scholarly journals Behavioural Aspects of the Financial Decision-Making

Organizacija ◽  
2019 ◽  
Vol 52 (1) ◽  
pp. 22-31 ◽  
Author(s):  
Katarina Valaskova ◽  
Viera Bartosova ◽  
Pavol Kubala
Keyword(s):  
Decision Making ◽  
Fuzzy Logic ◽  
Financial Management ◽  
Decision Making Process ◽  
Linguistic Variables ◽  
Behavioural Finance ◽  
Financial Decision Making ◽  
Economic Decision Making ◽  
Financial Decision ◽  
Behavioural Aspects

Abstract Background and Purpose: Behavioural finance is a relatively new, but rapidly evolving field that provides explanations of an economic decision-making by cognitive psychology, conventional economic and financial theory. Behavioural finance searches the influence of psychology on the behaviour of financial practitioners and the subsequent effects on the financial markets. The purpose of the paper is the research on behavioural aspects of financial decision-making as they help explain why and how markets might be inefficient. Design/Methodology/Approach: Fuzzy logic is an excellent tool for working with linguistic variables that are often found when working with behavioural data. Thus, we analyse the financial decision-making process from the perspective of behavioural finance aimed at better understanding of the decision-making process of investors applying the principles of fuzzy logic to solve various financial problems. Results: The results of the study indicate that fuzzy logic is applicable when solving problems of financial management and financial decision-making problems. The urgency of the fuzzy logic application for managerial and financial decisions should be emphasized. Research in this area indicates that in some cases, as in the case of behavioural financing, the use of fuzzy logic is far more suitable than the use of other methods (Peters, Aguiar and Sales). Conclusion: The novelty of the paper is to extend the application of fuzzy sets in the area of financial decision-making. The paper demonstrates that despite the fact, that fuzzy logic is currently used mainly in technical directions, it is applicable also in financial management, especially, in cases where it is necessary to consider the influence of human and the occurrence of linguistic variables.

scholarly journals Behavioural Aspects of Financial Decision-Making Process of Managers in Wood-Processing Enterprises

2021 ◽  
Vol 72 (4) ◽  
pp. 389-401
Author(s):  
Mariana Sedliačiková ◽  
Martina Kánová ◽  
Josef Drábek
Keyword(s):  
Decision Making ◽  
Business Environment ◽  
Primary Data ◽  
Decision Making Process ◽  
Financial Decision Making ◽  
Empirical Survey ◽  
Wood Processing ◽  
Financial Decision ◽  
Behavioural Factors ◽  
Behavioural Aspects

The study is focused on behavioural aspects in the financial decision-making process of wood-processing enterprises. The main aim was to map this topic and determine the key behavioural factors that lead management to make mistakes. Primary data on this issue were obtained from an empirical survey. The empirical survey was conducted through a questionnaire that contains questions focused on behavioural decision-making aspects. Using statistical methods, three key behavioural factors were determined. By selecting the given behavioural factors, it was established that love, hate, and sadness are the key factors that influence management behaviour and decision-making. In the real business environment, two managers working in a wood processing enterprise were chosen; they were willing to provide us with a review and opinion on the results of the survey. By analysing all the data, it has been concluded that, even though managers are trying to direct their behaviour and activities, they often do not notice the influence of these factors, and sometimes they are unable to make decisions. The managers should be able to direct their behaviour and activities, to provide self-control and take into consideration the fact that these factors are always present. Results determine the key and systematically occurring errors in the financial decision-making process, caused by the influence of the human factor. We have developed a model for activating the three key behavioural factors applied in the financial decision-making process as a tool that can help company managers not to make the wrong decisions.

scholarly journals Sensemaking and financial management in the decision-making process of farmers

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Michael Thomas Hayden ◽  
Ruth Mattimoe ◽  
Lisa Jack
Keyword(s):  
Decision Making ◽  
Financial Management ◽  
Strategic Decision ◽  
Decision Making Process ◽  
Structured Interviews ◽  
Content Type ◽  
Financial Decision Making ◽  
Farm Type ◽  
Farmer Decision Making ◽  
Financial Decision

Purpose The purpose of this paper is to contribute to a better understanding of the financial decision-making process of farmers and to highlight the potential role that improved farm financial management (FFM) could play in developing sustainable farm enterprises. Design/methodology/approach This paper adopts a qualitative approach with 27 semi-structured interviews exploring farmers’ financial decision-making processes. Subsequently, the interview findings were presented to a focus group. Sensemaking theory is adopted as a theoretical lens to develop the empirical findings. Findings The evidence highlights that FFM has a dual role to play in farmer decision-making. Some FFM activities may act as a cue, which triggers a sensebreaking activity, causing the farmer to enter a process of sensemaking whilst some/other FFM activities are drawn upon to provide a sensegiving role in the sensemaking process. The role of FFM in farmer decision-making is strongly influenced by the decision type (strategic or operational) being undertaken and the farm type (dairy, tillage or beef) in operation. Originality/value The literature suggests that the majority of farmers spend little time on financial management. However, there are farmers who have quite a high level of engagement in FFM activities, when undertaking strategic farm expansion decisions. Those FFM activities help them to navigate through operational decision-making and to make sense of their strategic decision-making.

Modelling the Effects of Financial Services Advertising on Financial Product Purchase: An Empirical Validation

2019 ◽  
Vol 23 (4) ◽  
pp. 418-431
Author(s):  
Pallavi Dogra ◽  
Rishi Raj Sharma
Keyword(s):  
Decision Making ◽  
Factor Analysis ◽  
Financial Literacy ◽  
Financial Services ◽  
Service Providers ◽  
Decision Making Process ◽  
Celebrity Endorsement ◽  
Financial Decision Making ◽  
Perceived Reality ◽  
Financial Decision

The main aim of the study is to find the effect of the financial advertisement on the respondent’s information selection, processing and analysing it while making the financial purchase decisions. The study identified the important factors that affect the investment decision-making process and explored them by using the exploratory factor analysis. The conceptual model has been tested using the AMOS SEM software. The factor analysis identified the four important factors that are affecting the financial decision-making, that is, financial literacy, celebrity endorsement, perceived reality and entertainment. The hypothesis testing reveals that advertisement, perceived reality and entertainment are affecting the information processing and financial decision-making process, whereas financial literacy and celebrity endorsement do not have significant effects on the financial product purchase. The results are useful for the advertisers, policy makers and the financial service providers so as to increase the sale of financial products by focusing on the variables extracted by the research.

PENGARUH FINANCIAL ATTITUDE DAN FINANCIAL KNOWLEDGE TERHADAP KEPUTUSAN KEUANGAN PADA PEMILIK USAHA KECIL DAN MENENGAH (UKM) DI PULAU LOMBOK: SUATU PERSPEKTIF BEHAVIORAL FINANCE

2020 ◽  
Vol 6 (2) ◽  
pp. 166-178
Author(s):  
Siti Aisyah Hidayati ◽  
Sri Wahyulina ◽  
Embun Suryani
Keyword(s):  
Decision Making ◽  
Behavioral Finance ◽  
Financial Management ◽  
Sampling Technique ◽  
Provincial Government ◽  
Financial Knowledge ◽  
Financial Attitudes ◽  
Financial Decisions ◽  
Financial Decision Making ◽  
Financial Decision

This study aims to analyze the effect of Financial Attitude and Financial Knowledge on financial decisions on Small and Medium Business Owners (UKM) on Lombok Island. The theoretical contribution of this research is expected to contribute to science and the development of behavioral finance theories related to financial decision making in Small and Medium Enterprises (SMEs). It is also expected that behavioral finance will be the subject of financial management courses. Furthermore, the practical contribution of this research is expected to provide input, suggestions and recommendations to the policy maker of the NTB Provincial Government in making policies related to the development of SMEs. This research is a quantitative approach based research, with the type of explanatory research. The study population is all SMEs in the island of Lombok. The sampling technique is done by using Non probability sampling, which uses judgment sampling, which is choosing SMEs that are engaged in the pottery industry and have already exported. From the existing population, there are 35 (thirty-five) SMEs that can be taken as samples. Respondents in this study are the owners of each of these UKM. Data collection techniques used in this study were using a questionnaire. To achieve research objectives and hypothesis testing, the data obtained will be processed according to needs using GSCA (Generalized Structured Component Analysis) statistical tools.The results showed that Financial Attitudes had a positive and significant effect on financial decision making by SME owners and owners. This means that the better the Financial Attitudes owned by SME owners, the bolder they are in making financial decisions. Financial Knowledge has a positive and significant impact on financial decision making by SME owners and owners. This means that the better the Financial Knowledge possessed by SME owners, the bolder the financial decisions will be

scholarly journals Individual Investors' Financial Behaviour and Financial Attitude: Role of Financial Literacy as Moderator in Decision Making

2021 ◽  
Vol VI (I) ◽  
pp. 200-213
Author(s):  
Sadaf Ambreen ◽  
Laiba Khalid ◽  
Aniqa Zubair
Keyword(s):  
Decision Making ◽  
Financial Literacy ◽  
Financial Management ◽  
Individual Investors ◽  
Individual Investor ◽  
Financial Decisions ◽  
Financial Decision Making ◽  
Financial Decision ◽  
Financial Management System

As an individual investor, it is incredible to have a successful performance return without financial knowledge. An organization's performance must be measured and analysed based on an adequate financial management system. In today's multifaceted financial scenery Financial Literacy is crucial as it does not only impact financial decisions at the business level but is also important for the country's development. Financial literacy has the importance of the backbone of society. The study adds a new mechanism of financial literacy. The main objective of this study is to determine further insight into the role of financial literacy on an individual's behaviour and attitude towards financial decision making. For analysis, the moderator impact of financial literacy on decision-making data of 100 individual investors has been collected from different banking sectors of Pakistan. The result of this study shows that financial literacy has a significant impact on financial decision making. This study delivers knowledge that can contribute to guiding coming studies, making policies, directors and instructors in their teaching.

scholarly journals Preliminary Conception of Financial Decision Knowledge Engineering

2021 ◽  
Vol 251 ◽  
pp. 03049
Author(s):  
Linhui Qiu
Keyword(s):  
Decision Making ◽  
Financial Management ◽  
Knowledge Engineering ◽  
Financial System ◽  
Digital Economy ◽  
Important Influence ◽  
Enterprise Strategy ◽  
Financial Decision Making ◽  
Financial Decision ◽  
Constructing Knowledge

In the era of digital economy, the intelligence of enterprise financial management has an important influence on the effect of enterprise financial activities. At present, the application of intelligent financial system and software focuses on providing analysis information for financial decision-making, and cannot effectively give complete financial decision-making suggestions, nor does it combine with enterprise strategy. This paper puts forward the idea of constructing knowledge engineering of financial decisionmaking based on frame, and uses frame representation to express the knowledge of financial decisionmaking and enterprise strategy, so as to promote the combination of intelligent financial decision-making and enterprise strategy, and promote the intelligence of enterprise financial decision-making through knowledge engineering.

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