revise essay according to the following guideline. RECOMMENDATIONS AND STRATEGIES FOR IMPROVEMENT THESIS/FOCUS: It is unclear where your thesis statement is, follow the guidelines by placing at the en

Running Head: EMPLOYING FINANCIAL CONSULTANTS TO AVOID POOR FINANCIAL MANAGEMENT 0

Employing Financial Consultants to Avoid Poor Financial Management

Abstract 2

Employing Financial Consultants to Avoid Poor Financial Management 4

Introduction 4

Discussion 7

Financial Literacy 8

Intellectual Capital 9

Uncertainty and Risk 10

Competitiveness 11

Owners’ Interest 12

Business Efficiency 12

Conclusion 14

References 15

Organizations face a wide range of challenges such as limited financial resources, managerial constraints, lack of equipped and trained personnel in the general setting, and in the operations to effectively executive organizational duties. But some of the problems faced are originating from the financial management concept. Thus, employment for the financial consultant would significantly boost the organization’s progress. Financial literacy aims to improve capacity and know-how about accurate calculations required for an effective financial decision making. Investment in intellectual capital (hiring a financial consultant) would significantly improve corporate competitiveness and financial performance. In a business environment, authorities should hire financial consultants to observe dynamics in the contemporary conditions for immediate response and predicting risk and uncertainties. There is a positive correlation between corporate governance and financial management success; thus, organizations should hire consultants for the shareholder’s interest in the long-run and short-run. An organization hiring financial consultants for decision making would stabilize the organization’s competitiveness and efficiency on a short-term and long-term basis. Therefore, this report has posited the need to hire a financial consultant to avoid poor financial management.

Companies, small and medium-sized enterprises, constitute a great percentage in the general economy and as the critical steering for the globe's socio-economic growth. Despite these organizations' appealing outlook, they face various challenges, not limited to managerial constraints, lack of equipped and trained personnel, limited access to financial resources, and underutilization of technology (Karadag, 2015). However, the lack of effective and efficient financial management is the central challenge facing these organizations among the listed challenges. Importantly, financial management is a critical aspect of the managerial system for all organizations. Thus, mismanagement or ineffective management of financial resources would replicate adverse ramifications on the organization's long-term performance.

The majority of the organizations' problems are of the financial mismanagement nature, and they significantly lead to business failures. Lack of financial management skills and know-how alongside unpredictability of the business' economic environment leads to economic effects and the organization's general thrive. Irrespective of the various benefits accrued by the organization, managerial deficiencies, lack of a strategic financial plan, and lack of financial resources control skills, constitute the critical reasons for the downturn of the organizations postulating poor financial management as the primary contributor for the businesses' failure (Karadag, 2015). This study also postulates a positive correlation between financial approaches, strategic decisions, and the organization's overall performance. Financial challenges such as huge value collateral requirements by the banks and other lending financial institutions continue to pose an imminent threat to the organizations' financial scope. The available financial sources, mostly for small and medium enterprises, are insufficient and inaccessible for the businesses' general operations. Notably, the organization's resources are scarce. For this reason, most of the managers refrain from hiring professional financial managers positioning their organizations at risk of collapsing.

The organization's failure begins from the lack of knowledge about the culture and miscalculations on the investment that significantly hinders the enterprise's financial performance. Miscalculations on the investment are contributed by the businesses' over-expectations, which lead to over-investment under limited demand (Yu, 2017). Financial illiteracy plays a key role in retarding investment choices. Lack of business strategies and internal problems on the managerial skills results from the poor financial performance. Thus, financial performance plays a critical role in the organization's general thrive and effective business decision-making.

Misappropriation of finances is a key player in most of the organizations' financial downturn. Lack of knowledge of financial policies and payment procedures comprises the components of poor financial management. Mostly, the key cause of the poor financial management in the organizations is the lack of internal controls that at end restricts the commencing of operational activities. Importantly, poor financial management ranges from failing to review the organization's budget, a fundamental aspect of financial management to instill financial controls. Poor financial management entails the lack of effective monitoring of the budget prospects and the enterprise's actual achievements. Notably, poor management of organization funds leads to unplanned budget deficits that would significantly affect the business's actual performance.

Planning in financial management requires knowledge and understanding of the financial implications of the various operations. Poor financial planning would lead to huge expenditures and vast drainage of financial resources that, in turn, would cause a financial crisis in the organization. Lack of proper financial management results in high capital, incorrect product pricing, and overproduction compared to demand, and input-output ratio problems.

For every organization's success and sustainable performance, financial management is a crucial tool from which each aspect of spending and acquisitions are initiated and monitored. Lack of a structured financial department has been a critical player in the failure of several organizations. Lack of financial management knowledge on planning and adequacy of financial systems should be a steering force for most institutions to mitigate the financial problems associated with poor management of financial resources. Mismanagement of financial resources renders organizations vulnerable to financial losses and incapable of navigating across the financial crisis.

Critically, Alma Company, as a global organization operating effectively, on innovation and technological advancement, should be standardized in all aspects and positioned at an advantageous spot. However, the CEO of Alma Company is less versed in the financing, cost reduction, cash flow, and profit margin, a problem that requires adequate financial management knowledge. The target audience in this report is the managers and the key stakeholders of the Alma Company. The audience targeted should learn an essential role played by financial managers or financial consultants in the effective performance of the entire organization. The CEO, as part of the target audience, would stand a chance to stabilize the economic position of the company in terms of effective financial performance and the overall thrive of the organization's departments. Therefore, this paper aims to recommend the employment of financial consultants to avoid poor financial management.

Financial consultants must consider a range of information like economic trends, regulatory trends, and the client’s willingness with risky decisions. A financial consultant offers financial advice to the client regarding an investment portfolio and other financial management aspects.

Financial literacy aims to improve capacity and know-how about accurate calculations required for an effective financial decision making (Hastings & Mitchell, 2020). In investment decisions, financially illiterate persons are more concerned with financial information and how it is structured. Thus, financial literacy affects the individuals' level of investment information interpretation and decision-making on investment choice based on knowledge. Thus, financial literacy is based on the individual's understanding of financial concepts such as inflation, returns on investment, and compounding. Financial literacy influences savings, investment, and wealth accumulation decisions. Thus, Alma Company should prospect to hire a financial consultant to reshape the organization's environment for wealth accumulation and investment decisions. Since the CEO has little knowledge of the financial decisions, a financial consultant would play a critical role in facilitating decision making on long-term financial improvement. Due to the financial consultants' know-how on the financial and investment market dynamics, he/she would assist the company in evaluating investment funds and selecting the most profitable with the lowest costs. Notably, the CEO cannot execute all operations effectively alone. Thus, it would be advantageous for Alma Company to hire a financial consultant to establish and examining critical financial decisions to mitigate negative repercussions associated with poor financial management in organizations.

Due to the steady growth of technology organizations that highly demand corporate governance, and knowledge-based management should consider the significant role of intellectual capital for corporate competitive advantage and financial performance (Xu & Wang, 2018). Intellectual capital fosters human capital maintenance, processes improvement, and innovation. Financial management focuses on striking a balance and establishing the relationship between actual business and optimal financial performance. Financial performance involves the examination of the organization's future ability. For a sustainable financial performance, the organization should understand the organization's dynamics and strike a balance on the intellectual capital requirements. The sustainable growth rate concept is used in financial management to postulate optimal growth. Thus, an organization can manage and balance the components of a sustainable growth rate to avoid straining financial resources and debt crisis. As a component of intellectual capital, human capital would significantly foster the organization's financial performance by inducing new ideas and skills. Therefore, the Alma Company CEO should consider investing greatly in intellectual capital to improve its performance. Thus, hiring a financial consultant would be a good investment in intellectual capital to improve its sustainable growth rate and general financial performance.

Intellectual capital creates value for the organization through knowledge management to create a long-lasting competitive advantage (Dženopoljac, Janoševic, & Bontis, 2016). Investing in intellectual capital is a significant aspect since the organization improves the ability to divide roles in terms of expertise and knowledge required. Importantly, Alma Company should hire or employ a financial consultant who will increase the company's value by inducing new knowledge and understanding the overall market dynamics. By making critical and appropriate decisions, a financial professional would direct the organization in the safe investments, and key procedures and patterns for financial resources management for optimal performance.

In a business environment managers or authorities to reflect on the dynamics since contemporary conditions deserve immediate response or else, it will cause chaos (Vukotić, Aničić, & Vukotić, 2017). The consultants' efforts seek to change the rigidity in understanding a particular business environment. The consultancy helps in improving managerial skills for effectiveness and competitiveness in the general market. Therefore, consulting mitigate the organization's worries about the future by repositioning itself on a hedged position in the total market. Notably, the consultant's role is to make financial decisions that are necessary for quality service delivery and not to manage the organization. Therefore, hiring or employing a consultant would position the organization at a competitive spot through risk prediction and uncertainties examination. Thus, employing a consultant in Alma Company would significantly boost its competitiveness by understanding and predicting market uncertainties and possible perils.

The financial Risk matrix plays intermediating operations and the attention to early warning signals (Themsen & Skærbæk, 2018). Risk management is originally interested in creating interest, assurance, and confidence in the unseen. Thus, financial consultants play a role of risk managers in promoting certain risk rationalities and balancing them with pre-existing managerial rationales. Thus, Alma Company should employ to execute several motives of risk management relationship with time, operations, and technologies.

In an aggressive organizational environment, companies must change and advance to survive (Vukotić, Aničić, & Vukotić, 2017). Survival and growth in corporate context involve examining the company's market share, investment, and competitive advantage. To achieve this, an organization should hire or employ a consultant to examine the considerable resources. On this basis, consulting and seeking assistance concerns financial restructuring, evaluating the company's value in terms of capital and liquidity. Alma Company should employ a financial consultant to establish its capital value, liquidity, and overall market share. Through expert consultations, the company can integrate organizations in a safe operating environment, such as joint ventures, to gain competitiveness.

The correlation between corporate governance and financial management problems is based on diverse organizational stakeholders (Manzaneque, Priego, & Merino, 2016). In financial management crisis mostly arises from the conflicting interest between the shareholders and the management. Notably, management makes short-term decisions and shareholders prospects to achieve long-term decisions. Therefore, it is essential to note that the managers' role is to safeguard and meet the shareholders' interest in their job security. The owners' interest is to mitigate long-term financial distress arising due to the lack of knowledge of financial management and risk mitigation. Therefore, an organization facing financial distress due to the stakeholders' conflicting interest should employ or hire an independent financial consultant who would play a critical role in assisting the organization balance the short-term and long-term financial requirements of the company. Therefore, Alma Company would acquire a consultant to induce more feasible financial goals to the organization's prospects.

The critical factor for successful trends in a profiteering organization is improved business efficiency, which is the key objective of consulting professionals in an organization (Malikova, 2020). Consultation solves a wide range of managerial and operational problems that would retard its efficiency in both the long-run and short-run. Poor financial management is the primary player in the underdevelopment and downturn of major organizations. Lack of information, new knowledge, and skills can restructure a company in a very bad shape leading to general inefficiency in management and operations. Therefore, employing a financial consultant would significantly boost the company in understanding the economic and financial concepts to mitigate the risk of making a poor financial decision. The financial consultant would help the company by analyzing and re-planning, budgeting, and optimizing management models and capabilities.

Financial knowledge is a vital tool for every organization's success or the general thriving of a Company. However, financial consultancy and advisory services are costly, with high payoffs (Mitchell & Lusardi, 2015). Financial products and decisions arising from consultations become more complex in the future. Additionally, financial advisors expose organizations to more financial risks as a result of high rates of estimations. Notably, financial knowledge as a human capital investment in the organization brings along tremendous human resources cost that an organization must pursue on top of the other projected expenses. Financial consultants' advice and decisions are also primarily embedded in the prediction knowledge and financial markets prospects. However, without considering the financial market trends, their decision is based on mere probabilities and does not consider the probability of natural dynamics.

Crucially, I have targeted to recommend the employment of financial consultants to avoid poor financial management in this report. Notably, I have established the problems associated with poor financial management as the key players for major organizations' downturn. Therefore, an effective, efficient, and knowledgeable financial decision is a crucial tool for any organization's success. I have established the need for the financial consultant's employment to assist in critical financial decision making. Importantly, financial literacy is the key benefit of hiring a consultant because a leader or the organization is equipped with knowledge about the general market dynamics and the safe investments in fund markets.

Additionally, an investment in intellectual capital by hiring consults on financial managers would significantly establish an organization's sustainable growth rate to attain business efficiency. I recommend employment for a financial consultant since he/she would help the organization minimize risks through financial models and reduce market uncertainties. An organization should aim to achieve less risky but productive ventures considering time and market share. Through business efficiency, the company can gain a competitive advantage over other organizations in the same industry. Thus, the organization must analyze the need of a financial consultant, evaluate the consultant's reputation, and the financial implication of hiring the financial consultant. Therefore, after evaluating the need for the consultancy services, and implementation has been initiated, the organization would thrive effectively under optimal risks and uncertainties.

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Hastings, J., & Mitchell, O. S. (2020). How financial literacy and impatience shape retirement wealth and investment behaviors. Journal of Pension Economics & Finance, 19(1), 1-20.

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Yu, I. H. (2017). Investigating the poor financial performance of Disneyland Paris. University of Chester.