The primary goal of any business is to generate value.

Value creation, the role of the Financial manager and the agency problem

The primary goal of any business is to generate value. From a financial perspective, value is created when revenues earned by the business surpass expenses. Value creation helps sell more services or products while generating value for stakeholders. For example, increasing stock price (referenceforbusines.com, 2019).

“Financial managers ensure the financial health of an organization through investment activities and long-term financing strategies.(lumenlearning, 2019). According to Beasley, Myers, Allen (2020), financial managers are responsible for any investment or financial decision taken in a company. Therefore, taking a big part on generating value for a company.

Large businesses have a necessity of separating ownership and management for practical purposes. The main reason is that ownership can easily change without modifying anything in the company (Beasley, Myers, Allen, 2020).

When doing so, agency problems might arise. According to Beaudoin (2008), “the agency problem has previously been used to explain why managers sometimes appear to make project continuation decisions that are not in the best interest of the firm”. Other authors specified that the agency problem relies on ensuring that managers will be responsive to the shareholder’s interest rather than their own. (Rachagan, 2010).

One example of agency problem is when a manager decides to continue with a project when it is not profitable anymore because it allows him/her to keep the position and the connections attached to it.

2)bharath

OPPURTUNITY COST: What one has forgone to undertake another venture could be considered as his opportunity cost. ( Guell, 2018).

I am spending USD 5700.00 per semester to pay my tuition at Westcliff University, which is a a lot of money considering my current financial situation. I could have invested this money in stocks or governament bonds but, I have decided to forego that amount for the sake of education.

Besides the money, I am dedicating 40 hours per week towards my education at Westcliff. I consider time as one of the most important factor in my life. As many economists and industry leaders are predicting, we could be facing another recession in the next few years. So this could be a really ideal time to start saving money rather than spending money. But, I have a strong feeling that with this DBA program ,I would be ready to face any kinds of market situation as this course would take me to the top of my game.

Guell, R. C. (2018). Issues in economics today (8th ed.). New York, NY: McGraw-Hill Education

Journal of Consumer Research, Volume 36, Issue 4, December 2009, Pages 553–561

3)!Pooja

I am thrived to see how business affects technology to advance day to day. As consumer is consuming goods at alarming rates. They need their goods cheap and fast. I believe due to this demand Suppliers have moved and leaned towards technology for their ease of work. It is not same as old days where everything was sold in stores and big markets. Those markets are now changed to name World Wide Web.

From this week of course I came to know supply is directly proportional to demand if demand drop supply changes. It is also necessary to keep Equilibrium between Supply and Demand as to save the firm from any shortage or surplus to the firm. I would like to apply these fundamentals for my future endeavor’s as to be middle of supply and demand through technology. Having a firm hand in technology development with addition of business skill would let me keep up in game of supply & demand using the skills to improvise my future Business.

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