Organizational Factors

The first hypothesis done regarding organizational factors concerned the positive relation between organizations’ dimension and accountability level. Hypothesis 1a stated that resource availability encourages a higher financial disclosure. Looking at the results of the analysis, reported in Appendix 4, we can notice two main clusters of organizations: the first one characterized by a total budget of about 850 million USD/biennium or smaller and a level of financial accountability equal or below 45% (small budget/low accountability).

This is a very concentrated cluster. The second cluster is more spread out and includes organizations with budget higher than 850 million USD and financial accountability higher than 45% (larger budget/higher accountability). Just two organizations remains out of these two clusters. In light of these data, the relation stated in hypothesis 1.a., could be considered relevant and verified in the panel of the UN system organizations.

Consistently with the contingency approach, a possible explanation for this trend is that a lager resource availability is related to larger administrative services and units able to better support the organizations in the realization of detailed disclosure.

Hypothesis 1b, linking resource availability to non-financial accountability, turns out to be not relevant. This result is confirmed when considering the aspects strictly linked to ethical and social responsibility issues. Legitimacy theory predicts that bigger and more visible organizations are more exposed to and impacted by societal concerns and media opinion, are more sensitive towards SER and consequently adopt more aggressive legitimizing strategies. On the contrary, drawing by the results it seems that dimension –and visibility- itself is not sufficient to determine reactive legitimizing strategies by the organizations concretizing in a higher amount of non financial information.

Hypothesis 1c, linking the level of organizational complexity to non-financial accountability seems to be not relevant. On the other side, a different relationship emerged from the data: growing levels of complexity seem to be accompanied with greater financial accountability.

This unpredicted result appears to be consistent with the contingency framework: the more complex the organisation, in fact, the greater the need for disclosing financial information.

In particular, looking at the graph we can identify two main cluster of organizations, with central points in the following n. employees/financial accountability values: 1000/20%

(low/low) and 3800/70% (high/high).

Consistently with the theory, more complex organizations have more articulated stakeholder relations (externally) and more complicated financial management issues (internally), which lead to a greater financial disclosure in the performance reporting.

Hypothesis 2a and 2b concerns the degree of decentralization.

Hypothesis 2a states that organizations with a higher degree of decentralisation (i.e.

which manage a higher amount of resources at their headquarters than they do at their field offices) have a greater financial accountability. Results seem consistent with hypothesis 2a and contingency theory. Looking at the data, in fact, we could draw two clusters with their centroids in the points with the following level of decentralisation/financial accountability values: 20%/20% (low/low) and 70%/50%

(high/high). Just one observation falls out this clusterization.

This evidence shows that the UN system organizations react and adapt to a greater complexity in terms of decentralised operations on the field with a greater amount of financial information. This evidence shows also that UN organizations are successful in overcoming the inherent difficulty related to the headquarter-field financial information flow, determined by the high level of geographical dispersion of the organizations (the most decentralised ones, like UNDP, have offices in nearly one hundred countries with a variety of different operations).

Hypothesis 2b seems not to provide relevant relationships: looking at the data there is a general trend consistent with the hypothesis –correlation coefficient is 0,30 and high level of accountability are shown by organizations with medium or high level of decentralization- but we cannot identify any relevant group of clusters which endorses the hypothesis 2b. In other words, it seems that the more sensitive accountability dimension to organizational decentralization is financial accountability, while no clear trends can be identified for the non financial accountability.

Hypothesis three was articulated in four points, since we operationalized the financial performance of UN organizations in two different ways: i) as organizational capacity to attract financial resources (hypothesis 3a, 3b); ii) as organizational capacity to use the available financial resources (hypothesis 3c, 3d). In both cases, contingency theory predicts a positive relation between the financial performances and financial/non financial disclosure, while legitimacy theory predicts that bad performers minimize financial accountability and focus on non financial accountability.

Hypothesis 3a. Drawing from our data, organizations with higher financial performance -intended as capacity to attract resources from the donors- generally appear to be less financially accountable. Correlation coefficient of -0,28 seems to confirm this relation. On the other hand, it is slightly difficult to identify relevant clusters in this case; to the high end of the financial performance axis there is a pretty defined group of eight organizations which delimitates a first cluster and seems to indicate that good performers actually have a lower level of accountability; on the contrary, the group of organizations at the low end of the financial performance axis appears to be non homogeneous and highly differentiated in terms of accountability. For example, six organizations of this group are characterized by medium/high level of accountability. In conclusion, given our research method and the

consideration we developed, we do not have enough evidence to declare that hypothesis 3a is relevant.

Hypothesis 3b seems to be not relevant in light of the available data; organizations’ level of accountability varies widely at different level of capacity to attract monetary resources and does not seem possible to identify precise clusters of organizations. Correlation coefficient is slightly negative, -0,18.

Looking at the data, a further significant trend emerged: the bad financial performers have a higher level of overall accountability than the good performers. It is possible in fact isolate two main clusters of organizations, with central points at the following “% variance extra-budgetary resources current-previous biennium” / “overall accountability” values:

+5%/55% (low/high) and 65%/40% (high/low). This trend, even if not contemplated as hypothesis, confutes the contingency framework and is consistent with the evidences we found for hypothesis 3a. Correlation coefficient of -0,33 confirms the interpretation of the data done through cluster analysis.

A possible explanation, grounded on legitimacy theory, of the fact that organizations with high capacity to attract voluntary resources experience low level of overall accountability is that they tend to focus on the accountability towards the member states and the non states donors, as opposed to the disclosure addressed to the general public. This phenomenon could be partially alleviated for the non financial accountability because organizations may try to contrast bad past performance in attracting financial resources by “justifying” the organization’s behaviours and results and by explaining in more details how resources have been spent.

Hypotheses 3c and 3d, developed within the contingency framework, seem not to be relevant, since it is not possible to identify any significant cluster of organizations supporting or confuting them.