Academic journal article Journal of Financial Management & Analysis

A Call for Review of Financial Management Curriculum in Management Institutions in Developing Countries*

Academic journal article Journal of Financial Management & Analysis

A Call for Review of Financial Management Curriculum in Management Institutions in Developing Countries*

Article excerpt

Om Sai Ram Centre for Financial Management Research Mumbai, India


Finance has been described as a lubricant of economic activity, without which the entire business will grind to a halt, and money has been aptly described by Dr. Geoffrey Crowther as the essential invention on which all the rest is based. With unlimited warils and limited financial resources, the financier is concerned with what is produced, requirements of funds (liquid and illiquid), allocation of funds, selection of development priorities, determination of gestation periods, proper monitoring of accounts to avoid cash flow problems and to ensure profitability of the enterprise - be it in public sector, private sector, industrial, agricultural, co-operative, banking and allied enterprise. The finance manager has to ensure rational decision making at the successive stages of preinvestrnent and investment as, in the absence of proper appraisal and evaluation and managerial abilities, there will be misallocation of resources, long gestation periods, investment cost-overruns, high rates of industrial mortality or lopsided growth.

Inasmuch as it is an established fact that we have finance/bank managers in organisations and banks who are recipients of IBRD loans and IDA credits and IMF stand by loans, etc. in US dollars or pound sterling or SDRs not knowing the difference between SDRs and US$ and the reasons for day to day exchange rate fluctuations; and again of bank managers advancing loans to a sick industrial unit not knowing the difference between liquidity crisis (cost flow problems) and corporate sickness; yet of bank managers dealing in pension funds not having any technical knowledge of pension fund management. MNC accounting systems, etc., the need for scientific knowledge of financial management, a science in an embryonic stage of development in developing countries, on the part of Bank Managers/Executives and Financial Controllers' in corporate and public sector and Government Ministries is of paramount importance to ensure maximum returns on capital employed.

There is an urgent need for a review of academic programmes (curriculum) at the postgraduate and professional levels of preparation and professional examinations (conducted by universities, professional bodies like Institute of Chartered and Cost & Works Accountants, etc.) to incorporate courses like Financial Management as understood in a scientific sense (and not as we are presently treating it as synonymous with Management Accounting and Commercial Law, et. al), Multinational Corporations, Pension Fund Management. International Financial institutions like World Bank, IMF, Asian Clearing Union, West African Clearing Union, Foreign Exchange Management, etc. The need for a growing dialogue between financial management academics and finance managers to provide well-trained and employable financial management professionals is very urgent. Also, the need for scientific financial management training programmes for finance and non-finance executives in public sector, private sector and Government Ministries organised by established financial management institutions in cooperation with established Management Professionals Association and allied professional bodies is imperative. Professor Gunnar Myrdal, the renewed economic development expert reminds us:

... It would be pathetic if economists in the underdeveloped countries got led astray by the predilections of the economic thinking in the advanced countries... I would instead wish them to have the courage to throw away large structures of meaningless, irrelevant and sometimes blatantly inadequate doctrines and theoritical approaches and to start their thinking afresh from a study of their own needs and problems.1

Financial Management, A Science in Embryonic State of Development

Established international development financing institutions like the Organisation for Economic Co-operation and Development (OECD), World Bank, Industrial Credit and Investment Corporation of India (ICICI), Bank of England and financial management experts, to name a few, have highlighted the magnitude of the underdeveloped state of development of the science of financial management with reference to the following parameters -

(i) Project Formulation : Lack of knowledge in developing countries of how to formulate a project in such a way that its potential profitability whether from a private or social view point, can be estimated from as firm a basis as possible. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed


An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.