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Historically, corporate finance played an important part in the development of business. The development of business activities was and still is closely intertwined with corporate finance. On the other hand, corporate finance does not only contribute to the rise of economy and business activities but it can also provoke financial crises and economic recessions. At any rate, often corporate finance and scandals as well as failures related to corporate finance or misuse of corporate finance provoked serious turbulence in financial markets as was the case of Enron, Goldman Sachs and other renowned companies and financial institutions. In such a way, corporate finance can have a negative impact on the performance of companies. In such a situation, the question concerning the scope of the impact of corporate finance on the marketing performance of companies arises. In this regard, there are two options. On the one hand, it is possible to presuppose that corporate finance are absolutely secondary and, therefore, unimportant for the marketing performance of an organization, whereas the business strategy, human resource management, organizational culture and other issues are consistently more important and determinant for the organizational performance and marketing position of companies. However, on the other hand, there is a more relevant concept, according to which corporate finance lays the foundation to the stable organizational performance and without the effective use and development of corporate finance even a successful company is doomed to failure. Obviously, modern companies cannot maintain a positive organizational performance if they have poor corporate finance because the modern business strategy and the overall organizational performance depends on the financial position of a company, its status, and relationships with customers and business partners, which naturally refer to the quality of corporate finance of the company to define its marketing position and potential as well as reliability.
The essence of corporate finance
Corporate finance comprises an integral part of functioning of companies operating at different levels from the local one to international one. In this respect, it is important to lay emphasis on the fact that corporate finance is closely intertwined with other areas of the organizational performance, such as business strategy, marketing strategy, organizational culture, human resource management and others. The main goal of corporate finance is to maximize the corporate value of a company. Obviously, the corporate values affects consistently the organizational performance, business strategy, human resource management, organizational culture and other vitally important issues related to functioning of modern organizations.
At the same time, corporate value is an important factor that defines the marketing value of an organization and, therefore, it affects consistently its marketing performance. It proves beyond a doubt that the higher is the corporate value and market value of a company the better is its position in the market and the more attracting for investors the company looks. On the other hand, the corporate value, being the major goal of corporate finance, is not the only aspect corporate finance deal with (Lee, 1999). Corporate finance deals with financial decision-making process which is of the utmost importance for modern companies, especially those operating at the national and international level. These companies need substantial investments and they use their corporate finance to maximize the corporate value and, thus, to attract new investors. However, the corporate value cannot increase if there are no right financial decisions being taken by the company.