Table of Contents
- Why is accountability important?
- What are examples of accountability in management?
- What are the components of accountability?
- What to read next
What’s it: Accountability means carrying out roles and duties responsibly as they should. It can apply to other individuals, departments, companies, or organizations. And let’s focus on its application in enterprise management.
When an employee is accountable, he carries out their duties and roles responsibly in accordance with applicable procedures, rules, and guidelines. Moreover, he behaved honestly and ethically to do so. And, he is willing to be judged based on his performance so far.
Then, sometimes, he might make a mistake. And accountability means he is willing to admit the mistake and is willing to take responsibility.
Why is accountability important?
Accountability is relevant to business aspects. At the organizational level, companies are increasingly required to be more accountable in managing their business. Their activities have a great impact on the environment and society. How they obtain natural resources and employees as inputs, process and employ them and sell products has received public scrutiny. Likewise, what they produce also has a wide impact on the public, so it is also a concern.
The public asks companies to be more accountable for their activities. People are starting to realize they don’t just benefit from the business. However, they are also concerned about the side effects and bad business practices such as environmental degradation and discrimination against employees.
Meanwhile, in human resource management, accountability emphasizes people playing their roles responsibly. They don’t just complete a task or job well. But, it’s also done right, as it should be (perhaps compared to applicable rules, procedures, or standards). In addition, they are willing to take responsibility if they do something wrong or don’t do it right.
Encouraging employees to carry out their roles in an accountable manner is essential. As a result, they produce performance in accordance with management’s expectations. So, for example, when management gives them more autonomy, they will try hard to fulfill their role and do their job well. Ultimately, it helps companies get results from them.
Accountability and leadership
Accountability has a substantial ethical component to leadership. Corporate leaders often make decisions with far-reaching consequences. If they are accountable, it will build trust not only within the organization but also outside the organization. It increases high trust in customers, suppliers, shareholders, investors, government, and other stakeholders. And, the trust is not only in them, but the company they lead.
Building trust within the company is important for creating synergies. Employees are eager to achieve the goals and targets set by the company. And everyone is moving in the same direction. Finally, achieving goals becomes easier.
Likewise, building trust among external stakeholders is equally important. For example, customers will tend to be loyal if they place high trust in the company. Take Apple, for example. People are willing to buy its products because they believe in what its leader, Steve Jobs, promised about quality products.
What are examples of accountability in management?
Take a salesperson as an example. You assign him to be able to sell as many products as possible. As usual, he manages customers, approaches them, offers products, and closes sales. To do so, he must comply with the rules and policies in your company. Say he can’t use shortcuts to get more sales.
When he is accountable, he strives to sell to many customers. The target you set does not make him use devious means. Instead, he uses creative ways to attract new customers and retain existing ones. For example, he uses a more personal approach and interactive communication.
For example, when a customer complains to management one day, he is responsible. He tries to improve the situation, for example, by contacting the customer, listening to them, and providing solutions.
Another example is an external auditor. His company requires him to not only comply with company rules. But, he must also comply with applicable accounting regulations and standards. Thus, if the audited company does not comply with the standards, he honestly discloses it through the audit opinion he gives.
He is not only responsible for the company where he works. However, he is also accountable to other parties, who rely on his audit results to make economic decisions. They include shareholders, investors, governments, and creditors. Thus, if he is negligent and fails to disclose the actual conditions, his accountability is questioned.
Unaccountable auditors can have a big impact. Many people rely on financial statements to invest money. So, it becomes a disaster when it doesn’t reveal the actual conditions. The Enron Corp case is one of the biggest examples of accounting scandals resulting from a lack of accountability.
What are the components of accountability?
Accountability is about being responsible and trusting. When company leaders make a decision, they announce it to people to see and understand where the company is going. It helps earn their trust.
Four core components of accountability according to Ebrahim and Weisband:
Transparency. Develop and provide information and make it available to relevant parties. For example, the leader communicates it to people within the company. It allows employees to understand what the leader wants and hopes to achieve. When people know the direction to go with the decision, they should be more enthusiastic about implementing it.
Answerability or justification. Every action and decision must have a reason. For example, why do leaders choose and make certain decisions?
Assume the company is under democratic leadership. These reasons become the basis for employees to question and decide. It can also encourage them to develop constructive feedback if they disagree.
Compliance. The decisions chosen are in line with company policies and rules. And, to a broader aspect, it complies with laws or industry standards.
In addition, leaders also develop it through appropriate procedures. And there are ways to monitor and evaluate the results, which also require transparency.
Enforcement or sanction. There are concrete actions to fulfill the other three components. In addition, leaders are willing to be held accountable and, ideally, get punished if they fail.
But, indeed, often, they can get away with it, especially if their decision is due to negligence. After all, it was easier to punish those at the bottom level than at the top in a company.
What to read next
- Levels of Hierarchy: Definition and Brief Explanation
- Chain of Command: Importance, Element, Advantages
- Span of Control: Importance, Types, Advantages, Disadvantages
- Delegation in Management: How it Works, Advantages, Disadvantages
- Accountability: Importance, Examples, Components
- Centralization: Importance, How it Works, Determinants, Pros, Cons
- Decentralization: Importance, Advantages, Disadvantages
- Bureaucracy: Importance, How it Works, Advantages, Disadvantages
- Delayering: Importance, How it Works, Strengths, Disadvantages
- Downsizing: Importance, Reason, Type, Pros, Cons
- Authority: How It Works, Sources, Types, Examples
- Organizational Chart: Importance, Features, and Types