Bigger Budget to Remain Relevant in Today\'s

¶ … Bigger Budget

To remain relevant in today's highly competitive business environment, entities must be ready to take decisive steps aimed at enhancing their competitiveness. For instance, a firm may seek to replace its existing management with a more experienced or knowledgeable cast of leaders. In my opinion, I am convinced that a bigger budget would be in the best interests of the company I work for.

Why a Bigger Budget is in the Best Interests of the Firm

It is important to note from the onset that in my view, the future progress and competitiveness of the company I work for will be hinged on three main factors. These factors include new technology, continuous improvement as well as research and development initiatives. However, all these factors are in one way or the other capital intensive thus the need for a bigger budget allocation. To get a better understanding of the need for a bigger budget, we need to look at each factor in isolation and its budget needs.

To begin with, the relevance of embracing emerging technology amongst firms operating in the global arena cannot be overstated. However, as Pride, Hughes and Kapoor (2011) note, though automation has a low operating cost, its initial acquisition cost could be relatively high. In that regard, the acquisition of new technology in the case of the company I work for could end up being capital intensive hence effectively calling for a higher budgetary allocation. The benefits of automation are many and varied. First, as I have already noted, it brings down operating costs (Pride, Hughes and Kapoor, 2011). Hence in the end, the company I work for could enhance its bottom line by cutting down on its costs through automation. Further, new technology and automation would enhance the company's level of efficiency. In this case, embracing new technology could be occasioned by replacing the existing personal computers with newer brands, enhancement of the production process by acquiring new and more efficient machinery etc.

Secondly, a bigger budget could go a long way into enabling the company I work for to enhance its research and development (R&D) efforts. According to Hill and Jones (2008), "research and development is concerned with the design of products and production processes." It can be noted that in the case of the company I work for, research and development could help in the enhancement of product functionality in a way that adds value to such products. With value addition, such products could become more attractive to clients and in that regard, sales could be impacted positively. Hence in my opinion, a larger budget should be allocated so as to cover research and development costs given the potentially costly investigative nature of the undertaking. As Hill and Jones (2008) note, R&D can in a way also help in the enhancement of the production processes hence effectively bringing down the various costs associated with production. If this is indeed the case, the company I work for could end up earning higher margins and in the final analysis; this could enhance its profitability. Intel is a company that has in the past effectively used R&D in value creation. Hence in this case, a larger budget would help fund R&V efforts so as to facilitate the realization of some of the benefits identified above.

Next, the company I work for could consider increasing the budget allocation to fund innovation, acquisition of new skills and continuous improvement. While innovation is closely related to research and development, continuous improvement is a tool of total quality management. Though largely beneficial in the long run, improving quality through the introduction of small incremental changes could end up using additional resources. Here, my reasoning is driven by the fact that in this case, employees may have to be trained or retrained to enhance their skill levels. In addition to that, new product components may have to be acquired. Such undertakings require additional funds and hence the need to allocate a bigger budget to cater for the same. However, as I have already noted elsewhere, the benefits of a bigger budget in this case are likely to be recognized later on.

Other Impacts of a Bigger Budget