FINANCE IN A BUSINESS ORGANIZATION

In business organizations, finance has elevated its status as one functional area. In a typical arrangement of a
business organization, four functional divisions are involved:
1. Production and operation division
2. General administrative or human resource division
3. Finance division
4. Marketing division

Chief Executive Officer/

President

Board of Directors

Product and General Administrative Finance Division Marketing Division

Operaton Division Division (Vice President (Vice President
Product
(Vice and
President
General Administrative
(Vice-President for Finance Division
For finance or Marketing
For Division
Operation Division Divisionor Human
Administration (Vice President (Vice President
For Operation) (Vice-President for Officer Chief Finance Officer) Marketing)
resource Development
(Vice President Administration or Human For finance or For
For Operation) resource Development Officer Chief Finance Officer Marketing))
)

Accounting Department Finance or Treasury

(Chief Accountant, Department
Controller, Controller or (Treasurer or
Finance Officer) Finance Officer)
)
Figure 2. Finance in a Business Organization

Some business organizations also elevate information technology and system as one functional area. In large
corporate entities, the finance department is headed by the vice president for finance while in medium or small
organizations, the common designation of the of the vice head of finance department is a controller or finance officer.

Figure 2 presents the typical organization arrangement of finance in a business organization.

Some business organizations follow a structure of two major divisions under the president or chief executive officer.
These two are the operating division and finance division.

Figure 3. Finance in a Business Organization

Board of Directors

Chief Executive Officer/

President
 Operating Division Finance Division
(Chief Operating Officer) (Chief Finance
Officer)

Production and Human Marketing Accounting Treasury

Operations Resources

The operating division handles by the marketing, production and operation, and human resources functions. It is
usually headed by the chief operating officer (COO). The finance division, on the other hand, is headed by the chief
finance officer (CFO) and handles the Accounting and treasury functions. This type of organizational structure is
illustrated in Figure 3.