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Business Finance

Organizational Chart and


the Roles of the VP for
Finance
Learning Objective
• To explain the major functions of key
management positions in a typical organization,
highlighting the crucial role of the finance
manager
Organizational Chart
Organizational Chart

Among the responsibilities of the Board of Directors are:

1. Setting policies on investments, capital structure, and


dividends;
2. Approving company’s strategies, goals, and budgets;
3. Appointing and removing members of the top management
including the president;
4. Determining top management’s compensation; and
5. Approving the information and other disclosures reported
in the financial statements.
Organizational Chart

Among the responsibilities of the President are:

1. Overseeing the operations of a company and ensuring that the


strategies as approved by the board are implemented as planned;
2. Performing all areas of management: planning, organizing, staffing,
directing, and controlling; and
3. Representing the company in professional, social, and civic
activities.
Organizational Chart
Among the responsibilities of the VP for
Sales & Marketing are:
1. Formulating marketing strategies
and plans;
2. Directing and coordinating
company sales;
3. Performing market and competitor
analysis;
4. Analyzing and evaluating the
effectiveness and cost of marketing
methods applied;
5. Conducting or directing research
that will allow the company to
identify new marketing
opportunities, for example, variants
of the existing products/services
already offered in the market; and
6. Promoting good relationships with
customers and distributors.
Organizational Chart
Among the responsibilities of the VP for Production are:
1. Ensuring production meets customer demands;
2. Identifying production technology/process that minimizes
production cost and makes the company cost competitive;
3. Coming up with a production plan that maximizes the
utilization of the company’s production facilities; and
4. Identifying adequate and competitively priced raw material
suppliers.
Organizational Chart
Among the responsibilities of the VP for Administration are:
1. Coordinating the functions of administration, finance, and sales
and marketing departments;
2. Assisting other departments in hiring employees;
3. Providing assistance in payroll preparation;
4. Determining the location and the maximum amount of office
space needed by the company; and
5. Identifying means, processes, or systems that will minimize the
operating costs of the company.
Organizational Chart

Functions of VP for Finance


••• Making
Determining
Determining
Capital decisions
the
Helpingbudgetinghow as
to to
to determine
how
appropriate
finance
howto
analysis finance
muchworking
capital
long-of
in support
cash
term
structure
capital
investments
long-term
dividendsaccounts
ofathe such
and
investments
company
working
company
as accounts
should capital
declarereceivable
which
deals
and inventories
with the day-to-
day operations of the
company
Organizational Chart

Several factors to be considered in declaring cash dividends:

1. Availability of investment opportunities


2. Access to long-term sources of funds
3. Capital structure
4. Stockholders
Self-Test Questions
1. What are the reasons why the Board of Directors is
the highest policy-making body in a corporation?
Give at least three.
2. How is a director elected in the Board of Directors?
3. What are the four important roles of a finance
manager? Explain each briefly.

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