Text №4. Financial management

In the past, financial management was not a major concern for a business. A company used to establish relations with a local bank. The hank handled the financing and the company took care of producing and selling.

Today only a few firms operate in this way. Usually businesses have their own financial managers who work with the banks. They negotiate terms of financial transactions; compare rates among competing financial institutions. Financial management begins with the creation of a financial plan. The plan includes timing and amount of funds and the inflow and outflow of money.

The financial manager develops and controls the financial plan. He also forecasts the economic conditions, the company's revenues, expenses and profits. The financial manager's job starts and ends with the company's objectives. He reviews them and determines the funding they require. The financial manager compares the expenses involved to the expected revenues. It helps him to predict cash flow. The available cash consists of beginning cash plus customer payments and funds from financing.

The financial manager plans a strategy to make the ending cash positive. If cash outflow exceeds cash inflow, the company will run out of cash. The solution is to reduce outflows. The financial manager can trim expenses or ask the customers to pay Easter.

The financial manager also chooses financing techniques. One of them is short-term financing. Another is long term financing.

At the end of the fiscal year the financial manager reviews thecompany's financial status and plans the next year's financial strategy.

Text №5. MANAGEMENT AND HUMAN RESOURCES

DEVELOPMENT

Managers perform various functions, but one of the most important and least understood aspects of their job is proper utilization of people. Research reveals that worker performance is closely related to motivation; thus keeping employees motivated is an essential component of good management. In a business context, motivation refers to the stimulus that directs the behavior of workers toward the company goals. In order to motivate workers to achieve company goals, managers must be aware of their needs.

Many managers believe workers will be motivated to achieve organizational goals by satisfying their fundamental needs for material survival. These needs include a good salary, safe working conditions, and job security. While absence of these factors-results in poor morale and dissatisfaction-, studies have shown that their presence results only in maintenance of existing attitudes' and work performance. Although important, salary, working conditions, and job security do not provide the primary motivation for many workers in highly industrialized societies, especially at the professional or technical levels.

Increased motivation is more likely to occur when work meets the needs of individuals for learning, self-realization, and personal growth. By responding to personal needs — the desire for responsibility, recognition, growth, promotion, and more interesting work managers have altered conditions in the workplace and, consequently, many employees are motivated to perform more effectively.

In an attempt appeal to both the fundamental and personal needs of workers, innovative management approaches, such as job enrichment and job enlargement, have been adopted in many organizations. Job enrichment gives workers more authority in making decisions related to planning and doing their work. A worker might assume responsibility for scheduling workflow, checking quality of work produced, or making sure deadlines are met. Job enlargement increases the number of tasks workers perform by allowing them to rotate positions or by giving them responsibility for doing several jobs. Rather than assembling just one component of an automobile, factory workers might be grouped together and given responsibility for assembling the entire fuel system.

By improving the quality of work life through satisfaction of fundamental and personal employee needs, managers attempt to directthe behavior of workers toward the company goals.