Introduction
The vision 2030 for Saudi was designed to improve the local and the international position of the country along economic, social, political, and the peoples` dimensions. The plan was designed along three critical aspects that encompass the social, economic, people, and the political position. The three pillars that founded the plan were the vibrant society, ambitious nation, and the thriving economy. Along the vibrant society, the model focused on tapping the nation`s strong roots through the blending and optimizing on the natural resources and the community`s cultural heritages. The plan focused on developing and promoting fulfilling lives among the people through the psychological, physical, and behavioral perspectives. The design aimed to develop and promote strong social communities through strong family and other social institutions (Vision2030.gov.sa, 2016).
Along the thriving economy, the plan aims to diversify the country`s national and international portfolio by investing in the long term. The nation will diversify their dependence of the oil and gas to other sectors of commerce and improve on their participation in the processed commodities. The country aims to improve their economic perspective by leveraging on its unique geographical commercial position. The plan aims to develop their economy through creating and rewarding opportunities for the young generations. In addition, the country will develop their economic perspective through being open to the local and the international commerce (Vision2030.gov.sa, 2016, p. 2).
In developing an ambitious nation, the plan aims to develop effective Governance and politics. The politics and mode of Governance in the Saudi has remained adamant to despite the internal and external changes. In addition, the plan will focus on the collective participation and collaboration of all the people towards the change. To attain the desired change, it would be critical for the plan to be supported by all the people in the nation and the external stakeholders. In the light of that, part of the plan would be to enable the collective support and participation of the internal and external stakeholders (Vision2030.gov.sa, 2016, p. 3).
Accomplishment of the desired plan will have effect on the local and the international retail businesses that operate in the Saudi or have their roots in the Saudi. The intended changes may influence the working capital management practices and the financial performance of the retail sector. The influence may be significantly due to the Government`s decision to change their financial calendar and the remuneration for the Government workers. The decision to change the payment time from Hirji calendar to Gregorian calendar and eradication of allowances extended to the laborers may influence the operations in the retail sector. The writer will explore the influence of the Saudi Arabia vision 2030 to the Working Capital Management Practices and Financial Performance of Firms in the Retail Sector (Vision2030.gov.sa, 2016, p. 18). In doing so, the author will focus on the influence of changing the financial calendar from Hirji to Gregorian calendar and elimination of civil and public servants` allowances to the working capital management practices and financial performance in the retail sector.
Relevance of the Study
The plan focuses on changing the Government financial calendar and expenditure from the Hirji calendar to adopt the Gregorian calendar design. The design would mean that the Government workers will have a change in the time they receive their salaries. The changes will have significant effects on the amount available for the workers to spend in the retail sector. The changes in the time they receive the money will influence the amount, type, and trends of the consumption of the retail products by the workers. For the retail sector that has the key consumers as these workers, the changes will influence the amount they can produce and sell in the market (Moynihan & Wells, 2010). In addition, for the businesses that have the Government as their key consumers, the changes will influence the time of the month the Government purchases and pays, thus influencing the account receivables, stock turnover rates, and the cash flows of the retail sector. The influence will be felt in the retail businesses by influencing the time and type of business expenditures during the month and the year. The Government decision to eradicate the allowances given to their workers will influence the consumer power, trends, and preferences. The changes will influence the amount demanded and supplied to the market by the retail sector (Hitt, Ireland & Hoskisson, 2015).
Problem Statement
The requirements of the vision 2030 aims at developing the nation`s economic local and international position. The plan focuses on adoption of the Gregorian calendar as the financial Government operations to align with the majority of other countries and fit in the international trade (Sama.gov.sa, 2016). In addition, the Government aims to reduce their expenditure on short term issues by eliminating allowances advanced to the public workers. The resources will be used to advance their interests in long term investments and fostering the retail business sector. The desired changes in the nation will influence the retail sector in the country significantly. Despite the plan aimed to improve the economic position of the country, the desired changes may have adverse effects on the management of the working capital practices and the financial performance in the retail sector. The changes may affect the performance and growth of the retail sector positively or negatively. It would be critical to determine the influence of the changes on the retail sector working capital management and financial performance measures to aid in the development of intervention and control measures to improve on the sector. It would be critical to determine the possible drawbacks on the financial performance of the retail sector that are aimed to form the key economic drivers in the plan (DITC, UNCTAD, T. A., 2014).
Research Objectives
The objectives of the study would be to evaluate the effects of the vision 2030 to the working capital management and financial performance of the retail sector in the Saudi Arabia. The study will investigate the possible negative influence of the eradication of allowances to the Government workers and change from Hirji to Gregorian financial colander by the authorities to the retail sector. The analysis could be used to design corrective and intervention measures to improve on the sector. The determination of the influence of the visoon 2030 to the financial performance and the working capital management of the retail sector would indicate the effectiveness of the model to improve the economy of the nation (Sama.gov.sa, 2016, p. 4). The design is critical since the plan aims to have the retail sector as the key economy driver in the nation.
Independent and Dependent Variables
The research will be a qualitative study that will employ secondary and primary research materials. The secondary information will be obtained from credible and reliable secondary sources while the primary data sources will be obtained through a selective survey. The study will employ independent and dependent variables (Mahoney & Goertz, 2006). The independent variables for the investigation will include cancelling of allowances of the public workers and changing the dates of paying the salaries from Hijri calendar to Gregorian calendar. The ministry of rural and municipal and rural affairs has announced a change in the financial months and remuneration for the public workers to adopt a Gregorian calendar design and eliminate allowances extended to the civil and public workers.
The changes will have significant effects on the consumers` power, trends, and preferences. The events will have a consequential impact on the financial performance and working capital management practices in the retail organizations that have the Government and the public workers as their major users (Valiris & Glykas, 2004). In the light of that, the survey will have the dependent variables as the amount available for public and civil servants to spend in the retail sector, the changes in the preference and consumption power in the month and the year, as well as the consumption trends. In addition, the dependent variables for the investigation will include the influence of the consumer power and trends to the account receivables, rate of stock turnover, cash flows, and time and type of business expenditure in the retail sector (Business.gov.au, 2016).
Research Questions
What would be the influence of the changes in the time the public and civil workers receive their salaries to the cash flows, rate of stock turnover, account receivables, and the time and type of business expenditure such as salary processing, payments of expenses in utilities and rent, as well as insurance?
What would be the influence of elimination of allowances for the public workers to their consumption power and hence the revenues obtained from the market sector by the retail sector?
What would be the influence of the change of the Government financial calendar from Hirji to Gregorian calendar influence account receivables and cash flows in the retail industries that have the Government as the key consumer?
References
Business.gov.au. (2016). Analyse Your Finances: Financial Ratios | business.gov.au. Retrieved from https://www.business.gov.au/info/run/finance-and-accounting/finance/analyse-your-finances-financial-ratios
DITC, UNCTAD, T. A. (2014). Developing Countries in International Trade 2005: Trade and Development Index. SSRN Electronic Journal. doi:10.2139/ssrn.983944
Hitt, M.A., Ireland, R.D., & Hoskisson, R.E. (2015). Strategic management: Competitiveness & globalization (11th ed). Stamford, CT: Cengage
Mahoney, J., & Goertz, G. (2006). A Tale of Two Cultures: Contrasting Quantitative and Qualitative Research. Political Analysis, 14(1), 229-236. doi:10.1093/pan/mpj017
Moynihan, D. P., & Wells, S. (2010). Designing Compensation Plans to Manage Today's Risk Environment. Compensation & Benefits Review, 43(1), 17-22. doi:10.1177/0886368710390490
Sama.gov.sa. (2016). Financial Stability Report 2016. Retrieved from Saudi Arabian Monetary Agency Monetary Policy and Financial Stability Department website: http://www.sama.gov.sa/en-US/EconomicReports/Financial%20Stability%20Report/Financial%20Stablity%20Report%202016_en.pdfVision2030.gov.sa. (2016). Saudi Vision 2030. Retrieved from http://vision2030.gov.sa/en
Valiris, G., & Glykas, M. (2004). Business analysis metrics for business process redesign.
Business Process Management Journal, 10(4), 445-480. doi:10.1108/14637150410548100
Vision2030.gov.sa (2016). Saudi Vision 2030. Retrieved from: http://www.Vision2030.gov.sa/en
