Sunday, January 25, 2009
As a manager, explain the importance of understanding the controllable and uncontrollable financial impacts on a business environment? What can you do to limit these financial constraints?
As a Manager I have an annual budget which is then broken up into Fiscal Quarters. As a marketing manager I have ad spends, sponsorships, promotional items, staffing and additional items. These are considered my more controllable financial impacts. However our Chief Operations Officers may make changes to my budget throughout the year that affects the company as a whole. Last year the majority of my budget changes were made at the staffing level. When the banking bubble first burst, changes were made to our staff training budget. All trainings were cancelled until further notice. The next budget change was the freezing of all staff salaries for the next calendar year. These changes started to affect general moral and some employees found other employment at this time because of the bank’s uncertainty. This caused Officers of the bank to decide whether these employees would be replaced or not. The decision was made not to replace any employees. As the banking arena started a downward spiral the bank started to face uncontrollable financial impacts of Small Business Administration loans failing and deposits dwindling down to FDIC insured amounts. This caused the bank to decide to release the SBA loan department and 10% of its work force. The layoffs were the banks way of limiting financial constraits.