Introduction
Chevy is a startup energy company seeking to reduce the carbon footprint resulting from the fossil fuels. The company forms partnerships with communities consequently widening scope of operation and increasing potential market for their products and services. The main objective hinges on providing clean affordable energy to various communities all around the world. All things considered, motivating people to use green energy goods and amenities consistently is an uphill task and requires good marketing skills and expertise. Chevy Corporation aims to reduce the gap between clean and carbon sources of energy. With looming effects of climate change and increasing pressure on nonrenewable sources of energy, the company rushes to rescues the earth from an impending danger. This essay will carry out an in-depth evaluation of ways in which strategic and financial performance management can facilitate and deliver the goals of the firm.
Reasons for choosing strategic and financial performance management
Application of strategic and financial performance determines the outcome, the pace and direction of the startup named Chevy company. The technique is crucial for the success of a firm due to its cross examinations of roles and performance rate of employees which in turn reflects on the output of the firm (Demil, and Lecocq, 2010). Any business owner understands that strategic and financial performance creates a clear picture of current trends and develops agility in the face of challenges through precise decisions and correct execution of solutions. In addition, the technique initiates a series of mitigation steps for the company in case of an impromptu situation.
Financial performance management focuses on interpretation of data emerging from the firm. There is a correlation between utilization of data and enhanced financial performance. The two aspects of any company fuel smart decision-making process. Furthermore, financial performance management offers guidance on pertinent issues such as cultural progress, leadership skills and values system of the Chevy Company. Therefore, the financial department has a custodian duty of informing and participating in the administration of the business via formulation of strategic decision, budgeting and reporting (Ernst, Hoyer, Krafft, and Krieger, 2011).
However, finance reveals more than data; they also unveil the unsuccessful leadership practices within the firm and provide a direct counter measure against the unproductive nuisance (Baker, Filbeck, & Harris, 2018). In the end, proper financial management makes the firm self-sufficient with proper handling mechanisms.
Decision-making
The only thing that separates a startup company from the rest of the business is the ability to make sound decisions, which later drive the firm higher into success effortlessly (Minichilli , Corbetta, and MacMillan , 2010). Before any startup can realize its objectives and mission, making decisions centers on performance and strategic planning. Professional accountants play a major role in giving insight into good decisions, which later inform on operations before hand.
Surviving the harsh market competition for any startup company requires efficient financial management skills. The only advantage a startup company has over old organizations is that they carry less debt. However, they have a small market equity, limiting their outreach and visibility. In addition, startup firms have fewer stocks making it susceptible to meagre performance within the market due to lack of overseer board members (Porter, and Kramer, 2011).
In other words, it is necessary to apply financial performance administration techniques to sustain the business (Moore, Petty, Longenecker, & Palich, 2008). As stated earlier, Chevy Company focuses on creating access to green products and services for the community, to achieve this aim, they have to ensure a steady growth rate through financial performance administration. Simply put, good use of resources can assist the company achieve its short and long-term objectives.
Role of Strategic and financial performance Management
In a startup business, one of the main challenges is sustainable growth and the best counter measure against this challenge is strategizing around strategic financial performance management. According to past researches, administration of a small business has to factor in financial data and federal laws governing its market (Stegerean, and Gavrea, 2010).
The fundamental foundation of any start up relies on proper management of its financial resources, which later directs administrative decisions. For example, transparency and liability, hard work and disclosure can sustain a business during its early start up days consequently determining the success of its operations (Ogendo, 2017). Financial performance management integrates prepares, predicts systems, procedures, both external and internal rules for the sake of streamlined administration of the company. In other words, it gives administrators insight and multiple dimension on various elements within and beyond the business.
The most common methodological feature associated with financial performance management includes highly organized and defined systems for long term planning. Therefore, the resulting organization out of financial performance management data enhances persistence of processes passing through the same organizational framework (Wang, and Wang, 2012). More or less, the key role of strategic financial performance administration hinges on securing long run sustainability while balancing the managerial and business part without depletion of resources. In short, financial performance management forms a proper organizational structure for the business dragging all factors along in line with the set system.
In the past, entrepreneurs claimed that financial performance management analyses the strength of a startup from the commencement stage to the early operational phase based on observable elements (Yunus, Moingeon, and Lehmann, 2010). Better still, it brings to the attention of the owners, the capability of human and financial aspects of the business in driving growth and increasing survival rate of the enterprise in the event of an accident. Generally, human capital in terms of education and gender reflect on the skill sets and opportunities the entrepreneur wishes to invest in the company. In addition, financial performance knowledge encompasses the relevant skills, partnerships in regards to the business. In the case of Chevy Company, financial management buffers against the effects of capital intensive tasks, which in turn enable the firm, achieve its objective without the need to worry about heavy financial expenditures. In summary, financial performance, management contributes to providing a business with alternative resource variables, which are less likely to stimulate growth and inhibit negative impacts on the business.
Utilization of various types of information, data derived from interviews and general community information, financial performance management can construct strategies not only based on collected information but also on undefined threat to the company. Concepts revolving around data provide accurate strategies that can solve emerging problems. Principles of financial interventions focus on monitoring tasks pertaining to financial performance for the purposes of foreseeing market trends (Thomas, & Thomas, 2011). Most stakeholders focus on adding value to their businesses hence monitoring financial progress indicates on losses and profits made by an organization. Thus, collection of data, then relating it with financial information for progressive additional value. Simply put, financial management enhances surveillance of expenditure of the business firm leading to a more compact and closes evaluation of progress.
Strategies arising from financial information rely on three elements: the coordination of internal and external market variables, genuine competencies, and sustainable competition between other established firms. More so, strategic planning procedures must follow specific analytical models, which guide and give an accurate picture of the expected results or coming as close as possible to the potential outcomes (Zott, Amit, and Massa, 2011).
Fundamentally, financial performance management factors in vision of the company fund allocation (Smith, 2005). Furthermore, a startup has to develop a solid background for analysis of trends, potential partners, and internal resources for the sake of avoiding market forces from pushing its footing from the market and finally out of business.
For formulating internal strategies, financial performance management avails information on competitive advantages based on reasonable prices (Stegerean, and Gavrea, 2010), and differentiating services and items offered by the Chevy Company so that consumers can make a decision based on experiences with the product rather than a random pick which fails to translates into considerate profit margins.
For the past decade, reliability of financial information for management of startup companies is a growing phenomenon especially among organizations providing green items. Financial performance management is a useful instrument for carrying out and monitoring strategical framework set in place to meet the target performance and functionality of the entire organization (Madura, 2011). The financial performance management interprets a firm’ goals into financial goals and concentrates on training employees, business expansion, and internal structure of an enterprise.
Financial metrics determine the criteria with which a company evaluates its performance. The financial performance management supports the task designated for the finance department in quantifying specific aims on an integrated basis hence permitting effective bench marking with other companies across the board. For illustration, the cash flow shows or indicates the manner in which an organization uses its resources to multiply its profits and make further investments. In fact, cash flow represents gross capital after paying off tax and other recurrent expenditures (Stegerean, and Gavrea, 2010). Working capital has the potential to push up an organization’s cash flow. Furthermore, firms can make good use of financial performance management when faced with excessive expenditure or when they want to finish an expensive project without limiting their scope. Therefore, the technique is relevant and applicable to a startup company such as Chevy able to meet the needs of a firm on all fronts without compromising on agility component of the business.
Planning and Management
Chevy Company only requires actionable strategies aligned to its objectives for it to establish an accessible network of clients (Van Dooren, Bouckaert, and Halligan, 2015). Since its activities rely on financial resources, financial performance will give an accurate amount needed to reach potential clients.
In addition, the clients will need a convincing reason to use clean energy rather than the traditional fossil fuels. In other words, raising awareness on the negative impacts of fossil fuel can drive people toward using clean energy (Demil, and Lecocq, 2010). Hence, the company seeks to reach an untapped market hence it has to reduce or shortened internal procedures and concentrate on controlling external branding.
Most startup businesses failed to shorten preparedness and forecasting processes. The administrators often rely on outdated and inaccurate information that cannot meet objectives of the firm and administer duties of the business. Currently, universal trends punish companies, which use conventional means of management for assessment of the status of the business. Financial performance management offers all aspects, reliable enough in shaping the outlook of the entire organization and retains operations with minimal shift no matter the time and trends and turn out of unpredictable market factors (Hassan, Maturi, and Mberia, 2017). It is vital to note that the planning efforts should adhere to the specific framework set up by the organization for better results and inclusion of the firm’s procedures and resources available for a better outcomes and safe measures.
One of the advantages of financial performance management is that it provides more than one strategy at the disposal of administrators for alternatives in case one strategy fail to meet a certain target, available alternatives shorten recovery in case of failure and widen scope and flexibility of the business (Aebi, Sabato, and Schmid, 2012). In the specific case of Chevy Company, the need for passionate marketers who can focus on convincing consumers on the need to use renewable energy and products rather than fossil fuels, which destroy the environment and aesthetic value of the natural surroundings. Consumers are an asset to a startup company seeking on creates a market niche for itself.
Budgeting
There is one aspect of financial performance management that cannot go unnoticed and that is effective budgeting. The uphill task of coming up with an accurate budget able to cater to the needs of the entire business operations requires proper communication and clarity. Budgeting provides resources for meeting crucial goals and hence must be accurate and unbiased. Financial performance management fills provides data needed for coming up with a budget (Hassan, Maturi, and Mberia, 2017).
In the end, a startup firm needs to can compare its productivity against the drawn budget. Furthermore, startups need an airtight budget, able to cover all operations and provide essential resources for meeting the objectives of the entire company. Budgeting needs external support from advisers and Chevy Company should consider bringing in a third party due to lack of experience on the side of startups (Dibrell, Craig, and Neubaum, 2014). In short, the execution of various core objectives depend on allocation of financial resources availed through financial performance management.
So far, the core functions of a startup company revolve around proper financial data, which later translates into planning effective budgeting and accurate decision-making and execution of proposals via a reliable framework (Bailey, Mankin, Kelliher, and Garavan, 2018). A startup such as Chevy Company operates under a framework that analyses its resources, effectiveness of the overall operates and gives feedback in due time. Any startup company seeks to gain traction through its operations and cut out a clean market share for itself with minimal effort and reasonable investment.
Financial performance
Chevy might be a good company, selling quality products or services but without a financial success, it cannot stay long in the market and realize success beyond its dreams. Business history contains numerous examples of companies that had innovative services and products, yet failed to convert the ideas into sustainable growth and profits (Mithas, Ramasubbu, and Sambamurthy, 2011). Therefore, financial performance management should the highlight of any startup company. In the present global market, stiff competition can render any business irrelevant if it fails to keep up with the ever-changing pace. Financial performance goes beyond the office function and financial docket of business into shaping the vision of the company aligning every activity based on strategic measures.
In summary, financial performance, management gives out actionable strategies and tackles immediate challenges faced by an organization. It forecasts, analyses financial information for the better prediction of market trends while controlling external factors based on optimized strategies. Financial records provide a good platform for planning and giving overall performances evaluation based on the needs of the company.
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