External Factors

related to the total amount of arrears concerning contributions, so that we operazionalised it as the percentage of contributions collected by the organization in the financial period 2002-2003 in relation to the total amount of resources approved and or pledged by member states. The higher the percentage, the higher the power. It should be noted that we considered the total amount of resources as base of this indicator; infact, even if organizations have the most relevant difficulties in collecting ordinary resources, the increase in extra-budgetary resources caused a growing phenomenon of non-collected (pledged but not received) resources.

Regarding the source of information, all the corporate governance variables related measures have been drawn from the Basic texts of the organisations, such as the Constitution and the Rules of procedures of the Governing Bodies, or from the financial reports (for exsample the case of arrears).

industry and the volatility of operating income (Keats and Hitt, 1988). Complexity has been linked to the variety and range of organization’s activities i.e. divisionalization, and concentration/dispersion of firm in an industry (Dess and Beard, 1984; Duncan, 1972, Keats and Hitt, 1988).

In the present work, we operationalised environmental uncertainty as the weigthed percentage of the decentralised resources (or resources spent on the field). The rationale behind this choice is that we tried to understand and measure the level of exposure to the environmental risk represented by the field conditions the organizations face in their core operations. Intuitively, implementing agencies working in emergency areas in eastern Africa or middle east (i.e. UNHCR, WFP) face a higher risk than regulative agencies with the majority of their operations in the headquarters (i.e. WIPO, ILO). On the other side, it has been proven difficult to quantify objectively the level of uncertainty actually faced by the organizations. We relied on the information regarding the resource allocation in the different “regions” of the world and we tried to find a measure of political/social uncertainty of each region. We proceded in the following way: we rated the the level of “political instability” of each country where the UN organizations have operations consistently with the classification on instability drawn from a specialised website (www.ppu.org.uk)²². Each world region has been awarded with a weigth representing the simple average of the uncertainty level of the countries comprised in each region; as a result, the regions were ranked in a1 to 5 scale North America and Europe scored 1, Asia and Pacific 2; Arab States 3; Africa 4; Latin America and the Caribbeans 5. Consequently, the weigthed percentage of the decentralised resources has been calculated as a percentage on a scale 1-5 attributing to the percentage of resource spent by the single organization in each world region its relative weigth. For example, if an organization spent 20% of the decentralised resources in Europe and Commonwealth, 20% in Asia and Pacific, 30% in Arab States, 0% in Africa, and 50% in Latin America and the Caribbeans the level of risk is: (0,2*1 + 0,2*2 + 0,3*3 + 0,5*5)/5 = 4/5 = 80%. The percentual value recalls the level of risk reached by the organization in relation to the maximum one (potentially reachable by organizations with a resource allocation 100% decentrated in the most risky region, Latin America and the Caribbeans).

22 We intended instability as a comprehensive parameter including the risk of war and civil disorder, the existence of militaristic and autocratic political systems, the internal or external situation of population displacement.

In the private sector literature, the market dependence has been linked to the level of reliance on debit and financial markets to finance the company activity: the two most used measures are the average debt to equity ratio over time (Roberts, 1992) and the net amount that has been raised from external capital markets (Adam, 2002) given by the cash flow.

UN organizations usually do not rely to financial markets to raise funds, excluding in some very limited use made by the IFIs. The real market of the UN organizations is represented by the voluntary contributions issued by member states and other non state donors. We do not consider the ordinary resources as part of the market sources for the UN organizations, because it is really unlikely that an organization does not get an incremental flow of these resources from period to period (usually the assignements are based on percentual increment on the historical amount of nominal resources).

Consequently, market dependence has been associated to the reliance on “market”or “non captive” resources, and more specifically to the percentage of extra-budgetary resources over the total resources of the organization. In the present study, we took into account a single biennuim (2002-2003); given the significant dynamicity and volatiliy of the extra-budgetary resources, it could have been beneficial to consider a longer period of time.

Unfortunately, organizations just recently began to measure and report the extra-budgetary resources in public reports.

Finally, we have taken into account the factor “technology”, mainly taken from the contingency literature. This factor conceptually refers to the industry and kind of core/operational processes of the organizations.

In these terms we can note a significant differentiation among the UN system organisations. Infact, they share the common mission to “contribute to bring, keep and maintain global peace and wellbeing” in different fields, such as economic and social development, education and culture, healthcare, environmental protection. However, each institution has specific “means” to contribute to this mission. Some perform mostly regulative and informative activities -international agreements, technical advice to state governments, research, study and information activities-. Others carry out activities which are predominantly of a financial transferring nature -grants to member States, contributions and grants to partners for managing projects on the field-. Many organizations have an implementing nature, meaning that they directly or indirectly perform technical cooperation projects. It is though often difficult to identify the boundaries between the implementing

and the financial transferring nature of organizations, since many organizations maintain both natures and since in the recent years many organizations passed from a direct to an indirect delivery.

For these reasons, we split up the UN population into two groups: organizations with prevalence of regulative nature and organizations with prevalence of financial transferring nature. Given the lack of quantitative information about the financial resources spent on the different activities, we just distinguished between “high”, “medium” and “low” level of regulative/informative activities and financial transferring activities, based on organizations’

official documents. In particular, we examined the constitutions and the strategic plans of the organizations in the parts concerning the means of implementation of the institutional mission.

Table 4.1 summarizes the measures identified to operationalise the factors which are likely to affect IOs’ external accountability.

Table 4.1- Operationalisation of Factors Likely to Affect Accountability in the UN Environment Influencing

Factors

Literature Measures –

UN environment Organisational factors

resource availability

Gross Income/Turnover (Hossain and others1995) Profit (Cowen and others 1987)

Total monetary resources (regular and extrabudget) available for biennium 2002-2003

Complexity

Number of employees in relation to sector and industry composition (Adams 2002, Gray, 1995)

Diversification: number of business areas/markets (Hackson and Milne, 1996) Industry "membership" (i.e. concentration) (Adams, 1998)

Systematic risk (Trotman and Bradley 1981, Roberts 1992)

Overall number of employees

decentralisation

Export on sales ratio (Raffournier, 1995)

Number of countries company has operations or selling activities (Cooke, 1989)

Countries in which the organisation reports and country of ultimate ownership (Guthrie and Parker, 1990, Roberts 1990)

Percentage of monetary resources spent “on the field” (away from the headquarter)

Financial performance - capacity to attract monetary resources

Consolidate or current profit (Cowen et al, 1987; Patten, 1991, Roberts, 1992)

Percentual increase in extra-budgetary resources collected on total resources available (two consecutive biennia: 2000-2001/2002-2003) Financial

performance .- capacity to use monetary res.

Available

Expenditure rate as financial efficiency (Jacobsen, 2006; Wildavsky, 1992; Borgonovi, 2004;

Anessi and Steccolini, 2005)

Percentage of “obligated”

resources on total resources available for biennium 2002-2003

Corporate governance factors

concentration of ownership

Type of ownership: private companies/public listed companies shares ownership diffusion/dispersion (Raffournier 1995)

Percentage of shares owned by the first 10 shareholders (Hossein and others 1994)

% of corporation owened by management and by indivudual shareholders owing more than 5% of out standing shares (Roberts, 1992)

Total percentage of shares that are owned by corporations, which hold more than 10% of the outstanding shares of the company ( Adam, 2002)

Percentage of ordinary resources given by the first ten contributors (member States)

accessibility of stakeholders to executive bodies

Balance of stakeholders’ power (Mearsheimer, 1994)

Shareholders’ warranty and minority rights (Shleifer and Vishny, 1997).

Stability/rotation of member States in executive bodies (year/s needed for entire rotation of members in executive organ)

presence of warranty mechanisms for members not represented in executive bodies

Presence of a corporate social reporting committee (Cowen and others, 1987)

Existance of legal protection mechanisms for investors (Shleifer and Vishny, 1997; Coffee, 1999)

Presence of representative bodies composed by all member States attending the organisation ( “1” if the representative organ is present; “0” if it is absent)

organisation’s bargaining power

Typically related to the specific technological and economic context and locus of power (Dunlop and Healy, 1953)

Level of organizational interdependence (Thompson, 1967)

Number of firms in an industry group and relative shares (Paroter, 1980; Sherer, 1980) Technical leadership, intensityof investments, export capability (Lecraw, 1984)

Dollars contributed by corporate political action committee to political campaigns (Roberts, 1992)

Context based vs. resource based power (Yan and Gray, 1994) Property rights (Hart, 1995)

Social ties and networks (Coff and Blyler, 2003)

Percentage of resources collected on total resources pledged and promised by contributors (1 – % of total arrears left from current and previous years contributions on total resources available for biennium 2002-2003)

External factors

environment uncertainty

Perceived environmental uncertainty about: suppliers, competitors, customers, financial markets, government and regulatory agencies, labor unions (Ireland and others, 1987) Perceived environmental uncertainty and international risk about: government policies, macroeconomic trends, market conditions and competition (Werner and others, 1996) Environmental dynamism: volatility of net sales in an industry, and volatility of operating income (Keats and Hitt, 1988)

Environmental complexity: variety and range of organization’s activities i.e. divisionalization, and concentration/dispersion of firm in an industry (Dess and Beard, 1984; Duncan, 1972, Keats and Hitt, 1988)

Weighted percentage of

“decentralised” resources (weight ascribed to the % of resources spent in every world Region conssitently with the political unstability of the Region) of biennium 2002-2003

market dependence

Average debt to equity ratio over time (Roberts, 1992)

Financing net cash flow as the net amount that has been raised from external capital markets (Adam, 2002)

Percentage of extra-budgetary resources on total available resources for biennium 2002-2003

type of activity

performed Regulative, financial transferring and direct intervention activities (Osborne and Gaebler, 1992; Anessi Pessina, 2002, Borgonovi, 2004)

Qualitative assessment of the prevailing nature of organisation:

(i) regulative-informative; (ii) financial transferring