Tag Archives: 8.Financial & Commercial Awareness
The Ladder of Inference is a model that was first developed by organisational psychologist Chris Argyris in 1992 and later used by Peter Senge in his book, The Fifth Discipline Fieldbook.
The ladder depicts the unconscious thought process that we all go through to get from facts to a decision for action. It attempts to explain how we tend to behave or "jump to conclusions" when faced with a "situation".
- We select 'facts' (although not necessarily consciously) from our data bank of experience, facts, beliefs and
- Once we have selected data, we begin to add meaning to it. We interpret, that is, make assumptions about what we see, hear, read, feel and we impose our own interpretations on the data.
- Then draw our conclusions from We lose sight of how we do this because we do not think about our thinking. The conclusions feel so obvious to us that we see no need to retrace the steps we took from the data we selected to the conclusions we reached.
- Our conclusions become part of our data bank - whether 'true' or distorted, they will influence future thinking.
Financial planning helps you determine your short and long-term financial goals and create a balanced plan to meet those goals.
Here are nine reasons why financial planning – with the help of an expert financial advisor – will get you where you want to be.
Income: It’s possible to manage income more effectively through planning. Managing income helps you understand how much money you’ll need for tax payments, other monthly expenditures and savings.
Cash Flow: Increase cash flows by carefully monitoring your spending patterns and expenses. Tax planning, prudent spending and careful budgeting will help you keep more of your organisation's hard-earned cash.
Capital: An increase in cash flow, can lead to an increase in capital. Allowing you to consider investments to improve your overall financial well-being.
Employee Security: Providing for your employee’s job security is an important part of the financial planning process. Having the proper employee insurances and policies in place can provide peace of mind for you and your staff. You need to ensure that you plan the finances to pay for pension plans, sick cover, unexpected expenses such as machinery breakdowns.
The Chartered Institute of Management Accountants (CIMA) produce a range of 'Topic Gateways' which are intended as a refresher or introduction to topics of interest to their members and others involved in the practical application of finance within organisations.
This booklet provides a definition, overview, and applications of different planning and forecasting methods.
Grid analysis is a useful technique to use for making a decision.
It is most effective where you have several good alternatives and many factors to consider.
To download an explanation of how to use the model Click Here
This is one of many models of how to solve problems.
It can give you and your team some structure if you need to find a solution which everyone needs to buy implement and learn from.
1. Identify The Problem
- What is it you acutely want to change? It is remarkable how often a group of people sit down together to solve a problem and each has a different understanding of the issue and a different outcome in mind. It is essential that all the key stakeholders agree on the nature of the
- You then need to analyse the problem in more detail. What factors are having an impact on the problem in question? What specifically is going wrong and to what extent? How should things be? Be careful not to define the problem too narrowly or too broadly, or in terms that place inappropriate emphasis on insignificant
- You should also avoid the tendency to stick rigidly to your original definition of the problem. Things change and it is important to check that the problem still exists in the form you have defined
2. LOCATING THE CAUSE OF THE PROBLEM
We all have preferred ways of doing things – including solving problems and making decisions.
This questionnaire can be used to help you gain an insight into how you approach these key business activities.
Facilitator guidance on how the activity can be used within a team meeting or learning event is also provided.
To download this activity, click on the following link: Decision Making Styles Questionnaire
Effective business planning will determine what business success looks like and what needs to be done to achieve it. Once you have a clear plan for your business, you need to look at the numbers to see if your plan will provide the financial results that you want.
This is done by preparing a budget based on your business plan objectives. For example, if you have decided to increase your sales, then this may mean extra staff, stock and/or increased marketing.
You will need to prepare a budget that shows not only increased sales but increased expenses that will be required to achieve the increase in sales.