Examining an expanded repertoire of finance functions: effects on performance and the moderating role of environmental uncertainty

Henrik Nielsen, Thomas Toldbod and Thomas Borup Kristensen

Accounting and Business Research, 2025, vol. 55, issue 1, 105-137

Abstract: The literature recognises that the activities of contemporary finance functions are expanding. Guided by the competing values framework, we group the results of previous research into four roles performed by modern finance functions – collaboration, adhocracy, control, and compete. We examine whether finance functions that encompass all four roles have an improved ability to match the right role with the corresponding organisational demand and then test whether this leads to improved financial performance. Empirically, we use structural equation modelling to analyse data from 408 firms operating in Denmark’s manufacturing and services sectors. The results show that fulfilling multiple finance roles is positively related to the ability to assist an organisation with the right activities at the right time and with the right quality. This ability to differentiate behaviour is also positively associated with a return on invested capital and, further, environmental uncertainty positively moderates this effect. The statistical results provide evidence that cultivating multiple roles within the finance function can create value and higher degrees of uncertainty positively leverage this value.

Date: 2025
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DOI: 10.1080/00014788.2023.2267443

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