The dynamics of financial working capital management strategies

Anna-Maria Talonpoika, Timo Kärri and Miia Pirttilä

International Journal of Business Innovation and Research, 2017, vol. 13, issue 3, 309-325

Abstract: The strategy matrix for financial working capital management (FOCAL matrix) is created in this paper to present the dynamics of financial working capital management strategies. The FOCAL matrix can be used as a general tool in the academia, and companies can use the matrix as a management tool to improve their financial working capital management strategies and benchmark competitors' strategies. The matrix is tested on three case companies which have a declining trend in profitability. Annual report information and press releases from the years 1999-2013 are used in the testing. The results indicate that the studied case companies have different emphases on financial working capital management. The strategies evolve according to the financial situation of the company, and companies do not always follow the strategies presented in previous literature.

Keywords: financial working capital; working capital management; management strategies; financial flexibility; flexible asset management; financial crisis; strategy matrix; design science; case study. (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijbire:v:13:y:2017:i:3:p:309-325

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