financial management

Topics: Strategic management, Management, Finance Pages: 8 (2951 words) Published: August 21, 2014
Introduction

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. The entire business activities are directly related with making profit. (According to the economics concept of factors of production, rent given to landlord, wage given to labor, interest given to capital and profit given to shareholders or proprietors), a business concern needs finance to meet all the requirements. Hence finance may be called as capital, investment, fund etc., but each term is having different meanings and unique characters. Increasing the profit is the main aim of any kind of economic activity.

Meaning of Finance: Finance may be defined as the art and science of managing money. It includes financial service and financial instruments. Finance also is referred as the provision of money at the time when it is needed. Finance function is the procurement of funds and their effective utilization in business concerns. The concept of finance includes capital, funds, money, and amount. But each word is having unique meaning. Studying and understanding the concept of finance become an important part of the business concern.

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 has been defined by Solomon (2004) “It is concerned with the efficient use of an important economic resource namely, capital funds”. The most popular and acceptable definition of financial management as given by S.C. Kuchal (2006) is that Financial Management deals with procurement of funds and their effective utilization in the business”. Howard and Upton (2003) Financial management “as an application of general managerial principles to the area of financial decision-making. Weston and Brigham (2003) Financial management “is an area of financial decision-making, harmonizing individual motives and enterprise goals”. Joshep and Massie (2002) Financial management “is the operational activity of a business that is responsible for obtaining and effectively utilizing the funds necessary for efficient operations.

Thus, Financial Management is mainly concerned with the effective funds management in the business. In simple words, Financial Management as practiced by business firms can be called as Corporation Finance or Business Finance.

Task 1
Strategy is one of the most over-used words in the business dictionary. Yet, surprisingly, there is no agreement on what the term actually means. No-one challenges its military origin, used with regard to how a commander might deploy his resources (i.e. armed forces) throughout a campaign aimed at achieving a particular objective (e.g. conquering territory or thwarting an invasion). The idea that a business organization could have a strategy seems to have first emerged in the 1960s, when the techniques of long-term business planning were first popularized. Since then many different interpretations of the concept and practice of strategic management have been developed. Indeed, entire books have been given over to contemplating the nature of strategy. For example, Mintzberg et al. (1998) characterize ten ‘schools of thought’ in their consideration of what constitutes strategy. A widely accepted definition is offered by Johnson et al. (2005), who define strategy as ‘the direction and scope of an organization over the long-term, which achieves advantage in a changing environment through its configuration of resources with the aim of fulfilling stakeholder expectations’. In its determination of the long-term...
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