THE RELATIONSHIP BETWEEN FINANCIAL MANAGEMENT EFFECTIVENESS AND A COMPANY’S COMPETITIVE ADVANTAGESE
Keywords:
Financial management effectiveness, competitive advantage, financial performance, strategic management, resource allocation, corporate competitiveness.Abstract
In the context of increasing market competition and economic uncertainty, the effectiveness of financial management has become a critical determinant of a company’s sustainable development and competitive positioning. This study examines the relationship between financial management effectiveness and the formation of competitive advantages at the firm level. The research focuses on how key financial management functions—such as financial planning, budgeting, cost control, capital structure optimization, and investment decision-making—influence a company’s ability to achieve superior performance compared to competitors. The study is based on a conceptual and analytical approach, drawing on financial performance indicators and strategic management principles. The findings suggest that effective financial management enhances resource allocation efficiency, improves liquidity and profitability, reduces financial risks, and supports strategic flexibility, all of which contribute to the development of sustainable competitive advantages. The results highlight the importance of integrating financial management practices with overall corporate strategy to strengthen long-term competitiveness.
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