1.

1 Introduction
Financial management refers to the efficient and effective management of money (funds) in
such a manner as to accomplish the objectives of the organization. It is the specialized function
directly associated with the top management. The significance of this function is not seen in the
'Line' but also in the capacity of 'Staff' in overall of a company. Financial management typically
applies to an organization or company's financial strategy, while personal finance or financial
life management refers to an individual's management strategy. It includes how to raise the
capital and how to allocate capital, i.e. capital budgeting. Not only for long term budgeting, but
also how to allocate the short-term resources like current liabilities. It also deals with the
dividend policies of the shareholders. The concept of global crisis can be in meaning of deviation of
common balance situation of organization’s relation with global environment in manner that they have to
be aware of it. The financial crisis was created due to a variety of reasons. The majors Studies show the
causes for the crisis due to the inappropriate structure of the country's or regional economic, where the
crisis started, especially in some components as a chronic and long-term deficit, long-term deficit, the
capital market and inefficient non-transparent. The second theories state the main reason of crisis the
effect of payments balance long term budget shortage inefficiency and unclear capital market. They believe
that exogenous variables which spreads the crisis i.e. Due to comprise of financial markets and the
integration of the crisis in the country in crisis that to other countries, are effective in crisis creation. Both
groups are agreeing to factors stressed the importance of the financial and economic structure and its
effect on the aggravation of the crisis or discounts. So identifying the factors that have created financial
crisis and study the resolutions adopted by the countries to prevent a crisis or stop and improve, it can
predict the future crises or taking the measures necessary after it to reduce its negative effects. Now day’s
world perceived that situation of financial statements in enterprises are critical and companies where most
of them escaped from primary effect of credit crisis observe that to make their required capital has been
more difficult. If we add increasing prices and decreasing demand to this difficulty, we can find out that why
the role of financial managers and need of changing of perception of share’s owners from their traditional
role into a financial engineer thinker will rapidly day-by-day. The objective of this paper is to study the role
of financial managers in recent global financial crisis, challenges & opportunities in front of financial
managers of enterprises in different industries. In regard to existence, circumstance of this crisis, and
changing role of financial managers is discussed. The obtained results of the accomplished studies
indicates that global recession comprises the opportunities such as: access to cheap financial sources -
accessing possibility to more liquidity - stock price stabilization - stock better performance - the possibility of
communicating development with other efficient global stock exchange - making pattern from foreign
enterprises. The global crisis also involves the challenges alike: informing power development and
information technology -transparency in produced information in to stock market -the necessity of
observance of accepted accounting standards - the existence of more analyzers in market and generally it
comprises increases quality level of decision making for financial managers in market. The results of this
research is used for financial and economical politicians and decision makers in capital market, investment
companies, users of security exchange market, insurance companies, top managers and also financial
managers of various industries. Therefore, in this paper has been tried to identify the fundamental
challenges in front of financial managers and with study of performance of financial manager’s various
duties in financial crisis, the relation quality among these areas will be analyzed.

1
Undoubtedly examine of potential of every of theses area can clarify the basic challenges in strength and
weakness of financial manager’s performance. Because the main challenge of financial managers in any
organization can be qualitative empowerment and promotion of financial managers in financial area for
continuous solving of unexpected events such as recessions.

1.2 Financial Manager’s Performance in Financial Recession

Role of financial managers have been involved abundant changes over time in organization. The financial
techniques have been complicated fundamentally in most of companies with several objectives
activity that some of them working in international level whereas others doing business at same time with
so many organizations so all of these organizations need to financing their required financial resources.
Therefore it is necessary that financial managers be known about capital market conditions and the
method of keeping asset and clarifying the method liabilities combination budgeting, financing,
investment project evolution, planning for marketing strategies all are important role that the financial
managers undertaking nowadays. The today's global economic crisis, bad condition and complicating
nature of enterprises have created the competitive area among financial managers. Therefore, company
will give the administrating affairs to those who can able to protect and defend of enterprise’s credibility in
bad financial and credit conditions. The new performance of financial managers can be expressed in
following categories. Role of Financial Manager in Enterprise’s Leadership Financial Managers discharge
key role in leadership of enterprises, and they will be enterprise’s main helmsmen practically along with
managing directors. Axial role of trading and work model scenarios designing, and activities and strategic
programs compilation of enterprise will be in financial managers, undertaking. The following two important
events will effect on output and future of enterprise (Hamidi, 2007): Planning and strategic management on
resources in direction to value creation for all users will be put in enterprises, work order. Strategic
management forwarding responsibility on resources and enterprise’s goals certainty will be in leadership
team undertaking of organization. Financial managers will have axial and active role in leadership of
organization and therefore they should necessarily have expand and aware vision to concept of strategic
management on sources and apply it.
Due to competitive aggravation and contortion of work and business environment the risk of enterprises
have been increased and will be and the permanence and continual activities of enterprises will be
faced to ever-increasing dangers. Financial managers at present are member risk committee in most of
companies and some time they are undertaking the main responsibility of risk management dep. of
enterprise. The financial management will undertake larger duty and role in modeling and future probable
risks evaluation, determine effect of kinds of risk effect on progressing an occurrence of strategy
and determining profit and analyzing and reporting risk to interested parties

2
1.3 Shareholders
The decision made by financial managers about profit apportion is their most important duties, in whole of
the world the profit apportion objective is serious and key factor and decision according to board of
directors of companies on the bias of liquidity considerations and surplus fund and on market reasoning.
However, in some countries, such kind of decisions is under Assembly’s responsibility and those individuals
who are not much familiar with enterprises, investments and liquidity position will make decisions about
it, so it is of financial managers association responsibility to remove such obstacles because the
decision-making about profit apportion by shareholders is not correct method. The stock's value are less
than logical value per share in some of investing enterprises which are present in stock market so to solve
this issue is duty of financial managers. Financial managers Communication with shareholders will be
close more rather more variety and information expedition which financial managers will give to
shareholders and in general to capital market in feature will not comparable with today, Providing
profitable information about value creating of enterprise for shareholders and analyzing that, feature
income delivering potencies reflection of enterprise and or adventure and risk which threat
enterprise, will propound financial managers as most effective informer to shareholders and capital
market .

1.4 Confronting with Recession

As it has been already indicated in above said matters regarding global financial crisis. Its consequence
and the performance of financial managers at the time of recession in various areas were analyzed and
evaluated subsequently and it was stated that economical stagnancy and present global financial crisis
causes the increase of financial manager’s role in enterprises. Moreover, in compare to past years the
financial managers have been more participated in strategies completion and risk management (Liaquat,
2009). Therefore here in this part the actions that has taken place and the recommended solutions stated
and therefore in beginning, the most factors of recession confronting will be indicated which are
used strategies by financial managers in a control effective and role plying they are as follows:  Reduction
of interest rate.  New liquidity infusion to financial institutes.  Purchasing of problem financial assets. 
Financial policies such as tax reduction and increase in construction costs. So in this regard, financial
managers using the necessary financial tools should assist the top managers of enterprises in optimum use
of internal as well as external financial resources. Financial managers instead of focusing on companie’s
strategy, should do for processes that through them the organization could provide their sources in suitable
way and since the knowledge and power have been dispersed the financial managers should be able
and urge that be effective on strategies of organization. In some cases, his judgment of financial
managers and their analysis for arbitration regarding judgment is more important that figures expressed.
The prosperity is that we empower financial managers even with limited authority so that they can be
able to have innovation, creativity, and providing suitable innovation in financial amazement and crisis.
Financial managers estimate the probability of financial crisis occurrence with use of financial techniques
such as financial ratios and breaks even point through combination of group of these techniques and with
use of statistical multiple variables. When a set of financial variables will be considered for financial
recession forecasting, the choosing of a suitable statistical method for determining of financial recessions
and insolvency is very important.

3
1.5 Risk management
Improving risk management tools and practices are among the top priorities for institutional investors in the
wake of the recent global financial crisis. In this article, we use the challenges posed by the crisis to
highlight the strengths and weaknesses of common risk management tools. We also outline key risk
management principles, introducing a holistic approach to illustrate how managers might best structure
their risk management efforts. Risk taking is at the core of active asset management. It is what enables
active managers to pursue above-benchmark performance and is the flip side of opportunity and reward.
Active managers with long-term, successful track records are also often effective risk managers. If the risk
management process fails, managers may find it harder to meet their performance objectives over the
course of a full market cycle. Risk management is broadly defined as the measure of the degree of
uncertainty about an outcome of an action. There are many types of risk and they change constantly. As
investors, it is our responsibility to take full charge of measuring, monitoring, and managing risk. These
tasks cannot simply be outsourced to a quantitative model without understanding the context of the current
environment. They require thoughtful analysis by portfolio managers in collaboration with risk management
professionals familiar with the strengths and limitations of risk models.
today, the impact of the financial crisis is still being felt across the globe, and financial institutions are
adjusting to the ‘New Norm’. The financial services landscape today comprises of, namely, increased
regulation and intrusiveness by regulators and governments on the financial services sectors; stock
markets around the globe experiencing increased volatility and loss of wealth are still being observed;
consumer confidence in financial services has fallen and a general backlash at financial services
companies is causing a public relations debacle for Wall Street; firms need to be able to manage the
increasing cost of doing business, without sacrificing the customer experience; much of the cause of the
financial crisis has been due to an unwillingness of banks to lend to each other, which froze liquidity in the
market; and many financial institutions are still reeling from the fallout of the financial crisis, and will
continue to do so in the short to medium term. Moving forward, it is important for greater linkages between
the real and financial economies. The challenge for governments and regulators is to bring the two closer.
Effective regulation and supervision supported by strong macroeconomic policies and strategies are
essential in linking the two together. To facilitate this, the Basel III reforms were introduced by the Basel
Committee on Banking Supervision. The Basel III requirements intend to strengthen the resilience and
soundness of the banking system against systemic risks, which have implications on banks and risk
management. This regulation has inadvertently caused the cost of capital and liquidity to increase.
In light of this New Norm, risk management in financial institutions needs to evolve and focus on the
following key areas, namely:

 Establishing an appropriate risk appetite is essential to link the risk strategy of the firm to its
business and strategic objectives;
 Balancing the risk reward dynamics more effectively - Banks’ risk management needs to strike a
balance between its capital protection objectives with its profit driven capital development
objectives;

4
  Enhancing the risk governance through more effective risk managers and risk management
function - The financial crisis has underscored the importance of a strong risk governance
structure which is independent and able to give challenge to the business; and
 Inculcating a stronger risk culture within the organization - Strong and effective risk management
is driven from a strong ‘tone from the top’, and this is evident in firms with a strong ‘risk culture’

1.6 Strategies
The several alterations that have been created in the recent years in the commercial environment have
compelled the economic units to face expansive challenges. One of these challenges is the intensification
of global competition, and the increase in the number of companies has manifested this fact that the
managers for the increasing profitability should make use of the existing opportunities in the international
markets. Likewise, the technology development, has forced many institutions to use the new technology
that has made the possibility of mass production possible in a short span of time. With the use of the
strategic financial management the progress of an organization from the viewpoint of managers’
performance and financial growth of an organization will be possible. An emphasis on the customer
orientation, the evolution in the management of the organizations, the timely delivery of products and
services and innovation in the production, are the other important cases that the managers should pay
attention to them. On the other hand, the social, political and cultural changes has increased the flexibility
and adaptation abilities of the institutions, and consideration of the organizational external factors and
production of goods or conduction of the services in accordance with the needs of the customers in the
global scale, has achieved much importance. The execution of strategies necessitates that an organization
considers its annual goals, determine the policies, creates a motivation in the staffs and assign the
resources in a manner that the formulated strategies are implemented.
The assessment of strategies – the strategies should be assessed since the success of today cannot
guarantee tomorrow’s success. Prior to anything else, the strategic management is an excellent task
management, because the success if fully related to the future of an organization and the effort in
specification of the context has an aim to the orientation of the main tasks of the managers. He thinks that
in the specified periodic horizon, what will be the organization and for acquisition of these results which
tasks should be carried out. The financial strategies of an organization are in association with the other
strategies and the success of an organization is in the shadow of the favorability of these strategies.
The organizations in the environment that they are nestled have a correlation and interaction within one
another. Whatever changes takes place in an environment the organization also accepts an effect from it.
For this reason, the strategic management will chase the environment from proximity. The financial
management as well as the strategic management is both the complete interdisciplinary methods that
integrates into a very useful method and leads to strategic financial management. The strategic financial
management has not been accepted in an expansive manner since it is specified with a wide range of
methods or has been limited to the special methods. The strategic financial management specifies the
goals, decisions and the activities in an organization and up to the lowest levels determine the initiation
movement point for each person. Overall the financial strategic of an organization is codified through the
stages that includes the state of how to meet the customers’ preferences, the allocation of resources and
the execution of new strategies for the customer satisfaction, the evaluation of performance and the
assessment of successes and failures due to the business. So, it seems that the financial strategy is the
most oriented strategy of an organization therefore the interaction of it with other organizational strategies
are encountered with high importance.

5
1.7 Conclusion
With structural and principle changes that have been appeared in business conditions, it will be continued,
and the basic changes have been created in of user’s expectation of financial reports, the financial
manager’s role faces with significant changes and their role enjoy of more complexity and more importance
consequently in such situations financial managers as vigilant conscience of Journal of Fundamental
and Applied Life Sciences.
Financial stability is important for the global financial system. This world has seen a number of financial
crises since the Great Depression of 1929. However, the recent financial crisis of 2008-09 was the worst
since the Great Depression. Many governments around the world had to save financial institutions from
further negative consequences by providing bailout packages. Th e main reasons of the financial crisis
were the lack of strong financial and banking regulations, excessive use of financial derivatives, inadequate
response from the market regulators and ignoring of early signs of the financial crisis. This paper also found
that Islamic banking and finance is a young viable financial system whose current asset size is above $2.1
trillion. T is system is based on ethical values and principles, and uncontrolled use of financial derivatives is
prohibited. Investors are strongly encouraged to engage in business activities backed by real economic
assets. Th e Islamic financial system also suffered from the financial crisis, albeit indirectly, when the
overall global financial system was in distress.

6
1.8 References
https://www.researchgate.net/publication/
272789502_GLOBAL_FINANCIAL_CRISIS_AND_ROLE_OF_FINANCIAL_MANGERS_IN_RIDDANCE_S
TRATEGIES.
Indian Journal of Fundamental and Applied Life Sciences ISSN: 2231– 6345 (Online) An Open Access,
Online International Journal Available at www.cibtech.org/sp.ed/jls/2014/04/jls.htm 2014 Vol. 4 (S4), pp. 93-
101/Saremi and Moinnezhad .
https://www.global-economic-symposium.org/knowledgebase/the-new-global-financial-architecture/
proposals/the-evolution-of-risk-management-resulting-from-the-global-financial-crisis.
https://www.researchgate.net/publication/
303040544_Strategic_Financial_Management_Review_on_the_Financial_Success_of_an_Organization.