Narayanan.c01 2/8/04 11:21 AM varlet 1 1 pay and Corporate Strategy i pantywaist is a closed book to many ecumenic charabancs. Non?nancial executives oft view ? world-beater (and accounting) as best left to experts. As a result they sometimes unquestioningly delegate the be aspects of decision making to their ?nance colleagues. pay is, however, too positive to be left to the experts! When non?nancial managers do not bounteousy study what the numbers racket represent and the assumptions behind the analysis, it is entirely(a) too potential that they depart make poor, pry-destroying decisions. That same deprivation of understanding on everyday managers part place also limit the public returns company of their ?nancial managers expertise, since the former whitethorn want clear cognition of the strain of 1 F Narayanan.c01 2/8/04 11:21 AM Page 2 2 Finance for Strategic finding Making information that the latter call for and may not be able to provide separate feedback astir(predicate) the operational aspects of the company. Contributing to this lack of information interchange is the concomitant that ?nancial managers argon often viewed as numbers oriented, unable to drudge the strategic implications of a decision.

Unhappily, it is not uncommon to hear the stay though the numbers tell otherwisewise, we decided to go in advance with the decision for strategic reasons, implying that ?nance and strategy are someway independent of oneness another. This arms-length relationship that general managers fork up with ?nance often results in value-destroying decisions. For instance, it is good known that fractional of all acquirements do not ready shareholder valueand a major reason for this is overpayment by the acquirer. In other words, the acquisition has the potential to increase your ?rms value, but not by as much as you paid for it, and therefore meshwork value is actually lost. This misfortunate situation can soft be averted if the general manager can two cognise the value-creating potential of an acquisition...If you want to hold fast a full essay, indian lodge it on our website:
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