Human Resources/Finantal maagement
The function of the finantial management is to review and control decisions to commit or recommit funds to new or ongoing uses. thus in addition to raising funds finantial management is directly concerned with production, marketting and other functions wthin an enterprise whenever decisions are made about the acquisition or distruction of asssets Elucidate
2. “The function of Financial Management is to review and control decisions to commit or recommit funds to new or ongoing uses. Thus in addition to raising funds, financial Management is directly concerned with production, marketing and other functions within an enterprise whenever decisions are made about the acquisition or destruction of assets”. Elucidate.
• Business concern needs finance to meet their requirements in the economic world. Any kind of business activity depends on the finance. Hence, it is called as lifeblood of business organization. Whether the business concerns are big or small, they need finance to fulfill their business activities..In the modern world, all the activities are concerned with the economic activities and very particular to earning profit through any venture or activities.
MEANING OF FINANCE
It includes financial service and financial instruments. The concept of finance includes capital, funds, money, and amount. But each word is having unique meaning
• “Finance is the art and science of managing money”
• word ‘finance’ connotes ‘management of money’
• BUSINESS FINANCE “Business finance is that business activity which concerns with the acquisition and conversation of capital funds in meeting financial needs and overall objectives of a business enterprise”.
“Business finance can broadly be defined as the activity concerned with planning, raising, controlling, administering of the funds used in the business”.
The Four Management Functions:
Planning is the ongoing process of developing the business' mission and objectives and determining how they will be accomplished. Planning includes both the broadest view of the organization, e.g., its mission, and the narrowest, e.g., a tactic for accomplishing a specific goal.
Planning is the first tool of the four functions in the management process. The difference between a successful and unsuccessful manager lies within the planning procedure. Planning is the logical thinking through goals and making the decision as to what needs to be accomplished in order to reach the organizations’ objectives. Managers use this process to plan for the future, like a blueprint to foresee problems, decide on the actions to evade difficult issues and to beat the competition. Planning is the first step in management and is essential as it facilitates control, valuable in decision making and in the avoidance of business ruin.
Quality in the results that are achieved and how the results are reached doing what is right, respect for others, value those that lead and take pride in all they do, and the value of teamwork to reach common goals.
Organizing is establishing the internal organizational structure of the organization. The focus is on division, coordination, and control of tasks and the flow of information within the organization. It is in this function that managers distribute authority to job holders.
Staffing is filling and keeping filled with qualified people all positions in the business. Recruiting, hiring, training, evaluating and compensating are the specific activities included in the function. In the family business, staffing includes all paid and unpaid positions held by family members including the owner/operators.
In order to reach the objective outlined in the planning process, structuring the work of the organization is a vital concern. Organization is a matter of appointing individuals to assignments or responsibilities that blend together to develop one purpose, to accomplish the goals. These goals will be reached in accordance with the company’s values and procedures. A manager must know their subordinates and what they are capable of in order to organize the most valuable resources a company has, its employees . This is achieved through management staffing the work division, setting up the training for the employees, acquiring resources, and organizing the work group into a productive team. The manager must then go over the plans with the team, break the assignments into units that one person can complete, link related jobs together in an understandable well-organized style and appoint the jobs to individuals. .
Directing is influencing people's behavior through motivation, communication, group dynamics, leadership and discipline. The purpose of directing is to channel the behavior of all personnel to accomplish the organization's mission and objectives while simultaneously helping them accomplish their own career objectives.
Organizational success is determined by the quality of leadership that is exhibited. "A leader can be a manager, but a manager is not necessarily a leader," . Leadership is the power of persuasion of one person over others to inspire actions towards achieving the goals of the company. Those in the leadership role must be able to influence/motivate workers to an elevated goal and direct themselves to the duties or responsibilities assigned during the planning process.. Leadership involves the interpersonal characteristic of a manager's position that includes communication and close contact with team members.
Controlling is a four-step process of establishing performance standards based on the firm's objectives, measuring and reporting actual performance, comparing the two, and taking corrective or preventive action as necessary.
The process that guarantees plans are being implemented properly is the controlling process. ‘Controlling is the final link in the functional chain of management activities and brings the functions of management cycle full circle.’ This allows for the performance standard within the group to be set and communicated. Control allows for ease of delegating tasks to team members and as managers may be held accountable for the performance of subordinates, they may be wise to extend timely feedback of employee accomplishments.
Importance of Management Planning
The four functions of management planning, organizing, leading and controlling, assume a great worth in the success of any business every day. In all organizations, each employee’s individual contribution to the success of the company is of enormous importance as the company’s goals would not be met and success would not be reached.
Financial management is an integral part of overall management. It is concerned with the duties of the financial managers in the business firm. The term financial management “It is concerned with the efficient use of an important economic resource namely, capital funds”.
SCOPE OF FINANCIALMANAGEMENT Financial management is one of the important parts of overall management, which is directly related with various functional departments like personnel, Marketing and production. Financial Management and Economics Financial Management and Accounting Financial Management and Marketing
Direct, control and administer the financial activities of the organization, and provide the Chief Executive and the Board with financial assessments and information which will ensure planning and budgeting activities meet corporate goals.
In consultation with other senior management, make recommendations and devise financial policy approach, and strategy.
Establish and direct the organisation's financial administrative activities and operational procedures to ensure the organisation's profits are protected.
Plan the financial operations of the organisation.
Provide financial information and interpretations to other management.
Co ordinate the development, implementation and monitoring of financial accounting and related systems.
Direct the collection of financial and accounting information and the preparation of budgets, reports, forecasts, and consolidated profit and loss reports.
Co ordinate the design, implementation and monitoring of up to date or computerised accounting and administrative systems.
Direct and co ordinate economic research, major feasibility studies involving detailed financial analysis, and estimates of future returns on proposed investment.
Evaluate the financial aspects of proposed acquisitions, investments, mergers, or the sale of assets or businesses.
Give assessments of proposals involving financial expenditure and of the financial status of operational projects.
Control activities such as taxation, credit policy, cash flow and investment policy, costing and expense control, preparation of tenders, audits administration of contracts, insurance arrangements and property administration.
Represent the organisation in dealings with the organisation's bankers, legal advisers, major clients and others as required.
Make policy decisions and accept responsibility for operations, performance of staff, achievement of targets and adherence to budgets, standards and procedures.
Control the selection and training of finance staff, establish lines of control and delegate responsibilities to subordinate staff.
OBJECTIVES OF FINANCIALMANGEMENT
PROFIT MAXIMIZATION Main aim of any kind of economic activity is earning profit. A business concern is also functioning mainly for the purpose of earning profit
WEALTH MAXIMIZATION Wealth maximization is one of the modern approaches, which involves latest innovations and improvements in the field of the business concern.
APPROACHES OF FINANCIALMANAGMENT
Financial management approach measures the scope of the financial management fields, which include the essential part of the in various finance. Financial management is not a revolutionary concept but an evolutionary
Traditional Approach Traditional approach is the initial stage of financial management, which was followed, in the early part of during the year 1920 to 1950.
FUNCTION OF FINANCE MANAGER
Finance function is one of the major parts of business organization, which involves the permanent, and continuous process of the business concern. Finance is one of the interrelated functions which deal with personal function, marketing function, production function and research and development activities of the business concern. Forecasting Financial Requirements Investment Decision
IMPORTANCE OF FINANCEMANAGEMENT
Finance is the lifeblood of business organization. It needs to meet the requirement of the business concern. Each and every business concern must maintain adequate amount of finance for their smooth running of the business concern and also maintain the business carefully to achieve the goal of the business concern.
Financial Planning Proper Use of Funds Increase the Value of the Firm