M.C. Ollin C.

Dionisio

BSME-3

1. WHAT DO YOU MEAN BY FINANCIAL MANAGEMENT TYPES?

 STRATEGICFINANCIAL MANAGEMENT
What is financial management without strategy? In the strategic approach, you
focus on long-term success. If you’re being strategic, you make financial
decisions based on what you want to achieve in the future. This means that you
may even have to tolerate small losses and navigate your strategy around them.
Therefore, effective strategic financial management may push you to adjust or
compromise on some short-term goals, if needed. Such trade-offs are necessary
to consider if you want to prioritize the long-term financial health of the
organization.There are some core elements of strategic financial management,
such as:
Defining objectives, identifying resources and creating a specific plan
Reducing wastage, identifying areas of financial efficiency and uncovering areas for new
investments Identifying, assessing and mitigating uncertainty or risk factors in
investment decisions Making and tracking financial decisions and taking corrective
actions, if needed

2. TACTICAL FINANCIAL MANAGEMENT

On a tactical level, financial decisions relate to short-term positioning. Tactical financial
management procedures inform how to process daily transactions and compare actual
spending with what was budgeted for. It helps you ensure compliance with auditor and
tax requirements.

In the tactical approach, the primary intent is to take advantage of market conditions.
For example, if the market outlook is poor, tactical financial management involves acting
more defensively and reducing equity exposure. Alternatively, if the market outlook is
healthy, the tactical approach provides flexibility to move to a higher end. The approach
is also useful for dynamic markets to help increase gains or mitigate losses.