role of financial management
 strategic role of financial management
 objectives of financial management
– profitability, growth, efficiency, liquidity, solvency
– short-term and long-term
 interdependence with other key business function
Can you?
Define the strategic role of financial management
Outline the objectives of financial management:
Outline the interdependence of financial management with the other KBF’s
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influences on financial management
internal sources of finance – retained profits
external sources of finance
– debt – short-term borrowing (overdraft, commercial bills, factoring), longterm borrowing (mortgage, debentures, unsecured notes, leasing)
– equity – ordinary shares (new issues, rights issues, placements, share purchase
plans), private equity
financial institutions – banks, investment banks, finance companies,
superannuation funds, life insurance companies, unit trusts and the Australian
Securities Exchange
influence of government – Australian Securities and Investments Commission,
company taxation
global market influences – economic outlook, availability of funds, interest rates
Can you?
Distinguish between internal and external sources of finance. Giving examples
Distinguish between both debt and equity sources of external sources of finance. Giving examples
Outline the financial institutions that businesses could seek finance from
Describe the influence of government on financial management
Describe he global market influences on finance
processes of financial management
 planning and implementing – financial needs, budgets, record systems, financial
risks, financial controls
– debt and equity financing – advantages and disadvantages of each
– matching the terms and source of finance to business purpose
 monitoring and controlling – cash flow statement, income statement, balance sheet
 financial ratios
– liquidity – current ratio (current assets ÷ current liabilities)
– gearing – debt to equity ratio (total liabilities ÷ total equity)
– profitability – gross profit ratio (gross profit ÷ sales); net profit ratio (net profit
÷ sales); return on equity ratio (net profit ÷ total equity)
– efficiency – expense ratio (total expenses ÷ sales), accounts receivable
turnover ratio (sales ÷ accounts receivable)
– comparative ratio analysis – over different time periods, against standards,
with similar businesses
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limitations of financial reports – normalised earnings, capitalising expenses,
valuing assets, timing issues, debt repayments, notes to the financial statements
ethical issues related to financial reports
Can you?
Describe the planning and implanting cycle of financial mamagement
Discuss the advantages and disadvantages of debt and equity finance
Explain how businesses need to match the source and type of finance to the business needs
Identify and interpret the liquidity ratio
Identify and interpret the gearing ratio
Identify and interpret the 3 profitability ratios
Identify and interpret the 2 efficiency ratios
Explain how business use ratios to identify issues and seek to solve them
Explain the limitations of financial reports
Discuss the ethical issues related to financial reports
financial management strategies
 cash flow management
– cash flow statements
– distribution of payments, discounts for early payment, factoring
 working capital management
– control of current assets – cash, receivables, inventories
– control of current liabilities – payables, loans, overdrafts
– strategies – leasing, sale and lease back
 profitability management
– cost controls – fixed and variable, cost centres, expense minimisation
– revenue controls – marketing objectives
 global financial management
– exchange rates
– interest rates
– methods of international payment – payment in advance, letter of credit, clean
payment, bill of exchange
– hedging
– derivatives
Can you?
Describe the strategies available to business to manage their cash flow
Describe the strategies available to management to manage their working capital
Describe the strategies available to management to manage their profitability
Describe the 6 issues that management must consider when managing their global finances
role of operations management
 strategic role of operations management – cost leadership, good/service
differentiation
 goods and/or services in different industries
 interdependence with other key business functions
Can you?
Define the strategic role of operations management
Describe how businesses differentiate goods/services in different industries
Outline the interdependence of operations management with the other KBF’s
influences
 globalisation, technology, quality expectations, cost-based competition,
government policies, legal regulation, environmental sustainability
 corporate social responsibility
– the difference between legal compliance and ethical responsibility
– environmental sustainability and social responsibility
Can you?
Explain the impact of the 7 influences of operation management on a business
Define the term corporate social responsibility
Describe the difference between legal compliance and social responsibility
Outline the growing importance to business of being environmentally sustainable and socially
responsible.
operations processes
 inputs
– transformed resources (materials, information, customers)
– transforming resources (human resources, facilities)
 transformation processes
– the influence of volume, variety, variation in demand and visibility (customer
contact)
– sequencing and scheduling – Gantt charts, critical path analysis
– technology, task design and process layout
– monitoring, control and improvement
 outputs
– customer service
– warranties
Can you?
Distinguish between transformed and transforming resources
Outline the 3 transformed resources
Outline the 2 transforming resources
Describe the transformation process
Describe the 4 V’s
Discuss why businesses use sequencing and scheduling tools such as Gantt charts and critical path
analysis
Outline how technology impacts on operations processes
Explain the importance of monitoring, controlling and improvement to the operations processes
operations strategies
 performance objectives – quality, speed, dependability, flexibility, customisation,
cost
 new product or service design and development
 supply chain management – logistics, e-commerce, global sourcing
 outsourcing – advantages and disadvantages
 technology – leading edge, established
 inventory management – advantages and disadvantages of holding stock, LIFO
(last-in-first-out), FIFO (first-in-first-out), JIT (just-in-time)
 quality management
– control
– assurance
– improvement
 overcoming resistance to change – financial costs, purchasing new equipment,
redundancy payments, retraining, reorganising plant layout, inertia
 global factors – global sourcing, economies of scale, scanning and learning,
research and development
Can you?
Outline the 6 operations performance objectives
Explain how new product or service design and development are important to a business.
Explain the role of supply chain management as an operations strategy
Describe the advantages and disadvantages to business of outsourcing their operations and the effect that
this can have on their operations
Outline how technology can be used as an operations strategy
Describe the advantages and disadvantage to business of holding stock, LIFO, FIFO, and JIT
Outline the importance of quality management as an operations strategy (control, assurance,
improvement)
Explain the 6 issues that management must consider when dealing with resistance to change
Describe the global influences on operations mangement
role of marketing
 strategic role of marketing goods and services
 interdependence with other key business functions
 production, selling, marketing approaches
 types of markets – resource, industrial, intermediate, consumer, mass, niche
Can you?
Define the strategic role of marketing management
Outline the interdependence of marketing management with the other KBF’s
Describe the differences between the production, selling and marketing approaches
Outline the different types of markets
influences on marketing
 factors influencing customer choice – psychological, sociocultural, economic,
government
 consumer laws
– deceptive and misleading advertising
– price discrimination
– implied conditions
– warranties
 ethical – truth, accuracy and good taste in advertising, products that may damage
health, engaging in fair competition, sugging
Can you?
Outline the different factors that influence consumer choice
Explain the importance to business of knowing the consumer laws that they must comply with including
: deceptive and misleading advertising, price discrimination, implied conditions and warranties
Describe the influence of ethical issues on a business relating to how they manage their marketing
marketing process
 situational analysis – SWOT, product life cycle
 market research
 establishing market objectives
 identifying target markets
 developing marketing strategies
 implementation, monitoring and controlling – developing a financial forecast;
comparing actual and planned results, revising the marketing strategy
Can you?
Explain in detail using a case study the importance of the processes of marketing. Remember the cycle:
Situational analysis, Market research, establishing marketing objectives, Identifying the target market,
developing marketing strategies and Implementation, monitoring and controlling.
marketing strategies
 market segmentation, product/service differentiation and positioning
 products – goods and/or services
– branding
– packaging
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price including pricing methods – cost, market, competition-based
– pricing strategies – skimming, penetration, loss leaders, price points
– price and quality interaction
promotion
– elements of the promotion mix – advertising, personal selling and relationship
marketing, sales promotions, publicity and public relations
– the communication process – opinion leaders, word of mouth
place/distribution
– distribution channels
– channel choice – intensive, selective, exclusive
– physical distribution issues – transport, warehousing, inventory
people, processes and physical evidence
e-marketing
global marketing
– global branding
– standardisation
– customisation
– global pricing
– competitive positioning
Can you?
Describe the importance to a business of segmenting their market
Explain the importance of the product as a marketing strategy. (Include, goods or service, branding,
packaging)
Explain the importance of the price as a marketing strategy. (Include: pricing methods – cost, market,
competition based, pricing strategies – skimming, penetration, loss-leaders, price-points, price and
quality interaction)
Explain the importance of the promotion as a marketing strategy. (Include: elements of the promotion
mix – advertising, personal selling, and relationship marketing, sales promotions, publicity and public
relations, the communication process – opinion leaders and word of mouth)
Explain the importance of the place/distribution as a marketing strategy. (Include: distribution channels,
channel choice – intensive, selective, exclusive, physical distribution issues – transport, warehousing,
inventory
Describe how people, processes and physical evidence can be used as a marketing strategy
Explain the impact of e-commerce as a marketing strategy
Explain the importance of global marketing to a business that wished to operate in a number of markets
role of human resource management
 strategic role of human resources
 interdependence with other key business functions
 outsourcing
– human resource functions
– using contractors – domestic, global
Can you?
Define the strategic role of marketing management
Outline the interdependence of marketing management with the other KBF’s
Discuss the advantages and disadvantages of outsourcing (using contractors, domestic/global)
key influences
 stakeholders – employers, employees, employer associations, unions, government
organisations, society
 legal – the current legal framework
– the employment contract – common law (rights and obligations of employers
and employees), minimum employment standards, minimum wage rates,
awards, enterprise agreements, other employment contracts
– occupational health and safety and workers compensation
– antidiscrimination and equal employment opportunity
 economic
 technological
 social – changing work patterns, living standards
 ethics and corporate social responsibility
Can you?
Outline the stakeholders in HR
Explain the different employment contracts that exist and their effect on the HR of the business
Outline the advantages and disadvantages to business of using the different types of legal contracts
Explain the effect of economic, technological, social and ethics and corporate and social responsibility
influences on HRM.
processes of human resource management
 acquisition
 development
 maintenance
 separation
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Can you?
Outline the processes of HRM
Explain the importance of the HRM processes in achieving the strategic goals of the businesss
strategies in human resource management
 leadership style
 job design – general or specific tasks
 recruitment – internal or external, general or specific skills
 training and development – current or future skills
 performance management – developmental or administrative
 rewards – monetary and non-monetary, individual or group, performance pay
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global – costs, skills, supply
workplace disputes
– resolution – negotiation, mediation, grievance procedures, involvement of
courts and tribunals
Can you?
Outline the importance of leadership style to the success of a business
Explain the importance of job design to the success of a business
Describe how recruitment, training and development, performance management, and rewards are an
important strategy of HR
Explain why businesses must consider global influence on HRM (costs, skills, supply)
Describe the importance to business of having strategies to resolve workplace disputes (resolution –
negotiation, mediation, grievance procedures, involvement of courts and tribunals)
Evaluate the effectiveness of HRM (consider indicators: corporate culture, benchmarking key variables,
changes in staff turnover, absenteeism, accidents, levels of disputation, worker satisfaction)
effectiveness of human resource management
 indicators
– corporate culture
– benchmarking key variables
– changes in staff turnover
– absenteeism
– accidents
– levels of disputation
– worker satisfaction