Recognition of Financial Managers to Profit and Not for Profit Organisation in Tanzania
CHAPTER ONE
INTRODUCTION
Background of the Problem
The Chief Financial Officer (CFO) primarily represents the highest position level of fiscal leadership and financial management service in the business sector. As a member of the organization’s executive leadership and management team, the CFO currently occupies a very crucial and viable position in today’s global business society.
However, this present level of CFO’s recognition has not always been identifiable or appreciated by non-for-profit and profit organizations. May (2001) state that “CFOs are some of the most misunderstood people on the universe. Somewhere along the way, they got mistaken for accountants” (p. 12). As the position of the CFO continues to evolve, so will the expectations of the position and the need to communicate those expectations in the organization. “Twenty years ago, many CFOs were expected to know about finance and be able to report financial results accurately and in a timely way. Now they have to understand the business intimately and be an equal partner with the business manager” (Goldstein, 1997, p. 46-51). Randall (1999) notes that new challenges in finance will require that CFOs spend “less time…on financial tabulations and reporting, and more time adding value to the organization through analysis” (p. 30-32). The role of the CFO has also developed in response to the changes in today’s global society such as, but not limited to, large corporate business expansions and failures, changes in human lifestyles and living conditions, and the demand for greater accountability and services from governments and corporate entities. Ewing (1998) recognized “that the role of the CFO has itself changed. The focus has shifted from the traditional control and compliance to business advocacy to providing value-added services. Today’s finance leader must be fully involved in the business, have a keen understanding of its costs and strategic drivers and an obsession with
INTRODUCTION
Background of the Problem
The Chief Financial Officer (CFO) primarily represents the highest position level of fiscal leadership and financial management service in the business sector. As a member of the organization’s executive leadership and management team, the CFO currently occupies a very crucial and viable position in today’s global business society.
However, this present level of CFO’s recognition has not always been identifiable or appreciated by non-for-profit and profit organizations. May (2001) state that “CFOs are some of the most misunderstood people on the universe. Somewhere along the way, they got mistaken for accountants” (p. 12). As the position of the CFO continues to evolve, so will the expectations of the position and the need to communicate those expectations in the organization. “Twenty years ago, many CFOs were expected to know about finance and be able to report financial results accurately and in a timely way. Now they have to understand the business intimately and be an equal partner with the business manager” (Goldstein, 1997, p. 46-51). Randall (1999) notes that new challenges in finance will require that CFOs spend “less time…on financial tabulations and reporting, and more time adding value to the organization through analysis” (p. 30-32). The role of the CFO has also developed in response to the changes in today’s global society such as, but not limited to, large corporate business expansions and failures, changes in human lifestyles and living conditions, and the demand for greater accountability and services from governments and corporate entities. Ewing (1998) recognized “that the role of the CFO has itself changed. The focus has shifted from the traditional control and compliance to business advocacy to providing value-added services. Today’s finance leader must be fully involved in the business, have a keen understanding of its costs and strategic drivers and an obsession with