3.

Usefulness of capital investment appraisal techniques

Capital budgeting is considered an essential marketing decision within an organisation.

Decisions on making investment should be taken based on the returns of the capital to be
invested. However, in this study Morgan Sindall Group has the opportunity of investing in
several construction projects within the UK. In this case, all the company needs is an effective
solution that will provide an effective capital investment appraisal technique (Li and Trutnevyte,
2017, p.89). Here the Morgan Sindall Group had the opportunity to invest in the public sector
and make partnerships with other companies based in the UK. Since the company was
established in 2000, Morgan Sindall Group has financed projects worth 2 billion pounds in the
UK including health, education, roads as well as housing.

There are several investment appraisal techniques available in the business world including non-
discounted cash flow techniques and discounted cash flow techniques. Here the company is
using the profitability index appraisal methods, which comes under the discounted cash flow
investment appraisal technique (Calastri et al., 2022, p.61). In this particular technique, the
company will be able to determine the return of each penny invested in other companies or
public sectors. In this case, the present value of an anticipated future cash flow when divided by
the initial outflow gives the profitable index or the PI of the respective project (Warren and Seal,
2018, p.16). The Morgan Sindall Group is also using the strength of their respective balance
sheets to track their investments. The company is also using other financial tools and vital
information to track their respective investment within the organisation such as Rights Capital. In
this way, the company is able to manage its investment portfolio throughout the year.

This tool has been able to provide the company with financial solutions. This type of tool also
allows the managers to acknowledge the type of investment to be made in the future to yield
profits in the end. In this case, the financial tool helps the company to segregate their top assets
around the world and decide the potential asset requirement for the respective clients. This tool
has also leopard within the financial planning sessions within the investment industry. It has
helped the financial advisors of the company to acknowledge the growth of the business through
certain investments (Siziba and Hall, 2021, p.100504). Right capital has also been a proven and
successful financial tool in the international finance market. It has also been able to provide a
tax-free financial strategy that would allow the organisation to make more profits in the current
fiscal year.

Apart from this, the financial tools and investment techniques used by Morgan Sindall Group can
be also used to protect information regarding the respective clients in order to ensure company
client privilege (Locatelli, et al., 2017, p.51). The investment techniques used by this company
have also helped in making right decisions in the field of finance and chose the path of lesser
risks. In this case, the investment appraisal technique used by the company has also helped in
fulfilling the needs and requirements of the respective clients and make profits in the end at the
same time. The investment techniques have also provided ways to demonstrate the various
payments programmes of the company so that the clients an enjoy the benefits in the initial stage
of the business (Al-Mutairi et al., 2018, p.1468232). The investment appraisal technique used by
the company has also helped the company in identifying opportunities for investment.

In most of the organisation, capital investment is considered significant activity in this case the
capital to be invested is huge. On the other hand, senior managers have stated a vision statement
according to which they want to acquire 10% share of the market by making investment in every
major project in the UK. The vision of the company is to be market leader within the investment
industry (Dawson et al., 2018, p.1). The budget has a vital function in the financial planning
process. However, the senior managers within the organisation are responsible for developing the
investment strategy while the other committee members will help accumulate and initiate
budgets, which are ready to be invested.

This committee is responsible for using the financial tools such as the Right capital, which seems
to have a great potential for several tasks at a time. The committee will also suggest changes to
meet the organisational goal and objectives (Chilvers et al., 2017, p.440). In this case, it is to
make an exceptional investment in the public sector that will yield high profits in the upcoming
fiscal year. On the other hand, the accounting department also contributes to the financial
planning process by providing advice in the formulation of the annual budget for the investment.

4. Critical assessment of the board members

In this case, both executive and non-executive directors have their roles to play within the
organisation. The function of the non-executive directors present in the board of directors is to
advise strategy while the executive directors are implementing those strategies within the
organisation. The non-executive directors of the boards are responsible for the formulation of an
effective management system, which will improve the working efficiency of the employees
working within the organisation (Hall and Millo, 2018, p.339). In this case, the non-executive
directors have been able to provide strategic planning to executive directors of the company so as
to ensure the presence of an effective management system within the organisation. According to
the UK corporate code 2018, the non-executive directors of the board should fulfil their duties
and possibilities within the organisations. Based on the governmental code it can be said the non-
executive directors of Morgan Sindall Group have played their respective roles responsibly
within the organisation including the formulation of effective business strategies along with
overseeing the entire business operations (Metz, 2017, p.716).

Apart from this non-executive directors in Morgan Sindall Group are also experienced in the
respective field including finance, marketing as well as management. They also possess special
knowledge regarding the existing business process of the company according to which they are
being to formulate effective solutions for the elimination of the issues prevailing in the field of
proper investment within the organisation (Warren and Jack, 2018, p.481). Apart from this, the
non-executive directors of the boards also have valuable insights regarding the key elements of
the organisation where they have the potential to suggest changes to enhance the entire
respective process. In this case, the management of the company including the non-executive
directors have the potential to bring change to the organisation by suggesting a change
management within the organisation so as to ensure the fulfilment of the organisational goals and
objectives (Pye et al., 2018, p.332). They also tend to play a valuable role in the board by
suggesting an effective management system and monitoring all the existing business operations.

In this case, the non-executive directors have provided strategic directions to ensure the
elimination of the external factors affecting the performance of the company. They have also
helped in monitoring the progress level of the company towards the achievement of the
organisational goals and objectives. The non-executive directors of Morgan Sindall Group have
also an important role in the risk management system (Crosby et al., 2018, p.234). They are
being suggested financial plans and ensure the elimination of the risks prevailing within the
financial department of the company. The non-executive directors have also played their duty of
ensuring the quality of the decisions to the respective shareholders.

5. Conclusion

In this study, the Morgan Sindall Group seems to have an effective management system present
within the organisation. This study has disclosed the goals and objectives of the company in the
end. The company also seems to have faced many challenges in the past few years in the field of
investment as well as other financial operations. The company has lost its customer base due to
low revenue income in the fiscal year 2020. However, the company has been able to provide low
cost services, which has been possible due to the implementation of an effective budgeting
system. This has also increased the customer loyalty as well as customer satisfaction level.
Despite the presence of an effective budgeting system, the company also faced some challenges
by using such a system. It has disrupted the entire decision process as it has provided several
financial solutions, which seem to have collided with each other's opinion.

The company has also been able to take precautions against it. Apart from disruption in the
decision making process the company has also faced challenges within the workplace. The
employees are not accustomed to such extensive shift timings as well as flexible hours. Apart
from this, the management of the company have great uses of the investment appraisal
techniques available in the business world including Right Capital. The company has also taken
on several financial tools in the field of investment. These tools have been proven effective
during financial planning sessions as well as budgeting sessions. Apart from the non-executive
directors of the board have also played their roles responsibly within the organisation and as per
the UK corporate code 2018.
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