Challenges of Financial Management
BUS 401 Principles of Finance
Challenges of Financial Management
Any financial institution is cognizant that money is essentially the blood work of any business to run efficiently and effectively, and the challenge to manage those finances in an ever evolving and fluctuating economy pose difficulty for any manager. Interview any CFO and they can provide you with a massive grocery list of the difficulties of financial management within an organization, however after conducting research, one believes the greatest issue behind financial management is training, uncertainty and information dissemination. The lack of knowledge within the financial realm results in financial struggle within any organization.
Finance must support flexibility scalability and responsiveness to a multiplicity of global opportunities and challenges (Ilie, 2015), however efficient and continuous training on the changes, processes and new financial regulations pose a problem for those whose positions are not those of a financial realm. Four main challenges were found during a study within the healthcare profession, and the one issue that resonated was insufficient training and education on financial management in combination with nursing economics was ranked number two; lack of intrinsic motivation being number one, communication/cooperation and insufficient references and tools were three and four respectively (Bai, Gu, Chen, Xiao, Liu, & Tang, 2017). This study revealed that many nurses who received medical degrees, certifications and accreditations had conflicting roles between healthcare and financial management. In short, the health and welfare of their patients are higher priority than finance, simply because financial management skills have never been considered as essential components in leadership development among head nurses (Bai, Gu, Chen, Xiao, Liu, & Tang, 2017).
Despite the lack of motivation for those who’re not financial savvy to learn the intricacies of finance, there are some who would agree the lack of communication between those who’re knowledgeable are hesitant to share that same knowledge with others. Few have expressed resolutions where there should be more communication and cooperation between departments. Hospitals have been encouraged to provide departments with platforms to study the success of optimizing resources across units and promote experiences, communicating to nursing departments (Bai, Gu, Chen, Xiao, Liu, & Tang, 2017). This is ideal in problem solving and information sharing for those who face financial issues within the healthcare realm.
Looking at challenges from a CFO’s perspective opens a more in-depth list of issues and challenges to the table. Regulatory changes become more frequent as the world faces more complex and uncertain changes within the economic environment, and as the fluctuation and random unknown of the economy creeps around every corner, so too does new regulations generate (Ilie, 2015). This provokes CFOs to re-examine their list of roles they play and add whatever additions are necessary to comply with new regulations, forcing them to become more flexible, well rounded and fully trained to overcome the challenge.
Lastly, keeping in mind the constant change of the economy, the new regulations that generate and the lack of training therein, the largest issue becomes the information that must be disseminated. An international report on Transforming Finance describes the difficulty for CFOs within the last decade, mainly due to erratic markets, disruptive technologies and a complex web of new regulations and compliance issues that forced redefinition of roles to play in finance (Ilie, 2015). CFOs were being flooded with information, and too had to make a change to narrow the information gap between information available for access and information needed to make sound financial decisions (Ilie, 2015).
Financial management is considerably an uphill climb to keep up with an ever changing and unpredictable economy, and greatest issues behind financial management are training, uncertainty and information dissemination. The lack of knowledge within the financial realm results in financial struggle within any organization, especially when those who’re not finance savvy are placed in positions of finance, or new information and regulation is not readily available to assist in compliance.
Ilie, L. (2015). Challenges for Financial Managers in a Changing Economic
Environment. Procedia Economics and Finance, 27, 726–730. https://doi-org.proxy-library.ashford.edu/10.1016/S2212-5671(15)01054-0
Bai, Y., Gu, C., Chen, Q., Xiao, J., Liu, D., & Tang, S. (2017). The challenges that head nurses
confront on financial management today: A qualitative study. International Journal of
Nursing Sciences, 4, 122–127. https://doi-org.proxy-ibrary.ashford.edu/10.1016/j.ijnss.2017.03.007