Finance and Financial Management: Functions and Sources of Finance

This report discusses the concept of finance and finance management, functions of a finance manager, and sources of finance. It also includes a case study of Tesco. Short-term and long-term sources of finance are discussed in detail.

Project Template for IBS on HR Case Study
Introduction – (100 words)
The main objective of the report involves the importance and concepts in relation to the business
studies. The present report comprises of the various motivational theories, background of the
organization, concept of finance management, sources of finance and much more.
Motivation Theories – (400 words)
The concept of motivation basically involves stimulating the behavior of individuals by making
them strive voluntarily towards attainment of company's aims and objectives. In reference to
organization, there are various factors such as opportunity for advancement, rewarding for hard
work, empowerment and responsibility, a sense of achievement and much more (Zartman,
2022).
Maslow's Hierarchy of Needs generally comprises of the different theories of motivation and
involves basically five categories of human needs which supports in dictating the individual's
behavior. The needs are generally presented in the form of a pyramid.
Physiological Needs: It basically shows the lower level of needs and involves basic needs such
as water, clothing, rest, health and reproduction. In reference to Tesco, the company offers
sufficient salaries and breaks to their employees.
Safety Needs: In reference to company, the safety needs generally comprises of emotional
stability, security and protection. In reference to Tesco, it basically comprises of safe
environment, retirement benefits, job security etc (Jackson, 2022).

Love and Belonging needs: In reference to social needs, it basically comprises of emotional
bonds, family bonds, friendship and much more. In case of TESCO, the organization carries out
team working activities and social events.
Esteem Needs: The self-esteem needs generally comprises of self esteem, ego driven needs and
self respect. In case of TESCO, the organization rewards their employees for better performance.
Self actualization needs: In case of self actualization, it basically involves needs such as
education, self fulfillment, skill development and much more. In context to Tesco, the
organization supports their employees in developing skills and competencies (Dörrenbächer and
Gammelgaard, 2019).
In context to Tesco, the company aims to motivate their employees through paying attention to
the hygiene factors. With the help of understanding the Herzberg and Maslow theory, it helps in
demonstration of the fact that the employees are motivated by various factors.
Herzberg Two Factor Theory: This theory basically states that there are various factors in the
workplace which helps in creating job satisfaction. With the help of this theory, it really helps the
company in truly motivating the employees and how a organization need to create conditions
which could make the employees feel fulfilled in the workplace. In case of TESCO, the
organization aims to motivate its employees through paying attention with the help of enabling
satisfiers and paying attention to the different hygiene factors.
Case Study of Selected Company – (70 words)
TESCO is a British based general merchandise and multinational groceries retailer
founded in the year 1919 and headquartered in Welwyn Garden City, England. The organization
is basically considered to be the third-largest retailer as per the gross revenues. The company

offers various products in relation to internet services, clothing, furniture, software and telecoms.
The organization has expanded its operations since the 1990s and has its operations in
approximately in 11 countries (Landry, Greenwald, Kalb and Esq, 2018).
Motivation in Selected Organisation – (330 – words)
Motivation is basically considered as the internal process which helps in achieving
personal objectives. In case of motivation, it basically helps in self development of an individual.
In context to TESCO, the company focuses on motivating its employees through enabling
satisfiers and paying attention to the different hygiene factors. The organization carries out
various operations in order to empower and motivate their employees through involving the staff
in the decision making process, through implementing timely communication and with the help
of delegating responsibility. In reference to organizations, the concept of motivation plays a very
effective method for the purpose to achieve development and growth in the company. Being one
of the successful retail chain, the company needs staff that are highly motivated. Well trained
and flexible and who can easily recognize the needs of the customers. In case of company, it
supported their employees in different roles and also identified that motivation of employees
plays a very crucial role in company's growth. In reference to organization, it uses various
methods in order to motivate the employees which comprises of development, rewards and
training. In order to motivate the employees it is very important to offer recognition to the
employees and appreciating their efforts. For any employee, it is very important to take part in
the decision making process and therefore it is very important that the company's managers
should be opened to suggestions and opinions for the purpose to create a freedom to express
their perspectives (Hague, 2019).
In context to organization, the company uses different methods for the purpose to motivate its
employees through development, reward and training. The company also focuses on the personal
development of the employees in order to grow and develop. The organization also offers
various benefits such as hygiene factors, Christmas benefits, voluntary and staff housing benefits
and much more.
Conclusion – (100 words)

From the above report, it can be concluded that motivation plays a very important role in
the organization and also it is very important to motivate the employees for the purpose to seek
development and growth in the company. In addition to that, it helps in deep understanding of
how the company like TESCO motivate its employees through paying attention to the different
hygiene factors.
References
Zartman, I.W., 2022. 1 Introduction: African Traditional Conflict “Medicine”. In Traditional
cures for modern conflicts (pp. 1-12). Lynne Rienner Publishers.
Jackson, L., 2022. The Business of Letters. In The Business of Letters. Stanford University
Press.
Dörrenbächer, C. and Gammelgaard, J., 2019. Critical and mainstream international business
research: Making critical IB an integral part of a societally engaged international business
discipline. critical perspectives on international business.
Hague, P., 2019. The Business Models Handbook: Templates, Theory and Case Studies. Kogan
Page Publishers.
Landry, P., Greenwald, S.R., Kalb, M. and Esq, R.G., 2018. The Business of Film: A Practical
Introduction. Routledge.

Project Template for IBS on Financial Report
Introduction – (100 words)
The main objective of the report is to have deep understanding about the concept of finance and
finance management. In addition to that, the report comprises of various functions of a finance
manager and the different sources of finance.
What is Finance and Finance Management? – (100 words)
In context to Finance and financial management, it basically comprises of the various
governmental activities and business activities. In case of Finance, it can be basically described
as the activities of the organization in order to raise capital through bonds, sale of stocks and
promissory notes. The finance management basically defined as the business function which
deals with the investment of the different financial resources in a manner that helps in
achievement of return on investment and success of the company. In context to TESCO, the
company plans to allocate and set budgets to their departments and also plans to make
predictions about the future outcomes.
Functions of a Finance Manager – (300 words)
Financial Manager is basically considered as the executive who manages the different
matters of financial in relation to the organization. In context to Tesco, there are various
functions of the financial manager which comprises of the following:
Estimating the amount of capital needed: In context to the financial manager the main function is
to estimate the amount of capital required in order to meet the working capital requirements,
purchasing of fixed assets and expansion and modernization of the operations of the company.

Determining the capital structure: Another important function of financial manager is to
determine the proper mix of long term and short term debt and equity which is basically done for
the purpose to maximize the wealth of shareholders and achieving the minimum cost of capital.
Utilization of funds: Another important function of the financial manager is to invest in the
different assets for the purpose to maximize the return on investment. It is very important for the
managers to take investment decisions (Rashmi and Wilson, 2018).
Management of Cash: In context to current assets and management of cash, it is considered to be
a very important task in relation to the financial manager. It basically comprises of forecasting
the outflows and inflows of cash for the purpose to ensure that there is neither surplus nor
shortage of the cash within the company. It is very important for the financial manager to ensure
that sufficient funds must be available in order to meet the day to day expenses, payments of
wages and purchase of materials.
Financial Control: In reference to the major function of financial manager, the evaluation of the
financial performance. It is very important for the financial manager to use various techniques in
order to evaluate and control such as ratio analysis, budgetary control, internal audit, cost control
and break even analysis. It is very important for the financial manager to lay emphasis on the
financial planning (Woodroof and Thumann, 2021).
Sources of Finance – (400 words)
Sources of Finance for the companies basically comprises of the retained earnings, equity, debt,
term loans, euro issue, venture funding, working capital loans etc.
Short-Term Finance
In case of short term finance, it basically refers to the financing needs for the small period
normally less than a year. There are various sources of funds which comprises of the following:

Trade Credit: In reference to Trade credit, it is considered to be one of the good source of funds
because there is no extra cost up to the period. Generally the credit is granted by the suppliers of
the goods for a period of 15 to 90 days.
Commercial Banks: In context to bank advance, it is generally meant not for the purpose to earn
profit but also for socioeconomic development. In case of banks, they advances granted on the
share security of few tangible assets such as gold etc.
Inter corporate Deposits: In context to this type of source of funds, the organizations can borrow
funds from another who basically have surplus fund for a period of six months. In case of
interest, it totally depends upon the time period and amount.
Long-Term Finance
Long term finance can be basically defined as the financial instrument with maturity exceeding
one year which generally comprises of bonds, debt finance, bank loans, leasing etc. In case of
long term finance, it basically denotes a time period of over five years. The following are few of
the long term finance sources:
Loan capital: In reference to Loan capital, it is basically borrowed from a bank which is subject
to regular interest payment. In case of loans, these can be unsecured and secured.
Share equity or equity finance: In case of share capital, it is basically considered as the
permanent capital as the funds are never paid back. A shareholder can sell their shares if they
find another investor prepared to buy them on the stock exchange.

Subsidies: In case of subsidies, these are basically the government benefits in the form of the tax
reductions and cash. All these subsidies are basically granted for the purpose to help the industry
or business (Migliorelli and Dessertine, 2019).
Venture capital: In case of few organizations, it basically provides funds for the risky
commercial ventures that generally banks refuses to finance. Such type of finance is suitable for
the entrepreneurial organizations as the owners have to be a part with an equity stake.
Conclusion – (100 words)
From the above report, it can be concluded that financial management and sources of
finances plays a very important role in the organization and it is very important for the Tesco
managers to identify the most suitable type of short term and long term fund in order to run the
business operations in a effective manner.
References
Rashmi, M.B. and Wilson, P.R., 2018. Personal Finance Management and Life Time Goals: An
Empirical Analysis. ZENITH International Journal of Multidisciplinary Research, 8(6), pp.160-
170.
Woodroof, E.A. and Thumann, A., 2021. How to Finance Energy Management Projects: Solving
the" lack of Capital Problem". CRC Press.
Migliorelli, M. and Dessertine, P., 2019. The rise of green finance in Europe. Opportunities and
challenges for issuers, investors and marketplaces. Cham: Palgrave Macmillan, p.2.