Financial Markets



Differenttypes of market structures have existed within business markets. Thevideo has highlighted four types of competition which includemonopoly competition, oligopoly competition, perfect, andmonopolistic competition. The video also highlights differentconcepts among them opportunity cost, different market mechanisms,and decision making strategies as described below. In perfectcompetition, the market structure is made up of numerous smallsellers and buyers. Different institutions produce identical productswhere customers and consumers are aware of their products andcompetitiveness. It thus has no particular market leader or anindependent firm. All companies must thus provide quality standardsto retain their esteemed customers. In a pure monopoly, suppliershave no close sub constitutes to their customers’ demands. Itcontrols all the potential suppliers blocking competitors from havingtheir way of maximizing their profits (Madura,2014).

Monopolistic Competition on the other side allows for competitionfrom other institutions by offering substitute products that cansupplement customer. A monopolistic competition service is highlyrecommendable because it offers superior products. Oligopoly marketstructure is dominated by some organizations that functionindependently. It is defined as different companies that provide thesame services with differentiated features. Perfect competitivecompanies/firms therefore, offers no single market leader since theparticipating institutions are identically leveraged. Pure Monopolyconsists of only producers without close substitutes. In thisparticular market structure, the industry has the power over all theavailable resources as well as the technology being used (Madura,2014).

Thevideo thus seeks to analyze the various types of market structuresthat have been used over and over to explain the competition threatsthat affect the organization however, these challenges can beutilized to maximize the goal achievement with different opinions.

Itis in an economy that we often find the word scarce and in most casesthis word is followed by resources. Hence, most students of theeconomy have learned to associate the two terms. Competition hasdriven many businesses to try and balance limited resources with highgoals. Analysis of most business will reveal that this one is themodern problem facing businesses (Belfield, 2010).

Financialmanagers are facing the challenge of doing the delicate balance ofmatching dynamic and changing business goals with resourcesavailable. Technology has proven to be a driving factor drivingexpansion and ultimate success of business. Acquiring this Technologyis not cheap. In the quest of keeping abreast with financialtechnology, managers are faced with the challenge of seeking morefunds to acquire equipment. Apart from the acquisition of equipment,businesses face huge competition daily brought about by Modernity. Indealing with competition, financial managers are confronted with theoption of trying to get what is best for the business and limitedresources available. In maximizing resources, managers are encouragedto collect enough data to support the acquisition of equipment or aparticular technology (Belfield, 2010).


Inflationand the financial crisis that has hit most of the world have led todecision-making.

Limitedto the highest ranks of an organization or cooperation, this is achallenge to financial managers. Managers, directors or vicepresidents can do final decision making but on very few occasions.This aspect of running the business was necessitated by means tomitigate risks and losses. But as the business are continuouslyevolving, individual decisions had to be made quickly.Decision-making and responsibility go in tandem, and givingresponsibility with limited decision making is a challenge tofinancial managers. Expectoration for innovation and businessperformance are enormous responsibilities but do not have theauthority to do anything without prior approval (Belfield, 2010).

Thebureaucracy that dictates decision making often leads to delay andchange of direction which in turn leads to frustration. Performancein a frustrating environment is either non-existent or very minimal.Although more decision making can be bestowed on managers, upfrontcommunication to the decision makers before doing a task will helpspeed up the decision-making process. Planning ahead will assist inimproving decision making. Financial managers can find themselves ina tight spot approving the purchase of an emergency nature (Madura,2014).

Modernbusiness is faced with employee retention that comes along with poordecision making. While some employees are under retention, theircompetitors take the opportunity to maximize their profits. Thefinancial managers are the most affected persons because of theconflicts that they undergo while trying to fix the financialstatements for their new employees. To repair the gap, they mustincrease the existing customer’s remunerations to motivate them toperform more duties and fill in the gaps. New hires also challengethe financial managers when they demand high salaries. Many customersare attracted to organizations that offer better compensations fortheir salaries. This has prompted many financial managers to go anextra mile to please their employees to be active so as to maintainthe competitive environment (Belfield, 2010).

Rewardingemployee’s accomplishment is also another difficulty that thefinancial managers have encountered in their line of duty. Differenttransformation on the use of technology has transformed the manager’sperspective of management. Technology has increased customers andemployees` performance. Transparency issues have made many financialmanagers unable to conduct their deceitful actions that may ruintheir reputations. Also, most of the financial managers have reportedthe loss of data to be a key obstacle to management. With the newtechnological advancements, many employees have adopted various waysin which data can tamper with to cover up their evil activities thatcould lead to their dismissal. This aspect has made it difficult forthe financial managers to compile their annual reports efficiently(Belfield, 2010).

Poorcommutation on how well to organize the allocated the resources, is athreat to efficient management. An unfortunate combination of theorganizational goals, project deliverables, and employee engagementcan cause great institution losses. Financial managers need to beconversant with the guidelines that inform the organization`soperations. All members of an organization must thus, be sensitizedon the need to improve their communication techniques to foster greatunderstanding within themselves. Viewers of this video will beencouraged further by learning key concepts of efficiency in theirbusiness enterprises to be able to understand market failure causes,and the immediate strategies that governments has put in place forthem to find remedies for such failures.

Inconclusion, the video illustrates both monopoly and perfectcompetition market structures. The market structures face greatmanagement issues especially on the financial administration of theavailable resources. It is of uttermost importance for theorganization to consider these challenges as a threat that may hindertheir productivity to improve their performance. A sound financialmanagement enables directors to counter stiff competition from theircounterparts to create more room for infrastructural development thatis highly appreciated in any given community (Belfield, 2010).


Belfield,C. R. (2010). Economicprinciples for education: Theory and evidence.Cheltenham, UK: Edward Elgar.

FilmsMedia Group. (Producer). (2011). Microeconomics: Understanding themarket system [Video File]. Retrieved from Films on Demand.

Madura,J. (2014).&nbspFinancialmarkets and institutions.Nelson Education.