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Research and write a Recommendation Report that persuades readers to take action in response to a defined problem within a real company or organization.

The Recommendation Report, an informative, analytical business document, uses facts from research to persuade an audience to take action in response to a defined issue or need.

Paper For Above Instructions

Title: Recommendation Report on Employing Financial Consultants to Avoid Poor Financial Management

Abstract

This recommendation report addresses the critical issue of poor financial management within the Alma Company, where the CEO’s lack of financial acumen poses a risk to its operational viability. This report advocates for the employment of financial consultants to guide the company in making informed financial decisions that can enhance its financial health, reduce the risk of bankruptcy, and ultimately lead to improved sustainability and growth.

Introduction

The Alma Company has been experiencing financial difficulties attributed to ineffective management and a lack of expertise in financial strategy. The CEO’s limited knowledge in financing, cost reduction, and cash flow management has hindered the company's growth and stability. This report aims to recommend the hiring of financial consultants who can equip the organization with the necessary financial knowledge and strategies to enhance performance and mitigate risks.

The target audience for this report includes the CEO and board members of Alma Company, who have the authority to approve recommendations regarding organizational changes. The recommended solution of hiring financial consultants promises to provide critical expertise and insights that can aid the company in navigating its financial challenges effectively.

Discussion

Financial Literacy and Business Performance

Understanding financial concepts is crucial for effective decision-making in any business. Hastings and Mitchell (2020) discuss how financial literacy directly impacts investment behaviors and wealth accumulation. A lack of this knowledge can lead to poor financial decisions, as evident in the case of the Alma CEO, whose understanding of financial management is limited. By hiring financial consultants, the organization gains access to experts who can foster financial literacy at the leadership level, thus promoting better decision-making.

Comparative Analysis: Lessons from Major Organizations

Analyzing the financial struggles of Disneyland Paris, as highlighted by Yu (2017), provides a critical lesson for Alma. Disneyland Paris faced significant financial challenges due to poor financial management and strategic missteps. The article establishes a direct correlation between management quality and financial performance, underscoring the necessity for consulting expertise to avoid similar pitfalls. If Alma does not address its management deficiencies proactively, it risks emulating the financial struggles seen within Disneyland Paris.

The Importance of Consulting Services

The paper by Vukotić et al. (2017) emphasizes the vital role of consulting in modern business management. Businesses today navigate uncertain environments, and decision-making is often fraught with risks. Financial consultants play a crucial role in analyzing market conditions and providing strategies that align with organizational goals. For the Alma Company, hiring financial consultants could facilitate better risk management and improve financial outcomes by aligning business strategies with sound financial practices.

Corporate Governance and Financial Risk

Corporate governance structures directly correlate with financial outcomes, as explored in the work of Manzaneque et al. (2016). This study on Spanish companies indicates that companies with weak governance structures are at a higher risk for financial distress. By employing financial consultants, Alma can enhance its governance practices, ensuring that financial oversight mechanisms are robust enough to prevent mismanagement leading to bankruptcy.

Intellectual Capital and Sustainable Growth

Xu and Wang (2018) put forward insights on how intellectual capital influences financial performance and sustainable growth. Their findings highlight that investment in intellectual capital, facilitated through informed financial practices, can drive a company's success. Alma can benefit from this approach by leveraging consultants to develop strategies that enhance its intellectual assets, leading to sustainable financial growth.

Consulting Services and Organizational Needs

Malikova (2016) discusses the conditions under which companies seek consulting services, emphasizing the importance of understanding when to seek external help. Given Alma’s current financial situation, this is the ideal time to engage financial consultants. Their expertise can guide the organization in restructuring its financial policies and practices to avoid detrimental decisions that may jeopardize the company’s future.

Conclusion and Recommendations

This recommendation report underscores the necessity for the Alma Company to employ financial consultants to navigate its current financial challenges effectively. The evidence presented demonstrates that hiring external financial expertise can significantly improve financial performance, reduce risks of mismanagement, and foster sustainable growth. Therefore, it is imperative for the CEO and board members to act on this recommendation.

The next steps for implementing this recommendation involve conducting a thorough search and selection process for qualified financial consultants, initiating consultations, and fostering a financial literacy culture within the organization.

References

  • Hastings, J., & Mitchell, O. S. (2020). How Financial Literacy and Impatience Shape Retirement Wealth and Investment Behaviours. Journal of Pension Economics & Finance, 19(1), 1-20.

  • Yu, I. H. (2017). Investigating the Poor Financial Performance of Disneyland Paris.

  • Vukotić, S., Aničić, J., & Vukotić, R. (2017). The Importance of Consulting in Contemporary Business Management. Journal of Process Management. New Technologies, 5(3), 69-78.

  • Manzaneque, M., Priego, A. M., & Merino, E. (2016). Corporate Governance Effect on Financial Distress Likelihood: Evidence from Spain. Revista de Contabilidad, 19(1).

  • Xu, J., & Wang, B. (2018). Intellectual Capital, Financial Performance, and Companies' Sustainable Growth: Evidence from the Korean Manufacturing Industry. Sustainability, 10(12), 4651.

  • Malikova, Dilrabo. (2016). Consulting Services Market of Uzbekistan. World Scientific News.