Different Approaches for Financial Decision Making

Financial
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Different approaches for financial decision making...................................................................1
TASK 2............................................................................................................................................3
Financial management Principle.................................................................................................3
TASK 3............................................................................................................................................5
Role of management accountant.................................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Financial management is defined as a procedure where planning, organizing, directing
and controlling the all the financial activities that conduct in the organization. For this apply
general management principle in order to arrange financial resources of the enterprises. It is
important for any organisation for the procedure of investment and get effective results (Renz,
2016). To better understand the concept of the report selected organization Adelaide Food group
Ltd, which is medium size organisation that wants to expand business activities and adding new
product in its product line. For this require to analysis the financial activities, principles and
strategies of management. In the report focus on the different approaches of financial decision
making and identify all the advantages and disadvantages that support in decision making
procedure. Along with identify all financial management principle that use for financial
strategies to maximise shareholder wealth and long term financial sustainability. In addition,
analysis the role of management accountant and provide all the appropriate recommendations
regarding to company position.
TASK 1
Different approaches for financial decision making
Financial decision making in business is difficult and challenging that impact on the
leadership and managements. On the basis of these challenges select best approaches that
provide help to leaders to select best approach. People make decision about different things as
per the situation in the company on the basis of formal and informal approaches. These
approaches categorised into two parts Formal and informal approaches. In the formal approaches
focus on the structure, systems, processes and in the informal approaches focus on the
relationship, networks and unwritten rules.
Formal decision making approach:
The formal decision making approach is set by the organisation where set particular
framework for the financial activities and follow all the systems that related with the decision
making. The formal decision making approach take longer time as compare with informal
decision and making appear less flexible (Arnold, 2012). In this decision making approach clear
about the documentation and develop equality as well as trust to stay longer time in market. In
informal decision making approach is not clear about the documentation and completely
1