Managing the sub-functions of the finance department: Exploring the independent control through business partnering continuum

Senior financial managers in large, publicly held firms face competing demands. They are expected to partner with top management to improve financial performance; they also are expected to be independent when recording financial transactions and presenting financial statements.; This dissertation used a contingency approach to demonstrate how finance departments balance the need for independent control with business partnering. It builds on earlier research that contrasted the control, conformance and compliance orientation of finance with a business partnering orientation. Unlike prior research, this exploratory descriptive study examined the sub-functions of finance, such as capital budgeting, financial planning, and cash. This study predicted that significant differences would be found in the emphasis given to independent control and business partnering by the subfunctional areas. This research also differed in the way the two orientations were examined. Prior research viewed independent control and business partnering as separate and distinct variables. This research viewed these two variables as interrelated ends of a continuum, similar to the concept of the balanced scorecard.; Management orientation in Fortune 1000 companies was used as the sample. CFOs were surveyed regarding the management orientation of the finance department, and the sub-functions, and the factors influencing management orientation.; The results of this study provide evidence that there are differences in management orientation between the finance department and the sub-functions, as well as within the 13 sub-functions studied. Two hypotheses of this dissertation addressed factors influencing the management orientation of the finance department. They were only partially supported. Corporate governance (CEO/Chair duality and the composition of the board of directors) was hypothesized to influence finance management orientation. There was very minimal support that CEO/Chair duality influenced the variables related to management orientation of the finance department. This dissertation also hypothesized that financial measures reported, the basis for the financial reporting system, training and development of finance personnel, and "who requests special financial studies," would vary based on management orientation. There was support for financial measures reported and the basis for the financial reporting system being influenced by management orientation, but the other two hypotheses were not supported by the research.*; *This dissertation is a compound document (contains both a paper copy and a CD as part of the dissertation). The CD requires the following system requirements: Adobe Acrobat.