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1 FM FUNCTION - Coggle Diagram
1 FM FUNCTION
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agency relationship
A description of the relationship between business owners (eg shareholders) and those acting as agents on their behalf (eg managers), expressing the idea that managers act as agents for the owners, using delegated powers to run the company in the owners’ best interests.
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goal congruence
The alignment between the objectives of agents acting within an organisation and the objectives of the organisation as a whole
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value for money
This can be defined as getting the best possible combination of services from the least resources, which means maximising the benefits for the lowest possible cost.
corporate strategy
long-term plan for how an organisation intends to compete, and which markets it intends to compete in.
corporate objectives
overall aims of an organisation that should result from the successful implementation of its corporate strategy.
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- PURPOSE OF FINANCIAL MANAGEMENT
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4.CORPORATE OBJECTIVES
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2.social responsibility
This might include environmental concerns such as pollution and sustainability, and also treatment of employees and suppliers
Especially in an economic recession, the short-term survival of a company is likely to be in the best interest of shareholders
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- maximisationof short-term profits at e expense of long term profits = short termisim
by cutting back on investments – to ensure short-term profit targets are met and to ensure profit-related bonuses are paid
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- WEALTH OF THE SHAREHOLDERS IN A CO.
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- market value of the shares
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