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ECONIMIC AND FINANCIAL ANALISYS – DETERMINANT OF BEHAVIOR IN ORGANIZATIONS

MIHAELA BÎRSAN, ALINA BALAN, ŞTEFĂNIŢĂ ŞUŞU “ŞTEFAN CEL MARE” UNIVERSITY OF SUCEAVA, ROMANIA 13 UNIVERSITATII STREET, SUCEAVA, ROMANIA, 720229 mihaelab@seap.usv.ro, alinab@seap.usv.ro, stefanitas@seap.usv.ro Abstract: Essential for business success in this constantly changing world, is not primarily the availability of resources (financial, human, material, information, etc.), is an optimal organization of work , given to priorities and external rigors, enterprise connection to physiognomy and environmental requirements, the attitude towards the problems posed by the market, the ability to mobilize resources to capitalize the potential of domestic and market opportunities. Any economic system is considered to be "closed loop (feedback) [1] and therefore, its operation requires the existence of two factors, namely: a difference between desired value and actual value (current), called deviation, and a policy (strategy) that expresses the actions necessary to ensure a certain desired size for the difference between desired and actual value. Deviations analysis is controlling instrument company (as the enterprise process management), giving it the ability to timely notify the distractions and allowing adjustment of the system, increases shortterm responsiveness of the entrepreneur and gives long-term capacity greater adaptation (it is called "seismograph company). From this perspective it is considered that the strategic approach and diagnostic analysis prior to the decision making and the alternatives they provide, justify it scientifically. Key words: economic analysis, financial analysis, diagnostic JEL classification: B26, C81, D22, M51

Enterprise as a system and analysis implications One of the specific features of enterprise refers to the fact that enterprise is a self-adjusting system that is has the ability to be self regulated [2] by means of awareness of human factors, and incorporating in its structure a decision or control subsystem. Self regulation [3] is characterized by the capacity of systems to respond to internal or external disturbances action and keep composure over different periods of time. In general, programmed outputs from enterprise system are based on market demand and profitability objectives and predetermined efficiency. In practice results have always tended to turn to the objectives, because company must face in its business environment a set of socio-economic agents which, in turn, pursuing their own objectives. Of course, it tries to anticipate the decisions of these agents (often competitors) predictions translated into budgets in order to prevent situations which might lead to bankruptcy [4]. In these circumstances, it is necessary for enterprise system to be organized that manages to be self-regulating. For this the system includes a self regulation internal structure, with two major components: - Comparison - considers the deviations of actual output port with the programmed;

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giving another dimension of market competition.Control .. in order to substantiate future strategic objectives of maintaining and developing the company in a competitive environment. to take necessary corrective decisions. knowledge and environment. and environment quality estimating variables that characterize disturbed. a profound shift in scope and the general management department of companies. experts estimate that political economy. to master the situation. Knowledge has become a resource and a necessity of social existence. from this perspective.particularly psychology and sociology that were taken fundamental ideas and concepts. In fact.initiated corrections in the system based on input signals from outputs. even anticipating the future evolution of the environment so that enterprises can adapt to his new structure [5]. on behavioral strategies adopted and the nature of the environment. business functions are no longer the same. in fact. enterprise performance management. Therefore it is absolutely necessary knowledge the content and environmental requirements. economic. sociology and anthropology have made the conceptual foundations of current knowledge in this field. System survival in its environment depends. Diagnostic analysis is the management tool that helps enterprise management in understanding the past and present. which implies the existence of a control loop caused by reverse connection (feedback). System is developing strategies for cooperation with some elements of its environment that are dependent on its ability to organize and control their own behavior. regulatory and technological. Economic behavior through knowledge Increasing complexity of economic life led to necessity of knowing the human economic behavior mechanism which is becoming larger and more complicated. Today we are witnessing to rapid changes and frequent extreme political factors. For any business. - 779 . In author’s vision knowledge is changing and cause changes. new ones appear. implementing a control system able to bring significant deviations that arise between forecasts and achievements. is the point where start identifying opportunities. surpassing both capital and labor [7]. the analysis also subject to internal concerns of economic and financial partners . the only resource really relevant today. but also the dangers. etc. and quantitative and qualitative changes occurring within it. As research has progressed in this area. in order to obtain a new competitive advantage. the looming threats against him.banking interested in making cooperation with undertaking actions [6]. physiognomy and its operating mechanism analysis. which must be exploited for competitive aims because now knowledge are sources of productivity growth and creative ideas and innovative thinking are essential to achieve success in a rapidly changing market [8] . These factors determine a continuous adaptation to changing dynamic business environment. social. such as knowledge management company seeking a better selection of information and knowledge within the firm. a revised and managerial behavior. some merge or disappear. psychology. ignoring how serious manifestation of it causing disruptions. it became clear that investigation of behavior requires a multidisciplinary approach where an essential role returns to behavioral sciences . It is necessary. requiring a separate study of the two intrinsic components: human behavior as a producer of goods and services and the consumer's behavior. Managers see the current knowledge a key asset of the company.

Learned. known LCAG formulation. . can be characterized as [10]: . environmental front. internal resources and investor pressure to succeed. Thus. by giving them practical matter."There is no sustainable advantage other than what a company knows how to use what they know and how quickly can learn something new" [9].proactive. Because of this analysis and diagnosis acquire new valences. the company's flexible or. integrating the national plan of its potential performance constraints. modern perception is to integrate the concepts mentioned in addition to financial diagnosis and articulate its findings with the diagnosis and strategic. Guth) equates it to the organization's internal and external analysis. J. social or organizational for view a complex and fair image of competitive and organizational business’ behavior. and S. which can print an adaptive behavior.innovative .passive . entrepreneurial. Conduct business under analysis and diagnosis sign In relation to the situation where the firm can adopt behaviors are different strategically competitive. conversely. especially financial.active . Adapting to change is accompanied by operational active conduct of market developments as a result of the attitude adopted by the enterprise. This paper refers in particular to the complementarities existing between the finance and strategic analysis. . the firm's strategic responses to the constraints of its external environment and foreshadowed its efforts to adapt to structural changes of environment and positioning efforts appropriate to the competition. etc.decisions involving adaptation to changes occurring in the environment. First define and analyze the company’ competitive context preparing. Similarly. launch new products and/or abandonment of construction products whose demand is declining. named after its authors (A.adaptive . This model. maintaining a potential reserve capacity. at each financial year. technological. through what is known as SWOT analysis. financial. in light of the attitude towards risk. Andrews. An organization's ability to integrate environmental pressures. marked by resistance to change. commercial. the company merely imitative processes. If financial analysis is traditionally focus on indicators of solvency calculation and analysis. Christensen. Dynamic behavior of the system. But in assessing how the analyzed company manages to benefit from its environment opportunities. autonomy and financial flexibility the analyst uses a series of specific techniques and tools that enable them to make relevant assessments on the one hand the performance and dynamics of this indicator for the activity studied and secondly on the level of risk to which it is located. innovative. witch need to develop forecasts of cyclical risks involved and. depending on investigation results. balance and performance. initiating change and possible market-making right decisions before the changes actually occur. Scientists have developed a number of models of strategic approach to our attention heading towards the model school at Harvard [11]. Without innovation. identified through the tests performed. to create value is critical to its success and sustainability.which is achieved by continuous and systematic exploration of the market and exploit opportunities. firm response to the pressures of its external environment is limited by internal resources available and management decisions. a business transformation skill in competitive advantage is achievable only if they are identified or can be built into business opportunities. 780 . N.

opportunities and threats on the other side present in the external environment. Threats Internal factors External factors Opportunities (O) Strengths (S) STRATEGY – “strengths opportunities" S/O STRATEGY – “strengths . or through strategic alliances with other firms. Practical utility of this approach is developed in the next paragraph. Strategy S/O (strengths/opportunities) is the most advantageous positions of the wheels on the grid for analysis and is as consistent use of potential internal strengths and exploit opportunities for environmental detection. organizational leadership in developing long term and its performance. The strategic behavior. Strategy S/A (strengths/threats) is to use internal strengths to eliminate or avoid threats in the external environment of business.threats" S/T Weaknesses (W) STRATEGY –“ Weaknesses opportunities" W/O STRATEGY –“ Weaknesses . providing rigorous formulation.threats" W/T Threats (T) Firm behavior. The combination of those four positions mentioned. and avoid dangers in its competitive environment. 2. and the correct response is to incorporate the potential for exploitation. Taking into account the strengths. 781 . the above model is best known as the SWOT. The strategic guidelines can not refer only to abandon those activities or maneuvers to safeguard restricting assignment or activity. emblematic of internal and external analysis. Strategy W/A (weaknesses/opportunities) appear virtually certain occasions when the company perceives its environment environmental development. learned from internal potential diagnosis. but lacks the ability to assert their own interests. 4. This type of behavior is framed in what experts call the strategic behavior. The easiest solution in this situation is to detect abandonment opportunities for competitors. Strategy W/A (weaknesses/threats) is the most unfavorable situation for the company. weaknesses of the company. 1 Combination of Strengths. 3. Weaknesses. implementation and assessment of appropriate strategy set. it is necessary to reduce both internal company elements of weakness. based on these benchmarks will be reflected in the strategies may be adopted: 1. Opportunities. strategic behavior results in the following possible: Table no. either through mergers (acquisitions). considering the advantages and disadvantages of each.The results of environmental analysis and diagnosis of internal evaluation can determine possible ways of action.

29.306. 2009. of 1.302 31. condition to increase efficiency in agriculture. 2.Analysis and diagnosis: determining the behavior in the enterprise .397.01 Rotational speed of 6 the 171 days 198 days 287 days 159 days flow .505. 0 1 Made Made Made Preliminary Indicators 2007 2008 2009 2010 1 2 Turnover 37.270. the terms of the degree of mechanization of agriculture. a decrease in all indicators of efficiency and enterprise entry in the area non rentable.clients Rotational speed of the 7 75 days 91 days 108 days 69 days loans .domestic sales 23. far below the EU average.043.859. 782 .090.234.137.798 Average number of 4 388 366 210 * employees 5 Current liquidity 1.12 * * action (RON / share) Source: Financial Statements and management report 2008. has worked on a domestic market with poor liquidity due to lack of support agriculture with budgetary funds or EU structural funds.382 23.001 28. the reduction of turnover compared with the achievements of the previous year.2009 material) Table no.201.313. which ranks Romania.143.885 19.441.391.1.02 (0. Environmental analysis reveals that domestic agricultural machinery and equipment has a considerable growth potential due to the fact that agriculture is a strategic sector with huge untapped potential in the endowment and scarcity of agricultural equipment to Romanian farmers.754) (5.394. associated with lack of government programs encouraging them to equip with machinery and specialized equipment.491 17. This led to a drastic drop in demand for agricultural machinery which resulted as shown in Table no.570 22.923 3 Net profit 2.2.301 3.43 1.264.168.628 15.937.mecanicaceahlau. 8.619 5.325) 4.651.sales on foreign 5.541 1.031 (5.451 Production sold.317 which: .095.571 (1.397.254. preliminary 2010 [12] * data were not available at time of study Since 2008 Mecanica Ceahlău S. but also because of the lack of a real market for agricultural products.703.30 1.874 * markets Income from sales of 1.72 2.169 16.011 * .ro/actionariat.064.981) 2.provider Basic earnings per 8 0.09.php (AGEA 05.Study on CEAHLAU STONE MECHANICAL NEAMT http://www.0321) (0.48 0. A crucial element is that the absorption power of the internal market of agricultural machinery has been so far limited by the lack or insufficiency of subsidies to farmers. 2 Indicators of general characterization Item No.685 2.267.322 1.0327) * share The market price 9 0.735) (7.159.A.134 merchandise 2 Operating results 4.

In this context. in partnership with some banks.09. with penalties of default with high interest rates. . Actions taken in support of farmers by boosting sales in recent years and lease rates could not compensate for insufficient support given to agriculture and farmers in the structural funds. at the company for all shareholders registered in the shareholders register by the end of 21. since 2007. .excess production facilities and equipment.restructuring program initiated in 2008 in which 110 people were made redundant. based on the analysis of economic and financial situation of the company. .produced in accordance with national and international quality standards. .wide range of products in accordance with the typology of domestic demand. in 2004 has resulted in the highest turnover of Mecanica Ceahlău (equivalent to 10 million euros).08. in conjunction with debt relief for the leasing. and even created additional problems of society. although productivity growth in agriculture was a priority of government mentioned in the programs. which will form the basis for substantiation strategy for the coming years: . Since then farmers have had only two choices: SAPARD and National Rural Development Programme (NRDP).2009. But overall analysis reveals the following aspects of society.In recent years. c) capital increasing. 2. Cash shortfalls in 2009. which would provide about obtaining an alternative other than income from selling agricultural machinery. . regarded as strengths.great capacity for innovation of new products.modern manufacturing technologies.A. b) obtaining a working and investment loan (refinancing). implemented by the team specializes in research and development. Measures to improve the liquidity of the company by: a) assets capitalization. but expectations are very high for future years taking into account the amount of 8 billion available for rural areas and agriculture would be far an unprecedented infusion of capital after 1990. . . Considering the above elements of Mecanica Ceahlău S.2009.Technology upgrades financed by structural funds and government access. in which were discussed: 1. NRDP (the National Rural Development Programme) has not yet reached the level of maturity that will materialize in significant allocation of EU funds for farmers in 2008 and 2009. 783 . which is not by accident. the Ministry of Agriculture has not given any support for agricultural machinery. with the possibility of obtaining good results since 2010. could relieve the company of a number of costs. resulting from the rescheduling lease rates and other liabilities incurred.Stable market share of machinery and agricultural machinery in Romania. According to estimates. Grants were given only in the period 20002004 for local farmers for buying agricultural machinery. the company has completed arrangements to sell in traditional retail and lease rates. decided to convene the Extraordinary General Meeting on 04. Piatra Neamt board. Proposal for the amendment the company status for expand the scope of business through the implementation of the second profile of activity in non-conventional energy equipment and mechatronics to medical applications. the company can not secure the funds necessary to cover the tip of the payment in 2009.

is a chain of rational action in which.minimization of costs to maintain competitive prices. the nominal value of 0. posting a profit of 11% rate of return. . Company actions made in 2010 in order to continue the company's activity. Strategic measures implemented have had a favorable preliminary data for 2010 (table no.Promote stronger export company.continuous improvement of product quality and services. .completion of the scope of business by implementing non-conventional energy projects and mechatronic devices with medical applications to create an alternative to the obtaining of revenue other than the sale of agricultural machinery. Retail market development: . by issuing a number of 80 million common shares. the issue is equal to nominal value. . strategic behavior.helps prevent events / problems before they turn into crises. coherent over the 784 . dematerialized and evidenced by entry in the account. The analyst must combine. .Structural fundraising projects by participating company with technological modernization. . .choose between alternatives that is offered and determine its long-term behavior. necessarily. .2009 by contribution in cash.10 lei each. the company will address a new formula by establishing a direct contract between the client and the agency leasing.The strategic directions of activity and social development. maintaining market share on market and external economic and financial recovery situation in the crisis that has made its mark this year. . sales agents to employment. where it bends to the study of a company at the financial diagnosis coordinated strategic vision for a global view. have resulted in achieving the following objectives: . upgrading machinery and agricultural equipment and products through the implementation of the second profile of activity. 2.helping the firm to evaluate decisions to be taken on the allocation and use of resources. and the rate of 0. In order to ensure product sales and valuation of stocks. deciding what should be done in each particular case in hand. the company managed to get out of the loss.09.Increase sales force by setting up their own regional distribution centers. 2) all indicators show an improvement to the increased sales. . in proportion to the number of shares they hold.optimize raw materials costs. Strategic behavior: . To create the necessary financial resources to cover cash shortages and development company providing necessary funds. Conclusions Any visionary entrepreneurial behavior must be. registered. . . as was communicated to the National Securities Commission in November 2011 [13] are: 1.manufacture of new products to meet production capacities. by evaluating the results expected from various activities.focus on target sales activities developed domestic and foreign markets.5 subscription right to subscribe new shares issued to shareholders registered with the Register's shareholders by the end of September 2009. materials. amounting to eight million RON.Facilitating access to EU structural funds for company. energy resources. 3. and implementation start of the second profile of activity in non-conventional energy equipment and mechatronics to medical applications Extraordinary General Meeting of Shareholders approved the capital increase on 04.

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