What was the first argument against traditional approach, Financial Management

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What was the first argument against traditional approach

The first argument against traditional approach was based on its emphasis on issues relating to procurement of funds by corporate enterprises. This approach was challenged during the period when approach dominated the scene itself.

Further, traditional treatment of finance was criticised because finance function was equated with the issues involved in administering and raising funds, the theme was woven around the viewpoint of suppliers of funds like investors, investment bankers and so on, which is, the outsiders. It implies that no consideration was given to the viewpoint of those who had to take internal financial decisions. Traditional treatment was, in other words, outsider-looking-in approach. Limitation was that internal decision making (that is insider-looking out) was completely ignored.

 


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