Financial Planning, Stakeholder Analysis and Team Dynamics Report

This report analyzes financial planning, stakeholder relationships, and cross-functional team dynamics. It explores the roles of internal stakeholders like employees and managers, and external stakeholders such as customers and government, in the financial planning process. The report also discusses agency theory and modern portfolio theory, highlighting their applications in financial decision-making. It further examines the advantages and potential problems of cross-functional teams, along with strategies for management support, organizational structure, and reward systems to enhance team effectiveness. Ethical considerations and employee motivation techniques, including job analysis, rewards, and recognition, are also addressed. The report provides insights into developing and maintaining stakeholder relationships through effective communication and feedback mechanisms, offering a comprehensive overview of financial planning principles and practices.

Financial Planning & Professional Management
Student Name： Lide Wang
Student Id:

Task 1
1.1
Two internal stakeholders are employees and managers. To improve the process of planning,
employees play the roles including identifying the needs of customers by sales and marketing
employees, providing budgets for customers by accounting and finance employees, communicating
with suppliers with employees responsible for supplier management, providing feedbacks of
strategic planning, and managing product costs of raw materials by relevant employees. This
implies employees from various departments are responsible for different roles, particularly
functional roles to improve financial planning. Managers plan several roles, including governance
of financial planning, making major decisions like costs, collecting feedbacks of operating costs by
front line managers, making major decisions and planning by top level managers, and knowing the
price of budgets. Managers mainly focus on decision making and corporate governance (BooN, Yee
and Ting 2011).
Two external stakeholders are customers and government. Customers play the roles including
generating revenues for the company, providing feedbacks about the company’s products and
services, exhibiting bargaining power, choosing other financial products as alternative, and
suggesting better financial deals. This implies customers can improve financial products and
services, to make a company generate more sales. Government plays the role such as releasing tax
regulations to affect costs, reinforcing tariffs on international trade, performing regulatory

investigations or checks on businesses, defining minimum wages, and setting interest rates. This
implies governments have high power and influence to improve financial planning, particularly
developing regulations and reinforcing controls (Cull 2009).
1.2
Agency theory can be used to explain the relationship between principals and agents in business
(Kingston and Weng 2014). So, agency theory is used to resolve the problems occurred between
principals and agents, when there are differences of the goals or desires between them. For instance,
when executives plan to expand their business into new markets as a financial plan, they need to
comprise the short-term profits. However, since shareholders usually expect high profits, they might
be aware of the expansion plans developed by the executives. Then there can be conflict of interests
between the executives and the shareholders. Agency theory can be used to analyse the problems for
financial planning. But this theory can more than just describe the situation, instead of provide
further details.
Modern portfolio theory is about how risk-adverse managers can construct portfolios, in order
optimise or maximise expected returns on the basis of a certain level of risk (Omisore, Yusuf and
Christopher 2011).This theory emphasises the risk and return cannot be viewed alone, but to be
evaluated based on the impacts of an investment on the whole portfolio’s risk and return. So, it is
important for investment managers to build a financial portfolio to evaluate the overall risk and
return. Particularly, financial portfolio consist a group of assets, stocks, bonds, cash and currencies.
For instance, a portfolio can have high risk and high return, low interest and low risk, high interest
and high risk, and low interest and high risk. So, modern portfolio theory is useful and important to
determine a financial portfolio’s risk and return.

Task 2
2.1
Cross functional team refers to team members from different departments to achieve a common
goal, like marketing, financial, IT, operational and production departments (Gupta and Misra 2014).
One major advantage of cross functional team is it allows employees to view their own and others’
work. By this mean, they can build trust and promote bonding among each other. Agency theory
suggests there can be differences of goals, opinions and expectations between principals and agents.
Cross functional teams allow team members, possibly including principals and agents, to work on
the differences, in order to meet the common goal of financial planning. But a hierarchy structure
divides employees into different departments. Within one department, there can be all agents or
principals. So, they are not likely to meet a common goal, compared with cross functional team.
2.2
Two problems those may arise while formulating the cross – functional teams are as follows –
 Misaligned priorities and goals – employees generally focus on the factors that will have
impact on their performance measurement and rewards. If work performed by the cross –
functional team does not form part of the assessment of employee’s performance, it will be
given lower priority. Hence, the management focussing on cross – functional collaboration
must identify strategic goals and priorities that shall be worked upon by the employees.
 Lack of trust and measurement – It will be nice if each employee trusts other employee who
is enthusiastic and competent regarding their job. However, for most of the entities the
required trust is not there. Further, working with the outside department needs faith and
willingness for abilities. Further, if proper way for measuring impact of cross functional
work for the team on the basis of business results it will be difficult to justify the resource
investment (Blindenbach-Driessen, 2015).

2.3
To management support: they can provide supports to develop cross functional teams, like resources
and time, direction about the goals, arrange enough resources, support activities of teams, measure
and appraise performance of members. So, top management mainly provides supports by arranging
resources and motivating teams.
Organisational structure: it has to be conductive for cross functional teams to be working, support
the formation and execution of teams. Some major organisational structures include centralised,
decentralised, team based, matrix, functional (Laslo and Goldberg 2008). Different organisational
structures can be different for cross functional teams. For instance, centralised structure means top-
down communication, strict hierarchy and decision made by top levels. For this structure, teams
should focus on resolving challenges and problems by focusing these characteristics.
Team authority: cross functional teams should be self-directed and allowed to work with authority.
So, they can resolve complex management challenges.
Reward system: they should be motivated with rewards for achieving the goals. Reward system can
motivate them to solve more complex management problems.
Team dynamics: team dynamics can build trust and confidence, and promote communication (Sarin
and O'Connor 2009). They are important to solve problems.
2.4
Financial planning and analysis through cross – functional process is major part of the job. While
planning the finance the cross – functional team shall translate the global and strategic technology
vision into the operational model that will be leveraged the data based analytics for driving the
decisions. The team shall closely work with the business intelligence unit for building the enterprise

database globally that will enable the team to perform the analysis for providing real time insights
regarding performances. Professionally team members must have mutual understanding regarding
the tasks they have on their hand. Considering the responsibilities of cross – functional teams, if
they do not value the objectives of the team they will not be able to put their effort they need.
Regarding ethical culture the major factor is how the employees are rewarded and measured. For
meeting the target pressure the most common way is to input unethical behaviour. Hence, while
doing the financial planning the incentive part shall be given importance. Further, the relationship
quality among the group is critical for considering while building the ethical culture. Socialization
is another important factor for the group membership and the relationship is core aspect for the
culture. If the employees feel more secure while taking risks and while expressing themselves the
cross functional team will be more successful, ethical and creative (Aime et al., 2014).
3.1
Internal stakeholders for the process of financial planning are the groups or individuals within the
business like owners, employees, management and shareholders. On the other hand, the external
stakeholders are the individuals, groups or the firms outside of the company like customers who
purchase the services or goods from the company, suppliers from whom the company purchase its
business products, creditors to whom the entity owes money and the government (Cardwell,
Williams & Pyle, 2017). External as well as the internal stakeholders for the financial planning
process are important as they measure the financial performance of the entity for various reasons
like investing into the company, lending credit to the company, purchasing product from the
company and distributing profit or providing returns to the stakeholders (Wheelen et al., 2017).

3.2
One method of developing and maintaining relationships is to use communication. By doing so,
internal stakeholders like employees and managers can freely communicate with each other, in
order to solve their issues, confusions and misunderstandings. Communication, particularly
effective communication is essentially important to provide them an open platform (Barker and
Gower 2010). Another method is to use feedbacks. By doing so, internal stakeholders can provide
reviews or feedbacks for others’ performance. Meanwhile, their performance can be improved by
referring to the identified reviews and feedbacks.
When internal stakeholders develop better relationships through methods like focus group or
meetings, they are more likely to be motivated to perform well and remain loyal to the organisation
(Waters et al. 2009). Loyalty is fundamentally important for them to better contribute to the
organisation. So, good relationships are the solid foundations for effective financial decision
making.
For internal stakeholders, they perform well by using the allocated financial resources.
Organisational performance reflects employees’ performance. When organisations present good
performance, internal stakeholders can be offered with financial incentives. So, their interests are
closely related to employees’ performance (Hubbard 2009).
Methods like meetings, breaks and interviews can be used to provide feedbacks. Feedbacks can be
used to inform budget allocation for each financial area, improve financial planning process, and
improve work processes of operations. Ethical considerations including coercion, honesty feedback
and consent and agreement should be addressed.
From the perspective of stakeholder mapping, customers have high interests, but they have limited
influence. They should be kept informed. While governments have low interests, but they have high
influence. Their needs should be met. To develop and maintain their relationships, methods like
regular communications, meetings, and data collection can be used. For instance, customers can be
organised with meetings, to identify their needs.
Customers, especially with more wealth, can be investors. So their opinions or needs should be
considered. Governments require the payments of tax and tariff. So their needs must be considered.

External stakeholders can be affected by organisational performance, like revenues. Their interest
for the planning process are profitable. Customers expect the rise of stock prices, so they can get
benefits as shareholders. Governments expect to get tax payments as revenues. So, they expect an
organisation to expand.
Methods like customer survey and review can be used to collect feedbacks from customers.
Methods like meetings and personal communication can be used to collect feedbacks from
governments.
Customers’ feedbacks can be used to improve the products or services, as well as adjust budgets.
Governments’ feedbacks can be used to improve tax payments. Their feedbacks are important to
improve relevant parts of financial decision making.
Ethical considerations like customer profiling can be used to develop and maintain relationships.
Through customer profiling, their needs and wants can be effectively identified by referring to their
profiles (Housden and Thomas 2012).
3.3
To develop and motivate employees, one technique is to implement effective job analysis, including
job description and job specification. Effective job analysis is important to identify the job nature
and develop appropriate jobs for employees. For instance, some employees might be motivated by
challenging jobs, so it is important to motivate them by including challenging parts for job analysis
(Danish and Usman 2010). Another technique is provide rewards for employees. Employees can be
motivated by either monetary or non-monetary rewards (Antikainen and Vaataja 2010). Sometimes,
a combination of them can effectively motivate employees. While sometimes, employees can be
solely motivated by non-monetary rewards, when their needs for monetary rewards are properly
met. However, employees can be motivated by complex combinations of monetary or non-monetary
rewards. So, it is important for managers to identify the motivation factors of employees. Another
technique is provide recognition to motivate employees. Recognition is intangible, which makes it
non-monetary reward. Sometimes, employees can be motivated by recognition, because they expect
their managers to recognise their works. Employees, especially those with relatively high job
positions, are more likely to be motivated by recognition.

3.4
Proper job analysis is important to ensure employees’ job is matched with their skill. When
employees feel such match, they are more likely to increase their productivity, because they think
the job analysis is suitable and appropriate for them (Furnham, Eracleous and Chamorro-Premuzic
2009). Rewards, which includes both monetary and non-monetary rewards are more likely to meet
employees’ low and high levels of needs, including both basic and advanced needs. Maslow’s
hierarchy of needs theory suggests that employees’ needs are divided into different levels (Sadri and
Bowen 2011). This implies employees are motivated by different needs. Rewards with monetary or
non-monetary rewards can meet their distinct needs, thus increasing productivity. Recognition
provide employees more respect for their work, so they can more engage with their work.
3.5
For self-development and improvement, one goal is career development, which implies employees
should have their own career goals for their future growth. Proper career development goals are
likely to include milestones or achievements for improvement (Hirschi 2009). But employees
should be provided with enough supports to develop proper career goals. Another goal is job
enrichment, which means employees should have some specific goals for their job enlargement.
This further implies employees should focus on more duties or responsibilities of their job, in order
to enrich the scope of their career (Hirschi 2009). This requires the supports from managers,
because they are actually responsible for assigning jobs and duties for employees.
3.6
To achieve effective financial planning process for increased organisational effectiveness, one
organisational goal is improve customer satisfaction. Customer satisfaction means customers feel
satisfied with the product or service of financial planning. Besides, customer satisfaction means

customers are more likely to repeat the purchase from the same company (Bai, Law and Wen 2008).
So, companies can increase their sales of financial products. Besides, improving customer
satisfaction enables the company to identify their underlying issues, so they can implement relevant
changes. Another organisational goal is to improve employee retention, which means companies
should focus on how to reduce employee turnover rate. Employee retention means employees are
more loyal to the company and they are more likely to feel satisfied. Therefore, their productivity
can be improved, thus increasing organisational effectiveness (Samuel and Chipunza 2009). For
managers, they should focus on how to improve employee retention by identifying underlying
issues.Then managers can provide concrete supports for employees, in order to make them feel
satisfied and remain loyal.

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