Course Hero Logo

Module 2 - Relationship of Financial Objectives to Organizational Strategy and Objectives.docx

Course Hero uses AI to attempt to automatically extract content from documents to surface to you and others so you can study better, e.g., in search results, to enrich docs, and more. This preview shows page 1 - 3 out of 7 pages.

Relationship of Financial Objectives to Organizational Strategy and Other Organizational ObjectivesLEARNING OBJECTIVESAfter studying Module 2, you should be able to:1.Discuss the importance of objective setting in a business enterprise.2.Describe the primary financial objectives of a business firm.3.Explain the responsibilities of a Finance Manager to achieve the firm's financialobjectives.4.Understand the nature of environmental ("green") policies and their implications for themanagement of the economy and firm.INTRODUCTIONFinance permeates the entire business organization by providing guidance for the firm's strategic(long-term) and day-to-day decisions. For long range planning and management control, abusiness firm establishes its overall objectives. Such objectives are developed by the topmanagement and they usually consist of general statement or a series of statements in generalterms stating what the company expects to achieve.Objective setting is thus, an important phase in the business enterprise since upon correctobjectives setting will the entire structure of the strategies, policies and plans of a company rest.Firms have numerous goals but not every goal can be attained without causing conflict inreaching other goals. Conflicts often arise because of the firm's many constituents who includeshareholders, managers, employees, labor unions, customers, creditors, and suppliers. There arethose who claim that the firm's goal is to maximize sales or market share; others believe the roleof business is to provide quality products and service; still others feel that the firm has aresponsibility for the welfare of society at large. For example, the objective may be stated in suchbroad terms as:It is the goal of the company to be a lead& in technology in the industry, orTo achieve profits through a high level manufacturing efficiency, orTo achieve a high degree of customer satisfaction.For the purpose though of measuring performance and degree of control, it is necessary to setobjectives or goal in more precise terms. The objectives are usually in quantitative terms and areset within a time frame. The setting of physical targets to he accomplished within a set timeperiod would provide the basis of conversion of the targets into financial objectives.Module 2: Relationship of Financial Objectives to OrganizationalStrategy and Objectives
Relationship of Financial Objectives to Organizational Strategy and Other Organizational ObjectivesSTRATEGIC FINANCIAL MANAGEMENTStrategic planning is long-range in scope and has its focus on the organization as a whole. Theconcept is based on an objective and comprehensive assessment of the present situation of theorganization and the setting up of targets to he achieved in the context of an intelligent andknowledgeable anticipation of changes in the environment. The strategic financial planninginvolves financial planning, financial forecasting, provision of finance and formulation of

Upload your study docs or become a

Course Hero member to access this document

Upload your study docs or become a

Course Hero member to access this document

End of preview. Want to read all 7 pages?

Upload your study docs or become a

Course Hero member to access this document

Term
Fall
Professor
Maxine
Tags
Finance, Finance Manager

Newly uploaded documents

Show More

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture