Question

Reflective practice

Purpose

At the beginning of this subject, some of you might be thinking ‘Why do I need to study finance? I am not working in a finance related role.

An understanding of finance is very important for a manager in carrying out their full scope of responsibilities effectively. In your current role as a manager, it is likely that you are often involved in setting targets and the preparation of budgets for your department which invariably requires a sound knowledge of finance.

Required

Your task is to identify anyone concept of finance which you have used in your current position as manager in your organization recently. Provide a practical example to demonstrate the use of the concept. What challenges you faced in dealing with the situation and how you handled the situation. What have you learned from this experience?

Answer 1

This situation came when I was working in my previous organisation. As a team member, I knew the team was wasting lot of time and resources in the manual processes which can be automated. So, seeing the issues and keeping a solution in mind, we proposed to team lead a process that will automate Various processes. But he was reluctant to see the additional cost that will be involved in automation. But since we knew that this cost would bring incremental benefits, we decided to collect data for the similar projects and did NPV analysis to make sure that the team lead understand that the project will bring more benefits than costs. This was only possible because of the Finance knowledge that we carried.