You are to use an appropriate model to identify and explain the level and impact

Question

You are to use an appropriate model to identify and explain the level and impact of innovative practices in an organisation familiar to you. Showing clear evidence of evaluation of the impact of the innovation to the organisation.

You need to analyse and evaluate the most appropriate management strategies to implement the changes required for the innovations to be successful. Justify your choice of strategies, paying attention to ensuring the movement of change is effectively managed.

You must demonstrates how the role of internal audit should be developed to support innovation and change in that organisation.

Regardless of the format of the presentation, you must produce a reference list (in Harvard format).

Explanation / Answer

Besides considering the cost of production of Ad-Soon, Megastra must consider the opportunity cost of the decision. It may be possible that the Company would be gaining from taking $4million in cash immediately. However, it must take into account the future cash flows that would be generated if the offer is not accepted. This would be by way of sales of Ad-Soon. All relevant costs would have to be estimated to arrive at the net cash flows from sales of the product if the offer is not taken. The cash flows from sales of the product should then be discounted to arrive at the expected present value of the opportunity of selling the product in future. This value should then be compared with the $4 million that is being immediately received to assess whether the decision to accept the offer is better or the decision to go ahead with the opportunity is better.

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