Non-Financial Measures
While one would hope that the current global meltdown largely based on increased financial gain for large corporate entities would lead to a more global restructuring of management that may still be a long time coming. The concept of non-financial measures being incorporated into management regime has been around for many years, yet has not come into the fore completely as yet. Dubin in his book the World of Work: Industrial Society and Human Relations (1958) has stated that non-financial incentives are generally given when the actual financial incentives are not large enough. A large corporation may, "give great prominence to the direct financial incentives of high pay,… and favourable income tax treatment in order to attract and hold men for such work. Here the opportunities for non-financial incentives to operate may be small, so that the emphasis is put largely on the financial ones. (Dubin 1958:246)
Then as now there is a cultural content to the assumption that non-financial incentives are what one gets when the pay does not meet the job. Changing this into something that Bhimani calls 'flexible management control' (2003:250) is perhaps one way to insure that management is no longer controlled entirely by the bottom line: 'Such management control loosely couples the 'new economy spirit' (reflecting indeterminacy) and financial management (reflecting rationality). It supports innovativeness and flexibility, but at the same time attempts to ensure profitability in the long run." (Bhimani 2003:250)
The idea of the bottom line must also be changed to incorporate non-financial measures as well, otherwise this cultural change would be futile. Thus the concept of a 'Triple Bottom Line' has been created with three areas of responsibility: corporate, social and environmental, otherwise known as the three P's: People, Planet and Profit. This has been alternately termed corporate responsibility or sustainability reporting and "many of those companies vie for industry, national, and international honors, such as the Dow Jones Sustainability Index, awarded to the world's most sustainable firms by industry sector." (Colbert and Kurucz, 2007, p. 21)
List of References
Bhimani, Alnoor, ed. 2003. Management Accounting in the Digital Economy. Oxford: Oxford University Press.
Colbert, B.A., & Kurucz, E.C. 2007. 'Three Conceptions of Triple Bottom Line Business Sustainability and the Role for HRM.' Human Resource Planning, 30.1: 21-33.
Dubin, Robert. 1958. The World of Work: Industrial Society and Human Relations. Englewood Cliffs, NJ: Prentice-Hall.
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