Guided Response: Review several of your classmates’ postings. Respond to two classmates’ by commenting on their example of management not fulfilling its responsibilities. Pose a question to spark discussion regarding what could have been handled differently.
Discussion 1
| The Role of Financial Management in a Firm |
Examine the role of management as it relates to finance in a corporation. In your post, discuss the role of management by addressing the following prompts:
· Explain the various aspects of finance that management must understand.
· Describe why a manager needs to understand the characteristics and importance of financial markets including their liquidity, competitiveness, and efficiency.
· Interpret the function of the Financial Balance Sheet in assisting in management’s decision making process.
· Discuss what could happen if management does not fulfill responsibilities related to finance. Share a real world example from your own professional experience or from an external source.
Your post should be 200-250 words in length.
Guided Response: Review several of your classmates’ postings. Respond to two classmates’ by commenting on their example of management not fulfilling its responsibilities. Pose a question to spark discussion regarding what could have been handled differently.
Respond to Peggy Harvey post
There are many different aspects of finance that management must understand. As mentioned in the text Managerial finance (2013), management is involved in business forecasting, planning processes, analyzing, evaluation, as well as understanding legal/regulatory issues. All of these areas that management are required to understand aid in the success or failure of the company.
It is important for management to understand the characteristics of financial planning so that they can embody these characteristics and enforce them across the entire company. These attributes aides management in the process of creating security or stability for their company without it coming at a huge cost reduction for the company. Those particular characteristics and abilities promotes for efficiency in the company; and also gives the company a competitive drive.
If management took a stance to not fulfill these responsibilities to finance the business could suffer a very short life span, and lose their advantage over competitors. A real life example of this is the downfall of Blockbuster video. It does not appear that those in management with the company successfully forecasted the growth of technology and how that could affect their business. There are companies such as Netflix that could have been their running competition. However; I believe their company began to go downhill before they had a chance to gain control of things.
References:
Byrd, J., Hickman, K., & McPherson, M. (2013). Managerial finance [Electronic version]. Retrieved from https://content.ashford.edu/
Respond to Ramon Pensado post
In the world of finance and business, every member of the leadership needs to understand the value their product or service has is given or taken by the customer. “Financial management involves planning, forecasting, analysis, and evaluation, as well as understanding legal and regulatory issues” (Byrd, 2013). In my field the value of having a tumor removed by three small incisions is priceless, the value is given by the sick patient that has a quick recovery and a decreased chance of infection. The same value would lose its luster to a healthy individual that does not need surgery. Managers in all organizations need to understand SWOT and the benefits of identifying strengths and weaknesses. Managers that do not understand the influence the market has on their products or services will not be equipped to make the necessary changes the market may have by virtue of market variance. The tangible roles and responsibilities of a finance manager are extensive; bookkeeping, reporting, and analysis, as well as financial allocation. I have served in healthcare management for many years and the difference between federal and public hospitals is like day and night. Federal hospitals have very little competition and the ability to make changes in accordance with market trends is nonexistent. Private hospitals panic during the beginning of every fiscal year since the insured must meet high deductibles and copays before they are able to access the hospitals’ services.
Ramon
Reference:
Byrd, J., Hickman, K., & McPherson, M. (2013). Managerial finance . Retrieved from https://content.ashford.edu/
Discussion 2
| Short Term View or Long Term View? |
After reading the first two chapters of your textbook, evaluate the following statement:
Managers should not focus on the current stock value because doing so will lead to overemphasis on short-term profits at the expense of long-term profits.
In your post, explain what is meant by this statement. Describe how management might decide whether to focus on short term or long term goals and how that decision impacts the organization. Next, using the financial balance sheet as displayed in the text, compute an example of how focusing on short term profits can be detrimental to long term profits. Share your opinion regarding whether you feel it’s a better option to focus on short term or long term goals. Use evidence from the text or external sources to support your position. Your post should be 200-250 words in length. Guided Response: Review several of your classmates’ postings. Respond to two classmates by sharing whether you agree or disagree with their view of managerial profit focus and provide advice on how to overcome the challenges they have identified.
Respond to Nicholas Manzella post
Concentrating on what you have right in front of you leaves no room for future planning. Similar to a person planning for their future, one will need to look at how things can play out over time. This is the reason people start bank accounts and 401K’s. Certainly, when a company looks at the immediate future, they can see how successful or unsuccessful they may become, but some bit of concentration should be dedicated to future projects and how they may be able to continually lead the company to future success. The manager must look at all possibilities for short and long-term projects. If something that could be a long-term possibility looks as if it may cause harm to the company, they should elect to steer in a different direction. “Long-term is important, because corporate managers cannot use deceitful means over an extended period of time to take advantage of stockholders’ trust” (Byrd, Hickman, & McPherson, 2013). When considering whether short-term or long-term goals are the way to go for the company, the manager should consider how the goals will affect the company. Something very important for the manager to consider is the current status of the company. If the company is not in financial shape for any new goals, they should consider clearing up the financial issues. Another idea could be to look at how past goals, whether short-term or long-term, affected the company. Knowing how things happened in the past, may influence how the goals are sought after in the future. When thinking of how a company should choose between short-term or long-term goals, I would play it similar to my 401K, middle of the road. Finding a happy medium between both types of goals would likely be beneficial to the company. If a company can find a good balance of goals to choose, it will help a company succeed. This will also help if there are sudden issues with one of the goals chosen, which could be abandoned with the hopes that other goals may resolve the issues that have arisen.
Reference:
Byrd, J., Hickman, K., & McPherson, M. (2013). Managerial Finance [Electronic Version].
Respond to Stephanie Martin post
In the text, Byrd, Hickman, and McPherson state that since managers are employees of their stockholders, it is their responsibility to raise stockholders’ long-term wealth as well as the firm’s long-term value (2013). In order to project a plan for a profitable future, managers cannot solely focus on short-term stock value. That is the same as considering the status quo to be sufficient, and the company does not need to grow or change to remain profitable.
If managers are too focused on short-term goals, they may not utilize the necessary funding to plan for the future, because they want to hold onto the current cash flow. By using investment funds on research and development, increased plant capacity, or new equipment that will make production more efficient, they may not achieve short-term profitability goals, but they are setting themselves up for a more profitable future. A future company will benefit from the investment of more highly trained employees. A future company will benefit from fewer quality complaints or recalls due to the investment of X-ray machines at the end of production lines. You should always look at the “big picture”, however, because if a manager focuses too much on the future, they may overextend the company today. It is also important to always look forward to set the company up for future success. A profitable company with a strong business plan will be reflective in their stock prices.
An example on how focusing on short-term profits may be detrimental to long-term profits is when a company undertakes a significant workforce reduction towards the end of an unprofitable fiscal year. Although they may make their financial budgets or goals by laying off so much staff, they are hurting the future company. Remaining associates will be over-worked and morale issues will increase. Since training also was not an approved investment, the quality of the product and customer satisfaction will decrease.
Byrd, J., Hickman, K., & McPherson, M. (2013). Managerial Finance [Electronic version]. Retrieved from https://content.ashford.ed