Enterprise Structures

You need to design and model your enterprise structures to fulfill your legal and management objectives.

The key decisions that impact your implementation of Oracle Fusion Applications are affected by these factors:

Industry
Business unit requirements for autonomy
Business and accounting policies
Business functions performed by business units and optionally, centralized in shared service centers
Locations of facilities

Every enterprise has three fundamental structures that describe its operations and provide a basis for reporting:

Structure	Description
Legal	In Oracle Fusion Applications, the legal structure is implemented using legal entities. A legally recognized entity can own and trade assets and employ people in the jurisdiction in which the entity is registered. Legal entities are required to: Account for statutory and external reporting. Comply with legislation and regulations. Pay income and transaction taxes.
Managerial	In Oracle Fusion Applications, the management structure is implemented using divisions, subdivisions, lines of business, strategic business units, profit, and cost centers. You can segregate multiple businesses by their strategic objectives and measure their results.
Functional	In Oracle Fusion Applications, the functional structure is implemented using departments and organizations, including sales, marketing, project, cost, and inventory organizations.

Structure

Description

Legal

In Oracle Fusion Applications, the legal structure is implemented using legal entities. A legally recognized entity can own and trade assets and employ people in the jurisdiction in which the entity is registered. Legal entities are required to:

Account for statutory and external reporting.
Comply with legislation and regulations.
Pay income and transaction taxes.

Managerial

In Oracle Fusion Applications, the management structure is implemented using divisions, subdivisions, lines of business, strategic business units, profit, and cost centers.

You can segregate multiple businesses by their strategic objectives and measure their results.

Functional

In Oracle Fusion Applications, the functional structure is implemented using departments and organizations, including sales, marketing, project, cost, and inventory organizations.

These structures are implemented using the chart of accounts and organization hierarchies. It is recommended that you start with one primary structure that organizes your business into these categories and align them with your strategic objectives. You can implement and use alternative hierarchies for reporting.