Suporte na Gestão do Relacionamento de Stakeholders via Divulgação de Origens de Recursos: Evidências das Principais ONGs do Mundo - PDF

Supporting Stakeholder Relationship Management via Disclosure on Resource Origins: Evidence from the World s Top NGOs Suporte na Gestão do Relacionamento de Stakeholders via Divulgação de Origens de Recursos:

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Supporting Stakeholder Relationship Management via Disclosure on Resource Origins: Evidence from the World s Top NGOs Suporte na Gestão do Relacionamento de Stakeholders via Divulgação de Origens de Recursos: Evidências das Principais ONGs do Mundo Kevin Joseph Good Mestrando do Programa de Pós-Graduação em Contabilidade - UFSC Centro Sócio-Econômico, Departamento de Ciências Contábeis, UFSC Campus Universitário Trindade Florianópolis, SC Brasil José Alonso Borba Doutor em Controladoria e Contabilidade USP Professor do Programa de Pós-graduação em Contabilidade da UFSC Centro Sócio-Econômico, Departamento de Ciências Contábeis, UFSC Campus Universitário Trindade Florianópolis, SC Brasil Lucas Martins Dias Maragno Mestrando do Programa de Pós-Graduação em Contabilidade - UFSC Centro Sócio-Econômico, Departamento de Ciências Contábeis, UFSC Campus Universitário Trindade Florianópolis, SC Brasil Abstract Issues surrounding accountability form a central part of the ongoing discussion regarding the role, place, and value of civil society organizations. Decision-makers must be aware of this challenge, seeking out proactive and innovative ways to meet the calls for legitimacy, lest increasing competition for finite resources overcome them. The disclosure of financial information using the internet demonstrates a commitment to transparency and provides an opportunity for users to make better decisions, fitting into theories on relationship marketing. This study serves the dual purpose of joining theoretical bases concerning accountability, legitimacy and marketing in the NGO realm and the execution of survey research on the online financial disclosure of the organizations listed in The Global Journal s 100 Top NGOs 2013 Ranking, with particular attention to the origins of their resources. Content analysis was applied to categorize the line items contained in the NGOs Income Statement (or equivalent) reports, and quantitative techniques were employed to generate conclusions regarding the income mix, the share of the resource total represented by each category, and each NGO s degree of dependence on each. The results indicate that donations are the most prevalent category among the sample (41.25%), followed by revenues (24.10%) and grants (17.93%). Donations were also shown to represent, on average, approximately 39% of the income mix of the NGOs in question. Finally, the vast majority of the sample (62 of the 69 reports-providing NGOs) was found to be dependent on one category alone, more than half of which received 80% or more of their resources from a single category in the year in question. These results contribute to developing research in the field of NGO web-based accountability as well as highlighting the need for a greater integration of transparency into stakeholder management practices. Artigo publicado anteriormente nos Anais do 14th International Congress of IAPNM, Vitória, Artigo submetido em julho de 2015 e aceito em agosto de 2015 pela editora Fernanda Sauerbronn, após processo de double blind review em sistema de fast-track. 139 Keywords: Transparency; Non-governmental organization; Accountability; Stakeholder. Resumo Questões sobre accountability formam parte central da discussão sobre o papel, o lugar e os valores das organizações da sociedade. Tomadores de decisão precisam estar atentos sobre este desafio, procurando maneiras proativas e inovadoras para atenderem à exigência por legitimação, para que o aumento da competição por finitos recursos não os vença. A divulgação de informações financeiras por meio da internet demonstra o compromisso com a transparência e oferece uma oportunidade para que os usuários tomem melhores decisões, aproximando-se às teorias sobre marketing de relacionamento. Este estudo tem o duplo propósito de unir bases teóricas relativas à accountability, legitimidade e marketing nas ONGs, e a execução de pesquisa sobre a divulgação de informações financeiras online das organizações listadas no 100 Top NGOs 2013 Ranking da The Global Journal, com especial atenção para as origens de seus recursos. A análise de conteúdo foi aplicada para classificar os itens de cada linha contidos nas Demonstrações do Resultado do Exercício (ou equivalente), e técnicas quantitativas foram utilizadas sobre o mix de receitas, a parcela do total de recursos que cada categoria representa e o grau de dependência de cada ONG. Os resultados indicam que as doações são a categoria de maior representatividade na amostra (41,25%), seguido por receitas (24,10%) e subvenções (17,93%). Comprovou-se que as doações representam, em média, cerca de 39% do mix de receitas das ONGs em questão. Finalmente, verificou-se que a grande maioria da amostra (62 dos 69 relatórios analisados) é dependente de uma categoria, das quais mais que a metade recebeu 80% ou mais de seus recursos a partir de apenas uma fonte no ano em questão. Estes resultados contribuem para o desenvolvimento de pesquisas sobre web-based accountability aplicado ao Terceiro Setor, bem como destacam a necessidade de uma maior integração de transparência nas práticas de gerenciamento de stakeholders. Palavras-chave: Transparência; Organizações não-governamentais; Accountability; Stakeholder. 1. INTRODUCTION More than ever, the organizations comprising the third sector find themselves confronted by calls for greater accountability, with demands from stakeholders and public institutions, if not society overall, for transparency and the responsible application of resources. Accountability now forms a central part of the ongoing discussion concerning the role, place, and value of civil society organizations, themselves increasingly faced with the need to demonstrate legitimacy. This, as the promise of meeting the needs of society and the absence of profit-as-goal are no longer enough to validate the third sector before the scrutiny of its stakeholders, whether they be direct beneficiaries, funding providers, or casual observers. Image, it appears, must be managed alongside operations, for the endorsement of various stakeholders can make or break an organization. This is to say, in order to thrive in the circumstances currently surrounding them, and civil society organizations must win support by developing new ways to market themselves. The expansion and diversification of both the third sector and the sources from which it draws support fuels the debate on legitimacy and drives the push for accountability (SCHMITZ; RAGGO; VIJFEIJKEN, 2012), making the acquisition of society s approval and, ultimately, financial support an increasingly complex matter. More specifically, the varied parties that observe, benefit from, and finance civil society organizations perceive and evaluate them under differing criteria often, ambiguous and subject to change- and via individual notions of legitimacy (MORRISON; SALIPANTE, 2007) and effectiveness Good, K. J.; Borba, J. A.; Maragno, L. M. D. 140 (GARCÍA, 2008). Efforts must be made to both gain and maintain approval (MITCHELL ET AL., 1997) in accordance with the weight of each stake held, thusly presenting an image of legitimacy that validates the mission and continued existence of the organization. In this way, civil society stakeholders represent not only the parties interested in, affected by, or in support of the diverse missions undertaken therein, but, rather, unique relationships that must be understood and addressed on their own terms. This notwithstanding, transparency has been identified as the primary tool for attaining NGO legitimacy (LARA, 2008), making the clear presentation of the organization s structure and its activities a crucial part of managing stakeholder perceptions. Decision-makers must be aware of these needs and seek out proactive and innovative ways to rise to it, lest increasing competition for finite resources overcome them. In summary, it becomes of managers and directors working in this field to incorporate transparency into their practices and policies. With this in mind, it has become indispensable that non-governmental organizations (NGOs) provide reports on both their financial performance and the governance structure that guides their activities (LARA, 2008), for transparency must be present at not only the operational, but strategic level, as well (RODRÍGUEZ; PÉREZ; GODOY, 2012). This, in conjunction with the recommendation of Panel on the Nonprofit Sector (2007), that NGOs disclose their financial information to a broad, even worldwide, audience, presents an additional burden to NGO managers and boards: beyond the efforts applied to achieving any particular mission, the financial situation must be carefully managed and maintained (CARROL; STATER, 2008), and reports on both communicated to society. However, a greater quantity of information does not automatically result in greater transparency and, by extension, legitimacy, for stakeholders require that it be telling of NGO activities and relevant to their evaluation and decision-making (SCHMITZ; RAGGO; VIJFEIJKEN, 2012). In taking stock of these circumstances, one might gather that, when not mandatory, the disclosure of information on NGO goals, activities, and structure is practically obligatory to ensure the survival of the organization. Along these lines, financial disclosure is shown to be an effective method for establishing and maintaining NGO accountability (SAXTON; GUO, 2011; SAXTON; NEELY; GUO, 2014; EBRAHIM, 2003), and continuing to acquire the resources necessary to carry out their missions (MALATESTA; SMITH, 2014). Similarly, the means by which said information is disclosed has gained attention in the literature, with the internet emerging, in recent decades, as the primary tool for achieving both broader and moreeffective disclosure. This, due to the fact that the competition between NGOs for finite financial resources ultimately yields a need for the maintenance of a positive image before stakeholders, driving the increased interest in social visibility within the third sector (LARA, 2008). Among the manners in which the NGO-stakeholder relationship manifests itself, the resources entering the organization from donors, grant providers, mission beneficiaries, clients and other contributors serve to illustrate an ongoing interaction. This comes full circle when reports on the same are disclosed, serving as a demonstration of the commitment to transparency and an opportunity for users to make better decisions with base in financial information. The question remains, however, as to what disclosure is necessary, what is beneficial, and how each can be tailored to meet diverse stakeholder expectations. This study seeks to analyze such methods in place in NGO financial disclosure, drawing from the reports provided by a sample of renowned NGOs to cast light on the transparent communication of the financial situation. Taking this concept as its foundation and striving to provide a more indepth understanding of the origins of resources that NGOs capture and ultimately apply towards their respective missions, this study analyzes disclosure on resources entering such Supporting Stakeholder Relationship Management via Disclosure on Resource Origins 141 organizations, complementing the procedures carried out in Borba et al. (2015). More specifically, the recognition and categorization of incoming resources, whether financial or converted into monetary terms, as a transparency mechanism is the object of this study. For sampling purposes, data from the financial statements disclosed to the public by the Top 100 NGOs 2013 was collected and analyzed. This ranking is compiled by The Global Journal annually, containing the organizations deemed as the best-in-practice according to the corresponding methodology, incorporating disclosure and transparency, among other criteria. Following a presentation of the key concepts making up its theoretical foundation, as gathered from related academic literature, the study provides a qualitative and quantitative analysis of the origins of financial resources drawn from the sample. In closing, concluding remarks on the study and its findings are provided. 2. THEORETICAL BACKGROUND The topics of relevance to this study as well as the existing studies concerning the same are outlined in this section, seeking to provide both a theoretical structure of the research at hand and a presentation of ongoing work in parallel fields. 2.1 Accountability Given its place as an umbrella term for legitimacy, transparency, effectiveness and efficiency in the NGO world, the notion of accountability is chief among the topics both directing and serving as foundation to this study. For the purposes of the later, the definition of accountability provided by Ebrahim (2003, pg. 3), which sought to synthesize existing theories and concepts in respect to the same, is adopted for the purposes of the research at hand: [Accountability] may be defined not only as a means through which individuals and organizations are held responsible for their actions (e.g. through legal obligations and explicit reporting and disclosure requirements), but also as a means by which organizations take internal responsibility for shaping their organizational mission and values, for opening themselves to public or external scrutiny, and for assessing performance in relation to goals. Accountability operates along multiple dimensions involving numerous actors (patrons, clients, selves), using various mechanisms and standards of performance (external and internal, explicit and implicit, legal and voluntary), and requiring varying levels of organizational response (functional and strategic). Within this, a topic of particular note is the exposure to scrutiny that organizations must face and, indeed, the need to integrate accountability into their organizational strategies. Moreover, it merits note that the author poses the distinction between legal requirements and the responsibility an organization takes on its own accord. 2.2 Relationship Marketing The lack of concrete criteria under which NGO organizational effectiveness and performance are measured results in a variety of evaluation methods, some unique to particular stakeholder groups, cultural settings or geographic regions. As such, financial disclosure cannot always be evaluated using specific requirements. Sawhill and Williamson (2001) pointed out the fundamental differences between how private enterprise and non-profit organizations are evaluated, raising questions as to what criteria should be incorporated into measuring performance and effectiveness, as well as the differing nature of primary accountabilities across sectors. In terms of financial disclosure specifically, the absence of international standards and regulations presents a complex scenario for NGOs either operating internationally or managing stakeholder relationships and accountabilities in several countries (SCHMITZ; RAGGO; VIJFEIJKEN, 2011). In recognition of a lack of consensus in terms of evaluation criteria, Liket and Mass (2013) highlight the reputational model an avenue for Good, K. J.; Borba, J. A.; Maragno, L. M. D. 142 assessing the overall view held by various stakeholders in terms of NGO effectiveness. Despite this, as per García (2008), calls for measurable outcomes are mounting, with organizational effectiveness and performance gaining ground in the ongoing dialogue on NGO legitimacy and accountability. Additionally, the same author presents the concise argument that no evaluation of consequence can be carried out, whether it be on part of stakeholders or managers, in the absence of meaningful communication to stakeholders. In viewing legitimacy as a resource in its own right, and transparency as a philosophy, to be incorporated into a position communicated to stakeholders, NGOs stand to present a more favorable image to concerned parties and, by extension, actively promote their longterm survival and effectiveness. The notion that accountability, legitimacy, and transparency overlap organizational governance and marketing two disciplines traditionally viewed as separate functions- has been addressed in NGO literature (GARCÍA, 2008; GARCÍA; GONZÁLEZ; ACEBRÓN, 2012; LIKET; MAAS, 2013; HANNAGAN, 1992). García (2008, pg. 21, apud HANNAGAN, 1992) posits that an operationalized marketing approach serves as a way to establish a permanent contact with its stakeholders, to configure or anticipate their needs, to measure their satisfaction and, in that process of relationship management to translate the vision or theory of social change sustaining their mission to society in general. To the extent that marketing can be applied to the NGO sector, the author places it as a primary tool for relationship management, essentially linking the otherwise entrepreneurial practice with civil society organizations. García, González and Acebrón (2012) also addressed the adoption of marketing concepts in NGO settings: the study proposed five evaluation approaches to assist in the development of an NGO marketing model, illustrating the overlap between NGO evaluation and relationship marketing. Towards these ends, the authors cite the principles of the latter outlined in Sheth and Parvatiyar (1995), which viewed it as a means to improve efficiency and effectiveness -seeing both stakeholders and the process of dealing with them central to value creation across the life of the NGO. The quality and availability of information communicated to key users is thusly a central point of concern. 2.3 Long-Term Resource Dependence Management The continued acquisition of support from those that provide it cannot be ignored by resource-dependent NGOs, suggesting that, in order to move forward in a sustainable manner, relationships with stakeholders must be managed in the long term. This ties in with Resource Dependence Theory as contemplated by Malatesta and Smith (2014), highlighting the competition for finite resources and the overall burden shouldered by NGOs of actively meeting the expectations of the parties providing support. Further, the authors attested to the need for managers to develop new strategies to mitigate their dependence on outside resources and vulnerability to exogenous control (i.e. isomorphism). This may be of even greater concern when considering the uncertainty inherent in donations and revenues from activities on which some NGOs depend. Ebrahim (2003) signaled the adoption of resource dependence management methods traditionally viewed as pertaining to the private sector in the civil society, stating that the phenomenon and its implications are equally of relevance in the NGO setting. This, in order to maintain the approval of key stakeholders that provide resources to NGOs that require them (EBRAHIM, 2003). Despite this, the sheer variety and often-unclear nature of stakeholder perceptions and values (WELLENS; JEGERS, 2014; MORRISON; SALIPANTE, 2007; GARCÍA; GONZÁLEZ; ACEBRÓN, 2012) stand to complicate the matter, especially in the case of multiple accountabilities to financing sources and mission beneficiaries alike. The authors highlighted the complex nature of stakeholder management while also presenting its urgency in terms of not-for-profit legitimacy, noting the difficulty in managing the priorities, Supporting Stakeholder Relationship Management via Disclosure on Resource Origins 143 expectations and perceptions of several different types of stakeholder groups (i.e. being accountable to them), including clients, governments and other financing sources. 2.4 The Role of Transparency This diversity notwithstanding, Lara (2008) succinctly states that transparency is at the core of the issue, placing it as the first priority and foremost resource in the pursuit of NGO legitimacy, in congruence with noted researchers working in t
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