Big O Paper

Emery, D.,Finnerty, E. & Stowe, J. (2007) discuss effective decision making stems from a clear understanding of the principles of finance. These principles offer the best guidance for an organization needing to review their finances. Groppelli and Nikbakht (2006) define finance as "the application of a series of financial and economic principles to maximize a firm's wealth and the value of its stock." Jaya Ongko, the founder of Ongko’s Furniture gained most of his success because of vast supply of timber and lack of competition (International Finance, 2011). The aforementioned occurrences are excellent examples of how competitive economic advantage operates. Ongko began his organization by demonstrating self-interest behavior, but was soon blinded sided by arising competition.

When evaluating the value and economic efficiency of the Ongko scenario, Emery et al. (2007) state “new ideas take the form of improved business practices or marketing.” Unfortunately for Ongko, competition arouse from overseas with better product and prices, not to mention, the cost of labor increased with the increase in the city’s population (International Finance, 2011). The competition that emerged in Bali is accomplishing success because, not only did they tap into the abundant resources, they added innovation. With such a hit Ongko must reorganization and develop a plan of action. He begins researching methods to recover and regain profitability. A valuable idea that transpired was to also embark on the latest technology, and more importantly partner with some competitors and shift his organization from manufacturing to distributing (International Finance, 2011).

Finally, by observing financial transactions, Ongko has a clear vision to process on a path forward. Now that Ongko has adopted the “if you can’t beat them join them mindset,” he can focus on financial aspects such as risk-return trade-off. This principle addresses Ongko because he has to shake hands with his...