This was lower than expected and the reduction was attributed to the operating costs that went down by 19.2 percent. The strategic direction entails the specification of resource utilization, the objectives, mission, and vision of the firm, plan and policy development, and resource allocation for plan and policy implementation. (2020, January 20). "Strategic financial management." • A German multinational corporation that designs and manufactures sports clothing and accessories. Also, training in PRINCE 2 and ATLAS may be strengthening project administration and management skills, in Alternatively, statutory consolidation is a coming together of firms that brings up a new entity in which all the involved companies stop to exist. It is concerned with a decision regarding the profit generated by the business and how it should be utilized and there are basically two options available for this profit utilization that are either excess profit should be used for distribution as a dividend or for the retained earnings depending on the future plans of the company. There are various directions an organization can take and each option has its own advantages and disadvantages. An organization that is achieving its goals may make a decision of harvesting their product or service by allowing it to be completely eradicated from the market, if its market analysis shows that its performance is poor compared to the other products. Even though Sony expected their operating loss to go even higher to 120 billion for the year ending 31st march, 2010, they reported a loss of 25.7 billion at the end of the first quarter. It consists of various expenses where cash payments are to be made like salaries and wages payments, and expenses of water and electricity bills, and also the amount required for the purchase of the raw materials, etc. What I believe this means that in order to obtain a strategically managed company the thoughts of evolution and destination need to me kept in mind and acted upon. Strategic Financial Management Executive Summary. In other words, it can also be termed as applying principles of management to the financial resources of an organisation.eval(ez_write_tag([[300,250],'commercemates_com-medrectangle-4','ezslot_7',121,'0','0'])); The first and foremost function of financial management is that it initially estimates the finance needed for the smooth running and functioning of the business. Strategic Management Models, SWOT analysis and Porter’s Five Forces. Financial analysis and planning b. Now after the accurate amount of funds is raised then these funds are invested in various means that are revenue-generating for the business and are also in line with the objectives and goals of the business. There are three types of working capital policies available:- 1. The common types of fundraising methods are raising funds through issuing shares & debentures, simply taking loans from the financial institution, or through the issuance of securities like bonds. This is IvyPanda's free database of academic paper samples. An organization reaches its goals because of the strategic management program. Which includes the task of crafting, implementing and executing a company’s strategies.It is best looked upon as be a combination of planned actions that brings into play the structure of the company for the future. "Strategic financial management." 2008. p. 479), Financial strategic management is the identification of the best strategies that will maximize the market value of an organization. The scope of strategic management is greater than the strategic planning, in the sense that the latter is one of the important components of the former, that encompasses drafting strategies, to stand in the competition and is helpful for … Copyright © 2020 - IvyPanda is a trading name of Edustream Technologies LLC, a company registered in Wyoming, USA. This enables it to concentrate on the line that suits its operations well (Kotter.2002.p34). Strategic management is equally necessary along with the operational management in order to attain a sustainable competitive advantage. CMA Part 2 – Strategic Financial Management - Examination Sample Questions 4 1. The final motive of divestment may de an order from regulatory authorities with aims of creating competition in the market among other reasons. Before applying the strategic financial management technique it is very essential that the objectives of the organisation are precisely and clearly determined so that accordingly finance requirements can be calculated and then required funds are raised through the various possible means. Write a seven to eight (7-8) page paper in which you: 1. introduction to financial management. Strategic financial management is about setting the goals throughout the business and deciding what resources will be needed to achieve these goals. Burlington: Elsevier academic press. 1984, Small business: theory and policy, Sydney: Croom Helm Ltd. McKiernan.1992. Harvesting is the complete withdrawal of the product from the market. This report on Strategic Management and Project Selection was written and submitted by your fellow student. Explain what strategic style you would adopt and why. Year 1 Year 2 Year 3 Year 4 Sales $1,250,000 $1,300,000 $1,359,000 $1,400,000 Cost of goods sold 750,000 785,000 825,000 850,000 Gross profit 500,000 515,000 534,000 550,000 For example, using financial ratios, it is possible to analyze relative proportion of production, administrative and marketing expenses. IvyPanda. The three basic elements in the strategic financial management are first of all a proper plan regarding finance is formulated, after that various controls are set up so that all financial activities go as per the pre-decided plans and then eventually decisions are taken regarding the financial matters. There are strong perceptions within UNDP that systems related to financial administration and management have improved. "Strategic financial management." There are four types of business consolidation and these include statutory merger, statutory consolidation, stock acquisition and amalgamation. Conservative- In this company having huge balance of cash and holding higher level of inventory. Hoagland. Financial strategic management basically involves financial, investment and dividend decisions of the organization. Strategic financial management includes assessing and managing a company's capital structure, the mix of debt and equity finance employed, to ensure a company's long-term solvency. MASTER OF MANAGEMENT IN FINANCE AND INVESTMENT in the FACULTY OF COMMERCE, LAW AND MANAGEMENT WITS BUSINESS SCHOOL at the UNIVERSITY OF THE WITWATERSRAND DECLARATION I, Neo Mohohlo, declare that the research work reported in this dissertation is my own, except where otherwise indicated and acknowledged. Cite relevant examples from the oil and gas sector. Refer to models learned on the course such as SWOT analysis, Porter’s Five Forces In my opinion, I would recommend that Sony would have divested. For full functionality of this site it is necessary to enable JavaScript. Restructuring the organization whose break up is higher than it self does not add value to the organization as such. There are several strategic options that an organization can decide to take. Kotter.j.p, 2002, the Heart of people and change.Boston: Harvard publishing School. For example, there are phases to reaching strategic management. Conclusion. Principles of management and leadership, Burlington: Elsevier academic press. This is one of the primary duty of financial managers. The finance requirements of every business will vary due to the size of the operation, their profit target and various other objectives and mission. The financial management is generally concerned with procurement, allocation and control of financial resources of a concern. For any business, it is important that the finance it procures is invested in a manner that the returns from the investment are higher than the cost of finance. Retrieved from https://ivypanda.com/essays/strategic-financial-management/. It determines the worth of the project planning's & costs calculations in the prospective periods of the business. You can use them for inspiration, an insight into a particular topic, a handy source of reference, or even just as a template of a certain type of paper. You are free to use it for research and reference purposes in order to write your own paper; however, you must cite it accordingly . Strategic Financial Management. The major strategic direction options include; growth based consolidation, divestment, and harvesting. Provide a rationale for your recommendation. In business context, the term consolidation refers to the act of merging or the acquiring smaller companies into bigger ones. 2. The role of financial managers includes: a. W. 2009. January 20, 2020. https://ivypanda.com/essays/strategic-financial-management/. 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