Transcript
Contents:-Introduction to finance function
Defination of finance function
The Finance Function in a Global Corporation
The Globally Competent Finance Function
Traditional questions for the local finance function
New questions for the global finance function
Financing in the Internal Capital Market
DSS Technology
Introduction
Four main operational areas of every business organization
Production, Marketing, Finance, Human Resource
Finance is crucial area Because all other business activities are depends upon funds
Decisions regarding funds may make / Destroy the organization
Definition of finance function
According to R.C.Osborn:Finance function is the process of Acquiring and Utilizing funds of a business
According to Dewey: Financing consist of raising , providing , managing of all money, capital or funds used in business
The Finance Function in a GlobalCorporation
Historically, the finance functions in large U.S. and Europeanfirms have focused on cost control
Operating budgets
Internal auditing
presenting new opportunities and challenges for CFOs
simply make aggregate capital-structure and dividenddecisions
The Globally Competent Finance FunctionAs companies globalize, they face new financial
challenges.
1st set of Questions summarizes the work of the traditional finance function with respect to external providers of capital
Finance function must consider a 2nd set of questionswhich addresses the internal capital market, in addition to the first.
Traditional questions for the local finance function:-
How should we finance ourselves?
How should we return cash to shareholders?
How should we analyze investment opportunities?
How should our ownership structure influence operations?
New questions for the global finance function:
a. How should we finance our subsidiaries?
b. How should we get money out of our subsidiaries?
c. How should we analyze the same investment opportunities in different countries?
d. How should we decide what to own and with whom?
Financing in the Internal Capital Market:-
A company’s operations allow plenty of scope for creating value through wise financing decisions.
Multinational firms can also exploit their internal capital markets in order to gain a competitive advantage in countries when financing for local firms become very expensive
CFOs can also exploit tax differences by carefully timing and sizing the flows of profits from subsidiaries
DSS Technology
What is DSS?
A computer base information system that supports business or organizational decision making activities.
e.g. Ms excel , logical decisions
1.Specific DSS:-
The system that actually accomplishes the work might be called the specific DSS
It is IS Application, but with characteristics that make significantly different from Typical data processing application
It is an information systems application
It is the hardware/software that allows a specific decision maker or group of decision making to deal
2.DSS generator:-
The second technology level might be called a DSS generator
This is a “package” of related hardware and software which provide a set of capabilities to quickly and easily build a specific DSS
Example of a DSS generator is the Executive Information System (EIS)
EIS can be used as a DSS generator, Especially for specific DSS to help him financial decision making
3.DSS Tools:-
The third and most fundamental level of technology applied to the development of a DSS might be called DSS Tools
It is hardware or software elements
facilitate the development of a specific DSS or a DSS generator
This Category of Technology has seen greatest amount of recent Development
DSS Benefits
Improves personal efficiency
Speed up the process of decision making
Increases organizational control
Speeds up problem solving in an organization
Facilitates interpersonal communication
Generates new evidence in support of a decision
Reference:-http://hbr.org/2008/07/the-finance-function-in-a-
global-corporation/ar/1
http://www.perflensburg.net/cp-web/TELESPWA.HTM
http://www.slideshare.net/KedarnathDongre/kd-functions-of-finmgtapproaches-to-finance-functions
http://en.wikipedia.org/wiki/Decision_support_system
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