Abstract
Strategic functional management is the approach a functional area takes to achieve
corporate- and business unit objectives and strategies by maximizing resource
productivity. It is concerned with developing and nurturing a distinctive competence
to provide a company or business unit with a competitive advantage (Wheelen,
2002:160). The credit function, with debtors as the largest current asset on the
balance sheet, is such a functional area that should be concerned with providing the
organisation with a competitive advantage. Although many generic organisational
strategic models are available, there is a lack of guidelines on how to mange the credit
function strategically.
The objective of this research was to develop a framework, which could be used by
credit managers as a management tool, to select those aspects of the credit function,
which are relevant for an organisational strategic role. In order to achieve this goal,
the following sub objectives have been identified in which the framework should
enable credit managers to: scan the credit function's external and internal
environments to keep in touch with opportunities and threats and to determine
strengths and weaknesses, and to formulate, implement and evaluate credit and
collection strategies that could contribute to organisational strategic goals.
A literature study method was used to collect data to be incorporated in the
development of this framework that will serve as basis for the alignment of strategic
credit management principles with strategic organisational principles. The focus of
the proposed framework was to use and adapt the four basic elements of Wheelen's
organisational model (Wheelen, 2002:2) into a more specific model applicable for
credit functions.
It was concluded that a competitive advantage could be obtained by the use of this
proposed strategic credit management framework. Credit managers should be trained
on how to use this framework effectively and then ensure that it is implemented,
evaluated, monitored and controlled on an ongoing basis. However, the applicability
thereof in practice is reserved for future studies.
Prof. A. Boesenkool