Different Approaches for Effective Decision Making in Financial Management

Project

Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Different formal and informal approaches used to support effective decision making........1
TASK 2............................................................................................................................................3
P2. Key financial management principles required by organisations to achieve effective
financial strategies for long term financial sustainability............................................................3
TASK 3............................................................................................................................................5
P3. Role of management accounts and their values as part of an integrated system...................5
P4. Use of accounting control systems and their value as part of an integrated business system
.....................................................................................................................................................7
TASK 4..........................................................................................................................................10
P5. The ways in which financial decision making is important for supporting long term
financial sustainability...............................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Financial control refers to the strategic making plans, organising, directing, and controlling
of economic undertakings in a company or an institute. It also includes making use of
management concepts to the monetary assets of an agency, even as additionally playing a crucial
part in economic management (Kembauw and et. al., 2020). Financial Management manner
making plans, organizing, directing and controlling the monetary sports together with
procurement and utilization of funds of the organisation. It manner making use of preferred
management principles to financial resources of the agency. Financial management is one of the
maximum critical elements in enterprise. In order to begin up or even run a hit commercial
enterprise, they may want tremendous know-how in economic control. In order to complete this
project, ASDA is taken in to consideration. It is a British supermarket chain and it was
incorporated in 1949 and is headquartered in Leeds, England. This report will consider
information about different formal and informal approaches used to support effective decision
making, key financial management principles required by organisations and role of management
accounts and their values. Moreover, it will define about use of accounting control systems and
the ways in which financial decision making.
TASK 1
P1. Different formal and informal approaches used to support effective decision making
Knowledge-based approach: A concept which primarily focuses on quantitative,
objective and factual information to inform decision-making. Knowledge-based approach is a
method that includes adapting theories, understanding, and traditions from a whole variety of
disciplines and making use of them to the coaching engagement, as and while suitable
(Yuniningsih, Pertiwi and Purwanto, 2019). These may consist of theories from management,
psychology, exchange management, and organizational way of life; understanding from
spirituality, family systems, sustainability, and mindfulness; and traditions from self-assist and
the human capability actions.
The role of stakeholders in decision-making: The contribution of internal stakeholders
(the employees and manager’s perspective on the situation) and the contribution of external
stakeholders (e.g. suppliers or investors vested interests) to decision-making. Influence of
stakeholders on the organizational management. Stakeholders are the human beings or
1

organizations who've an interest, declare, or stake within the organisation. Hence, stakeholders
generally recognition at the overall performance of the corporation and make sure that it stays at
a suitable degree. Stakeholders do now not have any function within the control of the
organization, but they do have an impact on the organizational management.Stakeholders
impacts the choice making system. They make sure that the organizational work environment
remains dynamic, stimulating, and rewarding and there are accurate operating situations
available in the organisation in order that the enterprise can perform properly.
Stakeholders may be divided into predominant classes specifically (i) internal stakeholders,
and (ii) external stakeholders. Internal stakeholders have direct affect on the resources of the
organisation (Ameliawati and Setiyani, 2018). External stakeholders are humans who've no
direct position within the organizational operations, however they have got a few interest in it or
its activities. The needs positioned forth by means of the external stakeholders motivate the
company to carry out in addition to to reap its objectives and goals. Internal stakeholders in an
business enterprise includes its personnel and the management, even as the external stakeholders
are buyers, customers, providers, lenders, regulatory groups, government companies, change
unions, neighbourhood community, stress businesses, and well known public and many others.
The organizational stakeholders affect maximum the management of the agency particularly the
manner of selection making. Stakeholders impacts the selection making manner. They make
certain that the organizational paintings environment stays dynamic, stimulating, and profitable
and there are accurate operating situations to be had within the employer in order that the
company can perform well.
‘Make or buy’ decisions: Reaching a strategic decision to internally make or externally
buy based on significant influencing factors. A make-or-buy selection is an act of selecting
among manufacturing a product in-residence or shopping it from an external dealer. Also called
an outsourcing decision, a make-or-purchase decision compares the costs and benefits associated
with producing a necessary proper or provider internally to the expenses and blessings involved
in hiring an outside dealer for the sources in query (Mitchell and Calabrese, 2019). To compare
charges as it should be, a business enterprise must recollect all factors regarding the acquisition
and garage of the objects versus creating the items in-house, which may also require the
acquisition of recent gadget, in addition to storage prices.
2