Abstract
Working capital literature is rather limited and the process of managing short‐term resources is not understood well by academicians. In contrast, corporate managers are continuously involved in the working capital decision-making process, but their perspective is limited to the practices within their firm. In order to fill this gap in the working capital literature, a study of management perceptions of the working capital process was undertaken. A survey was used to collect the information from the sample of marketing, production, and financial executives in large corporations in Belgium, France, India, and the United States. The study intercepts management ranking of working capital objectives and indicates the need to improve finacial planning models to include explicitly short–run objectives; further, predictability of cash inflows and outflows is examined and the potential factors affecting the predictability are evaluated. Finally, this study examines management perceptions of long-range objectives in order to provide a proper perspective to the short-run financial planning.
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*James A. Gentry is a professor of Finance and Associate Dean In the College of Commerce at the University of Illinois at Urbana-Champaign. He originated a Working Capital Management (WMC) Conference In 1975 and was Chairman of the subsequent WCM Conferences in 1976 and 1977. Professor Gentry has authored monographs and articles on corporate financial management and in portfolio management for financial institutions.
**Dileep R. Mehta is a professor of Finance at Georgia State University in Atlanta. He has authored numerous articles and a book entitled Working Capital Management published by Prentice-Hall, Inc.
***S. K. Bhattacharyya is a professor of Accounting and Control at the Indian Institute of Management. He is the author of many articles related to financial control and serves as a consultant for the Indian government and several multinational corporations.
****Robert Cobbaut is a professor of Finance at the Catholic University of Louvain in Belgium. He is also Director of the Centre de Perfectionment Dans la Direction Des Enterprises. A recognized leader of financial education in Western Europe, Professor Cobbaut serves as a consultant for several Belgian corporations.
*****Jean-Louis Scaringella is a professor of Finance at the Centre d'Enseignement Superieur des Affairs, H.E.C., in Paris. He is a leading professor of Finance in France and is a well-known management consultant.
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Gentry, J., Mehta, D., Bhattacharyya, S. et al. An International Study of Management Perceptions of the Working Capital Process. J Int Bus Stud 10, 28–38 (1979). https://doi.org/10.1057/palgrave.jibs.8490627
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DOI: https://doi.org/10.1057/palgrave.jibs.8490627