Problems in the development and use of managerial financial models

Holland, J.B. (1981) Problems in the development and use of managerial financial models. Managerial and Decision Economics, 2(1), pp. 40-48. (doi:10.1002/mde.4090020108)

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Abstract

In this paper the author identifies two related problems in financial modelling. First, the problem of implementing financial decision theory in practical decision situations and, second, the need to develop existing managerial financial models. A discussion of organization decision processes indicates possible reasons for the relative failure of management science and financial theory based models in practice and the predominance of accounting based models. This analysis of strategic decision processes suggests key design features for the implementation of financial models. Finally, research orientated models designed using these guidelines are seen as appropriate media for the transfer of knowledge between financial decision theory and financial practice. This is seen as providing a tentative basis for the development of managerial financial models. Throughout the paper the author uses examples from his own experience in model building in instalment credit, and leasing financial intermediaries, i.e. “Finance Houses”.

Item Type:Articles
Status:Published
Refereed:Yes
Glasgow Author(s) Enlighten ID:Holland, Professor John
Authors: Holland, J.B.
College/School:College of Social Sciences > Adam Smith Business School > Accounting and Finance
Journal Name:Managerial and Decision Economics
Publisher:John Wiley & Sons Ltd.
ISSN:0143-6570
ISSN (Online):1099-1468

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