External Factors

As far as external factors are concerned, results highlight interesting and relevant trends in relation to the identified hypotheses.

In particular, hypothesis 6a seems to be supported: increasing levels of financial accountability are associated to higher environmental uncertainty. Looking at the data shown by the relative graph in appendix we can identify two relevant clusters with their central points in the following values of the “weighted % of resources spent on the field” /

“financial accountability”: 2%/20% (low/low) and 60%/50% (high/high).

This result is consistent with the contingent approach, according to which an unpredictable environment is likely to foster organizations’ financial reporting in order to allow external stakeholders to better evaluate trends and activities. In particular, this result is consistent with the idea that a fair and transparent identification of the resources allocated in the most uncertain (and hence in need) areas of the world is considered a powerful communication element towards the main donors and publics.

Results regarding hypothesis 6b show as a whole a similar trend to hypothesis 6a;

increasing levels of non financial accountability are associated to higher environmental uncertainty, even if values of non-financial accountability are more levelled and close values can be found at very different environmental conditions. Looking at the data shown by the relative graph in appendix we can identify two relevant clusters with their central points in the following values of the “weighted % of resources spent on the field”/non financial accountability: 2%/50% (low/low) and 60%/60% (high/high). Five organizations fall out the identified clusterization.

The minor intensity of the relation found for non financial accountability when compared to the financial one could be partly due to the fact that in most uncertain areas of operation, media and other actors’ attention is also higher. Stakeholders can then gather contextual and non- financial information from many other different sources.

Hypotheses 7a and 7b, although not supported, remark a possible inverted U-shaped relationship between market dependence and respectively financial and non-financial accountability. High levels of market dependency, in fact, are associated with high accountability up to a threshold. At about 48% of market dependency, an increase of the variable seems to be associated with a decrease in the financial and non-financial information disclosed. This might suggest that when organizations become too much dependent on the market (about 50%) their accountability starts decreasing in favour of alternative forms of reporting and disclosure addressed to single and groups of donors of voluntary resources. Specifically, three main clusters emerge: i) organizations mainly financed by ordinary sources and thus showing a relatively low level of (financial and non financial) accountability; ii) organizations mainly financed by extra-budgetary sources and again showing mid or low levels of accountability; and iii) organizations gathering resources from different sources and dealing with a more uncertain situation and a higher market exposure. The latter condition tends to increase their accountability, consistently with a possible legitimating strategy.

Hypotheses 8a and 8b state the relationship between the type of activity performed by different UN organizations and their relative degree of accountability. Recalling Chapter 3, we made hypotheses regarding organizations characterized by a prevalent regulative and informative nature (8a) and by a prevalent financial transferring nature (8b) as opposed to organizations with a prevalent implementing and project management activity. In both

cases, contingency theory states that the organizations with prevalent regulative/financial transferring nature show higher levels of accountability. Organizations have been rated accordingly to a low/medium/high level of regulative and informative activity.

Specifically, hypothesis 8a seems to be relevant but confuted; organizations sited on the low end of this variable show the highest values of financial accountability of the entire population, with an average of about 62%, while organizations on the high end show low financial accountability values, with an average of 25%. Just two organizations in the high end seem to fall out this clusterization. Organizations with a regulative nature of medium intensity show average accountability values.

The negative association between regulative activities and financial accountability could be explained by the presence, in the regulative organizations, of a main focus on internal procedures and processes and a consequent lower attention to the provision of financial data. On the contrary, organizations performing a relatively lower amount of regulative activities (and having thus a different focus) could pay less attention to internal procedures and compliance and provide more financial information because of their difficulty to measure differently their actual results.

Finally, hypothesis 8b seems to be verified. Organizations with a prevalent financial transferring nature show higher levels of financial accountability than organizations rated with a low financial transferring nature. Looking at the data, organizations on the low end of the independent variable show an average accountability of 16%, while organizations sited on the high end score on average an accountability rate of 55%.

The relations resulting from the empirical analysis and discussed above are summarized in Table 5.4.

Table 5.4. Resulting Effect of the Tested Variables on Organizational Performance Reporting: a Summary

Variable Organizational factors

Corporate

governance factors

External factors Hypothesis

resources managed by the organization (contingency)

+ (financial) 1a - verified

resources managed by the organization (legitimacy)

not relevant (non financial)

1b – not relevant

organizational complexity (contingency)

not relevant (non-financial)

+ (financial-emergent relation)

1c – not relevant emergent relation complexity/financial acc. (+)

organizational decentralization (contingency)

+ (financial) not relevant (non financial)

2a – verified 2b – not relevant

organization’s past performance in attracting financial resources (contingency)

not relevant (financial) not relevant (non financial)

+ (overall – emergent relation)

3a – not relevant 3b – not relevant emergent relation financial

performance/overall acc (+)

organization’s past performance in using available financial resources (contingency)

not relevant (financial) not relevant (non financial)

3c - not relevant 3d – not relevant

concentration of ownership (contingency)

not relevant

(financial/non financial)

4a – not relevant 4b – not relevant

organization’s bargaining power (legitimacy)

U-shape (financial) 4c – modified

(U-shape)

4d – not relevant accessibility for stakeholders to

executive bodies and decision-making activities (contingency)

not relevant

(financial/non financial)

5a - not relevant 5b - not relevant

presence of interest warranty mechanisms (contingency)

not relevant

(financial/non financial)

5c - not relevant 5d - not relevant environmental uncertainty

(contingency)

+ (financial)

+ (non-financial)

6a – verified 6b - verified organisation’s market

dependence (legitimacy)

inverted U-shape

(financial) inverted U-shape (non financial)

7a - modified (inverted U-shape)

7b - modified (inverted U-shape)

organization’s prevailing regulative activity (contingency)

- (financial) 8a – confuted (opposite)

organization’s prevailing financial transferring activity (contingency)

+ (financial) 8b – verified