Why business leaders need financial acuity

The skies over Europe have become quieter in recent months. Since October 2018, a handful of airlines have gone bust and ceased operations; Cypriot carrier Cobalt, Danish Primera Air in October, and the UK's Flybmi in February. At the time of writing, Icelandic budget airline Wow Air had become the latest to go, after failing to secure emergency funding in March 2019.

These collapses come after UK-based Monarch Airlines entered administration in October 2017, becoming the most significant airline collapse in the country’s history, and causing it's biggest peacetime repatriation. In December 2018, even the once rock-solid Norwegian Air was forced to issue a statement addressing its poor financial performance and promising better in 2019.

So, what's going on? No two airlines go under for exactly the same reason, but rising oil prices, market overcapacity and uncertainty in the run up to Brexit have all contributed. Ultimately, each airline has suffered from a fatal lack of investment, which suggests the European aviation sector is facing more pressure to stay solvent than ever before.

It doesn't take much for external factors to knock the financial fortunes of an entire industry, which is why it's so important that today’s business leaders have corporate finance expertise in their skillsets. Here's how our online MBA can help you develop a keen economic awareness that helps keep your business strategy flying.

Why should business leaders develop financial dexterity?

Virtually every decision made within a commercial organisation will have an impact on its bottom line. It’s natural for money to flow in and out of a business, but every fluctuation should be tracked and analysed against key objectives, while spending should be planned in line with real-time budgets. Unsupervised accounts can be the first step towards unexpected financial surprises, so it’s vital that companies makes this a priority.

Most businesses have a dedicated accounts department to handle day-to-day capital management, with periodic higher-level touchpoints via account meetings and financial reports. Yet, leaders with only a sporadic view or a limited understanding of a business's financial health risk missing the bigger picture when making strategic decisions that will undoubtedly affect it.

Instead, a thorough grasp of financial management helps you assess each decision’s fiscal implications, keep investors and stakeholders informed and work with an awareness of wider market influences.

Understanding finance as the language of business

Today's leaders should ensure they have an in-depth knowledge of the financial 'language of business', with the skills to interpret cost and management accounting information for themselves. Only then can they put that data to use in new and imaginative ways that will maximise a company’s revenue stream.

Honing these capabilities can make an already-accomplished manager a formidable force. Our online MBA seeks to develop all areas of your expertise, including Financial and Managerial Accounting. By exploring the complexities of the financial accounting language and framework, such as budgeting, strategy mapping, responsibility centre structures and balance scorecards, you can gain the economic insight you need to direct funds with finesse.

"As a partner with Kessels & Smit, I’m co-responsible for the financial processes. The Financial and Managerial Accounting course has really helped me assess whether we're doing the right thing and if we could be smarter. I've already applied a lot of what I've learnt, it’s given meaning to the numbers," says online MBA participant, Niel Van Meeuwen

Placing financial learning in a real-world context

The intricacies of accounting and finance become far clearer with actual examples to help demonstrate their impact. Another of our online MBA courses, Corporate Finance, is designed to help you delve into real case studies in order to reveal the links between accounting, the economy and real companies in the context of international financial markets.

Dissecting the financial journeys of real businesses and examining which decisions resulted in financial loss or gain, can enable you to explore alternate actions and outcomes without the risk – ideal preparation for similar decision-making in your real-life role. What's more, you’ll take on a group valuation project of a company of your choice, analysing its financial history and forecasting its future value from a shareholder perspective.

"Studying economic development has given me a lot of new ideas and approaches that are immediately applicable in my job," explains online MBA participant and international renewable energy advisor, Sander Maebe.

"It has helped me support the implementation of a local community mini-grid that generates energy for isolated areas here in South Africa. I could immediately use all information from the module within the financial proposal of this mini-grid because we talk about inputs, outputs, the whole balance sheet, about investment. These were things that were completely applicable to the mini-grid I was working on."

Add finance and accounting to your professional arsenal

Intermittently dipping in and out of your company's financial statements will never give you the complete view you need to make innovative yet pragmatic business decisions. You need the internal and external economic contexts through which to propel your organisation to bigger and better things.

Our online MBA incorporates finance and accounting alongside a wealth of other business-critical teaching. To find out how this programme could help you develop your professional skillset, now.

Accreditations & rankings

  • EQUIS
  • Association of MBAs
  • The Association to Advance Collegiate Schools of Business (AACSB)
  • Financial Times