Finance is a broad term covering many different things regarding the financial management, development, and measurement of monetary and non-monetary assets and liabilities. The field is particularly large in developed countries, especially those which have a developed currency and strong central banking system. It is also becoming much more diverse in developing countries, given the greater mobility of labor and the ability to adjust exchange rates to the benefit of creditors. This paper explores some of the ways in which finance can impact organizational culture.
Finance has a very important role in all economies. It impacts production through the pricing of products and services, the allocation of resources such as capital, the regulation of banks and other institutions, and the conduct of economic policies. All these decisions rely on the valuation of assets and liabilities based on their external economic value. The use of external economic value is to determine the value of a dollar against another in terms of what it would cost to make the same investment, whether or not it would create the kind of economic surplus desired, and whether or not it would be conducive to the creation of economic wealth. In addition, in order for a nation’s total economy to function properly, the distribution of income and wealth across the population must be fair as well. Otherwise, incentives for individuals to engage in economic activity are biased, leading to under-utilization of resources and distortion of the distribution of wealth.
Developing countries that rely primarily on foreign trade to generate domestic revenue face many challenges in terms of managing their public finances. As these countries become more dependent on international financial markets, international public finance is an expanding field that also tends to affect the organizational culture of organizations that are dependent on foreign trade. For example, developing countries with lower levels of financial technology find themselves increasingly reliant on finance companies and other finance specialists to perform the tasks that once were the responsibility of private finance departments.