Financial Management: Approaches and Decision Making Report

This report provides a comprehensive overview of financial management, encompassing strategic planning, organization, direction, and control of an organization's financial undertakings. It explores various approaches to support effective financial decision-making, including a knowledge-based approach and the use of decision matrices and T-charts. The report highlights the importance of economic conditions, capital structure, and stakeholder roles in the decision-making process. It also discusses setting objectives for achieving financial goals, the significance of ethical financial management, and the role of management accountants and financial management systems. Furthermore, it examines principles for delivering sustainable growth, such as the use of return on investment and effective resource utilization, along with techniques for fraud detection and prevention. The report concludes by emphasizing the essential role of management accounting in informed decision-making and the need to balance stakeholder interests to achieve organizational goals.

FINANCIAL
MANAGEMENT

TABLE OF CONTENT
■ INTRODUCTION
■ MAIN BODY
■ CONCLUSION
■ REFERENCES

INTRODUCTION
■ Financial management refers to strategic planning, to organize,
direct and control of financial undertakings of the organization.
■ Financial management include application of management
principles over financial assets of organization. It plays and
important part in fiscal management of business (Matthew, 2017).
■ Present report will be providing approaches used for supporting the
financial decisions.
■ It will also provide principles for supporting the effective financial
strategies. The role of accountants and management accounting in
business and the ways in which the financial decision making helps
in sustainable performance.

Different Approaches used for supporting
the effective decision making.
■ Knowledge based approach
■ Knowledge based approach involves recognizing
knowledge as the resource to gain organizational
competitiveness, knowledge suggests the method for
managing and improving the performance of
organization.
■ It is essential for the business enterprise to have
knowledge based approach so that the decisions taken
for the improvements are having some authentic base
(Almumani, 2018).
■ This have significant impact over the decision making
approach of the executives of organization.

Techniques used in decision making
■ Decision matrix – It is used by managers in
evaluating all options for decisions. In this
matrix all options are placed in first column of
the table and factors affecting the decisions in
first row. It involves scoring and weighing
factors based on their importance and selects the
best options
■ T -Chart – The chart is made for weighing plus
and minus of options. This ensures that all the
negatives and positive are considered in making
decisions (Ax, and Greve, 2017).

Factors contributing in effective decision
making
■ State of Economy
■ Economic conditions greatly contribute in
decision making process. Strong economic
conditions attract high investments for the
organizations. The expectations are also high of
the investors.
■ Capital structure and money market.
■ It is easy to make decisions for raising capital
in companies having strong and developed
capital market. This provides the manager with
the bargaining powers (Dudin, Lyasnikov,,
Yahyaev, and Kuznecov, 2014).

Role of stakeholders in decision making
■ Stakeholders are important for the business and
play critical role in decision making process of
company. All the stakeholders have different
interests in the business and managers are
required to manage their conflicting objectives.
■ It is concerned with systematically identifying,
analyzing, planning and the implementation of
the actions concerned with engagement with the
stakeholders

Managing conflicting objectives of
different stakeholder groups
■ Manager is required to understand necessity of
balancing interests of various stakeholders.
■ Shareholder and sales teams are concerned with
the revenue and profit generations for having
adequate returns over their investments.
Operations team expects to complete task in less
time increasing their efficiency.
■ Every departments and stakeholders have their
own interests and it is essential for the manager to
identify their interests

Setting objectives for achieving the
financial goals
■ Companies are require to make short term as
well as long term goals for the business. A
business is required to set goals for overreaching
the goals and objectives of business.
■ Short term goals are made by organization for
achieving and getting near to the future goals.
Success of the business is achieved by short term
goals helping to achieve the long term vision of
company (Mohagheghi, Mousavi and Vahdani,
2017).