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Capability Directory

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Current Asset Transformation

Current asset transformation


Related Terms:

Inspired by David J. Teece, dynamic capability is “the firm’s ability to integrate, build, and reconfigure internal and external competences to address rapidly changing environments”.

Fast-changing markets require the ability to reconfigure the firm’s asset structure and accomplish the necessary internal and external transformation (Amit and Schoemaker, 1993). Change is costly, so firms must develop processes to find high-payoff changes at low costs. The capability to change depends on the ability to scan the environment, evaluate markets, and quickly accomplish reconfiguration and transformation ahead of the competition. This can be supported by decentralization, local autonomy, and strategic alliances.

Beginner competence definition

A beginner level competence for this capability involves understanding the basic principles and processes of managing and transforming current assets. This would include knowledge of accounting and financial concepts such as cash flow, budgeting, and financial analysis. Additionally, a beginner has a basic understanding of the different types of current assets, including cash, accounts receivable, inventory, and the impact they have on a business’s financial performance. They also have the ability to use basic tools and software for tracking and managing current assets, such as spreadsheets and accounting software. Overall, a beginner in this area has a solid foundation in the fundamentals of current asset management, and can assist in the development and execution of strategies to optimize the use of these assets within a business.

Intermediate competence definition

An intermediate-level competence involves a deeper understanding and application of the principles and processes of managing and transforming current assets. This includes knowledge of advanced accounting and financial concepts such as financial forecasting, variance analysis, and working capital management. Additionally, an intermediate level individual would have a comprehensive understanding of the different types of current assets and their inter-relationship and the impact they have on a business’s financial performance. They would also have the ability to use advanced tools and software for tracking and managing current assets, such as budgeting software and inventory management systems. They would also be able to evaluate the performance of current assets and make recommendations for improvement. At this level, an individual has the ability to lead and execute strategies to optimize the use of current assets within a business, and can communicate the results and recommendations effectively with management and other members of the team.

Advanced competence definition

An advanced level competence involves a deep understanding of the principles and processes of managing and transforming current assets, as well as the ability to design and implement innovative solutions. This would include knowledge of advanced accounting and financial concepts such as risk management, financial modeling, and optimization techniques. Additionally, an advanced level individual has an in-depth understanding of the different types of current assets and the impact they have on a business’s financial performance, as well as the ability to evaluate the performance of current assets and make recommendations for improvement. They also have the ability to use advanced tools and software for tracking and managing current assets, such as budgeting software and inventory management systems. They can identify trends, predict future scenarios and implement the appropriate actions. Their ability to lead and execute strategies to optimize the use of current assets allows them to to communicate the results and recommendations effectively with other members of the team, the management and stakeholders. Furthermore, they would be able to anticipate market changes and make predictions on how it will affect the current assets and therefore be able to implement action plans accordingly.

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