Man­ag­ing Mis­man­age­ment

Bhutan Times - - Editorial -

It is quite in­ter­est­ing to know how the ac­cused em­ployee of RICB ab­sconded. When the public heard of such an in­ci­dent they thought the thief should be pun­ished. But when the de­tails emerged of how the thief fooled the whole sys­tem to siphon off huge amount of money, the public be­came skep­ti­cal of the man­age­ment. So ac­cu­sa­tion made a sharp turn to­wards the fail­ure of top man­age­ment to check the em­bez­zle­ment.

Now the fugi­tive is on the run. The po­lice has of­fered a hefty re­ward for in­for­ma­tion lead­ing to his where­abouts. Public are ex­cited to dig into this prob­lem and get more in­for­ma­tion. We learned that there are al­ready col­lec­tive ef­forts be­ing un­der­taken by some groups of the public to net­work and share in­for­ma­tion of the fugi­tive’s where­abouts for pos­si­ble share of the re­ward.

RICB said that in­ter­nal fraud re­sulted in mis­man­age­ment.

But again look­ing at the way its em­ployee si­phoned the money at sus­tained pe­riod of time (3 years or so) weak­ens its own alibi. Its sys­tem of check and bal­ance is very much ques­tion­able.

We know that RICB is a fi­nan­cial gi­ant given its worth. It pro­vides one of the dom­i­nant fi­nan­cial ser­vices in the coun­try in­clud­ing com­mer­cial lend­ing apart from in­sur­ance. And to op­er­ate such a com­plex fi­nan­cial sys­tem, there re­ally needs to be a cred­i­ble mech­a­nism for checks and bal­ances.

The fraud has al­ready cost the com­pany. Yet a hefty re­ward of 1 mil­lion to catch the thief dents the cor­po­ra­tion’s cof­fer.

So now the ques­tion who do we blame? The thief, the sys­tem or the CEO?

Go­ing by the man­age­ment prin­ci­ple, CEO should be ac­count­able to any mishap in the or­ga­ni­za­tion. If CEO passes the blame to his/her sub­or­di­nates for the fail­ure then cer­tainly the or­ga­ni­za­tion is in the grips of au­thor­i­tar­ian con­trol. Such a case gives ad­e­quate rea­sons for any CEO of any cor­po­ra­tion or or­ga­ni­za­tion to re­main stiff against the wishes of the public to re­sign over mis­man­age­ment.

Per­haps this kind of bu­reau­cratic sys­tem ex­poses the top-down rule in our public en­ter­prises man­age­ment where bosses are safe de­spite fail­ure of man­age­ment. There is no way em­ploy­ees can rea­son against their bosses in such sit­u­a­tions. It breeds syco­phancy and un­der­mines the true em­ployee per­for­mance. And we know that this is ram­pant in Bhutanese or­ga­ni­za­tions.

RICB’s case is be­com­ing a good case study for man­age­ment scholars. It de­fies the con­ven­tional man­age­ment prin­ci­ples by en­dors­ing its own ideals. If its Board too shuns away from the wishes of the public, then we can safely claim that ‘noth­ing can be done against the bosses’ of cor­po­ra­tions in Bhutan even if they are re­spon­si­ble for fail­ure.

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