Expansion Planning

The care home is a home that offers personalized services to a small group. The group includes the adults, disabled and children. The homes act on a basis of provision of comfort and care for specified reasons. At the care home, the group require attention. However, the establishment of the homes is not only for purposes of helping the unable but to make a margin out of the activities included in their routine operations. The homes provide services at a fee hence require professionals to handle special matters. These cases revolve around health, education and food. As a concern, the homes develop a strategic plan to ensure that the services are within the same institution. Therefore, as a manager in charge, there is need to draft an expansionary program for the care home to include the required composition.

The expansion strategy an organization adopts defines the functions and long-term solutions. Therefore, as part of the growth resolutions, expansion requires resources both monetary and non-monetary. The growth of the care home means that it should expand its activities and physical location to capture the rising needs and the increased population. The growth signifies the possibility of creating a more reliable care centre with all the facilities within its vicinity. While planning, there is much to consider ensuring effective operationalization. Moreover, the capacity increases and requires the close attention of the officials. Therefore, the monetary and no-monetary resource reveals the essence of providing standard care. Therefore, to ensure effective execution of the expansion, it is necessary to do resource planning. It is crucial to consider the urgent and necessary resources that have a priority when executing the plan. The resource planning will involve consideration of the personnel, equipment, finance and time. Concerning planning costing is a common factor. There is need to understand and estimate the quantity and quality of resources required. The continuous procedure aims at creating room for the betterment of the care homes. 

The services rendered by the care home did not consider details rather it was about nursing the adults, children and the disabled. The environment of operation focused on the day today survival of the clients. However, as the changes appear on the top level, the care homes advanced the functions to the desired levels. The result is an impact on the fees collected verses the expenditures incurred.

Expansion planning

The necessities of expansion revolve around planning. The organization has to device a way in which to capture and account for the resource in advance. To succeed in the planning, the manager is vested with the mandate of accomplishing the function (Welsch, Hilton, and Gordon, 1988). The expansion plan captures the expanded service provision both in the health and education sectors. The care home intends to build a hospital within the compound. The objective is focusing to reaching out to diversified group that includes the community. This is a way of providing better medical facilities to the sick. The health facility intends to assist in giving the medical attention to all the groups and provide medical attention to the level of required international standards. The hospital requires equipment and other resource hence it is necessary to plan for the source.

The education is relevant when it comes to hygiene and general knowledge. There is need to create the education department to take care of the children in the care homes. This is an opportunity for the organization to improve on the performance. The education focuses on the development and creation of awareness for the citizens. The two major areas require heavy investment. The investment is a major expansion and area for the organization to maximize. The finances required and equipment would vary depending on the size.

Behind the expansion

The success of the project depends on the support from the management however, a plan is necessary to help in the implementation of the relevant activities. Therefore, all available resources must be planned for to confirm on efficiency and their status. It is important to know what is available now and what is needed in the future. Therefore, in terms of human resources, it is important to provide a budget of the number of employees required to handle the expansion. The availability of the employees has to be planned. It means there is need to know the qualifications, job vacancies and the cost of their employment. In this case, the expansion requires a complete turn of the employees to fill a position of a start-up kind of organization. The hospital requires the doctors, nurses, receptionist, messengers, pharmacist and other relevant employee that complete the cycle of a hospital set-up. They have to be people that have qualified. Therefore, the costs or salary depends on the qualification and the technicality of the job they handle.

This is a plan of a set-up that is up and running. If the process of construction is still required, the management has to consider the construction cost as the primary requirements. The expansion demands for availability of construction materials ranging from the cements, sand, labour, metals irons and other materials. Considering both constructions, they need a budget sufficient to sustain the activities. Therefore, the sources of finance are key when deciding to expand.

Sources of finance

The sources of finance vary but the most urgent sources available to finance the expansion include the retained earnings, loans, contributions and donations. The development of the home care is based on the efforts of the well-wishers. They aim at giving back to the community. This is a form of social responsibility.

The retained money or earnings are a source of finance that is readily available to the organization. The source does not attract any costs since it does not require to be raised from the stakeholders. It is a source that is within the organization as it arises from the remaining profits after all payments are settled. The use of the funds in this account may reduce the amount to be borrowed to finance the project. Therefore, the organization requires exhausting the source before utilizing the external sources. However, it is necessary to plan and accommodate the changes that may arise in a situation where the internal finance will not be sufficient. The external finances supplement the internal sources and enable the completion of the project. The financial institutions are a good source of external finance. The management can approach the financial institutions such as banks and other financial institutions for loans. Since the care home has grown, the financial institutions will not hesitate to fiancé the expansion. However, the collateral available can be used as securities against the loan takes. Nevertheless, the loan is a costly source of finance. In other words, to access the loan, there is a fee required by the financing institutions. The institutions charge the cost based on the prevailing interest rates of the central banks. Therefore, the long loan repayment period leads to the higher interest rates.

On the other hand, the contributions and donations constitute the sources of finance that do not attract a charge. Accessing the amount does not require collateral. The contributions and donations arise from the well-wishers (Bower, 1970). The amounts are significant in the expansion program. They form part of the resources for financing the project.  The available sources have sufficient funds to assist in the execution of the projects.

To commence the project, the funds, materials and labour is a key element. There is need to have sufficient funds to assist in settling the expenses and liabilities that arises (Wildavsky, 1986). The permit and other regulation certification is necessary for approval of the project. Therefore, as a concern qualified personnel need to be present to help in executing the project.

Requirements for user outcome

The main objective is to develop institutions that consider the user needs. The users require a good structure that favours both the disabled and the abled. The structures will help execute the long-term strategies of the organization. As a core value, quality is the priority. Quality gives a complete picture of the outcome of the expansion. The target persons form the relevant demand for the structures( Froot, and Stein, 1998). The user outcome as a necessity requires the organization to have tailor-made institution to motivate the disabled individuals. The overall objective of having a medical facility fulfilling the demands of the people fosters the desire to develop a big facility.

Budget

The budgeting function is a crucial function that depends on the past information and estimates (Bierman and Smidt, 2012). The budget focuses on all the relevant requirements to ensure the extension is successful. The budget has to capture the materials, labour, direct expenses, time and other expenses.

Sources of finance

Amounts in dollar millions

Retained earnings                                                       800

Loans                                                                          680

Contributions and donations                                       20

Total                                                                           1500

The above finances are to support the expansion programme. It is estimated that the whole process will utilize 1400 million dollars. Therefore, from the available finances, the project will be completed and funded to run for the first three months.

The costing budget includes costing for materials, labour and other expenses. The project is estimated to take two to three years to start functioning. The aim is to construct the hospital in the land adjacent to the care home. However, it is necessary to account for every resources utilized.

Amount in million dollars

Materials                                                                     700

Labour                                                                        100

Other expenses                                                           200

Total                                                                           1,000

The budget only captures all that is necessary to complete the construction. However, the remaining amount of 400 million dollars in the budget is to support the development and continuous operations of the programs by meeting the day-today expenses and paying the employees for a period of six months before the organization can report sufficient income.

Question two

Planning and management functions are necessary in any organization. The organization needs to operate effectively therefore, planning and management is relevant. The organization needs to have perfect planning and management. Moreover, this are the functions of the management. therefore, to effectively execute the objectives, the organization needs to employ qualified managers.

Obtaining the finances is one thing and planning and managing the resources is another. The top officials have to implement policies, controls to govern the resources and avoid, and fraudulent activities. The main sources of finance as mentioned is the loans, contributions and donations and retained sources. The three sources have advantages and disadvantages. They are sources that are available for the organization to explore. However, the interest of the organization is at hand. Enabling the expansion of the organization requires sacrifice. This is the reason as to why the retained earnings may be utilized to facilitate the expansion. Sometimes, the funds available internally may not be sufficient to fund the activities of the organization. Therefore, the organization opts to seek for external sources from the public and well-wishers. As mentioned, the loans are available in the financial institutions. The challenge is how to obtain them. If the organization has the ability to seek the funds meaning, it has a good reputation and can prove of growth, It can easily receive funds from financial institutions.

The care home has grown and is doing well; therefore, it can easily access the loans available from the financial institutions. Generally, the financial institutions look at the ability of the borrower to repay the loan and the security available. The home has a reputation and goodwill reflected in the financial statements of the organization. There is a possibility of accessing the loans to a higher limit depending on the function. Asset financing and mortgages are readily available hence makes it easier for the organization to fiancé the activities to the completion.

The third source of finance is the contributions and donations from the well-wishers. They are available at the request of the organization. However, the organization has an account for contributions and donations where they accumulate. The available amount can boost the plan and contribute to the success. The plan involves building the hospital and constructing conferencing halls used to educate the public. They are used to create awareness to the public about their health and how to leave with other people. Therefore, having finances enables planning and forecasting on the future outcome of the project.  The funds mentioned above will be categorized into short-term, long-term and medium-term. The retained earnings are short-term sources. The loan is a long-term source and the contributions and donations are medium-term sources.

The funds are utilized to settle expenses related to the construction and enable in financing the expansion at the early stages. The plan forecast that three years after completion the organization will be in a position to breakeven. These are some of the factors considered when borrowing finances from the third parties.

The organization needs to execute the objectives effectively; therefore, it needs to involve other parties in decision-making. The organization must have individuals, and team to execute the functions effectively. Utilizing the organization resources must have close monitoring (Dechow, and Mouritsen, 2005). Therefore, the management has a mandate to ensure effective utilization of the resources. Projects with urgency are considered and executed first. The enough resources are allocated to enable the execution of the resources effectively.  The individuals are responsible to achieve their own goals by executing their roles as assigned. However, without teamwork some of the tasks may be difficult to execute. Teamwork makes work easier and permits completion of the work in an effective manner. Therefore, accounting for the resources is a way of minimizing theft and maintaining resources.

Accountability

Accountability is a function that is effective to every organization. The function is vested one very employee but there is that person who oversees on the other employees (Hajkowicz, and Collins, 2007). The organization employs an individual who is tasked with the function of accounting for the resources of the organization. Therefore, for the expansion project, a separate accountant will be available to account for the resources that are utilized on the site and those that remain. They focus on effectively controlling the movement of crucial resources within the organization. The accountant will provide a report at the end of every week for assessment. This is a way of effective management required by the organization. It is a way of assisting the organization to execute the objectives.

Restrictions

The availability of finances is restricted. Funds such as the contributions and donations are restricted to the functions. They only focus on the functions that they are meant. Sometimes, the budget will be reduced or increased depending on the current economic situation. When the economy will have trouble in terms of inflation, the budget will expand to accommodate the changes. However, there are limits that restrict the utilization of funds. Therefore, there are the financial risks associated with the funds. The risks include theft and overpricing some of the materials. the financial risks are a threat to the organization. The restrictions provide a basis in which to utilize resources. The limited resources may be utilized efficiently. However, the management imposes the restrictions.

Factors influencing decision-making process

 The decision-making process is a process that involves the stakeholders. The effective decision making process involves the management and the employees. The process involves deliberation on various factors that contribute to effective management and attaining the organization’s goals (Noe, Hollenbeck, Gerhart,  and Wright, 2006). The aim is to achieve both the short-term and long-term goals. The factors include timing, knowledge, cooperation and availability of resources.  Time is a major factor with decision-making. It influences the process especially when planning and managing. Therefore, one should estimate the time available for every step or level required in a project. The decision on completion depends on the management’s ability to know how long the expansion will take to breakeven. This decision is a long-term decision since the time considered may be 3 to 5 years before the new projects breakeven. However, as an organization policies should be put in place to govern the operations that relate to significant resources.  The knowledge of the issue at hand is significant in decision-making. It is a factor that determines the relevance of the decision. it depicts the viability of the resolution reached hence the practicability. Therefore, when making a decision it is important to consider the information available. The decision-making team must have prior ideas to support the process. The social care funding requires experts to make decisions.

Cooperation is fundamental in any decision-making process. When making decisions it is important to seek employee’s cooperation. Their participation ensures fast decision-making. The employees are critical elements in the process. Their inclusion supports the organization in making viable decisions. The aim of the organization can be achieved via proper decisions made at all levels of management. 

In conclusion, budgeting is a process that involves a systematic analysis of all the available resources in order to ensure accountability. The budgeting helps in forecasting and planning as well as managing the available resources that are limited. The expansion of the programs will depend on the budget. The projects are crucial to the organization and the community. Despite recognizing the care home as non-profit making, it still makes profit from the business activities. This is the main reason why the expansion projects are relevant to the organization and the trusts. The strategic plan of the organization reveals the long-term goals. This is the reason for expanding into the health and education sector to capture the growing base. Therefore, to provide efficient services, the organization expands to capture the demands of the targeted groups. The aim is to be a leading home of all classes of people in the world.

References

Bierman Jr, H. and Smidt, S., 2012. The capital budgeting decision: economic analysis of investment projects. Routledge.

Bower, J.L., 1970. Managing the resource allocation process: A study of corporate planning and investment.

Dechow, N. and Mouritsen, J., 2005. Enterprise resource planning systems, management control and the quest for integration. Accounting, organizations and society, 30(7-8), pp.691-733.

Froot, K.A. and Stein, J.C., 1998. Risk management, capital budgeting, and capital structure policy for financial institutions: an integrated approach. Journal of financial economics, 47(1), pp.55-82.

Hajkowicz, S. and Collins, K., 2007. A review of multiple criteria analysis for water resource planning and management. Water resources management, 21(9), pp.1553-1566.

Noe, R., Hollenbeck, J., Gerhart, B. and Wright, P., 2006. Human Resources Management: Gaining a Competitive Advantage, Tenth Global Edition. McGraw-Hill Education.

Welsch, G.A., Hilton, R.W. and Gordon, P.N., 1988. Budgeting: profit planning and control. London: Prentice-Hall.

Wildavsky, A.B., 1986. Budgeting: a comparative theory of the budgeting process. Transaction Publishers.