Reengineering And Continual Improving Of Finance Organization Within The Institutional Framework Of CFO: Value, Strategy, Process And Balance

In today's world, global finance organization faces a common dilemma: How to create values for the shareholders as a business unit and partner of other functions as well as taking the basic responsibility of supervising the company for the shareholders? In the era of globalization, internet, knowledge, credit and humanism, what is the future of the finance and accounting? What actions will finance organization take? The dissertation develops the theory of Financial Value Matrix System (FVMS) from the literatures such as finance value chain, balance scored card etc.The essential theoretical logic of FVMS can be described as follows: the objective, mission and value of the finance organization determine vision, the vision determines the strategy, the strategy leads to the process, the process dominates the structure, both the process and the structure shape the role, the role (position) trains the quality, and the quality creates the performance. Meanwhile, the quality reversely affects the objective, mission, values, vision, strategy, process and structure.The objective of the enterprise is to maximize the lasting value of shareholders. The same is the ultimate goal to the finance organization. Thus, to help the enterprise realize the objective is the mission of the finance organization. The core value of the finance organization is balance, or juste-milieu. The vision of the finance organization is to progress from a data provider to a knowledge-and-wisdom provider, a strategy organization, a decision supporter, a value creator, a team leader, a performance management guider, a cost management leader, a pioneer to sustainably improve process and system and a qualified supervisor. Therefore, the strategy of finance organization is to provide integrative solutions for clients ~ to make the process lean and structure virtual.In the article, the finance organization is comprised of the accounting organization based on informational value chain and the fund organization based on financial value chain. The informational value chain includes shared informational value chain, financial informational value chain and managerial informational value chain. Thereinto, financial informational value chain includes financial reporting process and tax reporting process. Managerial informational value chain includes budget accounting process, cost accounting process, internal audit process and performance accounting process. Financial value chain inlcudes finances management process, investment management process, operation fund management process (narrow sense of financial supply chain), supply chain planning process and off-balance sheet resource management process.Based on the above analysis, the role of CFO and financial team involves supervisor, strategist, politician, diplomat, consultant and guide. The role of supervisor is responsible for corporation governance, while other four roles are responsible for company management. When the two responsibilities conflict, the former precedes the latter. Accordingly, the prime role of CFO and financial team is the supervisor thus integrity is the prime quality. However, integrity is not the sufficient condition; other two quality--professional knowledge and capability--are requisite for an excellent CFO and financial team. In addition, the article presents the hierarchical role model of CFO and financial team, containing five levels--Tao, strategy, rules, methods and skills and puts forward two models--virtue-talent model and knowledge- capability model-- to evaluate the quality of financial team.Hereinbefore, the dissertation presents the three principles and the six stages of the practical process of reengineering and sustained improvement of the finance organization. The three principles include invariability, simplification and transformation, and the six stages involve preparation, evaluation, design, execution, measurement and combination.Moreover, the dissertation explains the internal drivers of reengineering and sustained improvement of the finance organization. In conclusion, the theory of Financial Value Matrix System is validated in a certain extent by the empirical tests through surveys of 129 state-owned enterprises (SOEs).