Question

Explain why the basics of capital budgeting are important for HR managers in every organization.? Why do HR managers need a working knowledge of capital budgeting?

Give an example of a human resources decision in your organization that could/could have gone wrong if capital budgeting principles were/are not considered.

Answer 1

CAPITAL BUDGETING

The process by which to decide about purchasing assets or starting a new venture etc.. in which that should be accepted or declined will be decided in the capital budgeting process.

CAPITAL BUDGETING FOR HR MANAGERS

Capital budgeting is important for HR managers in every organization because the managers are having there needs for the growth of the HR department of the company such need can be filled within capital budgeting. For example for the travel benefit of the workers the HR department can buy a bus thus it should be decided in capital budgeting. Thus the basics of capital budgeting are important.

HR managers need a working knowledge of capital budgeting

HR managers need working knowledge because only with the working knowledge only they will be experts in the filed. The one who without any practical knowledge cannot do the work perfectly that is the capital budgeting work because only with complete knowledge he can do the work.

EXAMPLE

When our department decided to purchase a bus for the workers when I checked the cash flow it shown a decline stage because of the principle the cash flow I checked as decided to buy bus afterwards if didn't check that i will buy the bus and the company liability will be increased