Softmagic Financial Planning

1185 Words 5 Pages
When is hard or just impractical to constantly check the agent performing on behalf of a major organization, typically, the agency theory operationalized as corporate governance (CG) (Kochhar, 1996) is an approach that has been used by major organizations to flourish their businesses internationally (Agrawal & Knoeber, 2012; Bhagat & Bolton, 2008). Hence, the next step of the plan involves the definition of goals and objectives. Management by objectives (Robbins & Judge, 2009), is a worldwide accepted method by which leaders and agents agree to fundamental goals, and interact in ways that avoid the constant verification of activities yet providing enough freedom for ideas to flourish locally. Consequently, the Italian leadership team should actively participate in this activity with the U.S. …show more content…
473). Consequently, SoftMagic U.S. CEO must concentrate on finding a balance between the operating plan, the financial execution plan, and the new business strategy. Thus, the creation of a “financial plan” (p. 476) involves several activities. First, the need for a “forecast of financial statements” (p. 476) based on the operation plans (i.e.: sales), including financial ratios and projected profits. Second, a “determination of the amount of capital” (p. 476) needed to realize the operations. Third, forecast the internal funds the organization will generate, and identify any alternative source of funds required for the plans’ fulfillment. Four, develop an understanding and monitoring of market conditions. Five, establish a “performance-based management compensation system” (p. 476) to recognize employees for generating wealth to shareholders. Finally, ensure proper monitoring to ensure the plan will be adapted according to the changes or fluctuations in the

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