Non Financial Factors: Investment Proposal

The financial factors in financial context can be determined as liquidity, intensity of fixed assets, leverage, value of the firm and its size, etc. On the other side, the non financial factors are associated with improvement of staff morale, improvement of relationship with different stakeholders, etc. In the consideration of non financial factors, it is important to make better decisions by managers and executives of the organizations to adjust its value in the market (Chen, 2016). Further, the factors for investment proposal that are specifically considered in the non financial context are related to satisfaction of employees and motivation. Now, this report will discuss about the non financial factors for investment proposal in order to increase our understanding related to these scenario.

Non Financial Factors for Investment Proposal

The non financial factors for investment proposal is generally meet the requirements of current and future legislation with matching industry standards. For investment proposal, non financial factors are considered as good practice, improvement of staff morale and easy ways to recruit and retain employees in the organization. At the same time, the improvement of the relationship with suppliers and customers are also important to consider as non financial factors for investment proposal effectively and efficiently (Lammers, 2019). The satisfaction of the customers cannot be left as non financial factors for investment proposal as they are supreme power in the business to fulfill their needs and expectations on the priority basis. 

The non financial factors play essential role in the improvement of organizational performance because the outcomes of the company are based on the working capabilities of employees and their motivation. In the case of employees that is a major non financial factors need to motivated and satisfied effectively. Employees for investment proposal affect the production and expected outcomes (Lammers, 2019). At this stage, developing the capabilities of the business, it is important to build skills and experience of the employees. Such non financial factor is also very effective for investment proposal because of strengthening management systems.

Furthermore, a non financial factor, such as manpower availability in new project is required in order to fulfill the demand of more production. Therefore, in investment proposal, the labor requirements to work on the desired project are necessary to achieve the target of the project successfully. The increasing needs of the manpower within a project and accomplishment of project work match the industry standards and a good practice to get more production and other benefits (Lammers, 2019). The shortage of labor for a new project creates negative impact on the production and goals of the company.

In non financial factors, actions for investment proposal are also one of the financial factors that can be used to change the policy and procedure in the decisions of the organization. In this competitive marketplace, the actions to change the policy and procedure are important because getting a new project is necessary to move the rival business into successful business operations in the market (Lammers, 2019). Therefore, actions for investment proposal that is non financial is necessary to make the business effective through changing the policy and procedure with additional information.

The anticipation and dealing with future threats is a non financial factor that is useful for investment proposal. The investment of anticipation and dealing with the future threats, such as protection of intellectual property is important in the potential competitive environment in order to take competitive advantage effectively. The anticipation and dealing with the future threats for investment proposal assures a regular growth of the company. The protection of intellectual property right can save the future growth of the business as it helps to influence customers both new and existing more than rival companies (Forbes Business Council, 2020).

Moreover, the non financial factors for investment are also linked to managerial ownership of the organization. The managerial ownership is possible for investment proposal because of larger equity ownership stakes. In firm outcomes, managerial ownership works as risk aversion in high uncertainty of the market. In investment proposal, managerial ownership, such as stake in the company works effectively in which it makes the firm to grow slowly and steadily over time (Forbes Business Council, 2020). At this stage, there are a specific relation between managerial ownership and firm value in the market in which mitigating concerns of the company are considered effectively and efficiently.

Apart from this, improving business reputation and its relationships with the local community is also a non financial factor that can be considered for investment proposal. The improving business reputation and its relationships with the local community are very helpful to improve the reputation of the company. Therefore, this non financial factor for investment proposal works to serve customers of the company very well with a solution to address the business problems. Further, improving business reputation and its relationships with the local community assure an environment of brand reputation or identity development with maintaining its core values (Forbes Business Council, 2020).

Therefore, the customer experience can be integrated with their understanding on the social media to increase its value with increasing a number of new customers. The improvement of relationships with suppliers is also an effective non financial factor for investment proposal because of better meet one another’s needs. There are opportunities as well for improvement of the firm after investment proposal of relationships with suppliers. Deriving value in the business operations can be possible in improvement of relationships with suppliers because there would be effective identification of cost-saving opportunities in the supply chain system (Chen, 2016). The improvement of relationships with suppliers is effective in avoidance of risk and early warning in the business operations.

In non financial factors, the environmental impact of a potential investment can be seen as securing interest of general public and needs of the firm that affect the financial decision of management on the priority basis. When the decision is made by the management for investment proposal, non financial factors play essential role to support the decision and it should be always be taken into account on the priority basis (Forbes Business Council, 2020). Therefore, in investment decision, tracking non financial factors early is necessary in the context of adjustments.

In most of the situations, government ownerships and independent board of commissioners are also considered non financial factors. In investment decisions, government ownerships are linked to ownership in publicly traded firms of government equity. The bond credit of the government is an example non financial factor that is released to affect the cost of corporate debt in long-term scenario (Chen, 2016). At the same time, independent board of commissioners also affects the decisions of management related to the investment because of their special responsibilities under the Investment Company Act. They help the firm through raising fund assets in order to pay distribution expenses.

Conclusion

After discussion of non financial factors for investment, it can be stated that non financial factors affect the financial decisions of management effectively. In financial decision making basically in the case of investment, non financial factors play the most important role as regarding needed adjustments when managers make decisions. The non financial factors that are considered as customer satisfaction, employee morale, relationship development with suppliers and customers etc, always need a non financial control that is complement with financial controls. At this stage, non financial factors affect the outcomes of the company basically in the case of employees’ motivation and customer satisfaction.

References

Chen, B.S. (2016). Management Ownership and Investment in the Business Cycle. Retrieved from: https://scholar.harvard.edu/files/brianchen/files/mgmt_own_investment.pdf

Forbes Business Council. (2020). 15 Smart Ways To Improve Your Company’s Online Reputation. Retrieved from: https://www.forbes.com/sites/forbesbusinesscouncil/2020/10/20/15-smart-ways-to-improve-your-companys-online-reputation/?sh=63a7a32f24f8

Lammers. T. (2019). 3 Non-financial Factors That Affect the Value of Your Business. Retrieved from: https://www.business.com/articles/value-of-your-business/