*Question

a) Outline the key aspects of the financial manager's role within a large plc

b) Some analysts and commentators make a distinction between the 'Anglo-Saxon' and the "Contmental Europe Japanese approach to financial managenment. Briefly, explain the distinction

# The following is relevant #

a)

*They should comment initially that the fundamental objective of financial management is usually considered to be that of maximising shareholder wealth. All subsequent decisions should meet that objective (1)

*Financial management is concemed with financial planning and financial control (1)

*The financial manager will tend to make decisions in three key areas.

* Investment and capital budgeting - the financial manager will be involved in the decisions reg ardng the acquisition of assets through carying out appraisal techniques (1)

* Financng decisions- the financial manager concerned with the raising of finance at the lowest cost both to fund long term investment and short term working capital investment (1)

* Dividend decisions - linked to the above Retained profits are a source of finance but paying dividends may increase the value of the company and hence maximise sharcholder wealth(1)

[5 Marks]

# The following is relevant #

b)

Distinction based on the fact that there are other stakcholders in the company beyond shareholders (1)

The 'Anglo-Saxon- Le. US and UK (primarily) - approach has generally been to attempt to maxmse shareholder wealth Other interests while important are subordinate to the shareholder (1)

German, French, Japanese companies have tended to place equal or even greater importance to the rights of other stakeholders, e.g. workers and customers (1)

As examples the student might cite the fact that workers sit on German supervisory boards or the fact that Japanese firms have traditionally placed job security above dividend payout (1)

Good student may finally comment that wth increasing globalisation- world companies operating in all markets- there may be some merging of the approach (1)

[15 marks]