Impact Of Effective Management Of Finance On The Success Of Business Organization
Management of finance is one of the indispensable factors used in organization for the achievement of goal and objectives. Management tools that manages in an organization need in order to perform better. This research work focused on effective management as a tool for achieving business success using Union Bank of Nigeria Plc, Keffi Abuja road, New Nyanya branch as a case study. The researcher used questionnaires, primary and secondary source of data collection. Tables and percentages were used for data analysis. It was observed that managers used ratio analysis, portfolio analysis and break even analysis as management tools. It is recommended that organization should properly met irate their managers to avoid low profitability for the achievement of its goals and objectives. And also the manager should be recognized and appreciated, for the hard work and job well done to encourage him to put in his best at work and for the organization.
1.1 Background of the Study
The effective use of funds brings about financial planning. Almost all activities require the use of finance. If finance is used in acquiring most things, hence there must be management of finance. One cannot acquire finance and utilize it anyhow.
Financial planning involves primarily anticipating, the impact of financing, operating and financial policies on future position of the organization and instituting the right measures that may be required. The financial planning decision concentrates on the type, size and composition of capital funds. It describe the management of capital resources, these involves the decision as to the proportion of debt and equity.
Financial planning to the management of any corporation, is what fuel is to motor vehicle or running machines, irrespective of the structure, ownership and size of the financial department of the firm, there is need to ensure that various financial planning, and control in an organization are carried out at the highest degree of efficiency, by these, it lead to versatile and increases proficiency in financial matters.
The financial management plays very key roles in the financial decision planning of the corporate firm. The financial manager is a person who is responsible for carrying out the finance function of the corporation. He or she plays a key role in assisting the firm to realize its corporate objectives, including shaping the fortune of the corporation.
1.2 Statement of Problems
We are living in the days of economic fluctuation and recession, in variably inflation has become paramount and the order of the day in so many economics. Banks are folding up, while those in operations are within the time. There are clashes in the global stock market, most investors have incurred financial losses, banking merger and acquisition is not yielding much fruit as expected the prospective investors are afraid to invest, the investment trend is not stable, the financial experts failing in their professional duties in the economic crunch is harder.
1.3 Objectives of the Study
The general objectives of this topic is to look at effective management of finance and it impact in success of business organization. In view of this, the following are the objectives of this study
- At the end of this research work, the student should be able to know how effective management of finance lead to the success of organizational growth.
- To enable the bank maximize profit and minimize cost.
- To enable the bank reach the customers satisfaction.
- It enable the effective survival of organizational image.
1.4 Significance of the Study
The significance of the study lies on the information which I generate to policy makers, planners and interested scholars, which I know will help the further researchers in the related field. At the end of the study, one would have contributed his quota towards the understanding of the reasons why financial planning and control is very important in an organization.
The study will also serve as an eye opener to the generality of the people as regards to financial planning and control.
1.5 Research Questions
- Does a financial manager carryout financial planning in the organization?
- How does financial planning affect the performance of organization?
- Does organization recognize the performance of its financial managers?
- How does financial manager perform his duty in the organization?
- Is there any problem incitation against financial planning system in your organization?
1.6 Research Hypothesis
The research hypothesis is assumption made on a statement, the hypothesis are statement of uncertainties.
H0: NULL hypothesis
Hi: Alternative hypothesis
H0: Impact of effective management of finance does not lead to the success of business organization.
Hi: Impact of effective management of finance leads to the success of business organization.
1.7 Scope of the Study
Financial planning is a very wide topic, but the researcher’s work will focus on it as a tool of achieving corporate profitability as it affects organization in general and united bank of Nigeria Plc in particular for the period of (4) years (2011 – 2015).
1.8 Limitations of the Study
Due to the present situation in the economy, that is cost of living is very high, the researcher was faced with problem on how to source fund to finance this research work.
(ii) Time Factor:
Time constraint was another area, because the study was conducted when the staffs were at their duties.
(iii) Attitude Of The Respondent:
This constitutes a problem because some of the staff rejected filling the questionnaire.
1.9 Definition of Terms
This is a balance sheet item which equals the sum of cash and cash equivalents, accounts receivable, inventory, marketable securities, prepared expenses and other assets that could be converted to cash in less than one year.
It is a long term tangible piece of property that a firm owns and use in the production of its income and is not expected to be consumed.
This is a business whose article or incorporation has been approved in some states.
The study of how people allocate their assets overtime under conditions of certainty, and uncertainty.
Means planning, organizing, directing and controlling the financial activities such as procurement and utilization of funds of the enterprise.
It means applying general management principles, to financial resources of the enterprise.
A corporate action, in which a company buys most, is not all of the target company’s ownership stakes in order to assume control of the target firm.
Advancement in knowledge or skill rather than quality or state of being proficient.
The combining of two or more companies generally by offering the stock holders of the company securities in the acquiring company in exchange for the surrender of their stock.
Capable of doing many things competently. Having varied uses or serving many functions.
Summary, Conclusions and Recommendations:
This chapter summarizes the findings on the impact of effective management of finance on the success of business organization using Union Bank of Nigeria Plc, Keffi Abuja road, New Nyanya branch as a case study. The chapter consists of summary of the study, conclusions, and recommendations.
5.2 Summary of the Study
In this study, our focus was on the Impact of effective management of finance on the success of business organization using Union Bank of Nigeria Plc, Keffi Abuja road, New Nyanya branch as a case study.The study is was specifically set to; enable the bank maximize profit and minimize cost, enable the bank reach the customers satisfaction, and enable the effective survival of organizational image.
The study adopted the survey research design and randomly enrolled participants in the study. A total of 31 responses were validated from the enrolled participants where all respondent are staff of Union Bank of Nigeria Plc, Keffi Abuja road, New Nyanya branch.
In the light of the analysis carried out, the following conclusions were drawn.
- Financial managers carryout financial planning in the organization.
- Financial planning affect the performance of business organization through the vital roles it plays, which include; facilitating critical financial decisions, ensuring adequate financial management, contributing to effectively allocation of financial resources, contributing to effective utilization of funds, and helps to maintain the liquidity of the organization.
- The organization recognizes the performance of its financial managers.
- The financial manager performs his duty in the organization, as he plans the financial needs of the organization, acquire the funds needed by the organization, invest appropriately the Funds of the organization and manages the working capital of the organization.
- There are problems in-citation against financial planning system in the organization.
The following recommendations were proffered with respect to the findings of the study;
- The organization should properly metirate their managers to avoid low profitability for the achievement of its goals and objectives. And also the manager should be recognized and appreciated, for the hard work and job well done to encourage him to put in his best at work and for the organization.
- The management should critically and meticulously carryout a detailed investigation in the organization with the sole aim of identifying the major problems facing its financial planning system, so as to make necessary previsions to manage the problems on time.
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