Financial competency within medium and large Iranian companies

Abstract

Despite emerging financial challenges on financial literacy, the literature lacks studies on financial competency. Thus, the study conceptualized financial competency, illustrated the status of financial competency in existing competency models and explored causes of inattention on competency. The research used the qualitative approach based on the available competency models such as generic, customized and well-known organizations’ competency models. To avoid terminological biases, the financial competency was studied ontologically. In this study, 55 pair-words were found in the literature that employed words to represent the concept of financial competency. These collocations were searched in 416 accessible competency models and the content analysis resulted in a few competency models that had mentioned the financial competency. In addition, two eight-person focus group discussions and 12 in-depth interviews with Iranian business owners, organization and human resource managers, helped the researcher learn about what financial competency is and why it has been neglected in competency models. Grounded theory was used as the methodology to analyze the findings of the discussions and interviews. Data analysis showed that the participants had addressed the attitude aspect of financial competency in comparison to knowledge and skills. This research identified thirteen factors from two main themes which are financial and contextual. The first theme consists of expenditure, saving, income, investment, cash flow management, budgeting and debt management. The second theme consists of opportunity competencies, financial perspective, market observation, documentation, paradigm notion and learning characteristic. The study concluded that all the components of competency modeling could have caused the financial competency to be ignored. The human resource staff as a member of competency mapping teams has more effect on ignoring this competency because of their leading role in the teams. As a conclusion, revalidating this study and quantitatively repeating it are recommended as future works.