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