Professional Documents
Culture Documents
7.2 Accountability
The topic of governance was explored in Chapter 2 in terms of ownership
and management of sustainable enterprises. In this and other chapters, it has
been noted that innovative firms strive to eliminate numbers from evaluation
systems by creating a working environment were employees can have fun
and be creative rather than trying to achieve ambitious performance targets
and outcomes. However, numbers, statistics and other indicators are
important measures of performance outcomes and every organisation
attaches a lot of significance to performance measurement. This section
explores why performance indicators and the reporting of outcomes are
significant by focusing on the concept of accountability as applied to
sustainable enterprises. Accountability is a term that is used in all walks of
life – at national and local government level, non-governmental
organisations (not-for-profit) and private commercial (or for-profit)
organisations. The focus here is on small and medium-sized enterprises
(SMEs), which are at the core of the cases discussed in this Reader. The
following quote from the Association of Chartered Certified Accountants
(ACCA) summarises vividly why accountability is important to the
governance of SMEs:
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What is accountability?
Accountability means different things to different people: auditors see it as
a financial or numerical matter, political scientists view it as a political
imperative; legal professionals as a constitutional arrangement; and
philosophers as an ethical issue. There is neither a universally agreed
definition nor standards for accountable behaviour. Consider the three
definitions below:
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Table 7.1 can also be used as an indicative check-list to ensure that the
concerns of all relevant stakeholders, to whom an enterprise is accountable ,
can be incorporated into any account that is being prepared.
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Accountability implies that one set of actors have the right to hold other
actors to a set of standards and, if these standards are not achieved or
maintained, to impose sanctions. This assumes a relationship between
‘power-wielders’ and those holding them accountable, requiring the
acceptance of the legitimacy of the standards for accountability and the
authority of the parties to exercise power through, for example, sanctions
(Bovens, 2007). There are a range of tools by which one set of actors can
demonstrate that they are acting responsibly and transparently (ACCA,
2015; Ebrahim, 2003):
7.3 Resilience
This section covers how small businesses can use resilience to respond to a
crisis and deal with barriers to business recovery following a crisis.
Specifically, it explores resilience and vulnerability prior to, during and in
the aftermath of crises as they relate to the individual, the organisation and
the sustainability of the organisation. The societal impacts of entrepreneurial
and innovative activities are felt both during and following a crisis and
entrepreneurs and managers need to be prepared to identify and deal with
the consequences in ways that do not affect the sustainability of their
enterprises.
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What is resilience?
The concept of resilience refers to the key features or characteristics of an
individual or organisation that enables successful adaptation to changing,
vulnerable and risky working conditions and environments (Ngoasong and
Groves, 2016). According to Coutu (2002, p. 52) ‘resilience is neither
ethically good nor bad; it is merely the skill or the capacity to be robust
under conditions of enormous stress and change’. In the case of individuals,
it is called personal resilience (Ngoasong and Groves, 2016), while for
organisations, such as small businesses and community associations, it is
referred to as organisational resilience (Sullivan-Taylor and Wilson, 2009;
Ngoasong and Kimbu, 2016).
Personal resilience: This is very much about an individual and their
working environment. In their study examining the personal resilience of
nurses and nurse managers in public, private and religious hospitals,
Ngoasong and Groves (2016) found that personal resilience is a way of
being and acting in the workplace that makes a person strongly connected to
life through relationships. A resilient individual has the ability to be
creative by taking advantage of any beneficial opportunities within their
work environment to deal with risky and complex situations and thereby
enabling the achievement of organisational goals. Here, resilience takes the
form of adjustments made by an individual employee in the face of job
stress and pressure. Knowledge of employee’s resilience can enable
managers to better support them (Ngoasong and Groves, 2016).
Organisational resilience: Just like individuals, organisations also have to
adapt to risks and threats in the internal and external environments, if they
are to achieve their goals in a sustainable manner. The internal environment
includes the organisation structure and operations, the guidelines available
to help individuals and work teams complete designated tasks. The
managers of the organisations have control of this environment
(Doern, 2016). However, the external environmental factors, such as
political, economic and legal changes in society, are neither easily
predictable nor can they be controlled by SMEs. However, as organisations,
resilient small businesses can ‘meticulously prepare for the worst and
establish routines enabling them to improvise rapid responses to crisis’
(Sullivan-Taylor and Wilson, 2009, p. 253). Before going into a discussion
of how they do this, it is important to first outline the kinds of crises that
impact small businesses for which resilience is essential.
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crisis that have become integral parts of SME activity, for which business
interruptions and/or failures are likely without adequate preparedness and
response:
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We spoke with Mark recently and asked him about how he has
prepared for and dealt with external shocks and crises to his business.
He explained that the entire business runs on electricity and disruptions
to this service are one of his biggest problems, ‘No electricity, no
business and we have had electricity supply breakdown several times,
which has caused huge problems.’ During 2012 and 2013 they had to
deal with a number of power disruptions, but their longest outage lasted
for 6 hours in their old premises during 2007. With thousands of calls
coming in each hour, this caused them some problems with their
clients, ‘In the past we have had to kind of grin and bear it until the
supply company have managed to fix the problem and resupply us’.
The main source of their power disruption occurred when resurfacing
work was being done in the market square and a major supply cable
was dug through. Answer-4u was not the only company to be affected,
‘but for us we were literally dead in the water without power’.
After two recent power outages that occurred six weeks apart, their
power suppliers assessed the situation and informed them that it was
highly probable that their main supply feed cable would need replacing
in a few months. This would require about 48 hours. Mark and his team
decided that they needed to acquire a generation system. They
purchased a fully automated stand-by generator powered by natural
gas, which kicks in about 20 seconds after the power is disrupted.
Fortunately, the building was already being supplied with natural gas, so
this was a ‘very convenient way of solving potential power shortages
through a gas supplier that’s already on the premises’. In addition, they
upgraded all the IT and phone equipment so that they are powered by
an uninterrupted power supply (UPS) that is capable of running for
around an hour, ‘We had to do that because we were seriously
concerned it would cause major damage to our business’. There has
been a power outage since these have been installed and Mark shared
that his employees barely noticed it had occurred. He also added that
with the recent news about businesses switching off their electricity
during peak winter times under the endorsed plans of Ofgem (the
statutory regulator for the energy sector), he believes that he got his
electricity backup system at just the right time. With more companies
having to go this route, the prices would likely increase.
We asked Mark how they were able to finance all of this spend. He
explained that it had mostly been paid for out of cash flow and profits
but also that they had ‘used crowdfunding to raise £100,000 to help
towards the cost’. They used the crowdfunding company Funding
Circle, which provides an online market place for investors and
businesses with at least two years’ filed accounts and a minimum
annual turnover of £100,000. Funding Circle’s credit assessment team
review each business plan before placing them in the marketplace
where the loan is then auctioned to investors for the lowest rate. Mark
was very enthusiastic about this approach to financing and saw it as
having a significant role to play in the future, ‘My experience with
crowdfunding is, it is the way forward for the Western world. It is a
fantastic tool for the business and it is a fantastic investment tool for the
ordinary man in the street or for the sophisticated investor. It is a very
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Groupings
Maximise Deliver
Create with Adopt a Repurpose Develop
material functionality Encourage
value from renewables stewardship sufficiency for society/ scale up
and energy rather than
waste and natural role environment solutions
efficiency ownership
processes
Low carbon Circular Move from Product- Biodiversity Consumer Not for profit Collaborative
manufacturing economy, non-renew- orientated protection Education approaches
/solutions closed loop able to PSS – (models); Hybrid (sourcing,
renewable maintenance, Consumer communica- businesses, production,
Lean Cradle- energy extended care – tion and Social lobbying)
manufacturing 2-Cradle sources warrantee promote, awareness enterprise
consumer (for profit) Incubators
Industrial
Examples
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References
ACCA (2015) ‘Governance for all: the implementation challenge for SMEs’,
ACCA Global Forum for SMEs, The Association of Chartered Certified
Accountants [Online]. Available at http://www.accaglobal.com/content/
dam/acca/global/PDF-technical/small-business/ea-governance-for-all.
pdf.
Blundel, R. (2013) ‘Case study E: LandCruise Motorhome Hire Ltd, Special
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Bovens, M. (2007) ‘Analysing and Assessing Accountability: A Conceptual
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sector’, IDS Bulletin, vol. 31, no. 1, pp. 1–13.
Coutu, D. (2002) ‘How resilience works’, Harvard Business Review, vol. 80,
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Doern, R. (2016) ‘Entrepreneurship and crisis management: The experiences of
small businesses during the London 2011 Riots’, International Small Business
Journal, vol. 34, no. 3, pp. 276–302.
Ebrahim, A. (2003) ‘Accountability in Practice: Mechanisms for NGOs’, World
Development, vol. 31, no. 5, pp. 813–29.
Edwards, M. and Hulme, D. (1996) ‘Too Close for Comfort? The Impact of
Official Aid on Nongovernmental Organizations, World Development, vol. 24,
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Fox, J. A. and Brown, L. D. (1998) The struggle for accountability: the World
Bank, NGOs and grassroots movements (eds.), Cambridge, MA, The MIT Press.
Lai, Y., Saridakis, G., Blackburn, R. and Johnstone, S. (2016) ‘Are the HR
Responses of Small Firms Different from Large Firms in times of Recession?’,
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Mulgan, R. (2000) ‘Accountability: An Ever-Expanding Concept’, Public
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Ngoasong, M. Z. and Groves, W.N. (2016) ‘Determinants of personal resilience
in the workplace: nurse prescribing in an African work context’, Human
Resource Development International, vol. 19, no. 3, pp. 229–44.
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References
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