Chapter 4 p 166 Case 4-1 Christian Children’s Fund
Using this chapter’s organizational architecture framework, discuss the strengths and weaknesses of CCF’s AIMES project. Answer:
As economic conditions change over time the competition for charitable donations and funding is pretty fierce. Christian Children’s Fund (CCF) will constantly be faced with competition from all different kinds of firms to limit the amount of access to funding for the community projects which support their charter. The principle of Economic Darwinism is in play, such that CCF will need to constantly adapt their charities organizational architecture to insure their chances of survival in this competitive environment. In every direction CCF turns they are faced with other charities looking for funding to support their charters, and a government with limited resources – grants, social programs, and scholarships - based on the depleted tax base of our economy in an existing downturn. They are faced by a growing number of people who are out of work - people that previously were able to contribute to their cause who now find themselves in need of reception of their services. Differential variation in CCF’s approach to the world it serves will increase their chances of survival among other charities. The first half of this successful equation is determining metrics in support of the successful implementation of their charter. The AIMES program is a step in the right direction but may need to do more to make sure that it differentiates itself by seeking to expand from basic needs support to coaching and uplifting people to independence. From an accounting point of view, CCF needs to design and implement the other half of a successful firm’s equation which is based around the correct organizational structure – a structure that supports innovation and creativity among their community managers but enforces the appropriate controls in support of goal congruence with their charter. Let’s explore the strengths and weaknesses of CCF’s implementation of the AIMES program and discuss what needs to happen to insure their survival from an Economic Darwinism point of view. In the Christian Children’s Fund Organization they must examine the three-legged stool in order to determine whether they have put the necessary organizational architecture in place to effectively manage the investment they have made in the AIMES system. The three-legged stool consists of the following: 1.
A system that measures performance
A system that rewards and punishes performance
A system that assigns decision rights
CCF has invested a great deal of time and money to determine the correct mixture of metrics gathering to determine just how to help the community it serves. The only potential problem that I can see with this is with a significant budget and limited or no controls in place to measure the performance of how each community manages their distribution of budget allocation there is always a possibility for shirking, goal incongruence, and self-interested behavior. To illustrate my point I offer the example of another not-for-profit organization known as the United Way whose heart was in the right place with how it wanted to serve their community but didn’t put the correct system of performance in place to measure it. Subsequently, the United Way didn’t reward or punish adherence to their charter the way they should have. What was the unfortunate result of this was that some of the managers of United Way offices were driving extravagant vehicles and redecorating their homes all on the donators’ dime. It becomes a huge necessity to make sure that adherence to not only the letter of the law, but the spirit of the law is taken into account when aligning to goal congruence with their organization. When we examine the agency problems that can exist in CCF, we recognize that without the appropriate performance measures in place there is no particular...
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