This article says it all that on the logic of corruption starts from the lack of strong governance that is shown by example by the head and allowed to develop down the organisation. I would like to add the strong governance is only possible if the leader has a strong morale ethic and discipline to resist the many temptations present in the role. He too should have the stamina to pursue the same values to be observed by everybody up, below and even across his organisation.
And unlike in a business where there may be a major shareholder/ owner who can be made accountable for any unethical practices made by management, in government the ultimate owner are the many voters whose ability to gauge his management performance is too difficult to measure given to the many public service needs they seek if not demand.
Another insight is the point raised here where the solution of having higher salaries is suppose to eliminate corruption needs further research and validation. We should solicit thesis and dissertation papers done in this area.
Finally, with barely two years left in the term of the current administration, the process of continuity for what has started in developing a culture of strong governance is another pressing matter as time goes by.
But hope springs eternal.
From BusinessWorld Philippines
September 07, 2014
Corruption in government vs corruption in business
PRESIDENT BENIGNO “PNoy” S. Aquino III has vowed that in his one-and-only, maximum-six-years term as President ending in 2016, he would decimate corruption in government under his policy of “Daang Matuwid” (Straight Path) of honesty and integrity. There remain barely two years in his single chance to do so. But the cheers for PNoy and his anti-corruption campaign are waning.
The Priority Development Assistance Fund (PDAF) pork barrel scam raised public fury last year, but even the anger against the supposed mastermind Janet Lim Napoles has mellowed. Perhaps the tempering of the media on this case has much to do with the dissipation of passion against this grand crime, even as the first three lawmakers allegedly involved, Juan Ponce Enrile, Jinggoy Estrada and Ramon Revilla III, have been detained and arraigned for plunder. In a strange twist of fate, PNoy himself, with Budget Secretary Butch Abad, is now suspected of the very same sin of diversion of public funds in the DAP (Disbursement Acceleration Program) — the presidential pork barrel, as they call it. Thanks to the sympathetic numbers in Congress who voted nay to three impeachment complaints, PNoy can still try to chant the mantra of Daang Matuwid, despite the political bruises from an ambiguous comment about Charter change and a careless declaration of “openness” to a term renewal.
There is now the queasy feeling of suspended animation in the campaign against graft and corruption in government. There is finger-pointing for so many possible anomalies and so many surprise whistle-blowers probably just as guilty as the supposed culprit. Exposés are now ordinary news. But doesn’t the see-saw of emotions that the people are subjected to induce blasé acceptance of graft and corruption in government?
Perhaps the reason for such licentious behavior in government is that there are no visible “owners” that a government official must worry about, unlike a business that would have exacting owners to answer to. In government, there are only the pixelated faces in a blurry photo-mosaic that PNoy calls his “bosses,” the Filipino people. And even PNoy must know that what the boss doesn’t know won’t hurt him. And that while the cat is away (or not looking), the mouse will play. Enter corruption. That is the way in business — as it is in government, as it is in life.
Government and business differ in their objectives. Business is driven by profitability, while government is (supposed to be) driven by altruistic service excellence. How can service excellence in government be measured? Is it in providing an 11-storey office-cum-parking building for the constituents, allegedly worth P1.56 billion, and allotting P111.9 million (in 2009) to 50,000 senior citizens of the city?
Government has no profit and loss statement, as a business would have a profit and loss (income statement), balance sheet (statement of assets and liabilities) and cashflow statement. If the owner of a business found that income had gone down, assets have been depleted, or there were no expected dividends, there would be screaming and likely chopping of heads in the organization. Thus, if there would be corruption in business, it would probably be found out at least at the end of the reporting year, when the financial statements are presented to the stockholders.
Monitoring government handling of people’s money would not be as clear and easy. Taxpayers would have to content themselves, often with two-year-old data, on the variances to the budget reflecting disbursement decisions made by government officials, as in PNoy’s DAP misstep, for example. Corruption in government could be undetected for many years, because of the lag in reporting and analysis in the Department of Budget Management (DBM) and/or the possible lapses and delays in the Commission on Audit (CoA) reports. It is easier for wrongdoers to cover tracks in government.
In business, there are the internal auditor who keeps management and operations honest and proper among themselves, and the contracted external auditor who clears the business to be compliant with the government regulatory agencies. Departments or units in a business check and balance each other to ensure proper control and conduct of operations, like Accounting/Controllership being separate from Treasury, or Sales from Marketing and Advertising, for example. Yet the internal control systems also nurture the cooperation and harmonization of efforts toward that common goal of profitability, and the individual goals of livelihood. Participants in that cooperative effort who do not follow the rules of engagement through deviant behavior such as dipping into the company coffers are immediately found out by the built-in system of checks and balances in a business.
Not so in the government bureaucracy. An article by Dr. Gerardo Sicat in the Philippine Star pointed out that “implementing officials, often lodged in agencies or in lower levels of government, exercise certain powers that seize or create more opportunities for personal gain,” citing both petty corruption and grand corruption. Of course, in government offices, it can be deduced that the lower employees will not dare do mischief if the higher bosses do not know, sanction and enjoy “a cut.” Bigger items such as the procurement of equipment, or big contract amounts would be in the airspace of the top guns.
The principles of honesty and integrity are fundamental, and the basis of transparency and accountability is universal work ethics, but the application of these can be different, perhaps because of the disparate cultures in government and business. A sense of responsibility to contribute one’s share of the organizational deliverables, and ultimately protect one’s survival and advancement in the business organization, shames the prevalent attitude of the civil servant for minimal compliance for minimal pay. And then there’s graft and corruption tempting to augment meager personal income.
The ready answer would be higher salaries and wages for government employees and officials, to hopefully discourage dishonesty — but the correlation between high salaries and low corruption has not been validated by enough empirical testimonials. Meantime, government must be firm in its resolve to change the culture by not letting errant civil servants get away with graft and corruption.
Let’s see what happens to the pork barrel scam and other pending government corruption issues. And we wish deep in our hearts for an honest and capable leader in the 2016 elections, who can continue and improve PNoy’s initiative of Daang Matuwid in government.
Amelia H.C. Ylagan is a Doctor of Business Administration from the University of the Philippines.
Article location : http://www.bworldonline.com/content.php?section=Opinion&title=Corruption in government vs corruption in business&id=94091