The management of financial performances includes the set of activities, organizational structures and decisions that ensure the increase of the financial performance of the enterprise. The content of financial performance management can be approached in a rigorous way only by referring to its object, to the fundamental tasks incumbent on it and to the concrete operational responsibilities entrusted to different specialists within the enterprise.
The object of financial performance management is defined by relating the company to the opportunities and constraints on financial performance, determined both by the characteristics of the business environment (degree of stability and complexity) and the network through which the company relates to the elements of this environment. , respectively the way of carrying out the operations and the flows of resources, work, money, information and managerial regulations inside the enterprise. The management of the financial performances must ensure the most complete and judicious capitalization of the internal and external opportunities, as well as the best adaptation of the enterprise to the internal and external constraints in order to improve its performances. This is achieved by carefully balancing the endogenous and exogenous requirements of economic and financial functionality of the enterprise.
Given the above, we appreciate that financial performance management is a set of analytical methods, decision-making models and operational techniques that allow the company to continuously and systematically consolidate its financial performance by adapting its structures and functions to changes, both incremental and of major magnitude, which are recorded by the business environment.
The fundamental task of financial performance management is directly and completely subordinated to the global objective of the financial management of the enterprise - maximizing the economic value of the business. To this end, financial performance management identifies, diagnoses and optimizes the processes of creating added value. The particular tasks arising from this fundamental task are the following:
1) control of the risks associated with the processes of generating financial performances;
2) monitoring and consolidating the financial viability of the enterprise;
3) developing the potential for long-term growth of financial performance.
The management of financial performances is based on a coherent approach, which includes analytical, decisional and operational elements and which is structured in a complex process consisting of the following stages:
- global strategic diagnosis of financial performance;
- adopting decisions on maintaining and increasing financial performance, through an appropriate arbitration between short-term pressures and sustainable development requirements of the enterprise;
- implementation of decisions on financial performance;
- ensuring a systematic feedback regarding the measures for protection and increase of the financial performances.
Within the financial performance management, a distinction is made between the quantitative and the qualitative dimension of the performance. The quantitative dimension of financial performance refers to the absolute levels of financial returns of the resources allocated to the activity carried out by the enterprise, answering the generic question:
"How much has been achieved from the performance objectives that the company has planned in a given period of time?"
The qualitative dimension of financial performance refers, instead, to the effort or relative cost assumed by the enterprise to achieve the absolute performance obtained, answering the generic question:
"What were the consumption of specific resources (time, money, materials, labor, etc.) involved in reaching the absolute level of performance?"
Also, the management of financial performances distinguishes between the levels of performance training: the individual performance of the worker; work group performance and global organizational performance.
The paper focuses on a systematic and interdisciplinary presentation of the fundamental conceptual and methodological aspects that outline the discipline of financial performance management, being addressed not only to those who study economics, but also to practitioners in the field of economic and financial management.
Lect. univ. Dr. Roxana Arabela Dumitrascu
Assoc. Dr. Vadim Dumitrascu