Strategic Finance Essay

In the contemporary business environment, setting objectives is extremely important for the overall success of the business development, especially for companies operating in the banking industry. In this respect, it is important to place emphasis on the fact that objectives should not be limited to financial objectives solely, but also include a variety of strategically important objectives, which are closely intertwined and interdependent. For instance, a successful organization in the contemporary business environment is not only the organization that performs well financially, but also the organization that is capable to learning and to maintain its growth through learning and training of its employees. Therefore, the diversity of objectives the company has to reach should have the common ground and direction, where the organization actually moves to and all its strategic goals and objectives should be closely intertwined.

Objectives
Expected Outcomes
Learning/Growth
Learning and growth contribute to the faster business development of the organization due to the growth of the professional level of employees, their preparedness to face and to confront challenges the organization may face in the contemporary business environment. In addition, learning and growth are essential because the development of modern technologies stimulates the fast introduction of innovations in organizations. Without learning the organization cannot catch up with innovations and new technologies being introduced by its rivals. Employees of the company should learn how to use the full potential of new technologies and to accelerate its business development.
Internal Business Processes

Internal business processes are of the utmost importance for the contemporary organization because they contribute to the steady organizational performance and stability within the organization. At the same time, internal business processes stimulate the fast organizational and business development because the effective internal business processes maximize the effectiveness of the organizational performance. In addition, effective internal business processes can increase the effectiveness of interaction between employees working within the organization. As a result, the organization can enjoy the positive organizational culture and effective and productive employees’ performance.
Customer Service

The development of the customer service is particularly important in the contemporary business environment. Customers has always played an important part in the business development of any organization. Today, the role of customers has increased even more, whereas many organizations use the customer-centered approach, which helps them to maximize the effectiveness of the company-customer relationships. As a result, the organizational performance improves due to the development of positive company-customer relationships and to the formation of a positive public image of the brand and the company itself.
Financial

loan balances

Financial objectives are strategically important for organizations, especially those operating in the banking industry. The main point is to maintain positive financial performance to prevent the decrease of the trust to the company and financial position of the company in the market. In this regard, loan balances are very important, especially for banks, because they allow the bank to conduct planned loan policies and to balance loans and deposits. In such a way, they can maintain a steady and stable financial performance and minimize the risk of the consistent deterioration of their financial position in the market that may provoke the distrust from the part of business partners and especially customers.
deposit balances

Deposit balances are important for the bank because the deposit balances reveal the actual confidence of customers in the bank and the financial resources available to the bank, which the bank can use to provide loans for companies and the population. The deposit balances indicated to the stability of the bank, whereas the change in the deposit balances or misbalancing of deposits may provoke a profound crisis in the bank.
non-interest income

Non-interest income is growing more and more important for contemporary banks because the bank provides a variety of non-interest services, which can bring considerable profits. In fact, non-interest income boosts with the wider introduction of new technologies, especially information technologies and use of modern telecommunication systems, which open wider opportunities for the bank to receive non-interest income. As a result, the bank can improve consistently its financial performance through the use of new technologies and increase of its non-interest income.

In actuality, it is possible to trace the close relationships between the aforementioned objectives, including learning/growth, internal business processes, customer service, financial loan balances, deposit balances, and non-interest income. To put it more precisely, if the bank fails to develop learning of its employees and maintain their professional growth, the bank is doomed to deterioration of its organizational performance. In this regard, internal business processes will be at risk of consistent deterioration because through learning employees can develop new skills and abilities and learn how to use new technologies, which are applied in internal business processes of the bank. Therefore, if they have poor learning, they will be unable to use the full potential of new technologies, which are applied in internal business processes. The deterioration of internal business processes, in its turn, will lead to the deterioration of the customer service because the poor internal business processes will lead to the poor quality of services being delivered to customers of the bank. For instance, customer may suffer from delay of transactions and other problems. The deterioration of customer services will deteriorate the financial performance of the bank because the dissatisfaction of customers with the quality of services will drive customers to another bank that will decrease the share of deposits in the bank and undermine the deposit balance. The decline of deposits may limit the loan balance and loan opportunities of the bank. In such a situation, the decline of non-interest income is virtually inevitable because poor financial performance, declining number of customers, and poor internal business processes will prevent the bank from introduction of innovations, which can bring considerable profits and improve its financial performance and position of the bank in the market.
Thus, taking into account all above mentioned, it is important to place emphasis on the fact that the bank should focus on the achievement of the aforementioned goals and prevent the failure of either goal because this will provoke a chain reaction and the failure of the entire strategic development plan of the bank. In this regard, the bank should pay a particular attention to learning/growth because it can stimulate fast development of the bank and improvement of internal business processes through the introduction of innovations. The latter will increase the customer satisfaction that will naturally stimulate the improvement of the financial performance of the bank as customers grow confident in the bank and satisfied with the quality of its services.