Management Credibility and Honesty Essay Example | Topics and Well Written Essays - 2750 words

Management Credibility and Honesty - Essay Example A company which ignores management and credibility in its dealing with the working capital will in the long term be characterised by a negative return over the time and ultimately it will have damaged the trust of its shareholders due to its accounting manipulations.There will be a weakened balance sheet through excessive debt and poor working capital management.Based on the above problems this paper reviews through the example of the Enron Saga the importance of management credibility and honesty on working capital management for company and the effect of bad management credibility and honesty.The significance of management   and the link with working capitalCooke and Williams (1998) state that without planning it is difficult to envisage the successful conclusion of any project or the effective control of time, money or resources. Planning is essential throughout all stages of the process from inception through to design, tendering, construction and commissioning stages of a proj ect. The reasons for planning are summarised below.†¢Ã‚  To aid contract control†¢Ã‚  To establish realistic standards†¢Ã‚  To monitor performance in terms of output, time and moneyIt is an essential function of management to prepare forecasts in order to establish a plan for the future of the business. Without a plan against which to monitor performance, management has no control and no business can be run successfully without keeping close control over the day- to -day finances. Control is achieved by preparing budgets.... roblems this paper reviews through the example of the Enron Saga the importance of management credibility and honesty on working capital management for company and the effect of bad management credibility and honesty. The significance of management and the link with working capital Cooke and Williams (1998) state that without planning it is difficult to envisage the successful conclusion of any project or the effective control of time, money or resources. Planning is essential throughout all stages of the process from inception through to design, tendering, construction and commissioning stages of a project. The reasons for planning are summarised below. To aid contract control To establish realistic standards To monitor performance in terms of output, time and money To keep the plan under constant review and take action when necessary to correct the situation It is an essential function of management to prepare forecasts in order to establish a plan for the future of the business. Without a plan against which to monitor performance, management has no control and no business can be run successfully without keeping close control over the day- to -day finances. This involves providing the information necessary for keeping managers informed so that decisions can be made about how business should react to current circumstances.When managing a project, or number of projects, accurate scheduling is critical to success. Double- booked resources, inaccurate information, mishandling of materials, and more can cause significant delays in the project that result in massive profit loss. It is vital therefore that a form of cash flow monitoring is in place. Financial plans are called budgets, and the process of making, monitoring and adjusting them is called budgetary