The Multiple Roles of the Finance Organization : Determinants, Effectiveness, and the Moderating Influence of Information System Integration

This study focuses on three broad Finance organization roles: reporting, compliance, and internal control/risk management (RCCR); performance management; and strategic partner. Using data from a global survey of 832 firms, we examine the determinants of the various roles' importance and their relation with Finance effectiveness. While the effects of organizational change, market growth, international operations, firm size, decentralization, and industry on Finance responsibilities vary depending upon the role, we find little evidence of tradeoffs between the various roles. Instead, we find evidence of complementarities between roles, whereby greater emphasis on one role is associated with greater Finance effectiveness in the other roles. Additionally, we find that information system integration (ISI) not only has a positive direct impact on effectiveness in all three roles, but also interacts with the importance placed on RCCR and performance management roles to improve the Finance organization's effectiveness at carrying out these responsibilities