O Of Any Investment Decision A Business Makes Essay Example

machinery, manpower or repair costs may make loans used for investments unsatisfactory. Interest rate impacts can also be a factor. While increased expenses typically harm profit-making enterprises, non-financial factors such as corporate image can also influence decision outcomes. In some cases, a lack of product demand may be more related to reputation than business cycle effects.

If a company's negative reputation, caused by factors such as pollution, poor customer service or high prices, can lead to a reduction in customers and an increase in competition. Establishing a positive image is challenging and losing it is simple. The success of an investment often hinges on the level of competition and demand for the goods or equipment being invested in. A strained relationship with suppliers or maintenance contractors may have repercussions on the investment's success, especially if it involves constructing new buildings which could face delays.

Some companies may choose to invest in initiatives that are not profitable in order to enhance their public image, rather than immediately focusing on generating financial returns. Examples include Walkers' 'Books for Schools' and Tesco's 'Computers for Schools' promotions, which offer books and equipment in exchange for collected tokens, resulting in a loss from the investment. External factors such as opposition to equipment investment or property expansion due to environmental harm or pollution could affect the success of an investment. Additionally, planning permission for an investment could be denied. Investments that result in significant job losses could encounter difficulties if opposed by trade unions.

The possibility of industrial action can jeopardize investment efforts by compromising the availability of manpower to operate new machinery. Managers are responsible for ensuring the success of investments. Firms can

invest in improving staff relationships and motivation through facilities like a new canteen or training programs. Wasted investment may result if training is not conducted correctly. Ultimately, most businesses invest with the goal of generating profits as the overall aim and function of a business is to be profitable after surviving.

Finance plays a crucial role in the investment process, as having sufficient funds is imperative for businesses to invest. The objective of most investments is to achieve long-term profitability; hence those that yield minimal returns may not be viable options. While the business cycle and associated expenses can influence investing, non-financial factors also have an impact on business decisions.

One way to increase a firm's popularity over its rivals is by making investments, such as reducing prices for petrol and diesel, to outshine competition. Implementing these strategies may also boost the firm's market share. Another approach is for the firm to establish a community fund which helps it donate to various local groups, thus improving its prestige. However, a poor image could make it difficult for the firm to regain customers and recoup costs, despite attempting to improve its image. The success of any investment decision is also influenced by stakeholders, who have individual objectives. If stakeholders oppose the investment, directors and managers may succumb to pressure from shareholders.

Investment decisions are impacted by a variety of factors, which can be categorized as either internal or external. Within the company, employees may reject investments that do not benefit them and could lead to negative outcomes such as job loss or unfavorable work conditions. Conversely, they may support investments that improve their workplace environment and facilities. Externally,

local governments or authorities may oppose investments that do not align with community interests while trade unions would resist any investment resulting in ethical concerns about job loss. Regardless of financial and non-financial considerations, the focus remains on achieving long-term goals and finances through initiatives like training programs and promotions.

Non-financial factors, such as projects related to corporate image, community and environment, can contribute to a firm's financial success in the long term by increasing its popularity, market share and revenue. While financial gain is crucial for a firm's existence and growth, considering non-financial factors can facilitate successful investment decision-making and avoid loss of opportunities.