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Financial vs. Strategic Management

Any organization needs to identify its direction to succeed in its field. Here is where financial and strategic management comes in handy. Strategic management entails recognizing where stakeholders want a business to be in the future and then implementing strategies to reach there. However, it is hard to achieve this objective without sufficient financial resources. On the other hand, financial management involves linking its financial operations with its strategic plan. Merely put, strategic management shapes vision, while financial management shapes how to use financial resources to accomplish these goals.

An Overview of Financial Management

According to Alexander Djerassi, financial management is managing funds; it shows the cash inflows and outflows within a particular period. Businesses incorporate financial management into their operations to accomplish the much-needed financial goals.

Most companies have a separate financial department that plans for financial activities. This department is mainly responsible for handling various financial statements like cash flow statements, balance sheets, and income statements at the end of a given period. It is worth noting that organizations refer to these statements when preparing budgets.

Any financial management plan in a company should include budgeting, which is a predefined estimate for the future. A business can prepare several types of budgets like production, sales, cash, and more. Usually, a budget is prepared with regard to the previous year’s business performance. Regardless of a company’s size, budgeting is beneficial for future planning.

An Overview of Strategic Management

Due to the competitive nature of the present businesses, organizations need to have strategic management plans at their disposal to survive. Alexander Djerassi says that the main objective of strategic management is to outline the vision or direction of a business. The crucial thing about any business is that it needs to align resources with goals.

Strategic management offers the following:

A game plan for satisfying consumers
A road map for the organization to have a competitive advantage over its rivals
A formula for achieving long-term incredible marketplace performances
A prescription for carrying out business

Strategic management is seen as a step-by-step process. The first step involves creating a strategic vision that defines the company’s ultimate goal. The vision explains how the business sets its financial and strategic goals. The second step is to develop a strategy that allows the company to attain the stated vision and goals and then implement it. Next, monitoring is put in place to assess the performance and enact the essential alterations. The final stage is to revise the process, if need be, according to the prevailing conditions.

Overall, strategic management is simply a company management activity used to outline priorities, get the anticipated results, strengthen the operations, ensure that stakeholders and employees work towards a common objective, and allow the company to focus on resources and energy.

Differences Between Financial and Strategic Management

Strategic management offers the direction towards attaining strategic goals while financial management outlines how to attain financial goals
Strategic management is needed to align a company’s resources with its ultimate goals, while a financial management is needed to handle the company’s cash flows

Reinventing Performance Management

One of the most important parts of being the head honcho is to make sure that all of the staff is doing the best job they can but it’s not always as easy as it may seem. So, just how does one manage their performances without seeming like they’re micromanaging each & every person on the payroll? Well, Alexander Djerassi, who has a lot of experience in business, has a few tips on how best to do this so as to keep it light without it turning it into a big deal. This is what he has to say on the topic of keeping the staff on track. So the first tip he has for us is to always ensure that the staff is happy. If they feel valued & appreciated, they will be much more likely to do a good job for the company. So once they know their worth to the higher ups, they will give their all to whatever role they are in. It also helps if there is some sort of reward system in place as this will inspire them to do the best in the role they inhabit. The higher ups will find that they can catch a lot more flies with honey than vinegar. One of the more important aspects of this is to listen to what the staff has to say & take their words into consideration. Whether it’s a suggestion on how they can improve the company or just a comment on how well the higher ups are doing it is imperative to let them know that they are both seen & heard. This will let them know that they are not just a face in the crowd but rather someone whose hard work is highly valued by upper management. One would be surprised how much the simple phrase “I’m listening” can do for the morale of the company. If one wants to go a step further, they could even install some suggestion boxes as a way for staff to give ideas on how to improve the new company. This not only lets them feel like their voices are being heard but it also shows them that the company actually cares about what they have to say & that their voice does matter. Finally, one of the other things that can help too is if the higher ups check in with the staff every now & then to make sure everything is going off without a hitch & see if there is any kind of help, they might need. This not only lets them know that the higher ups care about them, but it also makes them feel like an equal part of the company as a whole. With that much empathy to go around, there is sure to be a huge spike in productivity and performance as the morale begins to climb. So, this is what Alexander Djerassi recommends to those individuals who hope to increase their performance output. It’s worked for many companies in the past.