The paper "The Financial Health of Shropshire Fire and Rescue Service" is a good example of a management case study. In any type of organization, defining the operational boundary and authorized limits are important. Organizations can only function if all the resources needed to operate can be readily made available. In most cases, the availability of these resources depends highly on the availability of funds to purchase or pay for these resources. Operations are typically outlined for over a specific period, with the length of the period determining the number of funds required to perform the organization’ s intended functions.
On the other hand, authorized limits provide the ceiling expense an organization can spend in the given period which can be defined by its source of funds or by its periodic performance (Siegel & Shim, 2000). In the case of Shropshire Fire and Rescue Service, the operational boundary and authorized limits are set from the number of activity it needs to perform in a given period. From an objective point of view, the operational boundaries and authorized limits are somehow low given the scope of its functions and operations and the economic considerations in operating the organization. The operational boundary of the Shropshire Fire and Rescue Service (SFRS) is defined by the six main activities it is engaged into namely administration, fire safety, health safety, human resources, operations, and technical and training.
As a unit, the SFRS manage administrative details of its function using an internal body that sees the day-to-day operation of the organization. Fire and health safety refers to the equipment, manpower, and the required materials relating to any major operations that require fire and health safety measures.
This cost driver is very similar to operations but on a more specific level. Human resource refers to the expenses SFRS requires to hire, pay, and manage individuals working for the organizations. Technical and training are the expenses incurred in modernizing the approach towards fire and risk management of the firefighters in the form of technical seminars and skills development. These cost drivers identified are the minimum number of cost drivers required for SFRS to operate. Any financial planning and budget allocation for SFRS must consider these major cost-driving activities of the organization.
This is because these identified factors in the operations of the SFRS are very important in one way or another. Allotting meagre funds on any of these areas may result in serious consequences, particularly since the main goal of the operations of SFRS is to save lives and properties. That is to say that if any of these considerations are not met, or if they are met but the budget allotted to these activities lack to some degree, then there is the possibility that SFRS would be rendered useless and unable to perform its intended function.
With six sub-departments to sustain, SFRS needs to be able to handle its funds appropriately in order for it the organization to perform all the functions expected of it. (2) The safety margin defined for the operational boundary for SFRS is 5% or a deviation of ± 5% from the 100% budget. To check whether the operational boundary for 2009-2010 is within the safety margin of the authorized limit, the figure for the operational boundary is divided by the authorized limit to get the available percentage.
That is, £ 16.419,000 / £ 17,500,00 to yield 93.82% or a safety yield of 6.18%. This means that the SFRS is operating within the recommended safety margin.