FM Unit 1.

6 Notes
1. Maximize Current Value: The primary goal here is to enhance the current value of the company's assets. This
involves strategic decision-making to optimize the utilization of resources and investments. For instance,
implementing efficient inventory management systems can reduce holding costs and increase the overall value of
current assets, positively impacting the company's financial health.

2. Maintain Growth: Sustaining growth is essential for long-term success. This could involve expanding into new
markets, launching innovative products, or improving existing services. A classic example is Apple's continuous
innovation and expansion into different product lines, which has contributed significantly to its sustained growth
over the years.

3. Maximize Profit: Profit maximization is a key objective for any business. This involves increasing revenue and/or
reducing costs. For example, a manufacturing company might explore cost-effective production methods to boost
profit margins, ensuring that the company remains financially robust and competitive.

4. Minimize Cost: Cost minimization is crucial for profitability. This can be achieved through operational
efficiencies, negotiating better supplier deals, or adopting new technologies to streamline processes. Amazon's
focus on operational efficiency, automation, and bulk purchasing exemplifies successful cost-minimization
strategies.

5. Avoid Bankruptcy: Financial stability is paramount, and avoiding bankruptcy is a critical goal. Prudent financial
management, debt control, and timely decision-making are essential. Lehman Brothers' bankruptcy in 2008 serves
as a stark reminder of the catastrophic consequences that can result from inadequate risk management and
unsustainable financial practices.

6. Controlling: Maintaining control involves overseeing operations to ensure they align with organizational goals.
For example, a retail chain might implement inventory control systems to minimize stockouts, prevent
overstocking, and optimize the supply chain, ultimately enhancing overall operational control.

7. Reporting: Timely and accurate reporting is crucial for informed decision-making. Robust financial reporting
mechanisms allow stakeholders to assess the company's performance. Companies like Microsoft regularly release
comprehensive financial reports, providing transparency and aiding investors and analysts in making informed
decisions.

8. Planning: Effective planning involves setting realistic goals and developing strategies to achieve them. Companies
engage in strategic planning to navigate market changes. An example is Google's strategic planning for product
development and market expansion, ensuring sustained relevance and competitiveness in the dynamic tech
industry.

Bullet points of the above

 Maximize Current Value:

 Optimize resource utilization.
 Strategic investment decisions.
 Example: Implementing efficient inventory management systems.
 Maintain Growth:
 Expand into new markets.
 Innovate products and services.
 Example: Apple's continuous innovation and expansion.
 Maximize Profit:
  Increase revenue and reduce costs.
 Example: Implementing cost-effective production methods.
 Minimize Cost:
 Operational efficiencies.
 Negotiate better supplier deals.
 Example: Amazon's focus on operational efficiency and automation.
 Avoid Bankruptcy:
 Prudent financial management.
 Debt control and timely decision-making.
 Example: Lehman Brothers' bankruptcy lessons.
 Controlling:
 Oversee operations for goal alignment.
 Example: Implementing inventory control systems.
 Reporting:
 Timely and accurate financial reporting.
 Example: Microsoft's comprehensive financial reports.
 Planning:
 Set realistic goals and develop strategies.
 Example: Google's strategic planning for product development.

 Risk Management:
 Proactively managing risks.
 Example: Identifying and mitigating potential threats.
 Innovation:
 Fostering a culture of innovation.
 Example: Encouraging employees to contribute creative ideas.
 Corporate Social Responsibility (CSR):
 Contributing to societal well-being.
 Example: Initiatives supporting environmental sustainability.