Financial Management

Meaning

Financial ratios are the relative magnitude of two selected numerical values taken from an enterprise’s financial statements. The company’s financial ratios demonstrate its credit unworthiness. The ratios indicate whether a company is a cable of repaying its loans (Bragg, 2009). The business financial ratios are deteriorating and are far behind the market average standards.

Remedies

According to the Wine club for entrepreneurs by Pam Newman on November 30, 2007, there are seven ways of improving a company’s liquidity. Use sweep accounts in the financial institution to earn interest on any excess cash balances. This can be achieved by keeping all the operating capital into an interest bearing accounts and only getting it when it is needed.

The company could also consider relocating to another place. This will help establish a new business with a new reputation (Scarborough, 2006). The new business that it will disguise will have no detrimental accounting history. This disguise will help the company qualify for a loan.

This company should form a franchise relationship with a bigger, more stable company than itself. The franchise will heap the burdened business to showdown behind the stable firm. This will allow the company to get a loan. The banks will be sure that it cannot default since the loan will be relatively small as per the assets base of the entire business formation.

Cisco

Cisco is one of the companies in the fortune 100 according to Cnn.com magazines. As per their press release dated February 8, 2012, Cisco is the worldwide leader in networking, the way people get connected, communicate, and collaborate. In 2011, its net income was $2.2 billion, from sales of $11.5 billion which reflected a growth of 11%.

According to Richard Bull (2007), financial ratios measure the performance of a process using a common unit mostly money. Some of the most notable ratios to the company are discussed. The debt ratio will indicate the proportion of debt a company has as compared to its assets. This is an indicator of the potential risks faced by the company faces. This ratio makes the company know its position regarding debts. If the ratio is greater than one, the company takes extra precautions since it is operating on debts hence the importance of the ratio (Bull, 2007).

A quick ratio is another indicator of a company’s short-term liquidity. It indicates a company’s ability to meet all the short term obligations of its liquid assets. Once the ratio decreases, it signals a problem in the company. The ratio helps check whether it is performing well indicated by an increase.

The inventory turnover ratio informs the frequency tab in which the company’s inventories have been sold. The more the number, the stronger the sales are. This ratio helps the business know the rate. The company may use the ratio to reflect on its prices and selling strategies.

The current ratio shows whether a company can meet short-term debts obligations or not. (Robb, 2003). The ratio should be more than one, otherwise, the company should form a strategy that reduces its debts and increases the assets.

Conclusion

Companies should, therefore, involve specialists who could advise them concerning the ratios since they are the basic factors in business. This will enable them to work together. Knowledge of the ratios is also vital for any entrepreneur.

References

Bragg, S. M. (2009). Business Ratios and Formulas: A Comprehensive Guide. Hoboken, NJ: Wiley.

Bull, R. (2007). How to use financial ratios to maximize value. New York: Elsevier.

Cisco. (2012). Press release AN JOSE. NASDAQ: CSCO.

Robb, C. M. (2003). External debt statistics: guide for compilers and users. International Monetary fund.

Scarborough, Z. (2006). Effective Small Business Management. London: Wilson Pearson-Prentice Hall.

Executive Summary

Financial management is an organizational function undertaken to inform investment, dividend, and operational decisions. The discussions presented in this paper show conclusively that different financial management practices have the potential to influence business performance positively. Some approaches such as working capital management and capital structure result in desirable decisions that can guide firms to pursue their respective objectives. Proper financial planning and investment appraisal influences a wide range of organizational procedures in an attempt to add value. Dividend policy guides corporations to meet the diverse needs of their respective stockholders. The benefits of appropriate financial management practices should be embraced by organizations in an attempt to achieve their potential.

Introduction

Financial literature and research indicates clearly that a company’s financial practice can impact its performance. Jain, Singh, and Yadav (2013) argue that financing mix is a powerful principle that guides firms to come up with better investment decisions. Companies that implement adequate financial and investment practices will be in a position to maximize shareholder value. Kharazmi and Teymouri (2013) encourage business organizations to strike a balance between cash outflows and inflows. This practice is capable of minimizing liquidity challenges and delivering credit support to tackle emerging financial fluctuations. This knowledge explains why financial performance evaluation has emerged as an important factor that can be applied to monitor organizational profitability. This discussion describes how financial management practices impact business performance.

Analysis of Financial Management Practices

Kharazmi and Teymouri (2013) define financial management practices as a task executed by managers and accounting officers in different areas such as asset management, supply chain, budgeting, and controlling. Institutions and corporations should embrace different financial management practices in an attempt to achieve their goals. The first practice is known as capital structure decision (Turyahebwa, Sunday, & Ssekajugo, 2013). This refers to the amount of equity and debt used to finance company’s operations. Capital structure is an integral aspect of a firm’s financial portfolio. It usually represents the major sources of funds in a given firm. The financial practice will definitely inform an organization’s financial structure whenever analyzed or done in a professional manner.

Sanusi, Johari, Said, and Iskandar (2015) acknowledge that the use of capital investment appraisal techniques can guide corporations to determine or monitor their investments. The appraisal approach will ensure both short-term and long-term investments are analyzed periodically. The technique embraces the concept of budgeting to ensure expenditures and investments are executed effectively without undermining the performance of the targeted company. Such techniques make it possible for companies to identify ventures, new undertakings, and expansions capable of sustaining business performance.

The use of dividend policies is a powerful initiative used as part of an organizational financial management. The practice focuses on the unique guidelines and procedures adopted by a specific firm to decide how earnings can be shared among its stockholders. Competent financial managers embrace the practice in an attempt to monitor financial performance and meet the needs of different stakeholders (Sanusi et al., 2015). However, evidence seems to indicate that some investors might not take the practice seriously. Such financiers can sell their equities in different stock markets (Kharazmi & Teymouri, 2013).

Working capital management is a practice used to monitor the assets of a firm. Financial experts use the financial tool differently depending on the corporation’s source of assets or income. This working capital refers to the total investment in a company in the form of assets (Jain et al., 2013). Such resources or properties tend to be liquidated within twelve months (Jain et al., 2013). The financial manager establishes the tradeoff between shortage and carrying costs.

Another critical practice is known as financial performance assessment. This is a measure used by experts to analyze how a given company can utilize its assets within its business model to come up with adequate resources or revenues (Kharazmi & Teymouri, 2013). The tool is widely used by a company to measure its financial health status within a specified period of time. The firm’s health is then used to inform various business practices that can be pursued to minimize potential problems.

Financial management practices revolve around the investment and expenditure attributes of a given firm. The leaders in a given company should consider these practices to ensure they are undertaken in a timely and efficient manner. Sanusi et al. (2015) believe that the success of most of these financial practices can ensure more companies realize their business aims. Emerging obstacles and challenges are usually identified and addressed before they can disorient organizational performance.

Financial Management Practices: Impact on Organizational Performance

Research indicates that effective financial and accounting practices tend to have a positive impact of organizational performance (Turyahebwa et al., 2013). Short-term financial practices such as working capital management can make it possible for a company to allocate resources in a timely manner and support different organizational goals. The practice guides stakeholders to pursue the outlined aims and eventually maximize business performance. Companies embracing the use of adequate short-term financial management initiatives find it easier to meet the changing needs of different stakeholders.

Investment appraisal is supported by many researchers since it promotes performance. The financial management practice is observed to guide corporations to make appropriate decisions, forecasts, and investment options. The strategy is known to create a comparative advantage in the targeted firm. Throughout the financial management process, the managers manage debts and equities. Debt remains one of the leading sources of capital for different firms. Appraisal is a practice that guides financial managers to make accurate decisions whenever acquiring new resources and identifying potential capital sources (Kharazmi & Teymouri, 2013). When the process is managed effectively, the firm will be in a position to pursue its goals and promote performance.

Jain et al. (2013) observed that capital structure was relevant in many corporations across the world. Firms can adopt different models to manage debt ratios and equities. The practice guides companies to analyze issues such as cash flows, agency costs, and asset substitutions to make appropriate decisions. Some leaders can utilize financial structures to achieve the intended aims. Research reveals that companies that use capital structure efficiently find it easier to manage debts and remain attractive to different funders (Sanusi et al., 2015). This approach can be embraced by managers to match the goals of the firms with existing financial resources.

Liquidity management is described as an effective process that can guide a given organization to monitor different obligations. Successful or functional firms must cater for their bills, wages, taxes, and loan repayments in a timely manner. Failure to meet such financial needs can disorient a wide range of organizational practices (Jain et al., 2013). These processes can be assessed and completed adequately if the targeted firm utilizes powerful financial management practices. Corporations that embrace such initiatives will ensure different functions are completed efficiently.

Financial control can only be realized through the use of valuable management practices. Effective financial management will ensure firms take issues such as profitability, growth, and liquidity seriously. The financial management tool can utilize most of the above practices to allocate resources, liquidate specific assets, and make timely decisions (Turyahebwa et al., 2013). The team can identify the best strategies to maximize share price. When such processes are implemented in a professional manner, it can be easier to enhance the long-term aims of the institution. Dividend policy can be pursued constructively to maximize the wealth of shareholders. This process will also capture the attention of different stockholders and consequently drive organizational performance.

Evidence reveals that the main objective of financial management in a company is to maximize shareholder value (Trehan & Setia, 2014). Selvanayaki, Sivakumar, Rohini, and Mani (2016) argue that the unique needs and expectations of the owners of corporation should inform most of the activities undertaken. The same reason can be used to support the role and relevance of various financial management practices. When such processes are executed efficiently, it becomes easier to support the best practices and acquisitions that resonance with the targeted goals. The initiative can guide a given firm to redefine its functions and eventually maximize performance. Profitability, for instance, is something that is taken seriously by many financial managers (Turyahebwa et al., 2013). Such leaders can use each of the above practices to control costs and prices. Capital expenditures will be matched with inventory in an attempt to deliver desirable profits. This practice, therefore, shows conclusively that the application of meaningful financial practices in a given firm will eventually maximize profits and business performance.

Selvanayaki et al. (2016) go further to support the idea that effective financial management practices will result in positive performance. Companies that utilize different financial management tools will be in a position to attract investors and sustain their operations. Different functions will be coordinated in such a way that the meet the objectives and goals of the organization. This reason describes why financial managers should pursue their roles and functions prudently (Sanusi et al., 2015).

Some scholars have gone further to explain why business managers should be aware of diverse factors that are capable of impacting organizational performance. According to Trehan and Setia (2014), variables (or factors) that affect the rate at which organizations realize their goals must be examined carefully. Managers should also be keen to match different functions and financial practices if they want to influence organizational effectiveness.

Conclusion

Managers in different business firms must realize and appreciate the benefits of different financial practices. When applied appropriately, most of these methods can maximize the performance of many companies and guide them to support the needs of their stakeholders (Trehan & Setia, 2014). Corporations that want to succeed should hire skilled financial managers and train them to pursue constructive financial practices. Business corporations should utilize most of these accounting processes to ensure they are on the right path towards realizing their objectives and missions. In conclusion, financial performance practices should be embraced by business firms since they have the potential to support different managerial functions and eventually improve performance.

References

Jain, P. K., Singh, S., & Yadav, S. S. (2013). Financial management practices: An empirical study of Indian corporates. New Delhi, India: Springer Shop.

Kharazmi, Z., & Teymouri, M. (2013). The effects of financial management practices and their role in economical development and organizational performance. International journal of Advanced Biological and Biomedical Research, 1(6), 578-582. Web.

Sanusi, Z. M., Johari, R. J., Said, J., & Iskandar, T. (2015). The effects of internal control system, financial management and accountability of NPOs: The perspective of mosques in Malaysia. Procedia Economics and Finance, 28(1), 156-162. Web.

Selvanayaki, S., Sivakumar, S. D., Rohini, A., & Mani, K. (2016). Financial management practices and profitability of modern rice milling firms in Kangayam Cluster, Tamil Nadu. Agricultural Economics Research Review, 29(2), 297-306. Web.

Trehan, S., & Setia, K. (2014). Human resource management practices and organizational performance: An Indian perspective. Global Journal of Finance and Management, 6(8), 789-796. Web.

Turyahebwa, A., Sunday, A., & Ssekajugo, D. (2013). Financial management practices and business performance of small and medium enterprises in western Uganda. African Journal of Business Management, 7(38), 3875-3885. Web.

Introduction

The financial market opportunities primarily predetermine the development of all types of non-financial organizations, and their activities often depend on external market factors. When it is about the possible risks related to financial activities, various ways to protect budget funds can be considered as effective mechanisms. One such technique is strategic financial risk management that is a set of measures aimed at achieving success in preventing potential problems with the funds of a specific organization. Using the example of the world-famous British American Tobacco (BAT) company and its data, it is possible to analyze the effectiveness of such measures and assess the strengths and weaknesses of such a policy. The purpose of this work is to study the potential of the company in the field of financial management and compare the current strategy of the organization with other similar models. The practical significance lies in the possibility of using the data obtained for the analysis of other non-financial firms to evaluate the effectiveness of their strategies.

Company Description

To maximally competently evaluate the quality of financial risk management, it is essential to study the scope of a particular company and its interests. According to the official data¹, this non-financial organization that is included in the FTSE 100 has a rather high price for shares, and today, there is a tendency for growth. However, when assessing the situation with the company for the past period of 2018, it can be noted that the organization is experiencing a significant decline in financial performance. Even though BAT is the company that has been operating in the market for quite a long time and occupies the second position in the list of organizations with identical products, it has begun to lose its positions. This phenomenon is likely to be associated with insufficiently effective financial policies.

Proceeding from a rapid drop in stock prices, it can be assumed that the leadership of BAT did not make sufficient efforts to ensure that the organization does not lose its positions. According to Gordon, Loeb, and Tseng², risk management is the activity in which timely decision making determines the degree of success, and too conservative and slow approach, on the contrary, increases the chances of problems. Accordingly, for BAT not to lose its positions on the world market and be able to successfully compete with other companies in the field of tobacco sales, its leadership should take urgent measures and revise the mechanism for risk assessment. It is likely to produce a positive effect that will manifest itself in increasing market interest in BAT and growing the value of its shares. For a more detailed analysis, it is possible to consider the features of financial risk management of the organization. It will help to evaluate some of the nuances of the current strategies and define potentially perspective directions.

Peculiarities of the Company’s Financial Risk Management

By generally accepted business strategies, the management of the analyzed company usually appoints employees who are responsible for such a significant component of work as risk management. As Chan and Wong³ remark, a risk manager, together with his or her team, first thinks through possible scenarios for doing a certain job and then analyses the possible consequences that may develop from a particular scenario. A similar approach to the organization of work is realized in BAT where there is a whole team of specialists in this profile. Because this brand has a lot of branches all over the world, each of the representative offices has several specialists who are responsible for assessing financial risks. Such analytical work directly at the sales points helps to more accurately evaluate the needs and opportunities of a specific section of the market and make the most accurate forecast regarding the effectiveness of the chosen strategy.

From working efficiency that characterizes BAT, it can be noted that, according to Jaakko and Henrikki⁴, the effectiveness of customer focus, which is typical for the company under analysis, can become a valuable mechanism when used correctly. In other words, BAT has always differed in its desire to take into account the demands of customers, and this type of strategic work certainly has its advantages. Nevertheless, risk assessment is a slightly different area where not only consumers’ interest but also possible unsuccessful consequences are also considered.

Financial risk is the variable that characterizes the probability of economic damage (financial losses) that an enterprise can incur while carrying out its activities under uncertainty. Consequently, the probability of risk occurrence is largely determined by the level of business stability. As Bromiley et al.⁵ claim, knowing the source and the factor of financial risk, it is essential to develop the ways of reducing and the methods of limiting any hazard. At the same time, knowing the forms of manifestation of a specific risk, it is possible to foresee its negative consequences. BAT’s peculiarity is the strategy of adapting to the constantly changing needs of the market. This type is distinguished by some obvious advantages.

Strengths of the Company’s Financial Risk Management

Due to the adaptive model of financial risk management, BAT can work with the needs of consumers and focus not on the overall dynamics of the market but on customers’ interests. It, in turn, allows the management to constantly find new supply channels and deserves recognition from clients. According to Almeida, Hankins, and Williams⁶, supply problems arise in those organizations that are forced to spend long and time-consuming work to find customers. In the case of BAT, the company is the world-famous brand, and the number of regular customers gives the corporation leadership the possibility to adapt to existing market factors and conduct business based on the current situation.

Another undeniable advantage of the adaptive model of financial risk management is the ability to receive relatively accurate and timely information about the situation on the market, using ready-made leadership strategies. As practice shows, the cyclical nature of demand and supply, which is currently typical for BAT, is quite a frequent phenomenon. The use of ready-made recommendations in the form of special management programs helps to succeed in developing a particular strategy for managing financial risks to ensure business stability. As Brown and Conrad⁷ note, following the instructions can help prevent a serious financial crisis and the loss of capital. Certainly, such an advantage is significant enough. However, in the case of BAT, it was not properly implemented; therefore, some of the shortcomings of the current managerial system can be identified.

Weaknesses of the Company’s Financial Risk Management

Despite rather high positions and recognition in the world market, recently, there has been a decline in consumers’ activity, and the cost of the company’s shares has significantly reduced. Perhaps, it is caused by an insufficiently competent policy of financial risk management. An adaptive strategy used by BAT leadership has certain positive aspects. However, this type of management may have been more suitable for a small firm, at least, for a temporary search of the crisis solution. According to Karadag⁸, the financial challenges faced by small business managers are usually addressed through effective interventions, and current strategies can be rapidly changed. Nevertheless, in the case of BAT, such a large corporation with branches around the world is unlikely to quickly rebuild its model to adapt to changing market conditions. Consequently, this disadvantage of an adaptive model deserves attention.

As another argument about the mistakenness of the chosen strategy, it is possible to cite the assertion that a too complicated control structure complicates the work process. As Theriou⁹ claims, the system of leadership is an important component of the success of any company in the market, and the more complex such a system is, the higher the chance is that any implementation will occur slowly. Accordingly, simplifying the model of financial risk management will help to accelerate the recovery of the BAT corporation after an unpleasant crisis.

Similar Models of Financial Risk Management

Strategic financial management implies the concept that focuses on planning costs and profits by the current policies and market conditions. According to Banker, Mashruwala, and Tripathy¹⁰, “whether a firm possesses a sustainable competitive advantage or not requires the examination of the financial performance of firms over time.” To assess the performance of the BAT company, it is possible to consider the activities of some other large corporations with a similar type of business. For example, the British company Imperial Brands engaged in the production of tobacco products, as Filatotchev and Stahl¹¹ the note has a similar management model. Nevertheless, BAT is a much more respected and well-known corporation, and the volume of its products significantly exceeds the Imperial Brands’ quantity of goods.

Another large enterprise that can be compared to BAT is the British company Diageo specializing in the production of alcoholic beverages, that is, excise goods. However, as Vomberg, Homburg, and Bornemann¹² remark, Diageo and similar firms should work diligently to achieve worldwide recognition since according to the volume of capitalization of funds, it is almost twice inferior to BAT. It means that British American Tobacco has already managed to significantly exceed the sales volume, which confirms the quality of work carried out even despite the lack of effectiveness of the current financial strategy and temporary difficulties.

Concerning profit, BAT can also be compared to another large British company. It is about SABMiller, the world’s second-largest brewing concern that has been successfully working for almost twenty years. As Richardson, Marsh, and Graefe-Anderson¹³ claim, the multi-level management process that is typical for this corporation has turned it into one of the world’s largest companies. Despite this success, the BAT management model is also multi-level, and all the departments of the corporation control financial activities by established responsibilities. Moreover, British American Tobacco has an essentially big profit. Therefore, even despite temporary difficulties, BAT is one of the leading British and global companies.

Key Performance Indicators

To effectively monitor the activity, any company usually takes into account several factors that help to assess the success rate of the used strategy. The same factors can be used for BAT as the corporation needs rather accurate data for planning further work and recovering from a temporary crisis. Thus, Finkler et al.¹⁴ offer four key performance indicators:

• Financial perspective.
• Customer perspective.
• Internal business perspective.
• Learning and growth perspective.

All these four indicators can be theoretically justified. For example, a financial perspective helps to assess the current level of profit and costs. If the management devotes more time to this type of planning, it will make it possible to draw up a relatively accurate plan for the distribution of the company’s funds. If BAT specialists had timely done this work, their corporation would hardly have incurred such significant losses and certainly would not be struggling with the crisis at the moment.

A client perspective provides an opportunity to calculate the volume of consumer demand. As it is known, the higher this indicator is, the more successful the company’s activity will be. Consequently, it is required to not only adapt to the current number of clients but also conduct appropriate work to expand the consumer base.

From the internal business perspective, it is possible to correctly study the errors and strengths of the current financial model. Certain changes in the management of a particular production area can be required at any stage of work. Therefore, this approach should undoubtedly be used in BAT to improve its internal order.

Finally, the perspective of learning and growth is the factor that confirms the ability of a particular company’s specialists to learn and professionally self-develop. The more motivated employees are, the greater the chance is that the organization will achieve significant success and deserve recognition. Therefore, the level of qualification and training of employees is the value that should always be increased by any possible means. According to Aebi, Sabato, and Schmid¹⁵, risk management will be effective in the organization where the leadership strategically thinks about the way its business is conducted. Therefore, in the case of British American Tobacco, the management should pay attention to the above factors and conduct work based on the outlined perspectives.

Conclusion

Thus, a detailed study of BAT’s features of the financial risk management strategy has shown that such a type of leadership model has some strengths and weaknesses. Based on the conclusions, it can be assumed that certain measures should be aimed at revising the model of activity planning, as well as improving work in the area of development perspectives. Accounting for key performance indicators can provide an opportunity to achieve improvement in the main areas of development since these factors cover most of any company’s activities. The concept of risk management that is applicable in BAT is subject to revision to move from the adaptive model to the planning system when the work analysis is carried out in advance. Appropriate interventions will help British American Tobacco recover from the crisis and continue to occupy the highest positions in the world market.

Bibliography

Aebi, V., Sabato, G., and Schmid, M., ‘Risk management, corporate governance, and bank performance in the financial crisis’, Journal of Banking & Finance, vol. 36, no. 12, 2012, pp. 3213-3226.

Almeida, H., Hankins, K.W., and Williams, R., ‘Risk management with supply contracts’, The Review of Financial Studies, vol. 30, no. 12, 2017, pp. 4179-4215.

Banker, R.D., Mashruwala, R., and Tripathy, A., ‘Does a differentiation strategy lead to more sustainable financial performance than a cost leadership strategy?’, Management Decision, vol. 52, no, 5, 2014, pp. 872 – 896.

British American Tobacco, Share price data, Web.

Bromiley, P. et al., ‘Enterprise Risk Management: Review, Critique, and Research Directions’, Long Range Planning, vol. 48, no. 4, 2015, pp. 265-276.

Brown, B.S., and Conrad, J., ‘The Effects of Derivatives on Firm Risk and Value’, Journal of Financial and Quantitative Analysis, vol. 46, no. 4, 2011, pp.967-999.

Chan, N.H., and Wong, H.Y., Simulation Techniques in Financial Risk Management, 2nd edn., Hoboken, NJ, John Wiley & Sons, 2015.

Filatotchev, I., and Stahl, G.K., ‘Towards Transnational CSR. Corporate Social Responsibility Approaches and Governance Solutions for Multinational Corporations’, Organizational Dynamics, vol. 44, no. 2, 2015, pp. 121-129.

Finkler, S.A. et al., Financial Management for Public, Health, and Not-for-Profit Organizations, 5th edn., Thousand Oaks, CA, Sage Publications, 2016.

Gordon, L.A., Loeb, M.P., and Tseng, C.Y., ‘Enterprise risk management and firm performance: a contingency perspective’, Journal of Accounting and Public Policy, vol. 28, no. 4, 2009, pp.301-327.

Jaakko, A., and Henrikki, T., ‘Creating Novel Consumer Value vs. Capturing Value: Strategic Emphases and Financial Performance Implications’, Journal of Business Research, vol. 66, no. 5, 2013, pp. 593–602.

Karadag, H., ‘Financial Management Challenges in Small and Medium-Sized Enterprises: A Strategic Management Approach’, Emerging Markets Journal, vol. 5, no. 1, 2015, pp. 26-40.

Richardson, W.D., Marsh, J.S., and Graefe-Anderson, R., ‘AB InBev’s offer for SABMiller (A): pricey or practical?’, Business Case Journal, vol. 24, no. 2, 2017, pp. 1-11.

Theriou, N.G., ‘Strategic Management Process and the Importance of Structured Formality, Financial and Non-Financial Information’, European Research Studies, vol. 18, no. 2, 2015, pp. 3-27.

Vomberg, A., Homburg, C., and Bornemann, T., ‘Talented people and strong brands: the contribution of human capital and brand equity to firm value’, Strategic Management Journal, vol. 36, no, 13, 2015, pp. 2122-2131.

Footnotes

1. British American Tobacco, Share price data, Web.
2. L.A. Gordon, M.P. Loeb and C.Y. Tseng, ‘Enterprise Risk Management and Firm Performance: A Contingency Perspective’, Journal of Accounting and Public Policy, vol. 28, no. 4, 2009, p. 307.
3. N.H. Chan and H.Y. Wong, Simulation Techniques in Financial Risk Management, 2nd edn., Hoboken, NJ, John Wiley & Sons, 2015, p. 91.
4. A. Jaakko and T. Henrikki, ‘Creating Novel Consumer Value vs. Capturing Value: Strategic Emphases and Financial Performance Implications’, Journal of Business Research, vol. 66, no. 5, 2013, p. 596.
5. P. Bromiley et al., ‘Enterprise Risk Management: Review, Critique, and Research Directions’, Long Range Planning, vol. 48, no. 4, 2015, p. 268.
6. H. Almeida, K.W. Hankins and R. Williams, ‘Risk Management with Supply Contracts’, The Review of Financial Studies, vol. 30, no. 12, 2017, p. 4182.
7. B.S. Brown and J. Conrad, ‘The Effects of Derivatives on Firm Risk and Value’, Journal of Financial and Quantitative Analysis, vol. 46, no. 4, 2011, p. 974.
8. H. Karadag, ‘Financial Management Challenges in Small and Medium-Sized Enterprises: A Strategic Management Approach’, Emerging Markets Journal, vol. 5, no. 1, 2015, p. 28.
9. N.G. Theriou, ‘Strategic Management Process and the Importance of Structured Formality, Financial and Non-Financial Information’, European Research Studies, vol. 18, no. 2, 2015, p. 3.
10. R.D. Banker, R. Mashruwala and A. Tripathy, ‘Does a Differentiation Strategy Lead to More Sustainable Financial Performance than a Cost Leadership Strategy?’, Management Decision, vol. 52, no, 5, 2014, p. 873.
11. I. Filatotchev and G.K. Stahl, ‘Towards Transnational CSR. Corporate Social Responsibility Approaches and Governance Solutions for Multinational Corporations’, Organizational Dynamics, vol. 44, no. 2, 2015, p. 124.
12. A. Vomberg, C. Homburg and T. Bornemann, ‘Talented People and Strong Brands: The Contribution of Human Capital and Brand Equity to Firm Value’, Strategic Management Journal, vol. 36, no, 13, 2015, p. 2125.
13. W.D. Richardson, J.S. Marsh, and R. Graefe-Anderson, ‘AB InBev’s Offer for SABMiller (A): Pricey or Practical?’, Business Case Journal, vol. 24, no. 2, 2017, p. 2.
14. S.A. Finkler et al., Financial Management for Public, Health, and Not-for-Profit Organizations, 5th edn., Thousand Oaks, CA, Sage Publications, 2016, p. 276.
15. V. Aebi, G. Sabato and Schmid, M., ‘Risk Management, Corporate Governance, and Bank Performance in the Financial Crisis’, Journal of Banking & Finance, vol. 36, no. 12, 2012, p. 3215.