Adapt or Quit - A Passive Organizational Submission
'Adapt or quit', entirely disregarding flexibility, is a blunt statement that does not normally have desirable outcomes. A similar sort of experience has the microfinance sector gone through during the last two decades or so. During the period from the early to mid-1990s the sector witnessed a sharp shift in its approach to handling-poverty. The donor community started emphasizing profitability, self-sustainability, and cost-control on the part of MFOs around the word. This change of approach on the part of the donor community posed a situation to which MFOs had to adapt and reorient. Since these MFOs were highly dependent on the donor community for their sustained operations, they were left with no choice but to submit passively to the demands of their 'sustainers'. This empirical paper argues that the parent organizations - the 'power source', have ethical responsibilities in using their power over their 'dependents'. In the light of empirical data and the Laughlin (1991) Model of Organizational Change, the 'power source' must stop applying further power if it becomes evident the dependent organizations would not be able to retain their overall structure and real identity in the face of further pressure to change. The paper presents the case of the Aga Khan Rural Support Programme (AKRSP), a pioneer in micro-financing in Pakistan, and argues the Microfinance Organization could not keep its organizational structure intact in the face of externally dictated conditions for change, and that the 'power source' had an ethical responsibility to stop applying further pressure when the MFO started losing its basic coherence in the face of this pressure, and evolved into an entirely different organization with a predominantly commercial setup.
Business Schools and Sustainability: A Promise Unfulfilled
"Give me a child until he is seven and I will give you the man" (anonymous). With the recent financial crises and associated corporate collapses combined with the seemingly unstoppable environmental degradation at the hands of organisations, the external environment for Management Accounting education around the world has not been very conducive. Society is expecting a change that will shift the current management accounting education paradigm to a more robust one, which could not only solve the current problems facing the environment and the financial world but also ensure such problems are not repeated in the future. Business schools around the world are being blamed for producing graduates whose unethical and immoral decisions have contributed if not resulted in these problems. This conceptual paper appeals to policy-makers and argues a case to identify and address the root cause of the problem. Business schools claim they have imbedded ethics and its significance in business decision-making into their curricula, but apparently this has not been reflected by these Schools' graduates in their routine decision-making in organizations. Thus, we argue that ethical behaviour in most cases cannot be taught in adulthood; and ethics taught at the business schools will not be implemented by their graduates in their practical life if ethics has not been inculcated into their very personalities at an early age. In this conceptual paper we suggest two remedies for ensuring smooth and efficient functioning of markets on a long-term basis: first, transformative teaching and learning activities that inculcate ethical behaviours into students should be implemented at secondary schools that feed universities with potential business graduates and develop personalities and mindsets that dominate students' behaviour throughout their life, and then reinforced at universities; second, conducive corporate governance environment within business organizations that encourages and fully supports ethical decisions - the first being the pre-requisite for the second.
The role of internal auditing in risk management
This paper is based on a theoretical analysis of the role of internal auditing in the accountability framework of contemporary corporate governance. We conceptualize the risk management rationale of internal auditing by drawing on the concept of accountability. We locate the emergence of internal auditing within the metamorphosis of capitalism. It is argued that this development produced the institutionalization of structural control of the firm to address the control problem in the inherently conflicting relationships that characterize accountability relations of capitalist enterprises. The exercise of control in this context entails ensuring accountability of employees, management and the board of directors to shareholders to increase profit. The extant literature does not provide an integrated conceptual framework that explains the role of internal auditing with a holistic view of this accountability landscape. This paper explains how the accountability relations of advanced capitalism create conditions that produce the demand for internal auditing as a risk management technology deployed to advance the managerial values of efficiency and effectiveness of the firm through assurance and advisory services.
Influencing the Organization's Priorities - A Theoretical Rationale for an Independent Intervention
Current literature on organizational change advocates the significance of 'strategy facilitation' on the part of the parent organization in the process of change imposed on the subordinate organization. Through this conceptual paper, resorting to the recent strategic changes Australian tertiary sector's constituents underwent in response to the Australian government's funding-specific policy changes for the sector, we argue that while 'strategy facilitation' by a 'power source' works to the advantage of subordinate organizations, 'strategy imposition' may work the opposite way. Externally dictated conditions for a change that leave an organization with no option but to submit passively to the pressure and adapt its core organizational elements for the sake of its survival, may result in the organization's demise in its real essence, as the organization sacrifices its true identity in an attempt to placate the external demand. Accountability dictates that such a change needs to be scrupulously checked and subjected to an independent enquiry before considered for implementation. We aim to develop theory- and logic-deduced propositions to help guide future empirical research into the area.