Compare the example of variances and/or stakeholders impacted that your colleague described to your own professional experience

Instruction Details

My Colleague:

I work for a government organization that funds agencies across the state to assist with crises such as homelessness, being without lights, and water, or being at risk of eviction. My organization helps to enforce rules put in place by the federal government to ensure that funds are being allocated and appropriately spend. The programs that are in place are to aid low-income families and to help bring them out of crisis.

A favorable variance that happened was when my organization decided to raise the benefit amount for individuals in a particular bracket so that the service provided lasted longer and could assist with larger bills. This helped individuals to save money as they were caught up on their bills as well as pay off debt. It helped them to sustain longer and allowed them to stay on their feet if surprise bills arose. The stakeholders were the clients, agencies, and vendors for both electric and rental.

An unfavorable variance was when the pandemic hit and the agency that I work for was not equipped to handle things. It caused agencies to shut down, so we then had to cut down on the number of people we could serve. Due to a statewide moratorium that prevented disconnections of service and evictions from happening, we had to cut our funding from some programs. Even though individuals still needed because bills were getting higher, because there was no disconnect of services, individuals weren’t all able to be approved for assistance. The stakeholders that were affected were the same as before, the clients, agencies, electric vendors, and landlords for rent.

I feel that as a manager If I understood these variances more at that time, I would have been able to make more informed decisions. I would also have known how to present better solutions to my upper management team so that we would have known how to better handle the unfavorable variance better. It would have helped to create better goals that considered more than what we did the first time.

Mine:

Variance analysis is a managerial tool used to help assess whether an organization is achieving its desired results (Franklin, M., 2019). It does this by comparing actual results against budgeted or desired results. Variances can be either favorable or unfavorable. A favorable variance indicates that actual results are better than budgeted or desired results. An unfavorable variance indicates that actual results are worse than budgeted or desired results.

In my professional career, I have seen both favorable and unfavorable variances occur. One example of a favorable variance was when our team was able to achieve our sales goals for the quarter despite having a smaller budget than we had originally planned for. This was due to the team’s hard work and creativity in finding cost-effective ways to market our products.

On the other hand, I have also seen unfavorable variances occur. One example of this was when we missed our sales targets for the quarter due to unforeseen circumstances beyond our control. This resulted in a loss of market share and revenue for the company.

Variance analysis is a valuable tool for managers as it can help identify areas where an organization is exceeding or falling short of its goals. This information can then be used to make decisions about how to allocate resources and make changes to improve organizational performance (Franklin, M., 2019).

The stakeholders most affected by these variances are the shareholders, as they are the ones who ultimately benefit or suffer from the performance of the company. Other stakeholders affected by these variances include employees, customers, and suppliers.

In business, variance analysis is the quantitative investigation of the difference between actual results and desired or expected results. Its purpose is to understand the causes of these differences, whether they are due to chance or to some underlying factor, and to use this information to make decisions about how to improve future performance (Franklin, M., 2019).

Explain how understanding these variances could have helped you as a manager in this situation to make better decisions.

If I had been aware of the variances in this situation, I could have made better decisions about how to allocate resources and improve performance. For example, if I had known that we were not meeting our sales targets, I could have focused more on marketing and sales initiatives in order to try to increase revenue.

Another way that understanding these variances could have helped me as a manager is by allowing me to make more informed decisions about where to allocate resources (Franklin, M., 2019). If I had known that we were not meeting our sales targets, I could have redirected resources from other areas of the business into sales and marketing in order to try to increase revenue.

Questions:

  1.  Compare the example of variances and/or stakeholders impacted that your colleague described to your own professional experience.
  2. Based on your colleague’s explanation of how understanding the variances in their situation could have helped them make better decisions as a manager, provide a key takeaway that you could apply to your own managerial decision-making in the future.

Answer Guide

Comparison of Examples:

Both my colleague and I have provided examples of favorable and unfavorable variances in our professional experiences. In my colleague’s case, they discussed how a favorable variance resulted from achieving sales goals with a smaller budget, while an unfavorable variance occurred when sales targets were missed due to external factors. Similarly, in my own example, I described a favorable variance from achieving sales goals despite a smaller budget and an unfavorable variance from missing sales targets due to unforeseen circumstances.

Key Takeaway:

From my colleague’s explanation of how understanding variances could have helped them make better decisions as a manager, a key takeaway that I could apply to my own managerial decision-making in the future is the importance of timely and accurate variance analysis. By closely monitoring actual results against budgeted or desired results, I can identify trends and discrepancies early on.

This proactive approach would allow me to adjust strategies, allocate resources, and make informed decisions in a timely manner. For instance, if I notice that we are falling short of our sales targets, I can take immediate actions to reallocate resources, adjust marketing strategies, or address any operational inefficiencies. By staying vigilant about variances and addressing them promptly, I can increase the likelihood of achieving our goals and maintaining optimal performance.

Furthermore, recognizing the potential impact of variances on stakeholders, including shareholders, employees, customers, and suppliers, reinforces the significance of effectively managing variances. Taking their interests into account when analyzing and responding to variances can lead to more comprehensive decision-making that aligns with the overall success of the organization.

Complete Answer:

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