In The End, As A Manager, Part Of Your Role Is To Develop St

In The End As A Manager Part Of Your Role Is To Develop Strategy An

Develop an executive summary of your findings from LASA 2 in a 5-slide PowerPoint presentation. The presentation should include a statement of the problem or topic of LASA 2, a concise analysis of the findings, and a recapitulation of main conclusions or recommendations. Incorporate specific details from LASA 2 to support the summary. Additionally, explain how capital budgeting techniques such as payback period, Internal Rate of Return (IRR), and Net Present Value (NPV) can be utilized to assess changes in organizational performance and guide future decision-making. Apply APA standards for citing sources. The presentation should be submitted with the filename: LastnameFirstInitial_M7_A2.ppt.

Paper For Above instruction

Effective managerial strategy development requires a comprehensive understanding of organizational data and financial techniques to inform decision-making. The LASA 2 assignment centered on analyzing Ferguson & Son Manufacturing Company's budgetary control system, emphasizing the potential impact of adopting an activity-based costing (ABC) system. This analysis highlighted how shifting to ABC could refine cost accuracy, influence budget results, and ultimately enhance return on investment (ROI). The strategy derived from these findings was aimed at aligning organizational goals with performance metrics, ensuring more precise resource allocation, and improving financial outcomes.

In previous analysis, it was evident that the traditional costing system often distorts product costs, leading to inefficient decision-making. The implementation of ABC provides a more granular understanding of cost drivers, enabling managers to identify high-cost activities and areas where efficiency can be improved. By integrating this into the budgetary framework, managers can develop more accurate budgets, better control costs, and identify profit centers more effectively. This strategic shift not only improves ROI but also supports goal congruence across departments, fostering a culture of continuous improvement and accountability.

Assessing the impact of these changes requires robust evaluation methods. Capital budgeting techniques such as the payback period, IRR, and NPV serve as critical tools. The payback period evaluates the time needed to recover initial investment, offering a straightforward measure of project risk and liquidity. IRR provides the internal rate of return, indicating the efficiency or profitability of an investment—if the IRR exceeds the company's required rate of return, the project is deemed viable. NPV combines cash inflows and outflows discounted at the organization's hurdle rate, giving an overall value added to the organization by the project. When applied to changes within Ferguson & Son, these methods help quantify the financial benefits derived from adopting ABC, including cost savings, improved process efficiencies, and increased ROI.

For example, a revised budget that incorporates ABC data might reveal specific cost drivers and indicate areas where investments or process modifications could yield substantial returns. Using NPV analysis, management can project future cash flows resulting from these innovations, while IRR provides a percentage return estimate. If these metrics surpass organizational benchmarks, they reinforce the strategic decision to pursue process improvements or technology investments. Furthermore, the payback period can assure management that investments in new costing systems or operational changes will be recovered within a reasonable timeframe, reducing uncertainty and facilitating risk management.

In conclusion, integrating capital budgeting principles into strategic decision-making enhances managerial capabilities to evaluate and justify investments. The transition to activity-based costing, supported by financial assessment via payback, IRR, and NPV, enables Ferguson & Son Manufacturing to make data-driven decisions that promote efficiency, profitability, and goal alignment. As a manager, developing and sharing such strategic insights with stakeholders ensures organizational coherence and a unified approach toward financial health and operational excellence. Continuous evaluation and adaptation of these strategies are vital in navigating dynamic market conditions and sustaining competitive advantage.

References

• Brealey, R. A., Myers, S. C., & Allen, F. (2020). Principles of Corporate Finance (13th ed.). McGraw-Hill Education.