Strategy, Performance, and Investment: An Analysis of Corporate Financial Management

Abstract

This article presents a detailed analysis of the pillars of modern corporate financial management, exploring financial strategy formulation, performance evaluation, and investment decision-making. Based on a systematic literature review by Daming & Widyawati (2024), this text synthesizes and expands upon the main theoretical frameworks and empirical trends that define the field, contextualizing their relevance within today's dynamic and complex business environment. In financial strategy formulation, the analysis transcends traditional metrics, emphasizing alignment with organizational objectives and the growing integration of Environmental, Social, and Governance (ESG) factors as essential components for long-term value creation. Performance evaluation, in turn, demonstrates the shift beyond purely financial indicators, highlighting the relevance of holistic frameworks like the Balanced Scorecard by Kaplan and Norton. This model integrates non-financial metrics—such as customer satisfaction and internal process efficiency—that act as predictors of future financial success, enabling more strategic and proactive management. In the realm of investment decision-making, the study underscores the need for robust processes that incorporate quantitative analysis, qualitative assessments, and effective risk management. The evolution of the field is emphasized to include considerations of the socio-environmental impact of projects, the influence of cognitive biases identified by behavioral finance, and the opportunities generated by technological advancements like artificial intelligence. The article concludes that contemporary financial management demands an integrated and adaptive approach. By synthesizing current knowledge, the work also highlights gaps in the literature, such as the need for more empirical research on the application of sustainability principles and the impact of technology, thereby pointing to avenues for future academic inquiry.