The manager of a primary care health facility is planning to reclassify organisational cost items from capita-recurrent classification to fixed-variable classification. Discuss the implications of reclassification on financial decision making.
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One of the major implications of reclassification on financial decision-making, is the fact that reclassification will cause there to be a change in the methodology by which the organization seeks to meet its financial obligations, and or finance its expansion efforts. This is due to the fact that reclassification will cause there to be different kinds of variables to affect the manner in which organizational costs are calculated, and the proportion of the organization's financial capital that is directed towards materials procurement. These factors will serve to cause the leadership within the organization to have to change the methodology that it uses in respect to budgetary allocation and the dispersal of financial resources throughout the organization as a whole. Another very important implication of reclassification on financial decision-making is the fact that the reclassification would cause there to be a change in the financial options and alternatives that are ...