Unit 7 and 8 Journal Entry
By the end of this unit you need to reflect on the topics you have studied in the past two weeks and how you will be able to apply it to your personal and/or professional life and answer to the questions from the GoGO Airlines case study.
Write a short Journal Entry to explain:
The key things you learned during the last two weeks
How can they relate to the workplace?
How they can aid your personal and professional development?
Remember to be specific and give examples.
Implementing an appropriate system for performance measurement and working capital management can help a business to improve productivity and achieve its objectives.
Journal Entry:
For your Unit 7 and 8 Journal Entry consider the benefits and issues associated with implementing a system for performance management and working capital management within an organisation like GoGo Air.
Unit 7: Performance Measurement
Decentralisation is the delegation of decision-making responsibility. Decentralisation is a necessary response to the increasing complexity of the environmental factors and the growing scale of the organisation’s operations.
A danger of decentralisation is that managers may use their decision-making freedom to make decisions that are not in the financial interests of the organisation. Some managers may be tempted to make decisions which can increase their personal bonuses at the expense of the long-term financial viability of the organisation. To overcome this problem, senior managers introduce systems of performance measurement to ensure, among other things, all managerial decisions are in the best financial interest of the organisation.
In this unit we shall:
Evaluate the advantages and disadvantages of adopting a divisional structure.
Examine various methods of measuring the performance of divisions and divisional managers
Explore the importance of non-financial measures in decision-making
On completion of this unit you will be able to:
Evaluate the benefits and limitations of decentralisation
Examine common methods used to measure the performance of divisional managers
Appreciate the importance of non-financial measures in decision-making
Unit 8: Managing Working Capital
Working capital is the difference between current assets and current liabilities.
Working capital management is the management of all aspects of the current assets and current liabilities, to minimise the risk of insolvency while maximising the return on assets.
Working capital management refers to the strategy used by managers to control the level of current assets and current liabilities, to ensure the most financially efficient operation of the company. The primary objective of working capital management is to ensure the company always maintains sufficient cash flow to meet its short-term debt obligations.
In this unit we shall:
Examine the main components of working capital
Evaluate how working capital can be managed to maximise returns on assets
On completion of this unit you will be able to:
Evaluate how specific components of working capital affect a business’s financial viability
Specify costs associated with different components of working capital
