Internal and External Accountabilities for Organizational Governance - Research Paper Example

 Introduction: The term organizational governance can be defined as, The framework of any organization, which is established by the governing body of an organization, which takes into profound consideration that the stakeholders, particularly the parliament, the government and the community are well assured of the fact that the organization is performing all its tasks well and fulfilling its duties of planning, implementing, controlling and all those acts which are included in directing and controlling an organization in a highly disciplined manner.” The organizational governance generally follows three main rules, i.e. managing, monitoring and measuring how well whole of the process is going on. Basic principles of Organizational governance: Accountability, being one of the most important principles of organizational governance. Transparency is another factor included in organizational governance. Links between executive compensation and the accomplishment of financial and non-financial goals. Management of any sort of risk taken by the organization as a whole, or any part of the organization. Management of the lack in the skills, expertise, knowledge or any necessary quality of the board members. The quality, capability and standard of the board that identifies the social, economic and environmental issues and manages them as well, also understands and predicts the risks as well as utilizes all sorts of opportunities. Internal accountability: Internal accountability involves the internal operations of any organization. It deals with the internal processes of monitoring, managing and financing matters of an organization. It deals with the relations, works and processes made by the internal stakeholders of an organization. The internal stakeholders of an organization basically decide and make up the internal accountability of an organization. External accountability: Opposite to the internal accountability, stands another kind of accountability known as the external accountability. External accountability totally depends upon the external stakeholders of an organization. The external stakeholders interested and concerned with the profits and loss of an organization are the ones who build up the standards of the external accountability of an organization, as they are the ones on whose fulfillment of expectations and demands determines the appropriate levels of external accountability. “The purpose of external accountability is so that we can develop a stronger and more powerful sense of internal accountability.” (Tom Weber) Internal accountability in the not-for-profit organizations: Internal accountability in the not-for-profit organizations refers to the internal stakeholders such as employees, managers, directors etc, their quality of work and the coordination between them which leads to the welfare of the public or any other organization whom they are responsible to benefit. Profit is not their motto, their main aim is to provide services to others, therefore, the needs of others and their fulfillments by the staff and the financial resources of an organization are all a part of the internal accountability of a not-for-profit organization. Internal accountability in the for-profit organizations: Internal accountability in a for-profit organization similar to the internal accountability of a not-for-profit organization, refers to the internal stake holders such as employees, directors, managers, shareholders etc and the coordination between them. But, the difference between both of them is that, the internal accountability of a for-profit organization deals with the profits and loss made by the company, Such organizations don’t work for the profit of others, instead they work for their own profit, therefore, they are basically concerned how well the internal stakeholders work in order to make more and more money for the organization. External accountability in the not-for-profit organizations: External accountability of a not-for-profit organization is concerned with all the external factors that affect a not-for-profit organization. Charities, donations, sponsors etc are some of the external stakeholders of not-for-profit organizations. External accountability in the for-profit organizations: External accountability of a for-profit organization includes external stakeholders such as customers, clients etc which affect or make up either profit or loss for a for-profit organization. Difference between educational and other not-for-profit organizations: It is rather more difficult to control a not-for-profit educational institution than any other not-for-profit organization. A non-profit educational organization not only gives services to the students but, also has to keep a check that each and every student is being treated alike, no student is being provided with fewer facilities as compared to the other students. The management staff has to keep a strict check over this issue that no student in any sense is lacking behind. Whereas, a other non-profit organizations are easier to control than the non-profit educational organizations. This is because they have to keep an overall check over the public or any organization that they have promised to provide services to. Suppose a non-profit organization is providing financial resources to any other organization. In this case they just have to provide the other organization with finance and the management of that organization then controls the matters and the utilization of the financial or any other resource provided to them. Accountability of volunteers for a not-for-profit organization: It is most important for a non-profit organization to find volunteers who are accountable. Without accountability of volunteers, a non-profit organization cannot run. It is very essential for the volunteers to take care of time as well as financially. If promises are made by the volunteer to provide donations to an organization, then those promises shall definitely be fulfilled and on correct time. A volunteer’s sincerity and dedication towards an organization is as important as fulfillment of his commitments of time. If a volunteer is not present at the time when he/she is needed, the volunteer is then considered of no use for an organization. Therefore, not-for-profit organizations should definitely find reliable, sincere and honest volunteers for themselves. Assessment of governance performance: The performance of an organizational government can be assessed by the accomplishment of tasks of all the people working in an organization. The performance can be considered as good if an organization is working steadfast on its mission and objectives and is achieving its desired goals. For instance, the performance of a school can be considered good if the administration and the teachers are working hard enough to groom the students to become useful people for the world. A school will therefore be judged by the caliber of its students. Conclusion: It is concluded that for organizational governance, be it a for-profit organization or a not-for-profit organization, the above factors which include internal and external accountabilities, are equally important. References Edelman, Lauren, B. (1990). Legal Environments and organisational governance: The expansion of due process in the american workplace. http://www.jstor.org/pss/2780330 Beck, D. (2009). Accountability to employees, volunteers and board members. http://wyomingnpmgtnleadership.pbworks.com/w/page/8563732/Employees,-Volunteers,-Board-Members Barness, M. Internal accountability. http://www.mde.k12.ms.us/internal_accountability/index.html Flurmerfelt, S. (2006). WeLEAD online magazine. http://www.leadingtoday.org/Onmag/2006%20Archives/jan06/sf-january06.html Read More