Financial Management in Construction - Assignment Example

2. Ellison High fully adopted Lipman Comprehensive at the commencement of the academic year Sept 2006. The two schools are still known by their traditional names but all is not well, the performance of Lipman continues to decline and student results are very weak. Prepare a list of the information which needs to be captured and interpreted in order to find the causes of this decline 3. A deepening crisis: It would appear that financial targets for profits (at both schools) have not been met.

You are required to identify those areas of data which would need to be researched in order to explain this. You should also recommend on how the organization could set up an early-warning system which would give useable notice of such occurrences. 4. Yet more problems: It would appear that some of Ellison High's existing customers are defaulting on the payment of their children's fees. The school normally requires payment at the commencement of each academic term in advance. The situation is not a major difficulty but needs monitoring and a financial policy which would deal with the situation.

You are required to recommend such a financial policy. The current thrust of the British government in its education policy is to make schools responsible for their own strategic and financial future. The government aims to foster strong leadership and management values that will transform the institutions into a self-determining organization. The government views the financial freedom exercise of schools as a means to allow them to finance their own plans and improve their services. It is foreseen by the government that when the sector exercises its function in a free and self-determining manner, excellent leadership andmanagement will be of utmost importance.

Due to the self-determining state of affairs in the educational system will, institutions are compelled to improve their efficiency and management if they want to continue their operations. From this, the government hopes to raise the standard of education in the country.Although every school is expected to display leadership and management excellence, there will always be some weak (i.e. underperforming) institutions. The government stand on this issue is that these institutions be merged with excellently performing schools such that the students of weak institutions can avail of the services of the 'strong institution'.

The underlying principle in such an approach is that non-performing assets must be rationalized to improve cost effectiveness. Mergers are considered not as a response to failure but as a path to improvement and ultimately - success. By allowing the merging of schools, one can enhance the standing of an institution in the academic community. From the foregoing, it can be seen that the government is changing the way public service is conducted. It is apparent that the measures taken by the government takes the form of business practices wherein competition and self determination are the main drivers.

This approach stems from the Thatcher Era and is called 'New Public Management'.The philosophy behind the New Public Management is that the government imports decision-making processes from the private sector (i.e. from the business firms) and supposedly gain for their proven winning techniques. The government is encouraged to concentrate on the market and treat citizens much like customers.