Managerial finance | EPFL Graph Search

Managerial finance is the branch of finance that concerns itself with the financial aspects of managerial decisions. Finance addresses the ways in which organizations (and individuals) raise and allocate monetary resources over time, taking into account the risks entailed in their projects; Managerial finance, then, emphasizes the managerial application of these finance techniques and theories. The techniques assessed (and developed) are drawn in the main from managerial accounting and corporate finance; the former allow management to better understand, and hence act on, financial information relating to profitability and performance; the latter are about optimizing the overall financial-structure; see . In both cases, the discipline addresses these from the Managerial perspectives of Planning, Directing, and Controlling; here in the more specific context of strategic planning, organizing, directing, and controlling of the organization's financial undertakings

Resource Management Processes of External Knowledge Resources: External Designers in Product Development Projects

Giada Baldessarelli

Resource management processes that lead to value creation for customers are not yet fully understood. This paper sheds light on managerial decisions regarding the processes of structuring, bundling and leveraging of external resources that possess knowledge necessary for new product development projects. A model is proposed that illustrates the functioning of management processes of external resources and the mix of knowledge that managers draw on to guarantee commercial success of products. Results from a qualitative study on 16 firms show that structuring an open portfolio of external knowledge resources, bundling those that possess both design technical expertise and knowledge about customer needs and involving them throughout all the phases of development projects lead to the creation of value for customers.

2016

Modeling and mitigating supply chain disruptions as a bilevel network flow problem

René Yves Glogg, Anna Timonina-Farkas

Years of globalization, outsourcing and cost cutting have increased supply chain vulnerability calling for more effective risk mitigation strategies. In our research, we analyze supply chain disruptions in a production setting. Using a bilevel optimization framework, we minimize the total production cost for a manufacturer interested in finding optimal disruption mitigation strategies. The problem constitutes a convex network flow program under a chance constraint bounding the manufacturer's regrets in disrupted scenarios. Thus, in contrast to standard bilevel optimization schemes with two decision-makers, a leader and a follower, our model searches for the optimal production plan of a manufacturer in view of a reduction in the sequence of his own scenario-specific regrets. Defined as the difference in costs of a reactive plan, which considers the disruption as unknown until it occurs, and a benchmark anticipative plan, which predicts the disruption in the beginning of the planning horizon, the regrets allow measurement of the impact of scenario-specific production strategies on the manufacturer's total cost. For an efficient solution of the problem, we employ generalized Benders decomposition and develop customized feasibility cuts. In the managerial section, we discuss the implications for the risk-adjusted production and observe that the regrets of long disruptions are reduced in our mitigation strategy at the cost of shorter disruptions, whose regrets typically stay far below the risk threshold. This allows a decrease of the production cost under rare but high-impact disruption scenarios.

SPRINGER HEIDELBERG2022

External Venturing and Discontinuous Strategic Renewal: An Options Perspective

Anu Wadhwa

This study examines the relationship between a firm's venturing activities and its undertaking of strategic renewal. The study was motivated by some important gaps in the corporate entrepreneurship literature on venturing and renewal. The extant literature has not focused on the different types and dimensions of firms' renewal activities. In particular, discontinuous renewal involving shifts in firms' core businesses is not well understood. Moreover, the conditions that drive firms to undertake strategic renewal have not been examined. For example, it is not known how venturing increases or reduces the benefits of undertaking renewal. This study focuses on a discontinuous form of renewal involving major changes in firms' core businesses and examines firms' external venturing activities that complement their internal development. We examine corporate venture capital (CVC) investments, which are direct minority equity investments made by established companies in privately held ventures. Discontinuous renewal is conceptualized as resulting from a set of related, and often sequential, managerial decisions. The first managerial decision is to initiate growth in a business that is relatively newer or smaller for the organization. The second decision is to move away, or even withdraw completely, from the current core business that enabled prior growth and prosperity for the firm and served as its primary revenue earner. Employing a real options perspective, we argue that CVC investments create growth options in new and existing businesses but do not result in firms' withdrawal from existing businesses. Therefore, we expect CVC activity to be negatively associated with the likelihood of a firm undertaking discontinuous renewal. We also propose that the benefits of withdrawing from existing businesses are even lower, and the costs even higher, for firms in dynamic industries and for firms that possess strong internal capabilities. The predictions of the study are tested using longitudinal data on 477 firms from the 1990 Fortune 500 list for the period 1990-2000. We find support for all our predicted hypotheses. These results help address important limitations in the corporate entrepreneurship literature. The study also contributes to the real options and organizational capabilities literatures.

Wiley-Blackwell2013

External Venturing and Discontinuous Strategic Renewal: An Options Perspective

Anu Wadhwa

Wiley-Blackwell2013