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The Article

The article discusses the role and importance of Chief Financial Officers (CFOs) in organizations. It describes how non-financial managers often have misconceptions about CFOs, viewing them either with awe or contempt. The article uses examples to illustrate how CFOs contribute to maximizing shareholder wealth through effective decision making. It explains that CFOs make financial decisions based on understanding the balance sheet, and factors like uncertainty, time value of money, and increasing company wealth. Additionally, the article discusses how CFOs perform the same management functions as other managers, such as decision making, planning, organizing, leading, and controlling. The conclusion is that CFOs play a vital role in achieving organizational objectives, and

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214 views2 pages

The Article

The article discusses the role and importance of Chief Financial Officers (CFOs) in organizations. It describes how non-financial managers often have misconceptions about CFOs, viewing them either with awe or contempt. The article uses examples to illustrate how CFOs contribute to maximizing shareholder wealth through effective decision making. It explains that CFOs make financial decisions based on understanding the balance sheet, and factors like uncertainty, time value of money, and increasing company wealth. Additionally, the article discusses how CFOs perform the same management functions as other managers, such as decision making, planning, organizing, leading, and controlling. The conclusion is that CFOs play a vital role in achieving organizational objectives, and

Uploaded by

badarkhanlodhi
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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The article CFO the myth and the reality is written by Dr Safdar A butt who is

working as a professor faculty of management sciences and Director, Fiscal policy


studies center Mohammad Ali Jinnah University , Islamabad. The theme of the
article is based on the covering several important areas of finance managers, to
make readers understand what is the role of the finance managers, how much they
are vital for an organization to make the business profitable through effective
decision making and what organizational roles they play for an organization to make
it successful. The article is very well written and well-constructed by an author in
which he has explained the topic by giving the real life examples with facts and
figures to make it easier for the reader to understand.
The article first talk about the views held by non-financial managers about finance
managers which are broadly classified in to two groups: Awe and contempt. Awe
group of NFMS think of finance as some sort of mystery. They usually do not
comment on financial matters as they lack capability interpret the information
provided by the finance managers so they agree what so ever information is
provided to them. While on the other hand, contempt group of NFMS think that
finance managers do nothing but just summarize the report what has been attained
by the hard work of other managers, such managers does not contribute in
achieving the overall objectives of the organization. Furthermore he explained the
example of Aala energy limited and Bala power limited that how the finance
managers have contributed towards the companys overall objectives of maximizing
shareholders wealth based on effective decision making.
Further he explained the role of finance managers is based on the understanding of
both sides balance sheet. Then on the basis of that he takes financing, investing
and risk management decisions those are collectively referred as financial
decisions. Moreover than he explained three important factors that influence the
financial decisions includes uncertainty, time value of money and the objective of
the exercise which to increase the wealth of a company.
Furthermore he discussed that the financial managers also perform the identical
management functions perform by other managers in an organization. The writer
has explained each function in detail that how finance manager performs each
function. These functions include decision making, planning, organizing, leading and
controlling. Each management function is vital for a finance manager to attain the
overall objectives of the company and they face challenges in performing each
function. The writer has provided with the different scenarios that in reality how
finance managers assist sand helps other managers to achieve there departmental
objectives.
Conclusion
It can be concluded from the article that finance managers play vital role in
achieving the overall objectives of the organization. They are managers just all like

others who positively contribute to achieve the objectives of the company. Without
them, other managers could not single handedly makes the business profitable.

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