Financial control and organisational culture

The role of culture and the approach to financial control is an interesting area and one that has become more interesting to academics since the Enron collapse. However, most of the articles and comment seem to focus on the negative aspect of reducing control and pushing the accountancy profession back to ‘prudence’.

Contrast that with the view of other functions within an organisation and they may state that the financial controls imposed on them are restrictive and inhibit the development of the organisation. There are often polarised views on financial control inside an organisation and it may simply be that different sub-cultures thrive within different functions and it’s a leader’s job to manage these. For example, accountants have to follow the accounting rules, whereas an operations department may be more used to dealing with things on an ad hoc basis. This could result in conflicting viewpoints on financial information as the accountant is more interested in whether they comply with standards whereas the Operations Manager is interested in how it can help solve a current problem.

Task 1.5

Look at the model ‘Handy’s four types of organisation culture’ and identify a stereotypical culture for three functional roles (one being finance).