Question

Assess the objectives of financial management and the role of different stakeholders in the financial strategy of a company.(Minimum Word count 700)

Take note of word count

Answer 1

Financial management includes planning, organising, directing, and controlling all financial activities of the firm to achieve the best outcome for the business. Here the main objective of financial management is to manage the funds of the business properly and by doing that achieve the best earnings for the company along with high econmic value. We can make good outcomes by the proper fund allocation and management. Here it is done by the collective efffort by all stakeholders of the business. The first and main objective of financial management is profit and wealth maximization. Then we should underatand that management include in all area of the company. There should be proper mobilisation of funds, cashflow should be positive for the firm, Company should make proper reserves and surplus for the future and good will should be there. So company should achieve all of these things. Proper financial management will helps to achieve all these things. Without proper financial management a company can not properly control the day to day activity of the firm. There should be management in each and every single area of the business. Then only there will be smooth and proper working will be assured. Making these things practical is the objective of doing financial management.

When we are making strategy for the business then it should be a collective effort of all stakeholders of the company. They are the key people for the business. We should make decisions by asking their opinions. We should consider all their opinions and their contibutions also. Companies stakeholders include Shareholders, creditors, customers, Government, Employees, society etc. So before making a decision we should consider these sstakeholders. Then only we can succeed in business. They all have many rights and responsibilities towards the business. They have the legal rights in the company and can be a part of decision making. We can examine each of the stakeholder and then we can realise how they are the part of the decision making or strategy building of the business.

Incase of shareholders they are the owners of the business. They have voting rights and they will get dividend as the return. Share holders are able to select the board members and cheif executives of the company. They will contribute to the business so they can actively participate in companies decision making process. The customers. They are the kings of business. Here they are not directly make the decision but the company makes strategies according to their needs. In case of creditors they are the one who providing funds for the company on a credit basis. So they have the right to know the credit policies of the firm and companies repayment capacity etc. Then the company should make decisions and strategy only by following the government laws and orders and they should make proper tax payment. All decisions should be satisfy the government orders and no violation should be made. Incase of employees the company should provide proper facilities for their employees and should consider their opinions. This will makes them motivated and workspirit. So it will helps to make better working in the firm and also will help the business to achieve the best employee employer relationship with in the firm. Companies also have many obligations towards the society. Directors are the person who are selected by the companies share holder and they are the one who makes important decisions of the firm. They have to properly communicate with other stakeholders and then the collctive decision is considered as the strategy. When we analyse the annual reort of the company there should be mentioned the companies atakeholders and the strategy of the business for the current year. So these are not only the decisions taken by individuals but also the decisions taken by considering all companies stakeholders and these strategies are purely depend on the stakeholders interest. Companies also have many obligations towards the society. There So bfore making strategies we should consider all the stakeholders of the company. This is why we are saying that the stakeholders are very important in the companies financial management and decision making. Here the togetherness will leads to the success of the firm. This is the ideology of the companies and they are following this quote for getting succees in the business world.

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