses are deterministic, on the other hand, some values are probabilistic like costs concerning the asset reliability and maintainability (Daylan & Ciliz 2016).

The project manager has the responsibility of assessing the present asset condition, the budgeted value for the purchase of the asset, historical background to define the best alternative asset the company may consider worth the investment with the assurance of service delivery beyond the expected levels (Moreau & Weidema 2015).

Therefore, the making it possible for a rational decision concerning capital and expenditures, prioritize every company projects regarding total costs of ownership, and build management confidence when doing their report to major company stakeholders. Life cycle cost analysis also boosts management morale since the analysis assists in project validation calculation, risk reduction strategies, and consistent ways of project evaluation.

The asset life span starts immediately during creation planning to the time of disposal (Daylan & Ciliz 2016). For example, the asset passes through some stages such the concept definition, development of the design features, features specifications and documentation, manufacturing, the awarded warranty duration, and utilization stages. The other steps during the operation include maintenance and finally disposal.

Most importantly, is the strategic and periodic asset life span cycle which always commenced at the strategic planning, the asset formulation, operations level, asset in house maintenance, possible rehabilitation, and finally disposal. The life cycle of the asset is subject to necessary maintainability, technological developments, and the dynamic nature of the operational requirements are the few factors that may influence the life span of an asset (Moreau & Weidema 2015).

Costing Methods Financial Management
Costing Methods Financial Management

Kaizen Costing

The kaizen has its roots from the Japan where the knowledge of continuous improvement originated. According to Hert, the target costing planning process is compatible with the kaizen process in the production stage while firms which concentrate more on the shorter life cycle products usually use the target charging planning instead of combining the two charging methods (Kaplan & Atkinson 2015).

On the other hand, most of the companies with a complex life cycle practice kaizen during their operations at different stages of target costing to get products which are relevant to all generations. Kaizen holds every business organization player to get responsible and embrace never ending the quest for quality improvement through constant job processes evaluation.

All that this method need is just embracing the organization culture whereby all company processes get interconnected in a way that promotes learning from each other on the cost reduction strategies and quality improvement. As a result, kaizen is more aligned with knowledge sharing among the team members with the sole objective of enhancements. The kaizen costing holds the mighty aim of showing the management direction on how to apply the kaizen costing to ascertain a culture of continuous improvement across the organization (Mena et al. 2018). 

In the field of management accounting, kaizen assists firms to gain a competitive edge as it helps the management to do an appraisal to its strategic plans, activities, and long-term operations goals (Mena et al. 2018). With that in mind, the activities such as increasing company improvements, the permanent cost reduction along the production line, and ever diligent in the product design and development stages help the active management to reduce wastes and costs during production. Therefore, the output from the company processes meets the required quality to guarantee customer satisfaction at affordable prices in the market to make the company competitive.

Kaizen differs with the target costing in that the target costing involves product development stages while kaizen comes in during the manufacturing stage to eliminate wastes and reduce costs along the manufacturing lines. Furthermore, the kaizen uses the value analysis method in the form of value engineering to ascertain cost reduction at each process level. Notably, kaizen stresses the improvement in quality and cost delivery through the controlling the product market cost, timely delivery, and distribution.

According to Mark adults, the kaizen profits by getting the difference between corporate management projected profits and lower control expected profits (Kaplan & Atkinson 2015). For a company to achieve the benefits through kaizen costing it must install kaizen costing teams in every department to assist in planning, monitoring, and an evaluation of the processes.

Second, the target charging team must work hand in hand with the kaizen team for compatibility of refined product attributes with the set manufacturing kaizen standards and any variations in kaizen costing must get reported in time to the relevant authority for expert action. Third, the culture of continuous improvement gets supported by active channels of communication across the entire company.

The kaizen principles must get formal communications for kaizen costing information dissemination. Finally, the management ought to establish an evaluation method to gauge the kaizen success on a yearly basis and make the necessary adjustments (Mena et al. 2018).   

Costing Methods Conclusion

The three costing methods are very vital for any business organization to remain competitive in the contemporary market. They help in aligning the products and services offered with the requirement of the dynamic and volatile competitive current markets consisting of a knowledgeable consumer. The knowledge of target costing assist the design and development teams to come up with designs that are generational oriented after thorough market analysis.

The market segmentation helps the team to understand profoundly different needs of a different category of consumers. Also, life cycle costing is an important in management accounting because the methods help the organization concerned with asset acquisition the required knowledge for charging the asset ownership costs, supplier evaluation, and the general company projects evaluation skills.

Moreover, the life cycle helps the procurement and costs expert to acquire the relevant production machines at fair prices. Finally, kaizen costing is an equally more important approach that ascertains reduction of wastes and unnecessary cost along the production lines and, therefore, verifies quality products at affordable market prices. The combined knowledge of the three methods of costing makes a company to gain a competitive advantage in the global markets and assure sustainability.

For the organizations to apply the three costing methods successfully, they need to integrate the accounting knowledge with the strategic management approach thinking for effective internal control systems. Also, the company must work on its both inbound and outbound logistics, production policies and procedures, distribution channels, and marketing strategies like after sales services to offer it a better market advantage over rival firms. Therefore, the successful application of cost management strategies needs an effective and efficient supply chain management.

References

Cooper, R. (2017). Target costing methods and value engineering. Routledge.

Daylan, B., & Ciliz, N. (2016). Life cycle assessment and environmental life cycle costing analysis of lignocellulosic bioethanol as an alternative transportation fuel. Renewable Energy89, 578-587.

Kaplan, R. S., & Atkinson, A. A. (2015). Advanced management accounting and Costing Methods. PHI Learning.

Mena, C., Van Hoek, R., & Christopher, M. (2018). Leading procurement strategy: driving value through the supply chain. Kogan Page Publishers.

Moreau, V., & Weidema, B. P. (2015). The computational structure of environmental life cycle costing. The International Journal of Life Cycle Assessment20(10), 1359-1363.

Talebnia, G., Baghiyan, F., Baghiyan, Z., & Abadi, F. M. N. (2017). Target Costing, the Linkages Between Target Costing and Value Engineering and Expected Profit and Kaizen. International Journal of Engineering1(1), 11-15.

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Emerging Markets Project

Emerging Markets

The contemporary world economy gets its support from the phenomenon of the emerging markets and its consequential development of emerging markets multinationals (MNCs) (Sinkovics, et al. 167). The new re-engineering of the modern economic and political order is as a result of the state of international emerging markets that is much conspicuous in the recent past. According to the international business, the term emerging markets get referred to nations that are in constant motion and also have the capability of gaining a significant economic and political power (Cavusgil, Tamer, et al. 40).

The emerging economies showed the ability to endure a recession that bypasses even the major economies during the Financial Crisis that the world faced at the primary stages of the new millennium. They include the best emerging 20 (E20) countries selected based on their recorded GDP, the population, and the overall influence on both regional and international trade (Cavusgil, Tamer, et al. 46). For example, the E20 consists of Brazil, Chile, China, Argentine, Poland, Colombia, Saudi Arabia, South Africa, Malaysia, Mexico, Thailand, Russia, Philippines, Republic of Korea, South Africa, Turkey, Indonesia, India, Nigeria, and Iran. This report aims at examining the emerging markets from the E20’s enhanced economic growth, the ever-growing influence across the world economies, and increased technological advancements.

Emerging Markets and Economic Growth

The E20 savings are known to be dominated by a substantial and rapidly growing number of people. According to world census conducted recently, emerging markets population account for 50% of the total four billion estimated world population. For example, in a comparative perspective, 18% of the world’s population stays in OECD nations; an approximated 11% lives across the G7 countries which also recorded yearly population growth of a rate of 0.0051 of the total population (Cuervo-Cazurra, Alvaro, and Ravi Ramamurti 230). On the hand, E20 nations are also prone to an increase in annual population by 0.01 (Sinkovics, et al. 169).

Also, demographically, emerging markets consist of a community of the young generation who are at their prime ages. Even though the youths are demanding regarding the money allocated to the education and higher learning institutions, they act like a source of wealth to a country. For example, a learned young generation provides skilled and advanced technical know-how to their economy, the source of cheap labor to the available industries, and a potential market for the ready manufactured goods and services. Conversely, in the United States, Japan, and Europe the majority comprises of working age population. 

A nation with working age as the majority is at crossroads since the working age has the capability of ether impact the economy positively or negative (Cuervo-Cazurra, Alvaro, and Ravi Ramamurti 230). For instance, a country with a majority of working age must have implemented a beneficial education and healthcare system because the working class is aging very fast and the possibility of an increased dependency ratio. However, some of the E20 countries showcased an age structure that consists of a rapidly aging population such as China and Korea. Nevertheless, E20 states still well placed to have a productive working force that other developed economies (Cuervo, Alvaro, and Ravi 230).

Integration into the international Markets

With the high population in E20 countries, there are readily available markets for the produced goods and services (Hill, Charles, et al. 77). According to world consumer research conducted in 2010, the United States and Europe take the lead in the world consumer market. However, there is the likelihood that Asia will overtake them by 2030 due to rapidly growing emerging economies. The recent paradigm shift indicates how emerging economies are gaining firm ground across the international market arenas.

E20 countries learned a lot of world market influence between the early year 2000 and 2015 by a margin increase of approximately 6%. However, E20 nations have suffered currency volatility for not less than twenty years, which was worth declared a crisis among them. For example, Mexico, Asia, Russia, Argentina, and Brazil were the witnessed victims in the late 1990s. Fortunately, the emerging markets with the firm ground established in the contemporary international economy have the upper hand to maintain their positions (Hill, Charles, et al. 79). 

Furthermore, the emerging markets have increased their total exports to the world markets averagely 20% and that some countries stand as major commodities exporters. Emerging countries are the majority of the states with the most significant manufacturing products applying the advanced technology. For instance, China, Korea, and Malaysia use the highest technology in manufacturing their exports and that they also enjoy the lion’s share of FDI, therefore raising their international investments. The economic growth resulted in a well-consolidated world economy that boosted technology and innovation knowledge (Brannen, Rebecca and Susanne 141).

Technological Advancement in Emerging Markets

Growth and development of a nation must get measured by the level of technology and innovation present. Initially, high technology and innovation was only a reserve for the developed countries. However, in the current days, emerging economies have concentrated their efforts to improve their technological know-how through boosting research and development sector by providing resources and human capacity by embracing the right education system (Hill, Charles, et al. 79).  For instance, innovation improvements have greatly addressed the local problems to match the general atmospheres in the already developed countries.

Innovative cultures in emerging economies contributed to the development of new technology in the banking industry, telecommunication, and to the overall savings which not only benefited the locals but also spread to the rest of the world (Peng, Mike, and Sergey 12). Therefore, the emerging markets end up pioneers of some world innovations and technological advancements.

Emerging Markets Project
Emerging Markets Project

The E20 countries paid much attention in research and development funding both public and private sectors of the economy. Research and development are significant indicators of technology and innovation in any economy of the world (Peng, Mike, and Sergey 19). For instance, Korea and China are the leading nations which took more significant strides in R&D followed by Turkey and Malaysia.

Moreover, the emerging economies witnessed to embrace the right education system that promote innovative talents and that they use the most significant art of public expenditure on education. For example, Argentina, Mexico, South Africa, Malaysia, and Brazil were among the emerging nations with the highest education allocation. The E20 countries take education seriously since it is the critical factor that influences the full and sustainable economic growth.

Globalization

The emergence of interconnectivity of world nations through cooperation laid a firm ground for the emerging economies (Brannen, Rebecca and Susanne 139). The world’s economic and political order experienced a paradigm shift where countries were aiming to form multilateral cooperation resulting into formation of world developmental institutions like development bank and Asian Infrastructure Investment Bank and International Monetary Fund. The establishment of the last global institutions facilitated the emerging market’s contribution in global affairs, international trade, and investment (Brannen, Rebecca and Susanne 141).

Conclusion

The emerging economies managed to transform the global economy by constant and robust economic growth and the trend seeming to continue because of some reasons identified by this report. First, the emerging economies have both principal actors and regional powers than developed nations. Second, the majority of the emerging markets anchored the economic development on the right pillars such as technology and innovation.

Finally, these emerging economies enjoyed the current world readiness for international cooperation. Despite the possible challenges that particular emerging economy shall experience, there rise in general marked a milestone in the global landscape.

Work Cited

Brannen, Mary Yoko, Rebecca Piekkari, and Susanne Tietze. “The multifaceted role of language in international business: Unpacking the forms, functions and features of a critical challenge to MNC theory and performance.” Language in International Business. Palgrave Macmillan, Cham, 2017. 139-162.

Cavusgil, S. Tamer, et al. International business. Pearson Australia, 2014.

Cuervo-Cazurra, Alvaro, and Ravi Ramamurti, eds. Understanding multinationals from emerging markets. Cambridge University Press, 2014.

Hill, Charles, et al. Global Business Today Asia-Pacific Perspective. McGraw-Hill Education, 2017.

Peng, Mike W., and Sergey Lebedev. “Intra-national business (IB).” (2017): 241-245.

Sinkovics, Rudolf R., et al. “Rising powers from emerging markets? The changing face of international business.” 0969-5931 23.4 (2014): 675-679.

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Workplace Violence Legal Consequences

Workplace Violence is one of the prevalent issues that the world is facing today because of the diversity in the workforce brought about by the globalization. The term globalization may seem positive for major reasons, but in some note, it could create problems in the society, even in the work force. Since the organizations are now composed of people from different races, different backgrounds, opinions, philosophy and level of education, rift between parties are not a surprise.

Since it’s inevitable that workers in the organization may have some disagreements on the ideas or point, it is therefore important for employees, management and all members of the organization to understand the concept and definition of workplace violence in order to create a benchmark if the arguments are just plain arguments or it already falls under the category of violence. In this way, management will now be able to design the best strategy to address this certain issue.

Workplace violence is not only happening in your organization or in your friend’s organization. It can happen in everyone, anytime and anywhere. Therefore, it is just important that companies have policies with regards to the situation and appropriate consequences for the perpetrator or assistance such as counseling, training, experts’ opinion for the victim.

To better understand of what is workplace violence, the root causes of why this is happening, this research aims to address this issue and seeks to recognize the real cause of violence in the workplace. This paper also contains information that will give additional information for employees on how to overcome workplace violence or how to defend themselves when they’re faced with such kind of situation.

This paper also address company’s hurdle with regards to workplace violence and  some strategies on how to monitor the behavior of employees (e.g. CCTV) and methodologies to address workplace violence in the organization (e.g. seek experts opinion, design policies, etc). At the near end of this paper, the researcher also discussed the legal issues with regards to the topic in order to supply information to the reader that there are laws that address workplace violence. Lastly, at the very end of this paper, the researcher highlighted some bigger challenges with regards to this issue. Thus, after reader reading this paper, the researcher hopes that the reader will gain new insight about workplace violence and spread the knowledge gained to help lessen the occurrence or incidence of this practice.

Introduction

Globalization has greatly affected our lives and our lives processes. Goods and services from one country are now widely available in other countries and workers from one country are now welcomed to work in other countries. This phenomenon allowed other workers of different races to work in one company, which now comprise the diverse workforce in the world. Businesses are composed of diverse people working together for the success of the company. These people working for the company comes from different background and place of origin.

It’s inevitable to have complications and rift among the attitudes of the people in the organization because of these differences, this rift may be one of the causes of Violence in the Workplace. Violence is happening in our surrounding though sometimes we are not aware of it. Violence may happen in school, organization, work place and even in our own house. In this regard, we will be discussing work place violence and relate it to strategic management of each company. In this paper, we will also be discussing on how to overcome

Understanding Workplace Violence

Work Place is defined by the United States Department of Labor, Occupational Safety and Health Administration, as any violence that happened in the place of work against a co-worker or any staff that works for the same organization or event from other firms. It can be a form of threat, physical violence, homicide, verbal arguments or any other unspoken gestures.

This workplace violence may be the result of differences that are not settled, jealousy over co-employee or just a simple understanding because of the differences in opinion, ideas and ranks. Due to changes in company structures, people and the organization of functions, workplace violence is one of the growing concerns of companies nowadays. According to the US Department of Justice, in the year 1987 up to 1992, the number of work-related violence has increased gradually and reported that one of six violent crimes are actually happening in the workplace either co-employee being attacked, harassed or abused. The growing number of workplace violence poses threat to employees that’s why some are actually seeking for work from home jobs in order to avoid such incident may happen to them.

According to the article of Sharif, B. (2003) of the California State University at Los Angeles entitled Understanding and Managing Job Stress: A Vital Dimension of Workplace Violence Prevention, one of the prevalent causes of Workplace Violence is the Job Stress experienced by an employee. Job Stress may be the result of changes in the organization, workloads, pressing deadlines for proposal; technology used job function, sales quota and others which may add burden to the employee.

According to the article of Sharif, Job Stress is one of the Top ten causes of health problems and violence in the workplace as job stress triggers physiological, emotional, and even psychological difficulties for the employees and according to the researches of Blix, Cruise, Mitchell and Blix (1993), it caused the firm about $150 billion annual loss because of absenteeism, hospitalization and other medical benefits. In this regard, companies are continuously seeking for professional advices on how to prevent, stop or avoid workplace violence in the organization.

How to Overcome Workplace Violence and its legal issues

Workplace violence is now one of the issues or challenges that the companies are facing. No companies are spared with this violence, even small companies are actually experiencing these problems and up until now some of them are still searching for alternatives or solutions to overcome this problem. However, since the structure of each organization is unique and the culture, practices and customs are different from that of the others, laying out resolution for this type of problem or issue is very hard for each organization needs to suit the solution to their own protocol and based on the issue that arise in the company.

Therefore, there is no fix or one single strategy to resolve this kind of problem in the organization, hence, every organization should design their resolution in relation to their company policies and the type of violence they are experiencing. Thus, each organization needs to have multi disciplinary approach to the workplace related violence. Also, there’s no organization that can make single approach to different type of violence in the office for different violence may need different solution and needs to be given different level of attention by the management or the human resource department (e.g. attention to sexual harassment and bullying).

Therefore, in order for the concerned agencies to identify the best solution to the issue, they should understand first the root cause of the behavior or the instance that had happen in the workplace. In order to address this issue, companies are designing module which contains readings and things to remember by employees when they are faced with such issues.

According to the article of Rita Rizzo & Don Philpott about workplace violence, companies can actually design a model of violence-prevention protocols for the whole organization along with proper training, orientation and hand out materials to be given to the employees; companies can conduct awareness programs in the office or drill so that the employees will become familiarize with the defense mechanisms; or companies can put up counseling group that would help the victim recover from the trauma.

Workplace Violence Project
Workplace Violence Project

The US Department of Labor also suggests that companies should provide employees enough education about the issue and on how to protect themselves; securing the workplace by installing CCTV or surveillance cameras on all the corners of the workplace to monitor employee actions; and just by developing set of do’s and don’ts that all employee should follow to avoid issues or problems, thus, avoiding workplace violence. Other agencies are also proposing several ways on how to prevent or avoid workplace violence, however, the best weapon still depends on the employee or the victim themselves – knowing the proper defense mechanism or strategies when cornered in certain situation. Lastly, reporting the incident will also be a huge help for the management to give certain attention to the issue and correct the behavior of the doer or lay out appropriate punishment to the perpetrator.

In some cases, Workplace violence up to some extent already falls on the legal action. There are actually laws that protect an individual in the workplace or even the company from the situation. In Australia for example, under the occupational health and safety laws designed for their workers, employers are the one that should ensure the safety of each worker especially during work and in the constitution of Australia especially in the Work Cover New South Wales, an employer shall be punished in failure to perform the duty of protecting the employees. The penalty according to their legislation is $550,000 for the first offense and about $55,000 for other cases.

The Biggest Challenge in resolving Workplace Violence

In the US, there are 20 million workers who worked for non-governmental offices which most workers works for firms that have 20 employees or fewer. Though some researchers said that employees in small firms are getting the least paid and is composed of lowest status worker, they are not spared from workforce violence than any other type of business.

Since these companies are small, they don’t usually have budget or programs for workforce violence, less training capabilities and they offer less security for employees making the employees more at risk and they are the ones who received less prevention from workforce violence. Also, owners of small businesses tend to have less knowledge on human resources issues, legal matters and other workplace violence resources that they could use when they are faced with this kind of situation.

Since these small businesses employs large chunk in the workforce statistics, the government and even non-governmental organization are seeking a bigger challenge on how to protect the people working in this segment and up until now, it is still on the debate on who should protect the workers for small businesses.

Conclusion

I am aware that there are violence that are happening in my surrounding but honestly, I don’t have the idea on what are the causes of these violence and what triggers a person to harm a co-worker or just commit that kind of actions. As innocent as it may be, I just know that since people are just working for the company, they just basically do their job for the whole day then go in and out of the office.

The primary purpose of a person to go to the office is work on the job he/she is assigned based on the job description presented on the date of employment. However, after reading articles about workplace, I came to understand that in the workplace, people also socialize with his/her co-workers, and thus, they get to exchange ideas with each other.

I do know that globalization has greatly affected our ways of living, our culture, customs and tradition. Everything is changing from the clothes we wear and the languages we speak, this is because of globalization. Since change is inevitable in this type of world, people, the academe and even the businesses are going with the flow or adopting to this change in order to not to be stock in the past and discover possible benefits of this changes in our world.

Being able to adapt to changes also means that the personality or the company is flexible enough and are expected to last for sometime because it is able to adapt to its environment. In business, there are also gradual changes that happened in the operation, work force, customs and practices, technology and even with the management which poses threats, stress and burden to the employees and anyone who are part of the organization. Some may be able to adapt to this changes without any flaws, some are not, thus, they often result to bad habit and later on, they are committing violence which does not only hurt the themselves through their performance, they are also hurting the company customs.

After reading the articles related to workforce violence, I have learned that workplace violence isn’t contain on physical violence inflicted on other person but also involves verbal abuse, bullying, nonverbal communication and others. An employee might not notice at first that he/she is facing certain degree of workplace violence because of some unspoken violence because of non-verbal form of violence.

Because of this critical present issue, companies are on the rush on designing their own mechanisms and strategies on how to overcome this so-called workplace violence in order to protect their core employees and as well protect their company’s reputation. Based on my readings and based on the writings above, I have learned that businesses are designing policies; methods to supply more information for their employees, conduct trainings for employees, and consult legal experts about the issue and other companies even install numerous CCTV or surveillance cameras in the office in order to monitor the behavior of its employees. In such way, companies are hoping to resolve the issue as they occur and be able to keep their employees aware of how to defend themselves when they’re faced with such kind of situation.

Though the world is facing a greater challenge in the future because of the proliferation of small businesses who are less likely to implement a violence protection program for their employees, I am still confident that as of the moment, there are lots of concerned organization that will take care of that up until these small companies will be able to design their own protocols with regards to this issue. Thus, addressing this issue in casual or legal ways is still very important for employees in order for them to fell secured when they’re at their place of work.

References

Chauhan, D.S. ()Bowling Green State University. Preventing Violence in the Workplace: Threat Assessment and Prevention Strategies. Public Administration & Management: An Interactive Journal 4, 3, 1999, pp. 370-374

Isaacs, Arnold R. (2001). Workplace Violence: Issues in Response. US Department of Justice, Federal Bureau of Investigation. Critical Incident Response Group National Center for the Analysis of Violent Crime FBI Academy, Quantico, Virginia. Edited by Eugene A. Rugala, Supervisory Special Agent Federal Bureau of Investigation, 2001

Philpott, Don and Rizzo, Rita. Workplace Violence: A Seven-Step Process to Address and Manage Potentially Violent Situations in the Workplace, Covering the full life-cycle of the event from Prevention – Threat Recognition – Mitigation – Response. Published by Government Training Inc. ISBN: 978-0-9844038-7-5

Sharif, Behjat A. Ph.D., CHES (2000), Associate Professor, California State University at Los Angeles . Understanding and Managing Job Stress: A Vital Dimension of Workplace Violence Prevention. Posted in the International Electronic Journal of Health Education, 2000; 3(2):107-116

U.S. Department of Labor, Occupational Safety and Health Administration (2002). Workplace Violence: OSHA Factsheet

WorkCover. Workplace violence and legal consequences. Work Cover New South Wales and the National Children’s and Youth Law Centre ACN 062 253 874

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Strategic Finance Management

Strategic finance management refers to the procedures, systems, and practices established by an institution to aid in reaching its goals, such as expansion, stakeholder’s wealth maximization, and corporate social responsibility. The executives develop insights from business activities, its capabilities, stakeholder expectations, as well as the available opportunities. Hence, the strategies have to be based on a well-formulated game-plan, which has a clear vision (Deloitte, 2019).

An appropriate strategic finance management scenario defines an elaborate picture of the organization’s target, lays down the courses of action to lead the entity there, brings work satisfaction and morale, as well as brings together finance officials through fast communication, and timely decision making (Deloitte, 2019).

Ratio Computation and Analysis for Redding and Neaves Companies – Using Strategic Finance Management Techniques

1. Profitability Ratios

This refers to financial computations that investors and business advisers apply while determining an institution’s revenue (Clear Tax, 2018). To get the profit realized, the metrics asses the difference between the receipt and payments made within a particular financial period, such as a year. For the two competing manufacturers, returns on investment and returns on capital employed are used.

a. Return on Investment

It is a ratio used to compute the gains of an investor concerning the amount of their investment. A high ratio, the more the benefits to be earned by the investor (Schmidt, 2019). With this ratio, investors can eliminate the projects promising low profits and focus on those that have a likelihood of raising higher returns.

Return on Investment Redding Co. = Revenue after Tax  × 100

Capital Employed 

ROI = 49 × 100 = 40.49%

121

ROI Neaves Co.

= 379 × 100 = 65.34%

580

Conclusion: Neaves has a higher ROI, hence is earning more revenue compared to Redding by 24.84%. Thus, Neaves is more appealing to an investor.

b. Return on Capital Employed

It is a ratio that is used in determining a company’s profitability due to its efficiency in capital utilization. A company with a higher ROCE means that it had a more economical use of capital that realized maximum gains (Daniel, 2018).            

ROCE = Earnings before Interest and Tax × 100

Capital Employed

Redding: =      80   × 100 = 66.11%.

121      

Neaves ROCE = 503 × 100 = 104.79%

480

Conclusion: both organizations have a significant amount of returns on the capital they have put to use. However, with Neaves having a higher return, investors can prefer it as their investment of choice because it will utilize their funds better.

2. Efficiency Ratios Strategic Finance Management

They are financial metrics that inform on a company’s ability to utilize its assets while keeping an eye on its liabilities in both the short and long terms (Peavler, 2019). It is the efficiency ratios that ensure an organization is not experiencing over investment or under investments. Fixed assets turnover and inventory turnover are the ratios to be used in this analysis.

a. Fixed Assets Turnover

It looks into how a form utilizes the available fixed assets like plants and equipment to increase sales. A firm that has a low number of fixed assets turnover in under utilizing its assets and should work towards optimizing the usage of fixed assets (Peavler, 2019). 

Fixed Assets Turnover = (Sales ÷ Fixed Assets)

Redding Co.

FAT = (195 ÷ 255) = 0.764

Neaves Co.

FAT = (1050 ÷ 1026) = 1.033

Conclusion: Neaves Company has a higher fixed assets turnover, meaning that it utilizes its fixed assets in making sales, better compared to Redding Company.

b. Inventory Turnover

Also known as stock turnover, inventor turnover is a financial metric that is used in determining the number of times that a business has ordered a new batch of inventory after selling a previous batch (Nicasio, 2019). It is computed on pre-determined periods such as semiannually, annually, monthly, or weekly.  

Inventory Turnover = Cost of Sales.

Average Stock 

Redding Co. = 78 = 5.2 Times

15

Neaves Co. = 273 = 8.03 Times  

34

Conclusion: Neaves Co. has a higher inventory turnover ratio than Redding Co. it implies that Neaves has more sales; hence, more promising returns or revenue.

Strategic-Finance-Management
Strategic-Finance-Management

3. Liquidity Ratios

They are ratios used in measuring the ability of an organization to settle its short-term liabilities when they are due without necessarily having to raise capital from lenders (Kenton, and Hayes, 2019). The quick ratio and Current ratio are used in this analysis and commonly found in strategic finance management.

a. Quick Ratio

It is a financial ratio used in determining the ability of an entity to meet its current liabilities using its liquid assets only. In this case, the stock is eliminated from the liquid assets category because it is time-consuming to convert it into cash (Eliodor 2014, P. 5). A company that is at optimal performance should have a quick ratio of 1:1, which shows its ability to pay for the liabilities due using its liquid assets. 

Quick ratio = Current Assets – Stock

   Current Liabilities  

Redding Co. = 65 – 15 = 1.67

  30

Neaves Co. = 198 – 34 = 1.07

153

Conclusion: Since the optimal quick ratio should be 1:1, and both have a quick ratio of more than 1, they can readily service their obligations when due. However, Redding Co has a higher quick ratio and is, therefore, better positioned to convert its liquid assets faster compared to Neaves Co.

c. Current Ratio

It is a liquidity ratio, which is used in measuring an entity’s ability to pay for its short-term liabilities that is the debts due within a year. It informs the investors about how well a company realizes optimal benefits from its current assets so that it can meet its current debts and other payables (Kenton, 2019).  The optimal current ratio should be 2:1 that is two current assets for one current liability

Current Ratio = Current Assets

Current Liabilities

Redding Co.

Current Ratio = 65 = 2.167

30

Neaves Co.

Current Ratio= 198 = 1.294

153

Comparison: Redding Company has a higher current ratio of 2.17:1, while Neave’s Company’s current ratio is 1.29:1. It implies that Redding can quickly pay for its current liabilities while Neaves is going to experience challenges paying for the obligations because it has not met the optimal current ratio.

4. Gearing Ratios.

It is a business assessment ratio that is concerned with the business’s capital structure. The ratio determines the amount and impacts of financing contributed by the stakeholders compared to external funding, such as the use of debt (Bragg, 2019). If a company has a high gearing ratio, it implies that the company has used more of debt capital and less of equity capital. Besides, low gearing means that the company has employed more equity and less of debt in its capital. A highly leveraged/geared company uses debt capital to meet daily obligations, which poses a threat of bankruptcy to the organization (Bragg, 2019). In this comparison, the equity ratio and debt ratio will be used to assess the gearing of the two companies.

a. Equity Ratio/ Net worth to total assets ratio

It is a financial arithmetic that indicates the relative amount of equity that is used in paying for a company’s assets. It informs shareholders about their funds compared to the institution’s total assets, thereby showing the businesses’ solvency position in the future (Ready ratios, 2013).  

Equity ratio = Equity ÷ Total Assets

Redding Co.

Equity ratio = 121 ÷ 320 = 0.378 or 37.8 %.

Neaves Co.

Equity ratio = 480 ÷ 1214 = 0.395 or 39.5 %

Comparison: both companies have an equity ratio of less than 51%. It means that their equity has funded a low amount of their assets, while a significant amount is funded using borrowed funds. The two companies are leveraged and are going to pay a significant amount of interest on the borrowed funds.

b. Debt Ratio

It is a financial leverage arithmetic that is used to measure the amount of a company’s assets that have been purchased using debt capital. If a company has a debt ratio of more than 1, it implies that it has a higher number of liabilities compared to its assets. Conversely, a ratio that is less than 1 indicates that the company has a high proportion of its assets purchased using equity (Investors answers, 2019).

Debt Ratio = Debt

Total Assets

Redding Co.

Debt ratio = 199 = 0.62 or 62%

320

Neaves Co.

Debt ratio = 634 = 0.52 or 52%

1214

Comparison: Redding Co. has a higher debt ratio, meaning that a significant proportion of its assets are acquired using debt capital other than equity. Therefore, Redding Company is more leveraged compared to Neaves Company.

5. Ratios by Investors to Determine Performance

They are financial arithmetic ratios that are used in determining the amount of returns an investor expects if they obtain a company’s stock at the current market prices. The ratio help in determining whether the shares are under priced or overpriced (Peavler, 2019). The ratios to be used are the interest coverage ratio and preference dividend coverage ratio. 

a. Interest Coverage Ratio

It is used in determining the ease of a business in servicing the interest of its borrowed funds from the realized revenue (Ready Ratios, 2013). The higher the ratio, the better the financial stability of an institution. If a company has a ratio of less than 1.0, it is facing challenges in making ales to raise revenue.

Interest Coverage Ratio = Earnings Before Interest and Tax 

Interest Expense

Redding Co.

ICR = 80 ÷ 19 = 4.21

Neaves Co.

ICR = 503 ÷ 29 = 17.34

Comparison: Both companies have an ICR of more than 1. Therefore, they can pay their interest expenses quickly from the revenue realized. Neaves Company is better positioned to pay for interest expenses because it has a higher ICR compared to Redding Co.

b. Preference Dividends Coverage Ratio

It is a financial ratio used in determining the organization’s ability to for its preference dividends.  A company that has issued preference dividends determines its ability to pay the dividends on such shares using this ratio.

Preference dividends coverage ratio = Profits After Tax.

Preference Dividends

Redding Co.

= 49 ÷ 0 = 0

Neaves Co.

379 ÷ 100 = 3.79

Comparison: Redding Company has not issued any preference shares; hence, it doesn’t pay any preference dividends. Neaves Co. has issued preference shares and has a preference dividends coverage ratio of 3.79. The latter company can, therefore, pay for the preference easily when they are due.

References – Strategic Finance Management Essential Reading

Bragg, S. (2019) Gearing ratio, Accounting Tools

Clear tax, (2018) Profitability Ratio Formula with Examples

Daniel, E. (2018) Return on Capital Employed

Deloitte (2019) Finance Strategy solutions

Eliodor, T. (2014)  Financial Statement Analysis, Journal of Knowledge Management, Economics, and IT.

Investing Answers (2019). Debt Ratio

Kenton, W. (2019) Current ratio Analysis – Strategic Finance Management

Kenton, W. (2019)  Strategic Financial Management

Nicasio, F. (2019) Inventory Turnover Definition and How to get it Right

Peavler, R. (2019). Asset Management ratios in Financial Analysis

Ready Radios, (2013) The definition and application of equity ratio – Strategic Finance Management

Schmidt, M. (2019) Returns on Investment Metric for measuring profitability

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Did you find any useful knowledge relating to Strategic Finance Management in this post? What are the key facts that grabbed your attention? Let us know in the comments. Thank you.

Selfies in Marketing Dissertation

Use of Selfies in Marketing

The word “selfie” has become rooted in the vernacular of the millennial generation from all corners of the globe. This phenomenon is usually associated with taking portraits and posting them accompanied with a caption on social media networking sites (Rettberg 22). As a fact, selfies tell others who you are. Mostly, they are used for entertainment. However, business owners can exploit the potential of selfie behavior grow their businesses (Wan et al. 1). This implies that selfies posted in social media can be used as marketing tools to attract and maintain customers. Studies have shown that companies and corporate are incorporating self images and other photos in their marketing plans (Kiprin Para 7). This has made selfie advertising a major sales-driving force in the current market.

Research has also asserted that selfies are also used in the promotion of certain brands such as Coca-Cola and Samsung. Therefore, selfies can be used in marketing; business organizations can use self images to drive their customer engagement, show their personality, give social proof, show the humanity of a brand, and ‘share a laugh’.

What marketers have realized is that selfies are not only taken and viewed by the millennial generation, but also by the elder generations. On the other hand, social media networking sites are widely used all over the world. This makes them the two (social media sites and selfies) huge tools that marketers can use to facilitate wider reach to potential clients (Rettberg 23). Additionally, the use of these sites is simple and completely free. Users can, therefore, open an account and connect with others by posting photos and selfies within a short period. In this regard, social media networking sites offer cheap and simple methods that various businesses can use to promote their businesses (Rettberg 23).

Companies can use selfies to share the “story” of their company or the zeal that they have for their businesses through selfies (Kedzior 13). Simply put, self images offer a free way for marketers and business owners to visually show their potential customers why they should consider their businesses. For instance, many companies and businesses are using Instagram to display their new products and new ideas. It is free, fast and has limitless potential regarding the number of people marketers can reach.

Moreover, the wider reach of clients is facilitated by the fact that selfies have become viral. This implies that when selfies are posted on social media networking sites, many people will share and react to them, which increase their effectiveness and reach (Wan et al. 2). Therefore, the use of selfies in marketing enables products to be viewed wide and fast.

Selfies-Marketing-Dissertation
Selfies-Marketing-Dissertation

There are various ways that companies and businesses can use selfies to drive their customer engagement (Wan et al. 2). This implies that business people can use selfies in their marketing strategies. Marketers can use the selfies to attract customers by showcasing the personal side of their businesses, and by providing an innovative outlet that they can use to show their products (Rettberg 21). Moreover, selfies can be used to create awareness about a business by showing a client what a business does and setting up a familiarity between a company and its potential customers.

Companies can use selfies to show their personality. Traditionally, customers view authenticity as a top feature they look for when connecting and doing business with companies. Self images are very personal. Additionally, company selfies tell more about the conditions and the employees of a company (Kedzior 14). In this sense, they are very effective for connecting to clients and customers.

For instance, a selfie of smiling employees may be understood to mean that the company employees are satisfied, friendly and social. If such a selfie is posted by a company that specializes in giving services, it may help attract many clients because of the notion that the company’s staff is friendly (Rettberg 28). This is a marketing technique that is used by many companies to portray their good personality and thus, attract customers.

Selfies are also used by companies to give social proof. This mostly happens when customers post selfies in social media networking sites with a company’s products. This acts a recommendation of the product. Mostly, selfies are accompanied by captions. A good message on the caption is equally important. Since this selfie comes from a customer and not the company, it is interpreted that the customer is satisfied with the product and thus, serves as a good advertisement (Rettberg 33).

It is also assumed that clients will not post what they do not like. In this regard, many companies have hired celebrities to take selfies with their brands (Kiprin Para 7). When these selfies are posted on social media networking sites, there is a possibility that many people will be aligned to buy and consume a brand that is associated with their favorite celebrities.

Marketers also use selfies to ‘create and share a laugh.’ Wittiness can be widely used to promote various types of brands. Marketers post funny and hilarious photos because they have a great ability to go viral and spread all over the web. These hilarious selfies can carry certain messages that the marketers want to deliver (Wan et al. 5). In this way, they do not only create and share a laugh, but also pass their marketing messages over a wide area.

Marketing Selfies

Selfies also show the humanity of a brand. Connecting with people is much easier than connecting with abstract concepts such as companies. Thus, posting selfies helps companies show that there are actual people behind their brands (Kedzior 13). This creates strong emotional connections for those associating with the company’s products. For instance, selfies of a company’s staff make customers realize that they are talking to actual people. In this way, companies have been using selfies to promote their brands.

Though selfies can be good marketing tools, they also pose a great risk. A competing business, companies or people with malicious ideas about ones’ business may post self images that a company may not be willing to associate with its brand. Though marketers can edit selfies posted on their websites and their social media networking sites, they have no control over what is posted by others on their sites. This is a big challenge for many marketers. They have to be watchful on what others are posting on their sites.

All in all, this paper discusses the use of selfies as a marketing tool. This marketing strategy is not only cheap but also fast and simple. Marketers can make use of self images to promote a company’s brand, attract, and retain customers. Selfies are innovative ways that marketers can use to create awareness of their brands and persuade consumers on the superiority of their brands. Though selfie marketing is a good way to promote a company’s products, marketers should also be watchful of selfies that may damage the reputation of their brands.

References

Kedzior, Richard, D. Allen, and J. Schroeder. “The selfie phenomenon–consumer identities in the social media marketplace.” European Journal of Marketing Special issue (2015).

Kiprin, Borislav. “Go Selfie Yourself!.” (2013).

Rettberg, Jill W. Seeing ourselves through technology: How we use self images, blogs and wearable devices to see and shape ourselves. Springer, 2016.

Wan, Jinlin, Tailai Wu, and Yaobin Lu. “The Effect of Product Endorsers in Social Media: The Role of Self-Disclosure and Social Interactivity.” (2015).

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