Business and financial performance of an organization

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Business and financial performance of an organization

Cite Harvard Al, S. Building a Theoretical Model. The paper is purposively designed to study the linkages between organizational factors, including liquidity, leverage, asset utilization, market share position and firm size on financial performance in service firms.

In assessing the linkages, the study recruits return on assets ROA and return on equity ROE as dependent variables to assess financial performance derived from the existence of the stated organizational factors.

The aspect of financial performance in service firms is an important one as it reflects the effectiveness of the management. Additionally, the growth of productivity in service firms is traditionally low compared to the manufacturing firms; hence, the organization of factors in manufacturing firms has been quite documented in the literature to be linked with financial performance.

This provokes the question of whether management practices and organizational factors that have enhanced financial performance in manufacturing firms can also be accounted for the service firms.

The financial performance of the company is essential to measure management as the individuals and groups within the organization that contributes towards Business and financial performance of an organization financial objectives of the company.

The proposed research framework can be of practical value for the firms. Managers can benefit from the outcomes of the paper by having a clear picture of organizational factors and conducting necessary research in order to find out the true nature of these factors. Building a Theoretical Model 1.

Introduction It is the objective of every profit-oriented organization to attain financial performance, which is seen as the metric for assessing the effectiveness of management. Iswatia and Anshoria, posit that the ability of the organization to align the people and resources to tasks that are strategic for attaining organizational performance, in moral and ethical ways that ultimately leads to sustainable competitive advantage.

In measuring organizational performance, managers use financial performance and non-financial performance to assess their ability and that of the whole organization in moving the business towards financial performance. However, the extent to which a company is financially successful often determines the tangible benefits of management.

Bonuses, chances of promotion and other benefits depend on the bottom line of the company. Therefore, a number of factors have been studied in relation to various measurements of financial performance.

Numerous ways and theories have been proposed to measure the profitability of the company. A study in South Korea by Lee, that relied on panel data for the country from on the ownership structure of the organizations and financial performance, which revealed that firm performance, is attained at a hump-shaped level between the ownership structure concentration of the organization and firm performance.

The study further provided some empirical results on the linkage between organizational ownership structure and firm performance, which showed a positive relationship. The findings indicated that the size of the firm and leverage are two important determinants of financial performance.

The firms in Greece that were found to be profitable are large firms which build the strong competitive advantage with effective management. Firm size as a determinant factor has been validated by many scholars as positively significant in influencing financial performance of business firms.

For instance, Prasetyantoko and Parmono, studied the determinants of performance at the corporate level of Indonesian companies and their study result showed positive indicators such company profitability. The authors further argued that leverage ratio which positively affects firm performance is also influenced by conditions that are driven by market forces within the business environment.

The study carried in Omani banking sector validated that the size of the bank and effective asset management play an important role in the attainment of the financial performance of banks in Oman. As the extensive body of literature confirms the link between organizational factors and financial performance, a creation of a unified model, together with validation of particular relationships of the model is required.

Therefore, the focus of this study is on financial performance aspects with strong emphasis on the factors that are directly related to financial reports of the organization.

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Taking into consideration that the measuring firm performance is rather challenging, and as there is no consensus among scholars and business practitioners on the metrics to be used in tracking the efficiency and effectiveness of individuals towards the organizational goals.

In this study, return on assets and return on equity are relied upon to assess financial performance with the link to organizational factors. Furthermore, links between organizational factors of liquidity, asset utilization, leverage, market share position, firm size and financial performance of firms are conceptualized.

Research Model Assessing firm performance is critical to establishing the importance of various factors and resources combined towards the business goals and objectives.

No organization can afford to let the business system operate without evaluating and monitoring performance.

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The effectiveness of management to organize people and resources in an organization is strategic for contributing to the synergy between organizational factors and firm performance.

The research model constructed in this paper links the organizational factors towards achieving financial performance. The organizational factors such as liquidity, leverage, asset utilization, firm size, and market share are the independent variables. Financial performance is the dependent variable in this study and the selected performance metrics to measure it are the return on assets ROA and return on equity ROE.

Endogenizing this research framework is for the reason of selecting and using organizational factors to attain and improve organizational financial performance, therefore, is the focus of this research. Organizational Factors Influencing Firm Performance A comprehensive examination of the literature on financial and non-financial determinants of financial performance of an organization was employed to construct the research model provided in the figure above, which is elaborated below to represent organizational factors influencing firm performance.

Liquidity The current ratio is the common measure of liquidity. Liquidity is an important factor for the company in the capability of meeting the debt obligations by using the available cash and current assets that can be quickly turned into cash.The essential guide to creating an organization ofhigh integrityand superior performance.

With the high-profile corporate scandals that have taken placein recent years, corporate ethics are more important to a businessthan ever before. The course is designed to provide students with insights into the complex environment that organizations of any size operate.

Organizational leaders’ and organizational members’ responsibility to use ethical thinking to balance stakeholder interests with organizational duty are examined. This article needs additional citations for verification. Please help improve this article by adding citations to reliable vetconnexx.comced material may be challenged and removed.

(August ) (Learn how and when to remove this template message). Government organizations. Financial Newspapers and online.

Stock Exchange. External data in used to analysis the overall business and financial performance, competitive position, forecast about future position of organization and market share of business. Data Application in Research: The data chosen in this research is secondary data.

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Business and financial performance of an organization

We deliver relevant financial and performance dashboards that provide actionable C-level insights. The accomplishment of a given task measured against preset known standards of accuracy, completeness, cost, and a contract, performance is deemed to be the fulfillment of an obligation, in a manner that releases the performer from all liabilities under the contract.

Business and financial performance of organization - Free Accounting Essay - Essay UK