Professional Documents
Culture Documents
Culture
Role of leader in change management and
strategy
If you want to
make everyone
happy,
don’t be a leader
– sell ice cream
As a result of holding certain position, the individual concerned is granted
Leadership certain level of power such as authority transaction exceeding certain type of amount
• Leadership Barriers
– Time management
– Reluctant to take risks
– Non inclusion of visionary leaders in the formulation and
implementation of strategy
– Lack of knowledge
– Micro management = referring to the leaders paying too much attention on every single detail to extent that
they have not time to forces on strategy.
– Reluctant nature of employees for change
– Lack of awareness about change in leadership style
– Lack of flexibility
Usually, this is the result of the leader not having trusted and confidence on
their employees.
Knows as X Manager
The concepts of entrepreneurship and
‘intrapreneurship’
Entrepreneurship versus Intrapreneurship
Founder of the company
Openness Judgement
Ethical and
Reputation Honesty
Quality
professional
Expected
of directors values
underpinning
Fairness governance Transparency
Responsibility Independence
Accountability
Openness to remove information asymmetry caused by the separation of ownership of control
- refer to the disparity in the access to information between insiders & outsider.
(can give rise to insider trading) (Directors) (Shareholder)
Independence applicable for those parties who play the monitoring role with
the exception of shareholders who have financial relationship with the asmsung &
therefore self interest thereat.
• Influence by others
Being answerable for the outcome of our action or decision made.
Accountability
Responsibility
whoever involve in monitoring the company should maintain a skeptical mindset so that they will not
overlook on certain unusual or unexpected situation
Skepticism
have challenge motive on auditor
– Believes that people are either born or are made with certain qualities
that will make them excel in leadership roles.
– Focuses on analysing:
• Physical:
– Drive, Energy, Appearance
• Personality
– Enthusiasm, Adaptability, Self-confidence
• Social
– Tact, Courtesy, Co-operative
– Brought the behavioural approach to the study of leadership
Leadership Theories
Justin Trudeau
Leadership Theories
Leadership Theories
Rodrigo Duterte
Leadership Theories
Leadership Theories
• Styles Theory to how a leader handles a particular situation.
– Maintains that many of the traits or styles can be taught. Your answers
to the following questions can reveal a great deal about your personal
leadership style.
• You are in charge of a certain project, what do you do first?
– do you develop a time line and start assigning tasks or
– do you think about who would prefer to do what and try to
schedule around their needs?
• When the planning starts to fall behind schedule, what is your first
reaction?
– do you chase everyone to get back on track or
– do you ease off a bit recognizing that everyone is busy just
doing his/her job, let alone the extra tasks you have assigned?
Leadership Theories
(a) Blake and Mouton's Managerial Grid
• Leaders can be made
• Concern for Task and/or People
– Impoverished (1,1)
– Task-oriented (9,1)
– Country Club (1,9)
– Middle Road (5,5)
– Team (9,9)
The Managerial Grid
Centralised
Exploitative Autocratic decision making
Benevolent Authoritative
Participative
The manager has substantial but not complete confidence and trust in the
subordinates who are free to discuss issues involving their job with them.
delegate vs empowerment
- the leader transfer task to staff - the leader transfers his authority to the staff
but retain the authority by himself
Leadership Theories
(c) Contingency Theory the type of leadership should not be fixed
Instead, it should depend on the situation.
– Argues that there is no single way of leading and that every
leadership style should be based on certain situations
• This theory has two pillars: leadership style and the maturity
level of those being led. Competency
of the staff
• Imagine this:
You've just finished training the newest member of your team.
You have given him the data he needs to enter into the
company's database, and you hurry off to a meeting.
Leadership Theories
• Imagine this (cont’d):
When you return later that afternoon, you find that he hasn't
done anything. He didn't know what to do, and he didn't have
the confidence to ask for help. As a result, hours have been lost,
and you have to rush to enter the data on time. Although you
may want to blame the worker, the truth is that you're as much
to blame as he is.
• All works well only if the three elements line up: a strict boss,
telling passive subordinates to get on with their repetitive tasks.
•
by punishing system to promote or discourages certain behavior renatively
Transactional Leadership
– Focuses on the short term, controlling, maintaining and improving
the current situation, planning, organising, defending the existing
employees comply because of the fear of punishment or the eagerness to
culture. earn the rewards. even though they may not be performing the task willingly or agree.
the approach used.
– Rely on rational/legal power to command the cooperation of the
subordinates.
– Concentrate on ‘doing things right’.
– Useful to deal with the day-to-day running of the organisation.
• Transformational Leadership influenced the employees by making them acknowledge the intention of the leader
through throe convincing & explanation.
• Participative
– Founders / Leadership
The clients that the company serves are an often overlooked factor
that affects organizational culture. If a customer is upset and takes it
out on an employee, that employee’s behavior directly impacts those
around them. If a client has a big success and thanks the employee for
a job well done, that employee can uplift their whole team.
– Company’s Values, Policies and Work Ambiance as seen in the company code of ethics for
business conduct.
– Organisation's industry
Schein’s model looks at culture from the standpoint of the observer and
describes organisational culture at three levels:
– Artefacts
These are the influences on culture that can be seen. For example,
how employees dress, the layout of the office, the way in which people
behave.
– Espoused values value promoted to the company code of ethics for business conduct
These are the strategies, goals and objectives of the organisation. For
example, an emphasis on low cost or an emphasis on excellent service.
Organisation Culture
• Schein’s determinants of organisational culture
ii. Can respond quickly to events but are heavily dependent for their
continued success on the abilities of the people at the centre;
succession is a critical issue.
iii. Attract people who are power orientated and politically minded.
iv. Size is a problem because of the demands on their time and ability.
v. Against corporate governance practises of spreading power and
reducing risks.
co big, dont have time to devising strategy
calls for balance of power not domineering in order to avoid abuse & malpractices
Organisation Culture
• Charles Handy’s Four Cultural Stereotypes
– Role culture under this type of culture, individuals are given specific rules to play. As seen in functional structure.
– Task culture = matrix structure i,e company is set up in terms of project team.
teamwork
this type of culture can create duplication of resources as each of the project team
has its own team of personal instead of sharing with other teams
– Person culture Under this type of culture, the focus is one the individual. Instead of the company i.e. the individual
determine the culture of the organization.
Symbols
Control
Stories
systems
Paradigm
Power
structure
Cultural Web
• Symbols also include awards that a company has won which is an indication of excellence
in the provision of its services or goods.
The visual representations of the company including logos, how plush the
offices are, and the formal or informal dress codes. Questions that can
arise by an assessment of this area are:
– Are there symbols that signify the organisation?
– What are the status symbols in the organisation (e.g. corner office,
luxury company car)?
– What is the jargon used by the employees when talking to each other
and to third parties?
Based on what had been talked about by these people,
Cultural Web it provide an indication of the situation at the company.
• Stories
employees general public
The past events and people talked about inside and outside the company.
Stories are an important element to determine what is considered
important in an organisation. Questions that can arise by an assessment
of this area are:
– What core beliefs do these stories reflect?
– Do the stories focus on successes? Failures? Leaders? Villains?
– Who are the leaders? And the villains?
– If members deviate from norms, what are the norms that they have
deviated from?
Cultural Web
• Rituals and Routines
The daily behavior and actions of people that signal acceptable behavior.
This determines what is expected to happen in given situations, and what
is valued by management. Questions that can arise by an assessment of
this area are:
– Which routines are emphasised?
– If one or more routines were changed what would look peculiar?
– What behaviours are encouraged by routines?
– What are the crucial rituals?
– What are the core beliefs routine and ritual reflect?
– How easy are routines and rituals to change?
Cultural Web
refer to the way in which an organization is being set up
• Organizational Structure
This includes both the structure defined by the organization chart, and the
unwritten lines of power and influence that indicate whose contributions
are most valued. Questions that can arise by an assessment of this area
segregation of duties
are: having many layers, therefore promote check
– How flat/hierarchical are the structures? and balance within the organization.
– Do structures encourage teamwork or competition?
matrix structure in every organization project team: acc department, property development
under this organizational structure, there is ample opportunity for the staff from different
department to interact with each other &thereby promoting harmony
In fact that in each of the project team, there members from respective department means that
the company is able to respond to changes in the environment faster compared to functional
structure.
Cultural Web Based on the extensiveness of controls that have been pot in
place, it provides an indication of whether the mgmt are control
conscious or not as well as the likelihood of the occurrence of fraud
• Control Systems
Symbols For example, how people dress and how they are
addressed
Power structure For example, autocratic or participative
Artefacts
Organisational For example, tall-narrow or wide-flat what can be seen
structure
Control system For example, highly centralised or decentralised
Whenever exam question test you public interest, always think of the following component ;
General public :
Community
Environment ~> CO2, footprint ~> consumption of natural resources
~> pollution emission
Accountant as professional
1)
Advantages
Represents behaviors expended to be follows by
everyone regardless of religion, culture, nationalities.
Professional
Integrity Fundamental behaviour
Principle
Objectivity Confidentiality
Professional
competence
and due care
Fundamental
Principle
Integrity
Professional competence and due care 2) maintain ~> participate in continuous professional
development CPD programs to keep our self-up to date with
the new developments
required PA in practice & in business to observe the standards i.e IFRS/IAS & ISA in the undertaking of their work
Confidentiality
Obligated to disclose.
- Audit clients operating in regulated industries
such as insurance, banking, financial institutions where the prevailing laws &
regulations impose on the auditors the duty to disclose on any known or suspected
breach.
obligated to disclose
Disclosure is required by law:
public interest
Professional behaviour PROFESSIONLISM
Threats to
Independence
Advocacy
Self-review
Self-
interest
A rose because of the existence of the relationship
Threats to independence which can be Family, personal, financial
Happen when senior personal resigned from his/her previous company to join the firm.
He/she is assigned to audit the previous company without observing certain long cooling off periods
May end up auditing his/her work done prior to joining the firm.
Threat Definition Examples
Intimidation Occurs when a member of • threat of replacement over a
the assurance team may be disagreement with the application of
deterred from acting an accounting principle
objectively and exercising
• pressure to reduce inappropriately the
professional scepticism by
extent of work performed in order to
threats, actual or perceived,
reduce fees
from the directors, officers
or employees of an this happened when client put audit out to tender.
the existing firm is under pressure to quote a low fees in
assurance client order to secure re-appointment.
Safeguards that mitigate the threats to independence
Types of safeguards
• educational, training and experience requirements for entry into the
profession
• continuing educational requirements
• professional standards and monitoring, and disciplinary process
• external review of a firm’s quality control system
• legislation governing the independence requirements of the firm
company act prohibits Directors.
& officers and a company from being the auditor AOB : Audit Oversight Board
of the same company
under Secretions commission
Types of safeguards
Audit committee
1. Firm-wide safeguards
• internal policies and procedures to monitor compliance with firm’s
policies and procedures as they relate to independence
• policies and procedures that will enable the identification of
interests or relationships between the firm or members of the
refer to the annual declaration made by audit staff,
assurance team and assurance clients regarding their relationship with client mgmt. &
investment in client companies
Point dots 3 :
the firms should establish a limit as to how much it could earn from a single client.
Safeguards within the firm’s own systems and procedures
1. Firm-wide safeguards
• policies and procedures to prohibit individuals who are not
members of the assurance team from influencing the outcome of
the assurance engagement toengagement
uphold the fundamental principle of confidentiality by providing the
team from discussing client affairs with non-team members.
1. Firm-wide safeguards
• a disciplinary mechanism to promote compliance with policies and
procedures
• policies and procedures to empower staff to communicate, to senior
levels within the firm, any issue of independence and objectivity
that concerns them; this includes informing staff of the procedures
open to them
establishment of whistleblowing agreement within the firms
Safeguards within the firm’s own systems and procedures
2. Engagement-specific safeguards
• policies and procedures to ensure members of the assurance team
do not make, or assume responsibility for, management decisions
for the assurance clients by doing so will make thee auditor concerned seen on a member of mgmt &
therefore unable to be the auditor of client company.
to influence decision making so that it Favours the person who make the payment
Global Corruption Barometer 2013
Corruption and Bribery
What is corruption?
What is bribery?
112
Types of corruption
• Administrative corruption
– Alters the implication of policies such as getting license even if
one doesn’t qualify for it.
• Grand corruption
– Involve substantial amount of money and usually high level
officials such as 1 MDB.
113
Types of corruption
• Petty corruption
– Involve a smaller sums and typically more junior officials
– Found typically in a low level business
• Public corruption
– Public office is misused for private gain such as police receive money
for personal gain and drop any criminal offence
114
What Causes Corruption?
Most studies of corruption focus on institutional factors:
• Lack of democracy
• Ineffective judiciary
• Unfair elections
115
Risks
• Legal
– Prosecution
– Fines and imprisonment
– Large legal and compliance costs.
• Organisational
– Loss of focus – takes up management time
– Huge internal disruption
• Reputational
– Loss of face
– Brand reputation damage
– Loss of Key Customers
– Decrease in morale
116
Impact of corruption
• Hinders social and economic development and increases poverty by
diverting domestic and foreign investment away from where it is most
needed
117
Solving the problem
Organisations must have…
• detailed policies and procedures The presence of SOP promotes the transparency & therefore
discourages the act of corruption
• vigorous punishments