How and why is the functional area of finance important in the four phases of strategic management discussed?
We'll start with the assumption that finance is an entity which is designed to insure that the firm has the cad it needs to operate on a daily basis, and that it has the means to raise funds for future investment opportunities (this on a very simplistic view).
Next, we look at strategic management in terms of its role:
- strategic implies that management determines WHAT we are going to do --- our goals, our purpose, our standing within the marketplace, and the like.
- In order to gain the what, we have to formulate a plan for moving forward --- this would be a business plan which outlines the idea(s) we have for reaching the WHAT phase of our management approach.
- Once we have formulated our plan for moving forward with our investment criteria --- our ...
This is a response to a question dealing with financial management as it relates to decision making and to defining strategy and tactics for future investing.