While value is not the only important factor in the success of a business, it is indefinitely paramount. The importance emanates from the central point which relates the inability to create value for a firm will result in the firm’s inability to carry out its activities due to lack of enough equity fund(Hawawini, Gabriel & Viallet, 2010). Most of the activities carried out by a firm require the use of resources which are in most circumstances costly. If the result does not have created value for the organization in question, then it will incur losses due to the initial input directed to the implementation of such processes.
Time should play a central role in value determination. The above is due to different reasons. First of all, organization’s objectives are mainly realistic if they are time-bound as well as measurable (Laursen, Gert & Thorlund, 2016). Without the element of time, either so much time will be consumed in concentrating on a particular value addition factor while neglecting other contributory factors. Less time could also be used, hence, resulting in underachievement due to improper planning and execution of activities. This is a factor that hence requires strategic planning and decision making. In addition to this, organizations create value for themselves by relating with other stakeholders or engaging in activities such as trading in financial markets to continue building their worth. Without doing calculated moves regarding the time required to gain value through collaborating with the other stakeholders and market players, such undertakings are unlikely to be successful since the other parties, in most cases operate with time-bound objectives.
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The time spent on an activity, in some cases, does not translate to value creation. In the handling of a bigger project, however, considerable time that is maximally utilized to accomplish the goals of the project should be allocated. The business cycle pertains the use of initial capital which is used to finance assets which are sold to realize a profit (Hawawini, Gabriel & Viallet, 2010). Huge project will require more time to achieve the cycle more effectively in comparison to a small project.
References
Hawawini, G., & Viallet, C. (2010). Finance for executives: Managing for value creation . Cengage Learning.
Laursen, G. H., & Thorlund, J. (2016). Business analytics for managers: Taking business intelligence beyond reporting . John Wiley & Sons.
