Relationship between financial management and other disciplines

Financial management is a multidisciplinary concept that can be applied in various disciplines such as production, marketing, and human resource management. The relationship between financial management and other disciplines can be explained as follows:

Financial Management and Economics: Investment decisions, micro & macro environmental factors are closely associated with the functions of financial manager. Financial management also uses the economic equations like money value discount factor, economic order quantity etc. Financial economics is one of the emerging area, which provides immense opportunities to finance, and economical areas

Financial Management and Accounting: Financial management and accounting are interrelated because financial management involves keeping accounting records including the financial information of the business concern.

Financial Management and Production: Production department is concerned with the processes of turning inputs into finished products for sale. Financial managers work with the production department to manage costs and set prices appropriately. Financial management is used to determine the costs of inputs and compare with the price of output, hence determining the pricing model of the company. Setting product prices and controlling costs helps a company to manage profits effectively.

Financial Management and Marketing: Financial management is also used in marketing to control advertising costs and create budgets for marketing initiatives. An organization may need to launch marketing and advertising campaigns for creating brand awareness. Sometimes they want to outsmart the competition and emerge and gain top of mind awareness

Financial Management and Human Resources: Financial management is also related with human resource department, which provides manpower to all the functional areas of the management. Financial manager should carefully evaluate the requirement of manpower to each department and allocate the finance to the human resource department as wages, salary, remuneration, commission, bonus, pension & other monetary benefits to the human resource department. Hence, financial management is directly related with human resource management.

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