Financial Management Assignment

[Instructor name]

[Course name]

Financial Management Assignment

Answer 1

Peter Bartman (2012) in his article titled “8 Ways to Move from CFO to CEO” suggests various skills and techniques that the CFO of a company could use to develop and progress to the position of the CEO in the company. However, these ways are not easy to adopt and look easier said than done. Therefore, there are certain advantages and disadvantages of promoting the CFO to the position of the CEO.

The first advantage of promoting the CFO as the CEO is that CFOs are better able to usurp the opportunities that arise in the environment. First, they are quick at availing the opportunity to become the CEO when the position becomes available. Then, they are also better able to identify and utilize the opportunities that arise in the environment.

Next, CFOs are better able to grasp the operating model of the company. They know as to which are the levers of the business and those could be used to generate profitability for the business. They are also aware as to how to generate value from the business.

Furthermore, CFOs also have a top team always available with them. This group of cronies is just the requirement for the CEO to cleverly steer the strategy of the business. No other person in the organization is in a better position to put this team to work.

Next, CFOs are also usually very strong leaders. They know exactly how to motivate people and the ways to achieve profitability and success for the organization. Further, they can induce people to achieve higher productivity and show various leadership skills, such as those of authoritarian and team-based leadership.

However, there are also multiple disadvantages of promoting the CFO to the CEO's position. First, the CFOs are mostly unable to get the external perspective. Their perspective is mostly limited to crunching the numbers to generate the annual reports or to prepare the various departmental budgets. In this way, they are too parochial to assume the wider external perspective of the business.

Additionally, the CFOs also lack the decisive gene. They are not confident enough to make quick decisions. They require a lot of information and data before they can make even a piddling decision of their daily work. Further, they also lack the steady nerve and will become fraught at the regular decision-making situations that are faced daily by the CEOs. Therefore, they are not as good decision makers.

Finally, CFOs are not very good people person. They are unable to engage the employees through motivational inspiration and through the development of a higher purpose. Moreover, they are mostly also unable to take risky decisions that are an essential characteristic of the strategy making process. Therefore, CFOs are too prudent and chary to be good CEOs (Bartram, 2012).

However, another study found that although the CFOs are promoted to the CEO's job in America, the trend is lesser in the European region. The principle reason is that CFOs are not ...