The Financial Breakdown in the Developed Countries of Europe and North America - Case Study Example

?Video Business Case Report on acQuire Technology Solutions - Case 2 Executive summary The financial breakdown of the largest and most financial institutions in the developed countries of Europe and North America has been of great importance for the international business platform. The financial crisis affected not only the financial institutions but also a majority of other private and public organizations operating both internationally and domestically. The current economic and financial position of a corporate organization has been studied on this paper to prepare the decision criteria for the company. The paper provides the best alternative that the organization might adopt in order to deal with a situation of weak financial position in future. It is important for the organization to maintain a good customer relationship and upgrade itself with the technological developments taking place in the international market. The most important decision for the concerned organization is that of following a strategy of combining its pricing and marketing strategies in order to improve financial position of the company. The strategy has been recommended with the aim of helping the company to increase its total revenue and also its share in the world market. Introduction The major causes of the financial crisis are manipulations of the financial statements of companies, deficiencies in risk management, high leverage, lack of secured lending in the derivatives market and ineffective management (Bernanke 2010; Gramley 2013). All these led to the development of weak crisis-management capabilities by the companies (Friedman 2011, 98). As a result of the crisis, most of the open economies in the world have been the victims of recession and the companies operating multinationally are struggling to fight the effects of recession. This paper presents a report on a particular issue currently faced by a company named ‘acQuire Technology Solutions’. The company develops a “Geoscientific Information Management System called acquire” (Our company 2013) and delivers it to clients situated in more than 60 countries. This paper presents an analysis of multimedia business case presented on acQuire Technology Solutions. In this paper an analysis of the interview conducted with the Chief executive officer of the company has been provided. The outcome of this analysis would be useful in developing the decision criteria for the company and identify the alternatives that would be implemented while dealing with the issue currently faced by the company. Issues The world has recently emerged from the turbulent financial crisis and is still fighting to get rid of the after effects of the phenomenon. The concern shown by the CEO of acQuire Technology Solutions, Warren Cook, is that there is distinct possibility of recurrence of the 2008 crisis. This situation would be detrimental for the company and place it in a position of huge loss (Cook 2013a). In this context, the prime issue identified by the company is the development of strong strategy that would help the company deal with the current situation and emerge with success. Causes and importance of the issue The issue identified in the above section is important for acQuire since it is associated with long term sustainability of the company. According to the CEO, the long term performance of the company would be reflected in the way, the management of the organization deals with their responsibility towards their employees and treats their employees at present (Cook 2013b). acQuire Technology Solutions nurtures the objective of providing a long and cherished career to its employees. Maintaining the organization in such a way that it would be able to provide secure career to its staffs is one of the foremost concern for the firm. Decision Criteria Analysis Situational Risk Assessment acQuire Technology Solutions is a privately owned organization and it must make the comparison between risk and reward of any particular decision. The alternatives recommendations that are being considered by the employees of the organization should be estimated in terms of the risk and profitability (Belton and Stewart 2002, 119). Ways to mitigate the risk have to be devised by thorough consideration of the risks. Flexibility in the operations and management procedures would allow quick response to the situations (Building blocks 2013). The senior consultants of the organization should follow the objective of making financially sound transactions with the clients and stake holders of the organization, improving the market position by enhancing its competitive positioning and improving customer management Organization Wide Corporate Culture Corporate culture of an organization is the reflector of the health of the organization in terms of its position in the market and its financial condition. Hence, acquire puts significant importance on the selection criteria of its employees. It provides the training to its employees to best the established culture of the organization. The company is more value driven than profit driven. It believes that good product coupled with supreme post-sales services is the key to maintaining its position in the market (Our company 2013). The company shares uniform vision across the organization that aims at bridging the structure gap in the hierarchy. This makes the progress of the organizational success smooth. Interoperability Decision makers should aim at constant innovation and cost minimization. Innovativeness of the company allows it to occupy the position in the first order in the market. The company aims at creating and offering the best value to its customers and it aims at achieving this goal by integrating its systems of operations at all levels within the organization. Integration within the organization and good communication with the clients helps in developing stable relationships that can be retained in the long run. This would help the organization if a new financial crisis hits the organization (Kahraman 2008, 28). Strategic alternatives Business system resilience Resilience in the business systems is of top importance for acQuire Technologies. In this competitive global business environment risk assessment and diversification plays an important role. Risk diversification programs help the firm in recovering quickly from the after-effects of financial shocks (Subramaniam et al. 2011, 178). Some of the most important recommendations have been mentioned below: The company should calculate the risks in making a particular investment decision and weigh the risks against the possibility of future sustainability of the investment. acQuire might collaborate with its channel partners in its supply chains and share the risk involved in the business operations. The company might recruit more temporary workers on contract. It would reduce cost to the company and avoid the problems of retrenchment whenever there is requirement of less staff. Investment in training programs would upgrade its employees to the latest modes of production and technologies. This would increase their work efficiency and reduce cost to the firm in the long run. Constant encouragement for team building and cooperation would improve the working environment, foster trust among employees and add significant value to the business operations. Integration into existing corporate culture The company holds the strong view that the standardization is imperative for good market performance in the short run and long term success of the firm. The company operates in a number of countries has a diverse workforce. It is essential to maintain uniformity in the activities and the system in which customer relationship is maintained. The managers are responsible for integrating consistency among all the operational units. This is done by maintaining a set of principles within all levels of the organization. However, leadership styles vary from person to person (Roy and Bouyssou 2002, 39). This sometime leads to differences in the procedure of management. Cultural sensitivity and moral considerations of the employees is an important factor that would help the company to sail through the risky situations and mitigate the risk. Strong information exchange systems Constant innovation in the system of information exchange is on e of the characteristics of the company. acQuire needs to further develop its Voice over IP (VoIP) systems so that it might maintain vigorous communication with all the partners and stakeholders during the times of financial downturn. Smooth flow of information and transparency leads to a more clean business environment that would help the organization to avoid catastrophe. Solutions and implications The best solution is derived from the alternative that suits the company the most in pursuing the decision criteria given in the present situation. The PDCA cycle illustrated below helps the company to solve its most imminent problems. Figure: PDCA cycle (Source: PDCA - The Deming Cycle 2013) The alternatives presented above might lead to the following possible solutions for the company in situations of future crises. Solutions Implication(s) 1. Flexibility and preparedness for future crisis situations Advantage(s): Good communication and flexible work environment among all levels of the employees within the organization leads to integrated response to any future crisis. Round the clock monitoring reduces the chances of risks and losses. Disadvantage(s): Despite having crisis management programs some organizations cannot put up firm resistance against crises. Risks are often unprecedented and the pattern of management planning decides the level of aftershock faced by the company. 2. Training programs and customer oriented marketing practices Advantage(s): Financial stability of the company depends on the performance level of the company in the market place. In the current situation, training the marketing team to follow customer oriented marketing procedures using the most popular yet low cost channels would be most effective. Disadvantage(s): Adopting a new method of marketing requires insights about the future performance on the basis of this marketing channel. Inappropriate steps might lead to cost increase and produce undesirable results. 3. Stakeholder responsibility Advantage(s): Responsibility towards stakeholders improves reputation of the company. A company that has shown high value towards the stakeholders in the past would retain the trust of its clients during times of crisis. Disadvantage(s): Actual investment decisions made by the entrepreneurs depend on the-then condition of the market and apprehensions about the future. High CSR values of the company cannot play down the decisions of investors. Conclusion The alternative strategy has an important financial implication. The company has to strengthen its financial position and following the strategy and then only it would be able to increase its total revenue generation. The company has to strengthen its situational risk assessment programs and improve information exchange systems. An environment of constant technological up-gradation, transparent communication and team building would help the company to maintain strong business operations in the future. Reference List Belton, Valerie and Theodor J. Stewart. 2002. Multiple Criteria Decision Analysis: An Integrated Approach. Berlin: Springer. Bernanke, Ben S. 2010. Causes of the Recent Financial and Economic Crisis. Federal Reserve. http://www.federalreserve.gov/newsevents/testimony/bernanke20100902a.htm . Building blocks, 2013. Information sharing environment. Accessed August 29, http://www.ise.gov/building-blocks-content/identify-decision-criteria-ie-factors-you-will-consider-making-decision-and . PDCA - The Deming Cycle. 2013. University of Cambridge. Accessed September 9, http://www2.ifm.eng.cam.ac.uk/dstools/process/pdca.html . Cook, Warren. 2013a. Cook, Warren: Issue: What is an important issue that your company is currently facing? Streaming video, CBS Digital Media Platform, http://mcmaweb01.curtin.edu.au/segment.php?content_id=474&segment_id=7533 . Cook, Warren. 2013b. Cook, Warren: Cause: What caused this issue to arise and why is it important? Streaming video, CBS Digital Media Platform, http://mcmaweb01.curtin.edu.au/segment.php?content_id=474&segment_id=7534 . Friedman, Jeffrey. 2011. What Caused the Financial Crisis? Philadelphia: University of Pennsylvania Press. Gramley, Lyle E. 2013. The 2008 Financial Crisis: Causes, Response, and Consequences. Beloit. Accessed August 29, http://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web&cd=7&cad=rja&ved=0CGYQFjAG&url=http%3A%2F%2Fwww.beloit.edu%2Fupton%2Fassets%2FGramley.pgs.pdf&ei=b-geUsGMG4eIrQeRloC4Bg&usg=AFQjCNHf-E_nYL9aggZny4KfKBBwE1hu-Q&sig2=P8q1FAYLG3HMFLUAQwyCVA&bvm=bv.51495398,d.bmk . Improve your financial position. 2013. An Australian Government Initiative. Accessed August 29, http://www.business.gov.au/BusinessTopics/Business-Finances/Seek-business-finance/Pages/Improve-your-financial-position.aspx . Kahraman, Cengiz. 2008. Fuzzy Multi-Criteria Decision Making: Theory and Applications with Recent Developments. Berlin: Springer. Our company. 2013. acQuire Technology Solutions Pty Ltd. http://www.acquire.com.au/about-us.asp . Roy, Bernard and Denis Bouyssou. 2002. Aiding Decisions with Multiple Criteria. Berlin: Springer. Subramaniam, Nava, Paul Collier, Michelle Phang and Gary Burke. 2011. “The effects of perceived business uncertainty, external consultants and risk management on organizational outcomes.” Journal of Business and Economics 2 (7): 132-157. Tillman, Frank A. and Deandra T. Cassone. 2012. A Professional's Guide to Decision Science and Problem Solving: Define the Objectives and Identify Metrics. FT Press. http://www.ftpress.com/articles/article.aspx?p=1807181&seqNum=10 . Read More