Rangers: Decentralized Philosophy For Cost Cutting & Equity - Essay Sample

Introduction

The rangers use the decentralized philosophy. Decentralized philosophy is the process activities that of company or organization regarding decision making and planning are delegated and distributed away from the authoritative, group, or central. Decentralized organizations allow lower levels in the company to make a decision. Like in the case of ranger's company, all the employees are given the responsibility of cost cut and are being motivated by rewarding them with equity in the company.

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Decentralization has three significant forms of delegation devolution and deconcentrating. Decentralization helps lower-level managers to make decisions on their own. It is done by developing solutions for problems faced by the company, to assist in enhancing confidence also self-reliance among employees (Crook, & Manor, 2018). Advantages of decentralization it gives employees morale, job satisfaction, especially the lower level; it also reduces the work of top-level managers, helps in quick decision making, promotes motivation, helps in better supervision and control.

Liquidity refers to the ability of a company, individual, or organization to convert its assets to cash and maintain its value. The level of liquidity depends on how quickly an asset can be sold for money. Assets like bonds and stocks are natural to be converted to cash, unlike equipment, plants, or land, which may take time to sell, thus making them less liquid (Trebby & Xiao, 2019). The Ranger's Resource company can know they have enough cash by looking at the number of current assets that the company owns. They can look at the stocks they have at the New York stock exchange, among other existing assets like marketable securities, trade receivables, cash and cash equivalents, loan, inventory, investments, prepaid expenses. Ranger's resource reports having high liquidity through the vast acreage portfolio where they can sell and settle their debts. The company is one of the top three E & P companies in the New York Stock Exchange; therefore, they can quickly sell their stock and shares to liquidity their assets.

Several indicators show that Range Resources take a long-term approach to their financial performance. The first is that the company encourages equity building and discourages high costs (Lassala, Apetrei, & Sapena, 2017). Manny encourages the employees to make cost-cutting their culture since he believes that cost-cutting would increase equity in the company. The company also builds on high liquidity so that it can offset debts in the short term. Manny says that the top cash being encouraged in the company enables them to absorb shock in the company. The high returns the company has allows it to offer its products at low costs and therefore have a competitive advantage.

The company also sets a long-term growth strategy of at least ten years, which ensures that the company would be stable in the period. The range has vast reserves and has been increasing its productivity from thirty million cubic feet to nine hundred and sixty million cubic feet. The company also monitors its performance using a simple balance sheet, which will display its revenues and expenses. As the company seeks to reduce the costs, the balance sheet would make this easier when analyzing the financial performance. During the recession period, most companies closed down. Still, Range was able to remain in the market due to its high financial strategy, which would enable the company to perform well even in the long term.

References

Crook, R., & Manor, J. (2018). Democratic decentralization. In Making Development Work (pp. 83-104). Routledge.

Lassala, C., Apetrei, A., & Sapena, J. (2017). Sustainability matter and financial performance of companies. Sustainability, 9(9), 1498.

Trebbi, F., & Xiao, K. (2019). Regulation and market liquidity. Management Science, 65(5), 1949-1968.