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Financial Managers Essay

824 words - 4 pages

The primary goal of every corporation is to maximize shareholder wealth, primarily through cash dividends and share value appreciation. To this end, the role of the financial manager is to act in accord with this premise. Under his/her auspices, the financial manager must determine which factors affect the company's stock price, and which choices will add value to the company, all the while ensuring that the company does not run out of the cash necessary for continued, day-to-day operations and planned growth strategies. Within these areas fall decisions such as which short-term and long-term investments should the company engage in and ways the company will finance these investments.All ...view middle of the document...

From an employees’ perspective, it is a loss of job and income. Another scenario frequently occurs when a company divests a poorly performing, or fringe product and its associated staff. Nonetheless, it is also in the best interest of the company to attract and retain a skilled workforce. If a company has a reputation for paying poorly, implementing excessive rounds of layoffs, or other unattractive human resource policies, retaining a skilled workforce will be difficult, and will have a negative effect on shareholder value as operational efficiencies, product quality, and speed to market decline. Here, financial managers working in conjunction with human resources may consider benefits such as employee stock grants and discount stock purchase plans or stock options. In this way, the organization can align the priorities of the employees more closely with those of the stockholders (Connell, 2004).In addition to the core responsibilities discussed, the role of the financial manager has changed considerably over the past decade, with mergers, acquisitions, and global expansions strategies playing an increasingly important, and complicated role. In this regard, decisions that are deemed unpopular can have dire consequences on stock value. For example, a company's decision to move production operations offshore or to purchase a foreign entity can be a quite lucrative cost-containment or...

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