Functional Policy And Coperate Strategy

Question 1

Process of strategy decision making
Or
Need for a financial policy and corporate strategy

Answer 1

Maximum expected return at minimum risk

Capital is the limiting factor
So all business need to have the following 3 fundamental essential elements

1: clear and realistic startegy
2: Financial resources, control and system to see it through

3: right mgmt team and process to make it happen

Question 2

Functions of SFM

Answer 2

IPO IF

Investment opportunity
Profitable opportunity
Optimal fund mix

Internal control
Future decision making

Question 3

Key decision falling with the scope of financial startegy

Answer 3

Investment PDF

Investment decision

Portfolio decision

Dividend decision

Financial decision

Question 4

Different levels of strategy

Or

Startegy at different levels of hierarchy

Answer 4

1: corporate strategy

2: business strategy

3: function startegy

Question 5

Question that can answer through coperate level startegy

Answer 5

Suitability

Flexibility

Acceptability

Question 6

Short note on financial planning

Answer 6

Back bone for business and corperate planning

Systematic approach for maximising the existing Financial resources

3 componet
Financial goal = financial tool + financial resources

Outcome of financial planning
. Financial objective
. Financial decision making
. Financial measures

Question 7

Financial goals can be balanced with regards to sustainable growth.

Answer 7

Sustainable growth can be helpful for planning healthy coperate growth

conflict can arise if growth objectives are not consistent with the value of the organization’s sustainable growth

Question 8

Interface of Financial Policy And Strategic Management

Answer 8

 It is based on the fact that the starting point of an organization is money and the end point is also money.

 Sources of finance and capital structure are the most important dimensions of strategic plan.

..Another important dimension of strategic management and financial policy interface is the investment and fund allocation decisions.

 Dividend policy is yet another area for making financial policy decisions affecting the strategic performance of the company.

 Thus, the financial policy of a company cannot be worked out in isolation of other functional policies.

Question 9

 What makes an organisation financially sustainable?

Answer 9

 More than one source of income.
 More than one way of generating income.

. Adequate financial planning

 Adequate financial systems.
 Good public image.
 Financial autonomy.

Question 10

What makes an organisation sustainable?

Answer 10

IO AI C LCS

 have clear strategic direction.
 have adequate infrastructure.
 able to identify opportunities.
 able to attract and retain competent staff.
 able to leverage further resources.
 get community support.