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Do financial management decisions influence firm value? - Essay Example

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Author : aleen19

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Name Instructor Task Date a) Discuss the main financial management decisions taken by BP (British Petroleum) and how they are related Financial management decision involve adopting an inventive, open-learning approach to introduce the main principles of financial management in an accessible, non-technical way that help the business to achieve its goals and objectives (Lawrence, 2011)…

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Do financial management decisions influence firm value?

Investment Decisions The BP is a well-established company that diversified into business such as chemicals, coal, gas, minerals and nutrition that would improve the effectiveness of the company. This diversification strategy led to problems in allocating investment resources between the different division’s projects of the large conglomerate. According to Dayananda (2002), the investment has led to losses that demonstrate that the company could not successfully compete in the fiercely competitive international oil business while also trying to compete in other business. Owing to the volatile prices, BP shifted to the financial tool to help it to accomplish its strategies goals. According to Kent & Gerald (2011), the company began to concentrate primary on the investment business; problems of fitting corporate decisions into both the strategic and financial framework of the company are difficult to resolve. This led to a conclusion that the investment decisions were based upon dissimilar theories that sometimes contracted each other. ...
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