Affection of Managing Contracts Lifecycle On Organization Values

IPASJ International Journal of Management (IIJM)
Web Site: http://www.ipasj.org/IIJM/IIJM.htm

Email: editoriijm@ipasj.org
ISSN 2321-645X
A Publisher for Research Motivation........
Volume 4, Issue 7, July 2016
Affection of Managing contractslifecycle on

organization values
Dr. Abdullah Ibrahim Nazal
Zarqa University
ABSTRACT
This Study concentrated on contract which delay product. It analyses the contract in three stages to show the managing of
contract in each stage and affection of managing on legal dealing, financing, accounting, managing, and economic. Searcher
found that this type of contract has ways of managing by merge, collecting, adjusted and heart of the contract to be other
contract up to the stages type. It caused flexibility value that explains contract lifecycle. Contract lifecycle explain way of
controlling to understand changing of contract affection on organization values any time. Controller can understand affection
by answer question of contract affection and managing of contract risk in order to understand changing of value in accounting,
finance, economic, management and law. Searcher recommended controlling contract lifecycle stages and its way of managing
to get suitable evaluation for organization by following contractvalues within its lifecycle.
Key words: Finance, Contract, Lifecycle, stages, evaluation, and Managing risk.
1. INTRODUCTION
Contracts are agreement between dealers in order to get product as goods or service. Some contracts which include
delay of products. Itshave possibilities of loss or cause profit which need to be managed up to its case. The practically
example of managing contract is derivatives which give way to managing loose and to get unusual profit. The
international derivatives as Future contract, Foreword contract, Swap contract, and Options are dealing by produced
organization and in speculation market. It can by directed by aims of sellers and buyer. It affects organization value,
market dealing value and economic benefit.
Some studies show that derivatives are reason of causing crises but other studies show it cause positive affection to help
organization and increase economic growth. Derivatives need more explanation to be control. Controlling need details
of contract and ways of managing to avoid ignorance and rule contract practically in order to find organization strength
points and weakness point also to find environment threats and opportunities. (Julia, 2009) explained the illegally
dealing with derivatives as USA commodities future contract derivative dealing in 1990 which increased uncertainty of
future contracts and other derivatives.
1.1 The Problem
some finance contracts, investing contracts and saving contracts have fixed value but other contracts have flexibility
value because of managing. This flexibility will cause different value from time to time and it needs to be measured
practically. "There are no limit standards ruling government companies, international companies and local companies"
(IFAC, 2010: 388). The study problem is to help ruling delay contract standards. It found its flexibility and its affection
to limit problemsin legal control, financing control, accounting problem, managing structure problem, and economic
control. The questions of the problem are as follow:1- Is there flexibilityafter contract has been done?2- Whatis the
affection ofcontract managing value?3- What is the contracts lifecycle?
1.2 The Objectives
the search aims are as follow:1- To find reason of causing contract flexibility value.2- To find affection of contract
managing value3- To find contract lifecycle
1.3 The Importance:
This paper is important as result to show contract lifecycle and its way of managing. It helps leader in law, managing,
economic, financial andaccounting to control contracts in producing sector and financial market for speculation. It
gives idea about ways of managing contract to face loss and to get profit. It helps to understand financial crises.It shows
financial analysis suitable way to make suitable financial report.
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1.4 Literature Review

Some studies show importance of operation steps to be follow as (Winson, 2014) who explained that experts are led by
courts to follow expect steps of operation to found fraud steps before cheater complete frauds operation. (Muhannad and
Jamal, 2012) They concentrated on correctly documented up to different types of companies.They showed differenceof
contractsbetween Islamic organization and traditional organization.Some studies tried to solve problem of contract
value disclosure as (Pierre, 2013) who suggested model to increase disclosure by recalculates financial statement figures
to what it could have been which solve problem of account in delay product contract. (Justin, Daniel, and Eric, 2014)
explained the importanceofreevaluate companies investing and finance in crisesbecause of possibility of loss evens it
has good reputation.Some studies give rules as (Pedro and Erwan, 2010) who explained that product development
causes economic development when it promotes investment and making allocation of resources more efficient.
2. CONTRACT LIFECYCLE
Every product has lifecycle. Product could be produced for the first time and need support to success or it gets in
growth or it gets in maturity or get in default. Life cycle for product may ended by time to default to cause loss or it be
adjusted to get in growth up to success managing(Zeithaml and Bitner, 2000). Contract has life cycle as products and
manager has to managing its lifecycle. This managing causesflexibility thateffects on organization value because of
transfer risk or reduces risk partly to keep profitability organization. financing contracts as loan and bonds may has
fixed interest of flexibility interest , managing of finance contract can be done by selling contract to other dealer with
profit or with partly loss up to the changing of environment.Ex: manager sells his debits because he found that the his
loan could be sold with profit as result to possible reducing of future interest in future case in case the interest was not
fixed. Manager can sell his debts to avoid customer default. He can sell his debts by discount to avoid loss partly.
Investing contracts can cause flexibility up to aims. Investing can be aim to get usual profit form producing sectors or
unusual profit from financial market. It has flexibility by managing risks that avoid risk, transfer risk, and reduce risk
partly. Saving contracts can cause flexibility by deposit owner and deposit user. Flexibility of contract can causes
adjusted, merge, collecting and heart of the contracts. (Thomas, 2011) explained that there must be financing
tool, investment tools and saving tools to get suitable needs in suitable time.Practically, Flexibility comes
by different types of contracts to get aims and possibility of contract flexibility managing risk. See next table:
Table 1: Contracts types and itsflexibility of managing
Contract type
Financing
Investing
Objective of
contract
1-Get loan to
make operation
leverage
2-Get loan to
make
financial
leverage
in
producing
organization
3-Get loan to
make to make
leverage
by
margin
is
financial market
speculation
1- make investing
to get systemic
usual return and
suitable cash flow
in suitable time
up to it liquidity
need
2- Make investing
to get unusual
return in short
term
Usual Ways of
managing contract
Adjust the contract
conditions
- Merge the contract with
other contract as one
contract with out show
every contract cost or
profit
Collect the finance
contracts with each others
as one package
- The heart of the
contract to other contract
Adjust the contract
conditions
contract with out show
profit
- Collect the investing

contract
with
other
contract as one package
- The heart of the
Examples
To change interest rate, time and way of
calculate interest
Organization can get many loans to make
portfolio then it sells these loans as
bonds contracts with same interest in
order to get liquidity to buy loans and get
more time.
Collect different loans types in one
portfolio
Bonds can be changed to be common
share in the company
Adjusted producing products
Organization can get many investing
projects to make portfolio then it sells
these projects as investing certified
contracts in order to get liquidity and get
more profit also it is way to transfer risk
or organization will one small
organization
Collect investing projects from different
types in one portfolio to manage risk
Sell investing project s to change
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Saving
1- to get return of
saving service by
get commission
2 to use savings
in investing
3 to create money
by
derivative
deposits
Adjust the contract

conditions
contract with out showing
profit
Collect the finance
contract
with
other
contract as one package
- The heart of the
contract from investing to selling or

change preferred shares to be common
shares
Saving contract can be loan contract or
saving contract with out charge can be
which saving charge
Merge saving service with authorized to
make buying or getting instead of
customers
Collect all saving deposits up to the

terms in long term deposits, and short
term deposits to manage liquidity risk
Saving contract can be change to be
investing in project to get profit
3. CONTROL CONTRACT LIFECYCLE

Flexibility of contract has cases. Delay of getting price or product will increase flexibility up to time of delay. Manger
can cause unusual flexibility by make derivatives. To understand delay contract flexibility there is need to see next
figure, it is example of derivative the buying iron delay contract
Figure 1: flexibility of delay getting Iron contract

Stage of waiting has possibilities of loose or makes more profit. It can be manage by selling the right of getting iron in
1/4/2016 to other dealer. Dealer can wait to get Iron in 1/4/2016 or he can sell his right to transferowning iron to other
dealers. Practically buying Iron with delay contract has three steps and three values. Valuesare Iron value instage of
signing, value in stage of waiting and value in stage of execution. The three values will cause problem of Iron value
accounting, problem of iron legal value, problem of finance value and problem of added value in economic. See next
table:
Table 2: Questions of evaluate organization up to flexibility managing in contract stages
Delay of getting
product steps
stage of signing
Value Possibilities
Objectives
Limit price up to
expected demand and
supply in the execution
time
stage of waiting
1- Value is not fixed

because of different
expecting, Expecting is
not the real value
To avoid storing
product
in
currently time and
to get product in
suitable time to
fit
producing
needs or to sell
product
with
profit
To
watch
contract risk in
order to managing
loss or to get
added profit by
selling product
Questions of expect condition to avoid

Problems
1- Is contract be accepted by law?
2- Are there costs as buy law fees? 3- Does
Contract give organization real advantage?
4- What the affection of contract on financial
tables?
5- What is the affect of contract on benefit
for government, customer, supporter,
creditor, employees, Insurance companies
and classification of risks?
6- What is the current value of contract in
the organization?
7- What is the Future value of contract in the
organization?
8- Can company managing contract risk
practically?
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stage of execution
2- but when the

manager
sell
this
contract before time it
will be the value of sell
the right of getting
product to other dealer
and it will be real value
after selling
After the execution
there is comparing
between contract price
and market price. loss
come when market
price is less than
contract price
To transfer loss
or to get added
profit or to reduce
loss
9- Is contract effect organization shares price

in financial market?
10- Is the contract effecting economic
equilibrium point?
11- Is managing contract affect on managing
structure positively?
To get product
1- Is product suitable for using in producing

products?
2- Is there are costs as legal fees to get
product?
3- Can company managing product risks?
4- Is product price increase in market?
5- Can organization sell product with
suitable profit?
6- Is product effecting organization share
price in financial market?
The questions of expect condition to avoid contract problems are showing the accounting problems, Financial
problems, Managing problems, law problems and Economic problems. The questions explain way of controlling
contract in three stages up to its affection in financial tables that show case of assets, liabilities, net profit and share
price in financial market also it shows changing of financial structure, investing structure and managing structure. It
gives way to follow the accounting data of the contract.It shows the contract affection on economic equilibrium point
and the fit of law to avoid its gaps.
4. CONCLUSION
Search found that product delay contract has ways of managing by merge, collecting, adjusted and heart of the contract
to be other contract up to the contract stages type. It causes flexibility value that explains contract lifecycle. Contract
lifecycle can be watch by controller to under stand changing of contract affection value. Controller can under stand
affection by answer question of contract affection and managing of contract risk in order to understand changing of
value in accounting, finance, economic, management and law.
5. RECOMMENDATION
Searcher recommended controlling contract lifecycle stages and its way of managing to get suitable evaluation for
organization by following contract value within its lifecycle.
REFERENCES
[1] International Federation of accounting (IFAC), International accounting standards in public sector, USA,p388,
2010. See www.ifac.org
[2] Julia Pachos, Over the Counter Derivatives in Russia, ISDA search notes, International swap and derivatives
association, USA,P9,2009. http://www.isda.org
[3] Justin Heinze, Daniel Diermeier, and Eric Luis Uhlmann, Unlikely allies: credibility transfer during corporate
crises, Journal of Applied Social Psychology, wiley and Sons on line library, USA,p392, 44(5),
2014.http://www.socialjudgments.com
[4] Muhannad A. Atmeh and Jamal Abu Serdaneh, ,A proposed mode for accounting treatment of Ijrah, published by
Canadian center of science and education, International journal of business and management,pp51-53, 7(18)
,2012.http://www.ccsenet.org/journal/index.php/ijbm/article/viewFile/17370/13505
[5] Pedro S. Amaral And Erwan Quintin, Limited Enforcement, Financial
Intermediation, and
Economic development: A Quantitative Assessment, International Economic Review, Economic Department of
University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association,
August,p804, 51(.3),2010.
[6] Pierre Lucouw, Interpreting Financial Statements, journal of finance and investment analysis, UK, pp 69 - 71.2(1),
2013,http://www.scienpress.com
[7] Thomas H.W, Zieseme, Saving finance emigration and worker remittances serve to make staying rather than
migrating possible, international Economic Journal, UK, p373, 25(3), 2011 .
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[8] Wilson Harle, Barristers and Solicitors, New Zealand, p1,2014,www.wilsonharle.com/assets/Fraud-FinancialCrime-Issue-2-Feb-2014.pdf

[9] Zeithaml,Valarie A and Bitner ,Mary Jo, Services Marketing International Customer Focus Across the Firm,
Second Edition, McGraw-Hill Companies, Inc, U.S.A, p 198,2000 .
AUTHOR
Associate Professor: Dr. Abdullah Ibrahim Nazal. had received the PhD in finance and banking from Arab Academy
of Finance and Banking, working at Zarqa University in Jordan from 2009 until now, Shared in conferences and had
published searches also books whether in Arabic or English, locally or internationally.
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IPASJ International Journal of Management (IIJM)

Web Site: http://www.ipasj.org/IIJM/IIJM.htm

A Publisher for Research Motivation........

Volume 4, Issue 7, July 2016