Financial potential: strategic management in conditions of economic risk

In the monograph the scientific substantiation of the theoretical positions of enterprises financial potential under the influence of economic risks is conducted. A methodological approach and practical principles for their management and consistency in assessing the level of financial potential influenced by economic risks are developed. Three levels of financial potential are identified: high, medium and low, and its profile is compiled for each industrial enterprise. A methodical approach to the study of economic risks is proposed, organizational support of strategic management that involves the interests of stakeholders is developed and supplemented. Recommendations on managing the financial potential of an industrial enterprise are of practical nature and can be used in the production activities of industrial enterprises. This collective monograph will be useful for senior students of higher education institutions, masters, postgraduates and young scientists, who are investigating the question of financial potential of industrial enterprises under the influence of economic risk

Experiences in the development of a sustainable scorecard for enterprise sustainability course

The Universitat Jaume I (UJI) of Castellón, Spain and the National Distance Education University (UNED) are teaching together the Master's Degree in Corporate Sustainability and Social Responsibility. The main objective is to study the concepts of sustainability and corporate social responsibility (CSR) and their multiple dimensions. This master’s degree aims to train professionals to practically apply the approach of ethics, sustainability and social and environmental responsibility to existing business models, and to other public and private organizations, such as not-for profit organizations and government public bodies. The master is composed of different courses. One of them is focused in how to build a sustainable scorecard to support enterprise sustainability decisions making. A sustainable scorecard is a performance measurement and management system aiming at balancing financial and non-financial as well as short and long-term measures. It is one of the most effective tools in evaluating potential investments and initiatives by better integration of the environmental, social and economic aspects of corporate sustainability measurement and management. The sustainable scorecard for enterprise sustainability course equips students with the necessary basic knowledge and competencies they need to design and utilize a sustainable scorecard for enterprise management, considering not only technological aspects, but also the management of organization policies and people. The aim of this paper is to describe the subject objectives, the target competencies, the subject contents, the assessments, and how the teaching methodology and the resources are used to teach the subject

Enterprise Risk Management: Adoption, Performance Benefits, and Disclosure Effects

Enterprise Risk Management (ERM) includes the methods and processes used by organizations to manage risks and seize opportunities that maximize firm performance. Thus, the ERM framework can mitigate the occurrence of financial crisis while enhancing firms operating performance and potentially providing capital market benefits. This study uses a unique set of data obtained via survey of Internal Audit Function management and publicly disclosed financial information to empirically examine corporate governance factors associated with adoption of ERM, potential operational and market performance benefits associated with adoption, and the impact of the risk factors disclosures on the firm‘s cost of equity and debt. Specifically, this three (3) paper dissertation contributes to the existing academic literature by considering factors and benefits associated with Enterprise Risk Management (ERM). The first paper of the dissertation considers the audit committee and IAF as potential determinants of ERM adoption. The second paper of the dissertation provides evidence of operational and market performance benefits associated with firms adopting ERM. The third paper of the dissertation examines the potential cost of capital impacts associated with non-financial information, specifically, ERM related risk disclosures. Results of the study provide support for the hypothesized association between adoption and maturity of ERM processes and audit committee financial expertise as well as the internal audit function reporting independence. In addition, the results provide some evidence of a positive relationship between the assessed ERM process maturity and operational performance.Finally, results indicate that increased disclosure of risk factors associated with ERM process is associated with reduced cost of capital. Prior literature has relied primarily on surrogates to estimate ERM impacts. While the reported results are based on a limited sample of firms, it provides direct evidence on the factors related to adoption of ERM processes as well as the potential benefits of adoption. Given the magnitude of the investment in ERM, this dissertation provides empirical evidence that there are potential firm benefits realized on the investment

STRATEGIES FOR MANAGING THE COMPANY'S POTENTIAL TO INCREASE THE ENTERPRISE'S INVESTMENT ATTRACTIVENESS

The subject of the study is a complex of theoretical and methodological provisions and practical recommendations on increasing the effectiveness of the formation and use of the potential of enterprise management strategies through the creation and implementation of organizational and economic principles to increase their investment attractiveness. Currently, there is no objective method of managing the investment potential of an enterprise, which is capable of reliably reflecting possible problems of functioning and risks of investing funds in the enterprise. Existing methods of managing the investment potential of a company consider either an insufficient number of factors necessary for evaluation, or an excessive number of factors to be evaluated, as a result of which it is quite difficult for the investor to isolate the necessary information and make the right decision. For such enterprises the increase of investment attractiveness is possible only by qualitative changes in the management and production system, in particular by reorientation of the production process to the needs of the market, which will improve the image of the enterprises on the market and create new or develop existing competitive advantages. Methodology. The theoretical and methodological basis of the article consists of general scientific methods: comparison, dialectical development of economic systems, methodology of normative-legal and information-analytical support of the functioning of enterprises, formation and use of the strategy of potential management of the enterprise, creation and implementation of organizational and economic principles to increase their investment attractiveness. The research was based on the synthesis of social science theories, organizational systems theory and corporate finance theory. According to the system approach, the potential of the enterprise was considered as the potential of the financial system of the enterprise. The purpose of the article is the development of theoretical, methodological provisions and practical recommendations for the creation and implementation of the strategy of managing the financial potential of the enterprise in order to increase the investment attractiveness of the enterprise. Conclusion. The research carried out in the article consists in modernization and optimization of the considered strategies of financial potential management of the enterprise in order to increase the investment attractiveness of the enterprise, identification of an evaluation method that would meet the needs of investors, taking into account the factors significant for the assessment of the investment attractiveness of the enterprise, capable to objectively characterize its advantages and disadvantages and investment risks for investors

Bulgarian ERP market survey results – the accounting perspective

Тhis article presents the results from our survey investigating peculiarities of financial accounting and management accounting within ERP (Enterprise Resource Planning) systems. Two questionnaires are designed – for two target groups: ERP vendors and ERP users. The purpose of this article is the exploration of some strong and weak accounting sides of ERP systems, ERP capabilities to support financial accounting and management accounting within enterprises. The purpose is reached by comparing opinions of ERP vendors and ERP users from our survey. The results from the survey reveal that ERP users don’t reach some of the frequently advertised strong sides of ERP systems even after more than five years of usage. ERP vendors and ERP users have different position about the degree of facilitation and support (potential and really achieved) from ERP systems to financial accounting. ERP users don’t apply a broad variety of management accounting tools by ERP systems

FINANCIAL ARCHITECTURE AS THE BASE OF THE FINANCIAL SAFETY OF THE ENTERPRISE

In today’s economic realities, achieving the necessary level of financial security of enterprises is a prerequisite for ensuring their sustainable operation and the formation of competitive development parameters in the internal and external market environment. The effectiveness of this process depends on building a high-quality financial architecture as the basic structural element of the company’s financial security system. In this regard, the subject of the study is an analysis of existing theoretical approaches to the definition of financial architecture and its relationship with the financial security of the enterprise. The methodological basis of the research is the scientific development of domestic and foreign scientists, the fundamental theoretical positions of economic science in the field of financial architecture formation, financial risk management, and financial security of the enterprise. The purpose of the article is to study the essence of financial architecture in order to substantiate its determining influence on the financial security of the enterprise and ensure its sustainable functioning in an unstable development of economic processes. The article analyses the theoretical aspects of financial architecture and finds that the interpretation of this economic category is due to the existence of clear causal relationships between its constituent elements and their impact on the financial support. Proceeding from this, the definition of financial architecture is drawn as a set of interconnected structural elements such as capital structure, ownership structure and quality of corporate governance, which accumulate and mobilize financial resources, increase control over the activity of the enterprise, solve conflicts of interest between owners and other stakeholders. It is determined that the choice of principles and methods for constructing financial architecture depends on such financial interests of economic entities as forming a flexible financial potential, optimizing the structure of capital, increasing investment attractiveness, maximizing profits, and increasing the market value of the enterprise. It is proved that the result of building a flexible financial architecture is to provide the appropriate level of financial security of an enterprise by identifying, quantifying, neutralizing, minimizing, and monitoring its financial risks. It is proposed to systematize indicators of financial security level assessment on the most typical of its functional components, among which investment, credit, emission, innovation, and currency can be distinguished. It has been established that ensuring the appropriate level of financial security will contribute to achieving financial sustainability, forming qualitative financial potential, providing competitive advantages, harmonizing interests of economic entities, and creating an effective system of economic security of the enterprise. It is concluded that the construction of high-quality financial architecture is the basis of financial security of an enterprise, the level of which depends on the proper management of financial risks and ensuring an adequate level of safety of all its functional components. As a criterion for the effectiveness of the process of ensuring the financial security of the company, sustainable development of the enterprise was determined in the conditions of an unstable economic environment

Waqf as a financial instrument for the development of social enterprises in Pakistan

The aim of this research is to develop an understanding of waqf entrepreneurship and social enterprises. We look into different aspects of these entities their operation, fund management and challenges they face. This paper further applies the waqf model under Islamic financing for social enterprises. This research is fundamentally, descriptive, and Qualitative in nature. Sources of information are both primary and secondary. Primary source includes an interview from a youth-led organization operating in Pakistan. The secondary sources include research articles and archival record. The studied established that in Pakistan, social enterprises have no legal status with only few policies that indirectly apply. Some of the financial sources of social enterprises identified are donations, grants, concessional loans. Social enterprises face several issues in Pakistan. These include lack of funding, social recognition, government support and hardships in doing business. Islamic Financial Institutes also have the potential of playing a key role in financing social enterprise. Through the use of Islamic financial instruments like Zakat, Sadaqah, Waqf, Sukuk etc., Islamic financial institutes can alleviate this sector. We particularly look at waqf-based financing for social enterprises

СУЧАСНІ АСПЕКТИ АНТИКРИЗОВОГО ФІНАНСОВОГО УПРАВЛІННЯ ПРОМИСЛОВИМИ ПІДПРИЄМСТВАМИ

The article studies existing methods of anti-crisis financial management of industrial enterprises and developed methodological support to assessment of the level of anti-crisis financial management. Provided that industry is one of the leading industries in national economy of Ukraine. All conversions that occur in industrial plants always lead to significant changes in the socio-economic situation of the country. The author’s definition anti-crisis financial management of industrial enterprise at which you want to understand the complex system of actions aimed at preventing or eliminating the negative phenomena for commercial and business activities. The algorithm of crisis financial management, which allows the development of a system crisis financial management of industrial enterprise to consider the impact of external and internal factors of the environment in which operates an industrial enterprise, with the aim prompt identification of threats to prevent or troubleshoot to prevent, or overcoming the crisis. Noted that an important role in the financial crisis management play the financial risks that occur throughout the entire production cycle. The developed methodological support of anti-crisis financial management, which is an estimate of the influence of groups of indicators for the deployment of crisis on the industrial enterprise.. It is concluded that the use of the proposed methodological support of anti-crisis financial management of industrial enterprises allows to reduce the likelihood of crisis situations and significantly reduce the size of the potential loss. That is, it application gain the opportunity for industrial enterprises to respond quickly to the emergence of the crisis and to consider all types of financial risk in the implementation industrial and commercial activities.Досліджено наявні методики антикризового фінансового управління промисловими підприємствами і розроблено методичне забезпечення до оцінки рівня антикризового фінансового управління підприємством. Зазначено, що промисловість є однією з провідних галузей у національному господарстві України. Усі перетворення, які відбуваються на промислових підприємствах, завжди призводять до суттєвих змін у соціально-економічному становищі країни. Надано авторське визначення антикризового фінансового управління промисловим підприємством, під яким слід розуміти комплексну систему дій, спрямованих на запобігання або усунення негативних явищ для комерційної діяльності та бізнесу. Розроблено алгоритм антикризового фінансового управління, який дає можливість при розробленні системи антикризового фінансового управління промисловим підприємством ураховувати вплив зовнішніх і внутрішніх факторів середовища, у якому функціонує промислове підприємство, з метою своєчасного визначення загроз для їх попередження або усунення з ціллю недопущення чи подолання кризи. Зазначено, що важливу роль в антикризовому фінансовому управлінні відіграють фінансові ризики, які мають місце протягом усього виробничого циклу. Розроблено методичне забезпечення антикризового фінансового управління, яке являє собою оцінку впливу груп показників на розгортання кризових явищ на промисловому підприємстві. Зроблено висновок, що використання запропонованого методичного забезпечення антикризового фінансового управління промисловими підприємствами дозволяє знизити ймовірність виникнення кризових ситуацій та значно зменшити розмір можливого збитку. Тобто його застосування надасть можливість промисловим підприємствам швидко реагувати на виникнення кризових явищ і враховувати всі види фінансових ризиків при здійсненні виробничо-господарської та комерційної діяльності

Knowledge management applied to enterprise risk management

Risk and knowledge are two concepts and components of business management which have so far been studied almost independently. This is especially true where risk management (RM) is conceived mainly in financial terms, as for example, in the financial institutions sector. Financial institutions are affected by internal and external changes with the consequent accommodation to new business models, new regulations and new global competition that includes new big players. These changes induce financial institutions to develop different methodologies for managing risk, such as the enterprise risk management (ERM) approach, in order to adopt a holistic view of risk management and, consequently, to deal with different types of risk, levels of risk appetite, and policies in risk management. However, the methodologies for analysing risk do not explicitly include knowledge management (KM). This research examines the potential relationships between KM and two RM concepts: perceived quality of risk control and perceived value of ERM. To fulfill the objective of identifying how KM concepts can have a positive influence on some RM concepts, a literature review of KM and its processes and RM and its processes was performed. From this literature review eight hypotheses were analysed using a classification into people, process and technology variables. The data for this research was gathered from a survey applied to risk management employees in financial institutions and 121 answers were analysed. The analysis of the data was based on multivariate techniques, more specifically stepwise regression analysis. The results showed that the perceived quality of risk control is significantly associated with the variables: perceived quality of risk knowledge sharing, perceived quality of communication among people, web channel functionality, and risk management information system functionality. However, the relationships of the KM variables to the perceived value of ERM are not identified because of the low performance of the models describing these relationships. The analysis reveals important insights into the potential KM support to RM such as: the better adoption of KM people and technology actions, the better the perceived quality of risk control. Equally, the results suggest that the quality of risk control and the benefits of ERM follow different patterns given that there is no correlation between both concepts and the distinct influence of the KM variables in each concept. The ERM scenario is different from that of risk control because ERM, as an answer to RM failures and adaptation to new regulation in financial institutions, has led organizations to adopt new processes, technologies, and governance models. Thus, the search for factors influencing the perceived value of ERM implementation needs additional analysis because what is improved in RM processes individually is not having the same effect on the perceived value of ERM. Based on these model results and the literature review the basis of the ERKMAS (Enterprise Risk Knowledge Management System) is presented

Successful Economic Crisis Management Strategies Used by Small- and Medium-Size Enterprise Food Service Business Managers in the British West Indies

Poor crisis management strategies caused small and medium-sized food service enterprise leaders to permanently close business operations during the COVID-19 pandemic. These closures resulted in significant economic losses and reduced employment opportunities in the industry. Grounded in the relational crisis management model, this qualitative pragmatic inquiry aimed to understand the economic crisis management strategies used by business managers in the food services industries to prevent business closures in the British West Indies. Data were collected from semistructured interviews with six business managers in the food services industry who successfully navigated their businesses through the COVID-19 pandemic. Four themes that emerged from the thematic analysis were (a) employee retention strategies, (b) customer-centric business strategies, (c) cost-cutting for financial stability, and (d) innovation and implementation. Recommendations for business managers include deploying comprehensive strategies using risk assessment planning, financial management, innovation and flexibility, employee support, technology leveraging, and strengthening relationships with stakeholders. The implications for positive social change include the potential for business managers to create environments in which economic and social systems are better equipped to cope with unexpected economic challenges, contributing to the stability and sustainability of communities and fostering a more robust and adaptable economy