1.1 Identification of a problem which exists within a business
When a company expand business then it needs to introduce necessary resources to meet demand or requirement of marketplace. It includes adequate number of staff, machineries, training and development program, replacement of old technologies with advanced one and more. To meet all these requirements, the main thing which organisations need to concern is finance. As if there is a shortage of funds within a firm, then it will seem to be major problems which impacts on whole working operations and also managers feel unable to complete a project on time. In addition to this, company will also fail to hire proper number of staff members and give proper training to them. It will also seem to be unable to meet demand of marketplace on time in desired manner. Henceforth, the major problem which generate so many issues in a firm is shortage of funds. Therefore, it is necessary for managers of a company to concern it more, in order to complete a project within set period of time.
1.2 An analysis on present business problem
In a company, the major problem is inadequate amount of finance, which generate many problems in complete a project. For example: Due to shortage of funds, project makers cannot conduct any kind of activity in set period of time. This would impact on whole working process of completion of a project. Therefore, to overcome from such an issue, managers set some objectives. It includes-
- To ascertain regular and adequate supply of funds within organisation.
- To ensure optimum utilization of funds.
- To take loan from commercial banks and public funds.
Analysis of business of business problem is done by following various stages which are described as below:
Stage 1: In the first stage, problem of business is identified that is shortage of financial funds for organisation.
Stage 2: Main objective of the company is to enhance financial funds by increasing goodwill of company in coming 6 months. As increase is financial sources will help the company in grabbing new opportunities at marketplace.
Stage 3: The main purpose behind set some objectives by managers is to meet requirement of funds within company. With this assistance, they can hire eligible employees at workplace, will give proper training to them and gain their support towards business expansion.
Stage 4: To get perfect solutions for utilisation of funds, managers of company will analyse the whole situation first, to identify the cause behind occurrence of such issues.
Stage 5: In order to get some more suggestions to reduce financial problem, managers have organised conference meeting with all stakeholders or contributors. Through discussion, they have got some possible solutions like mutual funds, financial control, investment of funds and more
Stage 6: To test viability, research team can use primary research techniques to get feedback of customers and other stakeholders. Through this test, they have analysed that allocation of funds into most profitable ventures will give assurance that there is safety on such investment as well as regular return may also be possible
Decision taken by finance manager of company to meet requirement of sufficient amount of funds has large scope. By ensuring that there is a regular supply of amount help in reducing the problems which may occur due to shortage of funds. Furthermore, develop proper budget plan will also aid in utilization of limited funds and other resources as well. Along with this, if they take loan from any financial institutions, will help in resolving such an issue also. Thus, through this process, current employers have made mind to use effective approach to meet present requirement of cash. By developing a proper plan for using such an approach, aid managers to convince management of company to give their approval.
1.3 Causes of problem
The main causes of the problems for company is described as below:
- Goodwill:If there is always shortage of funds in the company which leads to decline of the goodwill in the market and the firm is unable to get funds from the market.
- Improper Utilisation of Resources: The main cause for the problem is that the company hire unskilled employees for the firm which makes improper utilisation of the resources. These increases the cost for the organisation.
- Increase of Frauds:On daily basis the chances of frauds has increased which is difficult for many organisation to take sufficient funds from financial institution.
2.1 A plan to solve the problem
As it has been analysed that in a company, the main problem for organisation is shortage of funds. Due to this, managers and other team members seem to be unable to complete a project on time or fail to meet requirement of business. Therefore, to deal with such shortage of funds, finance managers of a firm can formulate various strategies and techniques. It includes investment in profitable ventures who hold strong position in marketplace, take loan from public funds, utilise given resources and more. This would help in resolving issues which may arise due to insufficient availability of funds. But under this process, main possible constraints which may be faced by managers of such organisations are- Inadequate information of past record; Lack of expertise; High level of management approval; Bureacratism and more. All such problems will create issues in analysing past performance record and further processing as well. At present, approval of management to take and implement previous approaches is a major constraints in front of managers.
2.2 An explanation on chosen approach
Through analysing past performance record, managers of certain company has evaluated that previous business partners had used logical problem solving, to meet requirement of funds. Under this process, they had organised conference meeting with stakeholders and asked them to give their suggestions for utilization of limited finance and reduce other expenses. This had helped them in getting creative solution for specific problem and get contribution of each in achievement of business objectives. Managers have also evaluated from past data that in previous management of company had also give their approval for using such an approach. It had increased confidence level of staff members and managers to run business operations in own manner. Thus, if using logical problem solving approach in current period, company will definitely come out from main issue i.e. shortage of funds.
3.1 Evaluation on approach used to solve the business problem
In order to solve specific problem which is lack of funds, managers of a company adopt an effective approach. It includes logical problem solving approach, which helps in building strategies to resolve business problems. It helps in improving skills related to solve issues of business in short period of interval. But this approach has both pros and cons. Enhancing abilities for gathering required information; overlook an explicit view of certain issue; allowance to use past information of business for analysis; development of skills to find quick solutions etc. are some major advantages of logical problem solving approach. Other than this, if there is no evidence of past data then this approach might fail to give desired outcome. Along with this, to use historical information, approval of management is also necessary. Thus, these facts show ineffectiveness of such approach too.
3.2 Evaluation of other approaches which may have been more productive
Since logical problem solving approach fails to give appropriate solution for a certain business problem. Therefore, in place of this, company can adopt other approaches too. It includes- analytical, rational, creative and absolute problem solving approach etc. For example: Creative problem solving approach is more productive where all associated people of company given chance to give their suggestions. It increase abilities of employees to assess the problem which is lack of funds. By discussing with contributors, it gives opportunity to managers to get a list of effective suggestions as well. But this approach fails to give quick solutions, because after getting different suggestions, managers are required to check viability of each which may increase time duration as well as impact on budget also. Along with this, if contributors fail to give appropriate solutions then it may render whole practice as well.