Discussion W1

Understanding the Role of Financial Managers

Financial managers work in just about every industry and every country in the world. In fact,
in 2013, the need for financial managers increased by almost 4%, creating over 5,000 new
positions worldwide. In Thailand alone, there was a 32% increase, which was the third
fastest growth in the world, according to the Financial Planning Standards Board (Bangkok
Post, 2014).
Why is the financial management position becoming so important? What do financial
managers do and what types of businesses employ financial managers? The responsibilities
of and need for financial managers is the focus of this week’s Online Discussion.
To prepare for this Online Discussion, review Chapter 1 of the course text. Then, conduct
online research to explore the responsibilities of financial managers in both your country
and abroad.

Explain the responsibilities of financial managers working in global business environments.

Then, describe the types of businesses which might employ a financial manager, and explain
the need for such a position at businesses in your country.

Why is financial management important?

Financial management is one of the backbones in the business organization. For a business
to run smoothly, the business must maintain an adequate amount of finance. Due to the
business smoothness, the business will be able to achieve its goal, only if there is an
effective management of finance. Some importance of financial managements are: financial
planning, acquisition of funds, proper use of funds, financial decision, improve profitability,
increase the value of the firm and promoting savings. The financial management activities
can be broken down into three broad categories.
1) Capital budgeting: This involves decisions about the investments of the business with
its resources.
2) Financing: This involves decision about the external sources that should be brought
into the business, so that it can be used as investment in profitable enterprises.
3) Dividend policy: This is regarding the profits that will have to be distributed to equity
investors.
The responsibilities of financial manager become complex once they joined a global
business. They don’t make simple capital-structure and dividend decision anymore. They
will have to wrestle with the capital structure and profit repatriation policies of their
companies subsidiaries. The capital budgeting decisions and valuations they make should
reflect the divisional difference as well the complications that were caused by currency, tax
and country risks.
In order to achieve the firm’s primary goal of maximizing stockholder wealth, international
financial managers have three major functions to take over:
1) Financial planning and control (Supportive tools)
 2) Allocation of funds among various assets (investment decisions)
3) Acquisition of funds on favorable terms (financing decisions)

Financial managers can be employed in different environment, both private and public
sectors. They can be in MNC (multinational corporation), retailers, financial institution,
institutions, NHS trusts, charities, manufacturing companies, universities and general
businesses.

Kileo, H. (2016, March 31). IMPORTANCE OF FINANCIAL MANAGEMENT:. Retrieved from

https://www.linkedin.com/pulse/importance-financial-management-hamza-kileo/

Desai, M. A. (2014, August 01). The Finance Function in a Global Corporation. Retrieved
from https://hbr.org/2008/07/the-finance-function-in-a-global-corporation

Financial Manager. (n.d.). Retrieved from https://www.sokanu.com/careers/financial-

manager/#what-is-the-workplace-of-a-financial-manager-like