FINANCIAL

MANAGEMENT
IALMBA & OMBA PROGRAMMES

V042024

1
FINANCIAL MANAGEMENT

Editor: Jelena Roborgh

Date of writing: April 2024

This study guide contains information and literature to prepare you for lectures. It also contains material
to support you in your Action Learning, Question and Answer Test and Action Learning projects. More
information about the programme can be found in the student handbook.

Copyright © Business School Netherlands 2023. No part of this publication may be reproduced and/or
published by print, photocopy, microfilm or any other means without prior written permission from
Business School Netherlands. Excluded from this are copies/prints etc. for the purpose of study at BSN
for the participant’s/student’s own use.

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1. FINANCIAL MANAGEMENT Pg 4

2. LEARNING OBJECTIVES Pg 4

3. COMPLETION OF CORE COURSE Pg 7

4. FINANCIAL MANAGEMENT PROGRAMME Pg 8

4.1 PLACE AND FUNCTION OF FM Pg 9

4.2 FINANCIAL BENEFICIARY Pg 10

4.3 DESIGNING BUSINESS PROCESS Pg 11

4.4 RISK MANAGEMENT & INTERNAL CONTROL Pg 12

4.5 VALUATION AND FINANCING OF THE COMPANY Pg 14

4.6 INVESTMENT ANALYSIS Pg 15

4.7 CUSTOMER PROFITABILITY Pg 16

4.8 STRATEGY EXECUTION, CONTROL & CULTURE Pg 17

5. OVERVIEW LITERATURE Pg 19

APPENDIX: Q&A TEST - FINANCIAL MANAGEMENT Pg 20

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1. FINANCIAL MANAGEMENT
Financial Management concerns managing the finances within an organisation, also known as
the financial housekeeping. Having the financial housekeeping in order is vital for every
organisation, both profit and non-profit. Because the survival of almost every organisation is
directly linked to its financial situation and financial performance, this discipline occupies an
important place on the agenda of every management meeting.

In both profit and non-profit organisations, the executive increasingly has to deal with
budgeting, investment proposals, costing, financial accountability, reporting, risk management,
profitability and/or performance reviews. The higher the hierarchical position, the more
management responsibility and the more finance is discussed. At operational and tactical level,
finances often have less attention, even though that is where the organisation's financial
position is greatly influenced. It is up to the manager to master a financial repertoire and relate
to various partners and employees, including within other disciplines, on financial matters. It is
also his job to contribute to financial awareness within the organisation.

Financial Management has its own language. It is not always easy to understand, let alone apply.
This core course works on increasing your financial vocabulary and framework of concepts. You
gain insight into good financial policy and the meaning thereof for your organisation. You will
also be introduced to important financial methods and techniques used in practice.

The core course is structured in such a way that the material is not only conveyed and
deepened, but also applied and discussed from a practical perspective. The core course can
be seen as a "Tour de Finance" in which the many aspects of the field are reviewed. The great
thing about finance is that there is a lot to discuss, especially in these economically turbulent
times.

2. LEARNING OBJECTIVES
MAIN OBJECTIVE FINANCIAL MANAGEMENT
By the end of this core course, you will be able to have discussions with internal and external
financial experts and be able to relate to non-financials on financial issues. From your own
position and responsibility, you can understand financial advice and place it in the right context.
You are also able to develop financial tactical policy from a strategic level and translate it into
daily operational actions.

INTEGRATION WITH PROFESSIONAL DEVELOPMENT

The following table shows how this core course contributes to achieving the final qualifications
of the programme. The themes have been developed so that the topics within them appeal to
the general learning objectives.

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 Final qualification General learning Theme
objective

Strategic policy development 1 to 9 1 to 8

DOMAIN-SPECIFIC

Improve/develop ways of working 5, 7, 8, 9 5, 7, 8

Develop policy/implement annual plan 7, 8, 9 7, 8

Entrepreneurship 2, 5 2, 5

Leadership 7, 8, 9 7, 8

Decision-making 1 to 9 1 to 8

Ethical responsibility 4 4

Collaborate 7, 8, 9 7, 8
GENERIC

Communicate 1, 6 1, 6

Analysing, processing information, solving 1 to 9 1 to 8

Learning and personal development 1 to 9 1 to 8

International awareness 1, 9 8

LEARNING OBJECTIVES FINANCIAL MANAGEMENT

The general learning objectives elaborated below are guiding for both the student and the
teacher in the development of competences in Financial Management. Guiding the student to
assess his/her own competences in the field of finance and on that basis determine his/her
own study effort before, during and after the core course. Directing the tutor to provide content
for the meetings in consultation with students. As a result, it happens that not all objectives
are worked on in the meetings. It is precisely processing the 'core material' in the Ǫ&A and
applying it in one's own professional practice that contributes to deepening financial knowledge
and enriching Financial Management competences. Active participation during the meetings
naturally contributes to this.

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The core course Financial Management contributes to the following general learning
objectives, provided with sub-objectives

1. From your position and responsibility, you can determine the impact of FM in your
organisation
• Knowledge of financial concepts.
• Understanding the administrative organisation and internal control in your
organisation.
• Knowledge of the various roles of FM in your organisation.
• Understanding the effects of whether or not those roles are deployed and
functioning correctly on the effectiveness of the organisation as a whole.

2. Based on external reporting of an organisation (profit and non-profit), you can

determine and advise on the financial health of an organisation.
• Read and understand financial reports such as balance sheet, profit & loss
account and cash flow statements, from different stakeholder perspectives.
• Understand relevant key figures and be able to derive, interpret and analyse the
right key figures from the numbers.
• Conduct a sound financial analysis of your own organisation and other
stakeholders.
• Recommend or implement strategic, tactical and operational interventions to
maintain or favourably influence these key figures.

3. Advising on the optimal asset structure of one's own organisation and that of others.
• Be able to relate funding structure, return requirement and risk profile.
• Knowledge of the wealth market and different asset structures.
• Understanding mindset, interests and criteria of the financial factors within that
asset market in relation to risk and return.
• Knowledge of key methods to optimise an organisation's capital position.

4. Translating an organisation's value creation into financial returns and impacts.

• Knowledge of the five dimensions of value creation and be able to assess them
both beforehand planning and afterwards .
• Understanding the effects due to differences in innovation within a normal and
fractal economy (disruptive innovations).
• From the five dimensions steer and measure on:
- cash value creation;
- value creation in profits (returns);
- value creation in causes (of profit).

5. Conduct or advise on effective risk management, aiming to mitigate as many of the

manageable risks as possible at the lowest possible cost.
• Be able to explain and place the concepts of 'risk management' and 'internal
control' within the own or client organisation (in terms of importance, structure
and processes).
• Be able to distinguish different risk factors at the executive level within different
organisational areas.
• Distinguish between the probability of risk and impact of that risk.
• To control risks, be able to recommend or implement effective management
solutions (preventive, curative or repressive).

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6. Interpret, assess and advise on complex investment analyses.
• Knowledge of various forms of investment (replacement, cost-saving, revenue-
enhancing, strategic).
• Be able to determine the impact of investment choice on various 'capitals' within
the organisation, including financial, innovative, cultural and psychological capital.
• Understanding the impact on image versus social responsibility of the chosen
investments.
• Be able to take into account investment risks in your advice.
• Develop knowledge of and criteria for strategic and tactical decision-making.

7. Translate the organisation's strategy into tactical and operational activities (using various
models), defining a policy-rich budget.
• Based on strategic choices of the organisation, name the CSFs.
• Setting correct KPIs that reflect a company's strategy and also its value
proposition.
• Translate CSFs into an optimal set of financial KPIs.
• Determine non-financial KPIs that do contribute to the organisation's financial
results.
• Translate a policy-rich budget into activities and provide them with a cost budget.
• Understanding plan, control, measurement and reporting models, such as the INK
model and the Balanced Scorecard (BSC).
• Assess the effectiveness of a BSC from the strategic perspective of one's own
organisation and that of others.

8. Influence organisational efficiency through cost control.

• Distinguish various cost types and cost centres within your organisation.
• Be able to explain the differences between direct and indirect costs and fixed
and variable costs.
• Know various methods of cost control.
• Understanding opportunities for your organisation's financial agility.
• Understanding how to recognise and prevent failure costs.

9. Develop financial policies taking into account cultural aspects within the organisation.
• Understanding the impact of financial decisions on the culture in the organisation.
• Knowledge of the impact of organisational culture on the effectiveness of
management control.
• Be able to recognise and analyse impact of organisational culture on company
performance.

3. COMPLETION OF CORE COURSE

The core course concludes with an individual Ǫ&A. The Ǫ&A serves both to prepare for and
formally conclude the core course. The Ǫ&A includes knowledge and research assignments in
one's own professional practice. With this test, you demonstrate the knowledge and insights
acquired in relation to the learning objectives of Financial Management. Besides content and
application objectives, taking the Ǫ&A contributes to investigative and judgemental skills. The
Ǫ&A is attached as an appendix.

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4. FINANCIAL MANAGEMENT PROGRAMME
The programme is made up of eight themes, which together form a compact and up-to-date
constitute an exploration of the field. For each theme, reference is made to the literature and
to relevant articles, which are included in the 'reader' Financial Management (see articles below
this study guide on CLASSE365). The articles correspond to the themes in this study guide. The
articles marked A are highly recommended. All articles and the basic literature together form
a basis for the body of knowledge of the discipline of Financial Management.

BASIC LITERATURE
Atkinson, A.A., Kaplan R.S., Matsumura E.M. and Young S.M. (2019). Management accounting. 5th
revised edition. Amsterdam: Pearson.

WORKSHOP
The teaching days involve plenary and subgroup work, alternating between presentation,
discussion and group activities. The programme is designed in consultation with and based on
the needs of the students. This may mean that some topics are not covered and some are
explored in more depth than others.

PREPARATION FOR WORKSHOPS

For valuable teaching days, it is important to study the literature, including the compulsory
articles, and take the Q&A Test prior to the teaching days. Your timetable will invite you to do
so well before the core course starts. For valuable class days, it is important to study the
literature, including the articles, and make the Ǫ&A prior to the workshop day. Your timetable
on the student site will invite you to do this well before the core course starts. During the
lecture days, parts of the Ǫ&A will be covered during discussions and assignments. After
attending the lecture days, you will have the opportunity to revise your Ǫ&A before submitting
it for assessment.

ADDITIONAL PREPARATORY TASK

For two themes of your choice, we ask you to find a relevant article that relates to
developments in your organisation and about which you want to form a vision or an opinion.
Prepare a short oral presentation (no PowerPoint or similar). This will be discussed in a subgroup
during the core course, followed by a plenary review. Make sure the article is available to others.
processes, this has an impact on people, processes, and organisations. We, therefore, end with
a change management perspective on process improvement and innovation.

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4.1 PLACE AND FUNCTION OF FM

LEARNING OBJECTIVES
After studying the literature and participating in class days:
• you can place the broad field of Financial Management and translate it to your own
organisation (in terms of structure and processes);
• you have an understanding of the planning and control cycle and can relate it to your
own organisation;
• understand the importance of Financial Management and its relationship with the other
core courses and disciplines in the organisation;
• you have basic knowledge of the financial language.

INTRODUCTION
The field of FM consists of several subfields, including messaging, finance and risk management.
Financial Management is an important carrier of the (financial) effectiveness of the organisation.
It is important for the manager to know how FM is organised and how it relates to other
organisational areas. Having financial language skills are essential for the manager to relate at
the right level both internally and with external parties.

TOPICS
• Role and function of FM.
• The different sub-areas of FM.
• Its relationship with the organisation's strategy and strategy execution.
• Relating to the other disciplines in the organisation.
• Planning & control cycle.
• The power of financial language within management.

LITERATURE
Book: Atkinson, A.A. et al (2019): Chapter 1.

RECOMMENDED LITERATURE
• Dijkman, A. et al (2017). The controller function in the Netherlands. MCA, 27 (2), 34-40.
• Sas, E.J. van (23-3-2017). Trends in management accounting and management control
[Link]
• Slobbe, H. (18-09-2019). Terra Incognita Control, [Link]
• Spelbos, B. & Vark, H. van (2013). The relationship between the Management Board and
Supervisory Board members. Utrecht: VTW.

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4.2 FINANCIAL BENEFICIARY

LEARNING OBJECTIVES
After studying the literature and participating in class days:
• you are aware of the concepts and can apply them correctly;
• you can explain key terms and definitions from the financial sub-areas;
• you can relate financial accounting, management accounting, investment analysis,
financing to your own organisation;
• you can perform a simple ratio analysis (financial ratios).

INTRODUCTION
In addition to financial terminology, it is important to have knowledge of the basic concepts of
the field. While the formal correct definitions within financial terminology are important, their
interpretation and correct application is at least as important. In practice, skill in correctly
applying basic financial concepts is wrongly taken as a given.

TOPICS
Definition, interpretation and understanding of terms such as:
• Liquidity & solvency
• Return & risk.
• Cost of capital
• Assets & liabilities
• Costs & revenues

APPROACH
During the teaching days, many different and frequently used basic concepts from the field are
covered interactively. Using practical examples, students are challenged to apply the concepts
apply and explain. Using theses and real-life examples, it is shown that seemingly "simple"
concepts can quickly lead to great confusion of speech and wrong conclusions.

LITERATURE
• Book: Atkinson, A.A. et al (2019): Chapters 2 and 11.
• Guzman, M. & Meeuwen, V. van (2013) Business Codes of Ethics. MCA 23 (3), 14-21.

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4.3 DESIGNING BUSINESS PROCESS

LEARNING OBJECTIVES
After studying the literature and participating in class days:
• have knowledge of the different ways to measure and manage a company's financial
performance and be able to explain them;
• you can substantiate the advantages and disadvantages of different ways of measuring
and managing performance;
• you are able to question the method of performance management within your own
organisation;
• you can interpret and format a simple Balanced Scorecard.

INTRODUCTION
Financial performance of an organisation can be measured and managed in various ways, from
accounting profit to economic value creation (value-based business steering). For the manager,
it is important to choose that methodology that fits the (strategy of the) organisation. The use
of such methodology deserves customisation to be effective per organisation.
To measure and manage, the manager has financial measures, indicators. These can be placed
in a Balanced Scorecard (BSC); a methodology to present financial and non-financial
performance measures in a logical overview from the strategy. To manage adequately, the
indicators on which (financial) performance is measured must be in line with the company's
objectives.

'What you measure is what you get'. So it is important for every organisation to think carefully
about what and how to measure and reward. People simply adapt their behaviour to what is
measured and rewarded. When performance measurement within the organisation is set up
incorrectly (or measures the wrong things in relation to the objectives), unwanted or
dysfunctional behaviour arises. For instance, the banking crisis shows that a one-sided
emphasis in the bonus system on turnover and growth leads to bringing far too many risks on
board.

TOPICS
• From strategy to policy to action.
• Performance management.
• Measuring and managing (financial) performance, different ways.
• The KPI as a measurement and steering tool.
• Balance financial and non-financial KPIs.
• Navigating the Balanced Scorecard and the INK model.
• Advantages and disadvantages of the chosen methodology.

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APPROACH
A link is made directly to one's own organisation and each is invited to examine the way of
performance management for its connection to the strategy of one's own our organisation. The
way of performance measurement and assessment in both the profit and non-profit sectors is
examined and what this means for the direction and assessment of employees and managers.

LITERATURE
Book: Atkinson, A.A. et al (2019): Chapters 7, 8 and 9.

RECOMMENDED LITERATURE
• Groot, de B. (1 May 2019) Successful dashboarding: red is stopping
• Groot, de B. (6 May 2019) From 100 KPIs to 3, [Link]
• Kaplan, R., Norton, D.(1992) The Balanced Scorecard: measures that drive performance.
Harvard Business Review, (January-February),71-79.
• Traas, L.(2005). Isn't it better for EVA to go back to paradise? Management Executive,
(November-December), 1-18.
• Waal, de A. (2013) Trust as a source of performance. MCA 23 (5) 8-13.
• Waal, de A. (2006) Budgeting in the Netherlands: state of affairs and development.
Tijdschrift Controlling, (3), 8-11.
• With de, E. & Dijkman, A. (2006) Performance measurement and assessment in Dutch
listed companies. MCA Journal of organisations in control, 16(9), 22-29.

4.4 RISK MANAGEMENT & INTERNAL CONTROL

LEARNING OBJECTIVES
After studying the literature and participating in class days:
• you can explain the concepts of corporate governance, enterprise risk management and
internal control;
• you can define and explain "risk tolerance" (risk appetite);
• you are able to discuss the relationship between risk and return and translate it to the
practice of your own company;
• you have insight into the strategic, financial, operational and compliance risks within
your own organisation, as well as the interrelationships between them;
• you can explain and argue the main measures of internal control.

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INTRODUCTION
Risks are part of doing business and an integral part of running a business. Delivering
performance simply requires taking risks, whether that is profit, excellent client care at an
acceptable cost or putting out a fire. When one wants to achieve a financial return higher than
the "safe" government bonds, one will have to accept a higher risk. "No Guts, No Glory" the
Americans then say. But recent occurrences such as the BREXIT, cybercrime, change in energy
prices, for instance, and disruptive innovations show, at the same time, that while a good
understanding of the really important risks is crucial, it is nowhere near sufficient!

For managers, risk management is part of their job. Effective risk management companies are
interested in mitigating as many of the manageable risks as possible at the lowest possible
cost.

TOPICS
• Risk management
- Risk both impact and probability of occurrence.
- Risk versus expected return.
- Types of organisational risk.
- Strategic, operational, financial and compliance risks.
- Measures to mitigate risks.
- Process to identify, mitigate and report on risks.
- Dilemmas:
1. Setting up profit expectation versus risk expectation.
2. Disclosure on results versus risks taken.
• Internal control
- Internal audit.
- Instrumentation such as segregation of duties, procedures and regulations.

APPROACH
Theory is translated into practice using examples and propositions. Students are actively
challenged to contribute and discuss their own experiences.

During the teaching days, connections are made to previous topics covered in the core course.
For example, there may be a relationship between a company's financial risks and its chosen
financing structure. Good risk management is linked to higher valuation. A company's risk profile
feeds into the various methods of performance management.

LITERATURE
• COSO, Enterprise Risk Management: an integrated framework (ERM), Management
Summary, September 2004.
• Vries de, B.(2006). How does the Netherlands fare? Corporate governance systems in
Europe mapped. Good Governance,(1),26-36.
• Poelloe, S., Brink van den, G.J. (2009). Eat an elephant in small pieces: scenario analysis
for operational risks. The Accountant, (June) 46-50.
• Haex, P., Prinsenberg, M. & Niekus, M (2014). COSO, revision as flywheel for reorientation
of internal control, Spotlight 21 (1) 48-52.

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RECOMMENDED LITERATURE
• Paape, l (2012) Internal auditing: evaluating and improving internal control in
organisations. MCA 22 (5) 29-31.
• Bakker, B. (2013) Less maths, more stories. Magazine Accountant (12) 12-15.

4.5 VALUATION AND FINANCING OF THE

COMPANY

LEARNING OBJECTIVES
After studying the literature and participating in class days:
• you can name the different financing options and their advantages and disadvantages;
• understand the funding structure (and costs) of an organisation, be able to translate it
substantiated to the practice of one's own organisation and convey it to another;
• you can explain and perform a business valuation.

INTRODUCTION
Every organisation faces the question of what sources can be tapped to finance its activities
and investments. This financing issue plays out in both the profit and non-profit sectors. To be
an interesting party for others to finance, the value of the organisation is very important. The
vitality and resilience of a company is reflected in its financial valuation. This applies not only
to large listed companies. The value of the company is also important for private companies;
especially the development therein. This concerns not only the value in the context of an
acquisition or bank financing.

An exercise to establish the value of a company often leads to insights about the strategic and
operational drivers of that financial value. That insight can in turn be used in the context of
initiatives in areas such as process improvement (operational excellence), adjustments to
performance appraisal methodology or allocation of scarce resources. The value of a valuation
exercise is that it forces the manager to look at the organisation through the eyes of an external
investor. And that external investor sometimes sees different things than internal stakeholders.

TOPICS
• Funding and funding structure.
• Types of funding.
• Determine optimal financing structure.
• Financing costs versus the chosen financing structure.
• Relationship between company value and financing structure.
• Funding in non-profit organisations on government retreat.
• Understanding the valuation of assets and the risks faced by the organisation.

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APPROACH
This theme links to the knowledge and skills acquired in the previous themes.

LITERATURE
Book: Atkinson, A.A. et al (2019) Chapter 12.

RECOMMENDED LITERATURE
• Bakker, J., Houten van, T.(2009). Will you invest or not? Controllers magazine, (June/July)
34-36.
• Bouwens, J & Verriest, A (2017). The information value of Ebitda and earnings. MCA
27(3)14-22.
• Brounen, D., Jong de, A., Koedijk, K. (2005). Theory and practice of corporate finance:
investment selection. MAB, (May) 229-237.
• Kleyngeld, J. (13 -12-2017). 5 dimensions of value creation (FM Club financial analysis).
[Link]
• Finch, D., Thibeault, A. (2010). Securization: back to basics. Financial Executive, (48) 16-21.

4.6 INVESTMENT ANALYSIS

LEARNING OBJECTIVES
After studying the literature and participating in class days:
• you are able to carry out an investment analysis;
• you can present the investment analysis substantiated to stakeholders;
• are you familiar with 'real options';
• you can defend the importance of flexibility in the context of project management for
your own organisation.

INTRODUCTION
Important strategic decisions often involve substantial investments. Through an investment,
the organisation puts money into assets for a long time. So it is very important that the decision
to invest or not is done carefully. The conditions under which it is invested also need to be
determined. Proper financial analysis under different scenarios is part of such careful
consideration.

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TOPICS
• Assess investment proposals from a financial perspective.
• Take into account both expected returns and potential risks.
• Engage different scenarios (what-ifs) to establish final choice.
• 'Options' and the potential value of building options into
• investment proposals (= flexibility) Risk management by building in preventive Flexibility
Options, such as the right to unilaterally terminate a contract mid-term when economic
conditions are bad (although usually costing money, can in times of uncertainty make a
lot more money or avoid bankruptcy).

LITERATURE
• Book: Atkinson, A.A. et al (2019) Chapter 11.
• Broek van den, S., Blommaert, A. (2009). Recipe for better investment decisions: real
options a practical approach. The Accountant, (July-August) 44-47.

RECOMMENDED LITERATURE
• Hillier, D., Ross, S., Westerfield, R. & Bradford, J. (2021) Fundamentals of Corporate
Finance.

4.7 CUSTOMER PROFITABILITY

LEARNING OBJECTIVES
After studying the literature and participating in class days:
• you understand the principle and importance of customer profitability;
• you know how it can be determined using activity-based costing;
• you can create a segmented model along which the customer profitability within a
company can be determined.

INTRODUCTION
Not products or services, but a company's customers are the sources of profit. Research shows
that within most companies, profitability per customer varies widely and often unexpectedly.
Within many companies, large groups of customers contribute little or nothing to profitability.
When profitability is measured along the axis of economic profitability, it turns out that on
average 20% of clients even destroy value outright. Even in the non-profit sector, it turns out
that the costs spent across different client groups often vary widely, while little or no allowance
is made for this in the fee structure. Understanding profitability (or costs) by customer segment
can lead to strategic rethinking of the product and service package (and the service provided)
and/or pricing it. This can thus be a catalyst for innovation.

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TOPICS
• Customer profitability.
• The different methodologies to determine customer profitability.
• Differences in profitability by customer segment.
• Solutions and obstacles in determining and improving customer profitability.

APPROACH
This theme brings together all the knowledge and insights from the previous themes. It contains
the elements needed to determine profitability by customer segment. Using examples from
the group, several practical cases will be developed.

LITERATURE
• Book: Atkinson, A.A. et al (2019): Chapters 5 and 6.
• Dhar, R., Glazer, R (2003). Hedging Customers. Harvard Business Review, (May) 86-92.
• Portela, S., Menezes, R. (2011). On the use of discounted cash flow method on customer
valuation, International Journal of latest trends in Finance & Economic Sciences, 1 (1) 12-
15.
• Slobbe, H. (2015, 28 January). Lean Education. [Link]

4.8 STRATEGY EXECUTION, CONTROL &

CULTURE

LEARNING OBJECTIVES
After studying the literature and participating in class days:
• have an understanding of organisational culture and how it can be typed and measured;
• know the relationship between strategy, strategy execution and organisational culture
and be able to discuss it;
• you can explain the impact of culture on the effectiveness of management control and
company performance.

INTRODUCTION
The organisation's management control system (MCS) contains several tools discussed in
previous themes. Research shows that the effectiveness of management control is significantly
related to organisational culture. Organisational culture is the main driver of successful strategy
execution. Organisations use management control to influence employee behaviour in such a
way that their decisions and activities contribute to strategy execution. The MCS is thus aimed
at influencing behaviour in line with the organisation’s strategy. For the manager, it is not the
system or the instrument in itself that matters. What matters most is its effectiveness

17
In the wake of the banking crisis, for instance, several investigations have been conducted into
the backgrounds and causes. All these investigations show that, in most cases, the real reason
for the failure of a number of large banks lay in the prevailing culture within these institutions
rather than in flawed systems, procedures or models.

TOPICS
• Organisational culture versus performance and results.
• Types and measurability of culture.
• MCS and content and integration of tools.

LITERATURE
Book: Atkinson, A.A. et al (2019) Chapters 1, 8 and 10.

RECOMMENDED LITERATURE
• Groot, de B. (4 June 2019) From good financial to good leader
• Hofstede, G.(2011). Dimensionalizing Cultures: The Hofstede Model in Context. Online
Readings in Psychology and Culture, Unit 2, Article 8, 1-26.
• Simons, R. (1995) Control in an Age of Empowerment. Harvard Business Review, March-
April, 81- 88.
• Slobbe, H. (04-09-2019) Agility: the new Cost Accounting
• Slobbe, H. (11-09-2019) Guts, Knowledge and Communication, [Link]
[Link]
• Slobbe, H. (28-08-2019) Prevention is better than cure, [Link]
• Steensma, H. (2006) Trust: justice and group processes, SIGMA, (6) 4-9.

1 "In many cases, the true issues were more matters of culture than of the specific
deficiencies of models or systems, although those existed as well." [IIF Report of the Steering
Committee on Implementation Reform in the Financial Services Industry, December 2009]

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5. OVERVIEW LITERATURE
• Atkinson, A.A., Kaplan R.S., Matsumura E.M. and Young S.M. (2019). Management
accounting. 5th revised edition. Amsterdam: Pearson
• Bakker, B. (2013) Less maths, more stories. Magazine Accountant (12) 12-15.
• Bakker, J., Houten van, T.(2009). Will you invest or not? Controllers magazine, (June/July)
34-36.
• Bouwens, J & Verriest, A (2017). The information value of Ebitda and earnings. MCA
27(3)14-22.
• Broek van den, S., Blommaert, A. (2009). Recipe for better investment decisions: real
options a practical approach. The Accountant, (July-August) 44-47.
• Brounen, D., Jong de, A., Koedijk, K. (2005). Theory and practice of corporate finance:
investment selection. MAB, (May) 229-237.
• COSO, Enterprise Risk Management: an integrated framework (ERM), Management
Summary, September 2004.
• Dhar, R., Glazer, R (2003). Hedging Customers. Harvard Business Review, (May) 86-92.
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APPENDIX: Q&A TEST - FINANCIAL

MANAGEMENT

GUIDELINES AND INSTRUCTIONS

GOAL
This test determines your ability to convincingly articulate your acquired understanding of
Financial Management theory in relation to both the learning objectives formulated by BSN and
your own organisation.

ASSESSMENT
A correct and complete answer to the questions is central to the assessment. For those
questions that require a link to practice, the extent to which the correct and relevant theory
has been consulted is also taken into account. It is important that this theory has been
integrated in the answers in a way that demonstrates insight and can be proven.

The ten questions are divided into sub-questions, which touch the core of the subject of
Financial Management in unequal degrees. The amount of thinking and/or research varies per
question. Each question has a weighting, which is placed between brackets next to the question.
Adding up the scores leads to the mark for this test, a maximum of 100.

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The result (mark) for this test cannot be compensated with results from other tests and must
therefore be at least 55. Should the mark be lower, you will be expected to revise (parts of) the
test and resubmit it for assessment.

APPROACH AND SCOPE

First, consider all the questions and make a rough estimate of the total amount of work.
Compile the answers into a neat and easy-to-read document. Previous tests asked you to copy
the questions verbatim. In this Ǫ&A, we ask you to write down the number of the question and
the sub-question and add your own gist of the topic there.

Size: maximum 4000 words for all answers combined. If this guideline is exceeded, the
assessor will not consider the Ǫ&A. You will then receive it back for adjustment.
The fewer words you need to answer the questions in full the better. The nature of some
questions (possibly) requires answers with more text. Balancing the amount of text allowed
across all answers is your own responsibility.

PROCESSING LITERATURE AND ORGANISATIONAL

CONTEXT
Since you are free to study the literature extensively and also discuss it with others before
formulating an answer, it is up to you to decide which literature is most appropriate to relate
your answers to.

As mentioned under the heading 'assessment', a number of questions require a projection to

the situation in your own organisation and/or your opinion about it. In answering these, a clear
link to theory is expected. In other words, descriptions and opinions should be accompanied
by a relevant and traceable theoretical foundation.
If the projection to your own organisation is not possible (e.g. the data are confidential or the
question does not fit the size of your organisation), you can describe the situation as it applies
to an (inter)national profit or non-profit organisation. For this, you can use, for instance, annual
reports, audits or public analyses as sources. Perhaps you can use an organisation in your
network as reference material.

Furthermore, it is also up to you to determine the way in which your acquired knowledge and
insight are best expressed. In other words: you are free to use (self-designed) models, diagrams
and so on or, for example, relevant quotations, as long as they are correctly referenced and
applied in a limited way (see the general study guide for guidelines on the use and reference of
sources).

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QUESTIONS

QUESTION 1 (7.5 MARKS)

Financial Management is a broad field. Different roles and functions of Financial Management
can be identified within companies and organisations. Name at least three roles and functions
of financial management, as recognised in theory, and describe how they are performed within
your organisation.

QUESTION 2 (7.5 MARKS)

Describe the P&C cycle in your organisation and make a reasoned case for what you think is
right about it and what you think is wrong about it and what would you like to change.

QUESTION 3 (15 MARKS)

A. In your organisation, which financial ratios best reflect the health of the business?
B. Indicate which norm values of the mentioned ratios are considered healthy within
your company.
C. How do you assess your business using these norm values as a reference?

QUESTION 4 (10 MARKS)

A. Which non-financial ratios can be used within your company to increase the health
of the organisation? Use the Balanced Scorecard for this purpose.
B. How are strategic goals translated into performance indicators? Describe the core
theory and then whether it is adequately applied in your organisation.
C. Work out two financial KPIs and two non-financial KPIs that do affect financial health.

QUESTION 5 (10 MARKS)

A. What are the three main risks that threaten your organisation?
B. Describe how each of these risks is combated within your organisation. For each
control approach, argue whether it is preventive, repressive or curative.
C. Does your organisation have corporate governance in place? If yes, describe how it
is set up, if no, describe how you would set it up.

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QUESTION 6 (12.5 MARKS)
A. Determine the financial value of your business using the yield value method, the
intrinsic value method and the net present value of future cash flows. For non-profit
organisations, this valuation generally makes little sense. If applicable: establish
whether there are examples in your industry of 'commercial' companies targeting
the same audience. Describe the revenue model and value proposition of these
companies.
B. Determine whether your company or organisation is optimally financed. Use funding
structure theory to do this.

QUESTION 7 (10 MARKS)

A. Within your organisation, how are investments assessed from a financial
perspective? What ratios are used?
B. Describe a recent investment proposal within your organisation and for what
financial reasons this proposal was or was not adopted.

QUESTION 8 (12.5 MARKS)

A. Describe to what extent there is insight within your organisation into the results
achieved per customer and customer group. Both the income and expenditure side
should be described. If this insight is lacking, indicate how this insight into costs and
benefits per customer and customer group can be achieved.
B. Using the CANVAS business model, indicate how within your organisation the
relationship between customers and the value proposition can be established. Also
indicate the relationship with the revenue model and cost structure.

QUESTION 9 (10 MARKS)

A. Describe the relationship within your company between the organisational culture
and the planning and control cycle. To what extent is there an optimal balance
between this culture and strategy implementation?
B. Describe the difference between control and control and apply this difference to
your organisation. What do you want to see?

QUESTION 10 (5 MARKS)
Reflect on making this Ǫ&A and following the core course Financial Management. In a short and
concise report, indicate your learnings in terms of your own competences, vision and
functioning with regard to the learning objectives in this study guide. Also indicate what needs
further development and how you will tackle this. Limit yourself to three to four learning
objectives.

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SUBMISSION
• On the front, include name, set number, date and version number of the key (see top
right).
• Save (preferably) as a PDF and email it to your Registrar for review.
• The submission deadline is listed in your timetable on the student site.

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