Business transformation is a change management strategy which has the intense and radical changes that guides an organization towards a definite direction which take it to a new level of effectiveness . Volkswagen is most leading organization in automotive sector whose main objective is to serve qualitative goods or services to domestic as well as foreign clients. Therefore, assignment is going to highlight the two major subject that is finance and governance in order to analyse the need of capital at workplace. Along with this, throw some lights on major relationship between finance and governance for understanding each or every aspect in much better way.
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Governance – Bider, and Amin Jalali (2016) defined governance is the highest admin authority which regulates a business with an effective aim which has an objective. The effective governance establishes a structure by defining the relationship between interior and exterior people and groups which are involved in providing solutions and business implementation activities. It describes the proper flow of information between all the participants and stakeholders. Berman, (2012) said that it also undertakes the appropriate review and risks and issues that can be awake by the time of transformation. It ensures the approvals and directions for the program which is obtained at each stage with an effective timely manner. The purpose of governance is to provide a decision making frame work with logical, robustness in repetitive cycles that can achieve the success.
Finance – The transformation of a business is takes place when there is a requirement of new technology, so finance is the foundation which accelerates the short- term and long – term functions. Volkswagen finance manages the effective framework which increase the interaction with the business one of them is efficiency, second is risk, compliance, and control and last on is insights which is a key lever in business. Finance enables two dimensions which includes people and technology. People used to analyse the future requirement and competency and technology supports the future processes through validation. Aral and et. al., (2013) highlights that there are potential framework of finance that address business imperative including growth. The top management defines the why the change is needed, and it also develops a strong business partnering so that it support the business in growth phase. It responsible to design the best process that gives a efficient business functions. The finance has an important role because it has the potential to impact on a business.
Relationship between governance and finance
It has been analysed that both finance and governance plays vital role when it comes to transforming business in much effective and efficient way. Here, it has been located that finance cannot be properly managed without considering all the legislations which has been made by government of a Australia. Along with this, it has been located that a scandal which was came in-front where Volkswagen has build some software in their cars which has reduced actual pollution percentage which was being generated by them in order to enhance sales of them. For a longer period of time this organisation has raised percentage of finance (Income and revenue). As this action was illegal which has captured by an organisation which directly impacted on its reputation. Meredith and et. al., (2012) stated that government of every single country has their own sort of policies which stays different from each other, rules and regulations which has been made by the government which should be kept in mind as well while making any sort of initiatives. Relationship among finance department of a company and governance should be interrelated with each other. Debnath and et. al., (2012) said that only a firm can expect to transforming business in a successful manner. Away with this, stakeholders which can be stated as fund generating machine should be kept in mind while making any sort of decision. Government of Australia has fixed amount of incomes and revenue which a foreign company. This actions was taken and being considered as to give proper advantages to domestic companies as well. Because it has been located that foreign firms usually generates high revenue and then takes it back to the native country.
Importance in transformation of business
It can be said that there is an crucial relationship between corporate governance and finance in an organisation. The corporate governance is an structure which is helpful to an organisation in formulation of decisions relying on informal and scientific measures . The tool of financial control is determined through structure of governance of an organisation and can be considered as paramount element. The determination of use of assets is provided by the code of governance which will help an organisation transform its operations and services. There is a right coordination amongst each other leading to attainment of change objectives by a business. Scherer and F. Kog. (2010) demonstrates the manner in which finance of an organisation is utilised should match with the corporate governance model which has been implemented in an organisation. It takes into consideration the views and expectations of various stakeholders of a business leading to avail desired result. The financial control can be determined on the basis of party which is known to be dominate the ownership structure .
From the above report, it can be concluded that the governance and finance are mainly two topic which are highly linked with each other. Their main objective is to show that capital is seen as most indispensable aspect for company success because all the business activities are based on this only. Governance is the concept which is highly utilised to monitor and evaluate the production and other process. It means entire assignment is focussing on major significance of these two elements as both of them are consider as mandatory part for an organization. Along with this, one more thing is determined that governance and finance are interlinked with each other such as; sufficient funds is required for proper administration of an organization. As Volkswagen is a leading entity due to which they are focussing on these two components in order to control the possibilities of losses. At the end, it has been understood that it helps an enterprise while transforming their business in more effective manner.
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