Unilever limited transforming the finance function

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Unilever limited transforming the finance function

  1. 1. Unilever LimitedTransforming the financefunction
  2. 2. ROLE OF FINANCE DEPARTMENTFinancial Management means planning, organizing, directing andcontrolling the financial activities such as procurement and utilizationof funds of the enterprise.SCOPE:•Investment decisions includes investment in fixed assets (called ascapital budgeting)•Financial decisions - They relate to the raising of finance from variousresources which will depend upon decision on type of source, period offinancing, cost of financing and the returns thereby.•Dividend decision - The finance manager has to take decision withregards to the net profit distribution.2
  3. 3. INTERFACE OF FINANCE FUNCTION WITHOTHER FUNCTIONAL AREASFinancial Management and EconomicsFinancial management also uses the economic equations like money valuediscount factor, economic order quantity etc.Financial Management and AccountingAccounting records includes the financial information of the business concern.Financial Management and MathematicsEOQ, discount factor, time value of money, PV of money, ko, capital structuretheories, dividend theories, etc are used as mathematical and statistical tools andtechniques in the field of financial management.Financial Management and Human ResourceAllocates the finance to the HRD as wages, salary, remuneration, commission, etcFinancial Management and MarketingFinance department is responsible to allocate the adequate finance to themarketing department. 3
  4. 4. OBJECTIVES OF FINANCIALMANAGEMENTGoal Objective Advantages DisadvantagesProfitmaximizationLargeprofits1. Easy to calculate profits.2. Easy to determine the linkbetween financial decisions andprofits.1. Emphasizes the short-term.2. Ignores risk or uncertainty.3. Ignores the timing of returns.4. Requires immediateresources.WealthmaximizationHighest shareprice ofcommonstock1. Emphasizes the long term.2. Recognizes risk or uncertainty.3. Recognizes the timing ofreturns.4. Considers stockholders`return.1. Offers no clear relationshipbetween financial decisions andstock price.2. Can lead to managementanxiety and frustration.3. Can promote aggressiveand creative accountingpractices.4
  5. 5. Finance Journey: FinanceTransformation5CFO of your own OpCoDotted Line to CFO“Beancounters”9000 Finance peopleFocus on TransactionsTransactions at every siteOne Global Finance FunctionSolid Line to CFOPartners in Value Creation5500 Finance peopleFocus on Decision SupportShared Services / Outsourced
  6. 6. CFO OF UNILEVER-Jean-Marc Huët•CFOs are expected to play fourdiverse and challenging roles:steward, operator, strategist andcatalyst.•CORE ELEMENTS•Trusting the numbers•Providing insight•Getting your house in order•Funding organizational strategy•Developing business strategy•Communicating to the externalmarketplace.At Unilever he is responsible for Financial Reporting, Finance in theRegions, Tax, Treasury, Pensions, Mergers & Acquisitions,Investor Relations and Information Management.6
  7. 7. REFERENCE•http://www.unilever.com/careers/careerchoices/finance/ Accessed @23/10/2012 17:30•http://www.journalofaccountancy.com/Issues/2009/Sep/20091501.htmAccessed @ 23/10/2012 17:45•http://www.business-standard.com/india/news/the-21st-century-cfo/387187/ Accessed @ 24/10/2012, 10 am•http://worldacademyonline.com/article/24/338/profit_maximization_vs__stockholder_wealth_maximization.html Accessed on 24 Oct at 4pm•http://www.ey.com/GL/en/Issues/Managing-finance/CFO_overviewAccessed on 24 Oct at 4 30pm7

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