Factors influencing administrators’ empowerment and financial management effectiveness
In the current economic crisis, organizations’ information processing capabilities are challenged by additional and diverse demands. In this context, banks attempt to develop and apply more sophisticated and comprehensive Management Information Systems (MISs), in order to exploit their innovation competences and build a sustainable competitive advantage. This paper explores the antecedents of task innovation, reflected on (MIS) effectiveness, which was operationalised by the Competing Value Model (CVM). CVM synthesizes four different schools of management in order to measure IS effectiveness: open system (OS), human relations (HR), internal process (IP) and rational model (RM). Drawing from a sample of 186 bank employees in Greece, a structural model has been built and estimated using Partial Least Squares. Findings reveal that the HR component characterized by interpersonal communication, group decision making, team collaboration and personalization is the most important predictor of task innovation (TI). The RM dimension of MIS effectiveness based on optimizing, goal setting and forecasting has an indirect effect on HR via the OS and IP elements. The rest MIS effectiveness components (OS, IP) are indirectly associated with task innovation, through HR dimension.
Productivity, innovation, quality and flexibility of services improvement at the individual and organizational levels have emerged as key advantages for organizations to survive and excel in this global financial crisis [1,2] and have been extensively researched in numerous studies with the aid of computational methods [3 – 17]. Under the pressure of cost reductions, firms’ information processing capabilities are challenged by additional and diverse demands, in an attempt to develop and apply more effective MISs [18, 19]. Even though the impact of MIS on performance is widely acknowledged, previous researchers exploring their direct and indirect association concluded to rather mixed and confusing results [20, 21].
Among the various benefits of MIS is their capability to provide a broad range of information about multiple dimensions of the firm’s operations [3,5], thus supporting decision-making and performance achievement [1, 22, 23] and facilitating the work of end users. Focusing on the banking sector, organizations suffer from achieving different levels of MIS effectiveness, leading to different levels of work outcomes, such as task innovation.
This paper aims to investigate the impact of different MIS effectiveness dimensions on task innovation by utilizing the Competing Value Model (CVM).
After this introductory section MIS effectiveness built on the CVM is being reviewed. This is followed by a presentation of the research methodology, including the questionnaire design and sampling. Statistical analyses and results are following and at the end, conclusions and managerial implications are discussed.
2-Theoritical and Conceptual Framework
The research of Amalia Ifanti (2011) on schools’ empowerment issues over the last three decades, School Empowerment: Discourse and the politics of the Federation of Secondary School Teachers in Greece, affirmed greatly the importance of school empowerment. While empowerment is not new, framing it using the Integrated Clarity (IC) as suggested by Marie Miyashiro and Marshall Rosenberg spells out the difference since IC Framework helps organization to discover and articulate its needs critical to its sustainability in a way that benefits the whole system and the people by subscribing to six (6) universal organizational needs essential to the institution’s existence. These are (1) Identity refers to the vision statement, (2) Life-Affirming Purpose refers to the mission statement, (3) Direction refers to the strategic plans, means, thrusts and priorities of the organization; (4) Structure refers to the articulation of the organizational structure, policies and functions, (5) Energy focuses on the effectiveness of operational management, control and financial sustainability, and (6) Expression refers to the growth as a natural by- product of reaching and serving people or it conveys a specific contribution of the organization on the industry or society (Holman, Devane, et al, 2007). In this study, the aforementioned six (6) universal organizational needs are assumed as the factors influencing school administrators’ empowerment and are considered as the independent variables (x).
Achieving institutional financial sustainability for Catholic schools in the Philippines is both a goal and a challenge for its economic survival. The Sacred Congregation for Catholic Schools (#81) cited that many Catholic schools has considerably improved their financial condition while initially receiving various public or private grants but later began to enter into agreements, conventions, contracts, etc. which guarantee both the preservation of the special status of the Catholic school and its ability to perform its function adequately. The Pastoral Letter of Archbishop Jose Palma, President of Catholic Bishops Conference of the Philippines on the occasion of the 400 Years of Catholic Education in the Philippines (2012) affirmed the same point: The Catholic schools assist the government in providing education to the rest of the citizens who opt for Catholic education as well as those who cannot be accommodated in public schools. Brigham and Houston (2012) mentioned: All important organizational decisions have financial implications. According to Patricia León (2001) financial sustainability is its capacity to generate resources in response to a demand, in order to maintain productive processes at a steady or growing rate in order to produce results and obtain some savings. In the day to day operations of the school, administrators are entrusted the task to plan, direct and control operations of an organization (Ballada and Ballada, 2012). In order to succeed effectively and efficiently in this regard must require adherence to the four (4) financial management functions specifically, (1) planning refers to the formulation plan of actions or programs in order to attain the objectives or goals; (2) budgeting which completes the program planning because financial resources are committed to achieve the planned activity or program; (3) controlling ensures that actions conform to the plan and efforts are made to monitor its progress; and finally, (4) evaluating that becomes a tool to measure the success of the plan. If these functions are performed optimally and strategically, decision makers will help maximize the values of their organization and contribute to the welfare of clients and employees (Brigham and Houston, 2012). In this study, these four (4) financial management functions are regarded as the dependent variables (y).
As cited earlier, the role of the school administrator is crucial and he must be prepared to adapt to the changing environment. In this study, there are supporting variables (z) that may enhance his/her efficiency and effectiveness grouped as (a) administrator’s characteristics such as: (1) length of service as administrator; (2) financial management training and preparation; and (3) administrative experiences and (b) the principles of Integrated Planning-Budgeting and Monitoring System (IPBMS) such as: (4) participatory, involvement of all levels of management in the processes of planning, decision making and execution based on their competencies and authority; (5) stewardship, the wise use of resources entrusted to the administrators’ care and to manage it responsibly; (6) accountability, the obligation of an administrator to account for its activities, accept responsibility for money or other entrusted property, and to disclose the results in a transparent manner; (7) transparency, the full, accurate and timely disclosure of information which enables people to support each other in accomplishing the work to be done; (8) autonomy and solidarity, shown through the exercise of independence at the same time interdependence in relation to the common objective and thrust of the organization; (9) systemic, the implementation of each phase affects the whole system; and (10) Management by Objective (MBO) requires that all the unit plans must have specific results; target dates to accomplish, and has identified persons who are responsible and accountable for each activity. Finally, through the interplay of the above variables and structures of interrelationships together with a built in control mechanism, the application of funds and its corresponding performance is ensure to be consistent to the strategic plan (Schermerhorn, 2008). The use of Integrated Clarity as a tool offers new elements in enhancing the school’s financial management effectiveness and cultivating new ways of empowering the school administrators. Figure 1.1.a showed the interrelationships among independent variables (x), dependent variables (y) and supporting variables (z).
This study determined the relationship between the identified variables of administrators’ empowerment and financial management effectiveness among the selected nine (9) participating Catholic Schools in Davao city (6), Digos city (1), Iloilo city (1) and of Quezon city (1). The findings served as bases for a proposed empowerment and financial sustainable development plan. Specifically, this study answered the following questions:
- What is the level of influence of the identified factors on administrators’ empowerment as perceived by the research subjects?
- What is the level of influence on the identified functions of financial management as perceived by the research subjects?
- What is the level of influence of the identified supporting variables on administrators’ empowerment and financial management effectiveness as perceived by the research subjects?
- Is there a significant relationship between the
- supporting variables and factors influencing administrators’ empowerment and financial management effectiveness; and
- factors influencing administrators’ empowerment and financial management effectiveness?
- Is there a significant difference in the perceptions of the research subjects on the factors influencing administrators’ empowerment and financial management effectiveness when grouped according to schools?
- What are the perceived factors that may influence the administrators’ empowerment and financial management effectiveness?
- What empowerment and sustainable financial development plan can be proposed based on the findings of this study?
This study employed quantitative, non-experimental research design using descriptive correlation. It utilized statistical analytical tools such as: mean chi-square, Pearson-r correlation and One-way Anova. A customized survey questionnaire was designed and supported by Focused Group Discussions in order to verify the results and findings draw insights and reinforce especially the qualitative aspects of this study. This research was conducted in nine (9) selected participating Catholic schools located in Mindanao, Davao City (6) and Digos City (1), Visayas in Iloilo City (1) and in Luzon, Quezon City (1). Figure 1.1.b shows the geographical locations of the research subjects and number of participants in each school.
5-Summary of findings, conclusions and recommendations
5.1-Profile of the research subjects
The total 110 research subjects were composed of academe (68) and non-academe (42). With respect to Gender and Civil status, majority were female (69%) and married (59%) while the rest were male. In terms of Age, majority fell from ages 30 to 49 years old (66%). On the educational attainment, majority had master’s degree (65%) while 25% of them finished their doctoral degree. Further, the length of service in school, 51% of the administrators served the school from 10 to 19 years while in terms of the length of years in position held, 68% had been in the position for less than 5 years. Further, 101 out of 120 had assumed various administrative tasks but unfortunately, 84of them had not undertaken any formal training on financial management.
5.2-Levels of influence on the identified factors on administrators’ empowerment, functions of financial management and supporting variables as perceived by research subjects
Figure 1.2.A presented an over-all level of influence of “very high” on six (6) identified factors, of which 3.78 was rated by administrators from the academe and 3.76 by the non-academe. Examining the details, the factor on Direction got the highest score whereas Expression was rated the lowest. Further, Figure 1.2.B earmarked an overall descriptive rating of ‘very high’ on the four (4) identified functions of financial management effectiveness. The average means were 3.79 and 3.81 from the academic and non-academic research subjects, respectively. Planning got the highest mean responses while Control was rated the lowest. Finally, Figure 1.2.C indicated a descriptive rating of ‘very high’ on the identified Supporting variables of which an equal rating of 3.61 came from both the academe and non-academe administrators. Moreover, Transparency got the highest mean responses and administrative experiences was rated the lowest. Finally, as perceived by both academic and non-academic research subjects, the most rated administrative characteristics was Financial management training and preparations while Accountability was marked as the most important Supporting variable under the IPBMS principles.
5.3-Relationship among supporting variables, administrators’ empowerment and financial management effectiveness
Positive significant correlations at varying p values existed between the identified factors on Empowerment (x) and Supporting variables (z) as shown in Table 5.1. To wit: between Identity or vision statement with all the principles of Integrated Planning, Budgeting and Monitoring System (IPBMS) on Participatory, Autonomy and solidarity, Accountability, Stewardship, Transparency, Systemic and Management by Objectives (MBO); between Life affirming purpose or mission statement with Accountability, Transparency, Stewardship and MBO; between Direction or Strategic plans, goals, priorities, thrusts and objectives with Participatory; between Structure with Participatory, Autonomy and solidarity, Accountability, Transparency and Systemic; between Energy or operational management, control and financial sustainability with Stewardship, Accountability, Transparency, Systemic and MBO; lastly, between Expression or unique contribution and place in the market environment with all IPBMS principles except Stewardship. Moreover, a no significant correlations existed among the identified factors on Administrators’ Empowerment(x) with Supporting variables (z). To wit: between Identity or vision statement with all the three (3) Administrators characteristics on Length of service, financial management training and preparation and administrative experiences; between Life affirming purpose or mission statement with all the three (3) Administrators characteristics and IPBMS principles on Participatory, Systemic and Autonomy and solidarity; between Direction or strategic plans, goals, etc. with all the three (3) Administrators characteristics and IPBMS principles except Participatory; between Structure with all the three (3) Administrators characteristics and IPBMS principles on Stewardship and MBO; between Energy or operational management, control and financial sustainability with all the three (3) Administrators characteristics and IPBMS principle of Autonomy and solidarity; and between Energy or unique contribution and place in the market with all the three (3) Administrators characteristics and IPBMS principle of Stewardship.
Moreover, Table 5.2 showed positive significant correlations among the identified functions on Financial Management Effectiveness (y) and Supporting variables (z) as shown in Table 5.2 on the following: Participatory and Management by objectives. Further, varying positive correlations exist with Supporting variables with Planning such as: Financial management training and operation; Transparency; Accountability and Stewardship; with Budgeting the variable of Autonomy and Solidarity; with Control were Length of service, Accountability and Systemic; and finally, with Evaluation were variables of Systemic, Accountability and Transparency.
Table 5.3 summarized the significant correlations at varying p values which existed between the four (4) functions of Financial management effectiveness (y) of Planning, Budgeting, Control and Evaluation and Supporting variables (z) of Administrators characteristics and IPBMS principles specifically between Planning with Financial management training and preparation and IPBMS principles except Autonomy and solidarity and Systemic; between Budgeting with IPBMS principles on Participatory, Autonomy and solidarity and MBO; between Control with Length of service and IPMS principles except Stewardship and Transparency; and between Evaluation with IPBMS principles except Stewardship and Autonomy and solidarity.
In addition, a no significant correlation existed between Planning with Length of service, Administrative experiences and IPBMS principles on Autonomy and solidarity and systemic; between Budgeting with all the three (3) Administrator’s characteristics and IPMS principles on Systemic, Accountability, Transparency and Stewardship; between Control with Financial management training and preparation, Administrative experiences and IPBMS principle on Transparency; and finally between Evaluation with all the three (3) Administrator’s characteristics and IPBMS principles on Stewardship and Autonomy and solidarity.
Finally, a significant correlation existed between the identified factors on Administrators’ Empowerment(x) and functions on financial management effectiveness (y) on the following: between Life affirming purpose with all the four (4) functions of Financial management effectiveness; between Identity, Structure, Energy and Expression with Budgeting, Control and Evaluation; and finally, between Direction with Planning, Budgeting and Control.
5.4-Difference in the Perceptions of the Research Subjects on the Identified Factors on Administrators’ Empowerment and Functions on Financial Management Effectiveness when Grouped According to Schools
A ‘very high’ descriptive rating on the perceptions of the research subjects on identified factors on Administrators’ Empowerment when grouped based on the nine (9) selected schools was rated. But when testing the difference in the perceptions, a no significant difference existed on Direction, Energy, Expression, Identity, Life- affirming purpose and Structure as the identified factors on Administrators’ empowerment (x).
5.5-Perceived Factors that may Influence Administrators’ Empowerment and Financial Management Effectiveness
The common themes on other perceived factors mentioned during the Focused Group Discussions (FGDs) were categorized as follows: (a) core values, charism or directives and corporate Identity of the school; (b) leadership style that adheres the processes of consultation, participation and shared decision-making; (c) mutual trust that the person delegated does the task effectively and efficiently; (d) transparency as mutual sharing of expectations and desires; (e) coordination and team-working referring to the harmonious interactions among academic and non-academic administrators and personnel; and (f) honing the administrator’s skills through constant training and updating.
Whereas, the common themes the on other perceived factors on Financial management effectiveness were (a) Planning-Budgeting-feedbacking; (b) participatory Budgeting; (c) enhancement in the Evaluation; and (d) tracking and inventory of assets.
Based on the findings of the study, the following conclusions are drawn:
The profile on Gender connects with Life affirming purpose. In this study, the female research subjects outnumbered the male administrators. This data may have influenced the result.
Further, Organizational structure correlates with Planning as a function of financial management effectiveness which means that the clearer the structural design specifically on the lines of authorities and accountabilities, distribution of roles and responsibilities, and flow of communications, the better equipped are the research subjects or administrators to engage in institutional strategic visioning and planning.
Administrators’ empowerment is enhanced when identified factors such as Identity, Life affirming purpose, Direction, Structure, Energy and Expression are complemented with Supporting variables under the principles of Integrated Planning, Budgeting and Monitoring System (IPBMS) arranged according to frequency of importance from Accountability, Transparency, Participatory, MBO, Systemic, Stewardship, Autonomy and solidarity.
Effectiveness and efficiency in financial management are heightened as the identified functions of Planning, Budgeting, Control and Evaluation are complemented by IPBMS principles arranged according to frequency of importance from Participatory, MBO, Accountability, Systemic, Transparency, Autonomy and solidarity and lastly, Stewardship. Based on the outcome, as institutional Planning and Budgeting advanced, administrators’ Length of service and Financial experiences and preparations are factors that reinforced financial management effectiveness.
The Life affirming purpose or mission statement of the Catholic institution is significantly enhanced as the processes and dynamics of Planning, Budgeting, Control and Evaluation are developed and improved. Direction which signifies strategic plans, goals, priorities, thrusts and objectives of the institution are better pursued when Planning, Budgeting and Control mechanisms and systems are installed and supported by well-articulated measures of standards of performance leads to clearer institutional identity and better contribution to society at large. It can be concluded from the study that financial management effectiveness on Budgeting and Control are considered important in all the identified factors of Administrators’ empowerment, this further means that the schools understudied tend towards the aspects of operational management, control and financial sustainability rather than on long term strategic planning.
In order to harness the strengths that are intrinsically present in each of the identified factors of Administrators’ empowerment and the functions of Financial management effectiveness, the administrator is challenged to make a paradigm shift from the traditional way of managing the school’s finances to an integrated and systemic manner of doing things backed up by the basic IPBMS principles as its foundation. He/she is further confronted to make a major decision inherent to his/her function to consider Integrated Clarity (IC) framework and IPBMS as priority thrust and program in setting the new direction of the school. Active participation of the members of the school community is necessary since the strength of the IC framework and so with IPBMS lies on its people. While, monitoring, review and impact assessment are essential mechanisms and tools in order to measure the attainment of the institutional strategic plans, goals, programs and objectives in an efficient and effective manner. Moreover, a well-defined set of standards and policies must be timely communicated and harmoniously coordinated leading to better results.
The perceptions on the identified factors on Administrators’ empowerment and Financial management effectiveness of the research subjects when grouped by schools point to the same direction, unified expectations, shared understanding and common convictions in relation to the interactions of these two variables understudy, as strategic pillars of any educational system.
On the whole, the research subjects highlight other perceived factors that may influence Administrators’ empowerment such as the institutional core values and identity, mutual trust among those delegated with authority to govern and lead, transparency, shared responsibilities, coordination, consultation and delegation as a style of leadership to name a few. Whereas, aside from the four (4) functions of Financial management effectiveness, an effective and efficient exercise of plan-budget-feedback mechanisms, evaluation and review techniques, capital expenditures (CAPEX) inventory system just to name a few are the added elements.
Based on the findings and conclusions of the study, the following are recommended:
- Implement the Proposed Empowerment and Sustainability Development Plan in the two (2) major areas of concern: Administrators’ Empowerment and Financial Management effectiveness, in order to improve the financial net-worth of the Catholic school.
- Conduct regular financial management operation’s evaluation as a built-in mechanisms complemented by benchmarking
- Conduct similar studies in other Catholic schools and non-sectarian schools using the identified significant
- Specifically, for St. Pedro Poveda College and University of San Agustin conduct an interim financial management operation’s audit and impact implementation of Integrated Planning, Budgeting and Monitoring system (IPBMS) and draw best financial management practices to be shared to other Catholic educational institutions or other non-sectarian schools as one of their unique contribution in the field of educational administration and management.
The findings of the study revealed that effectiveness and efficiency in financial management increases as the functions of planning, budgeting, control and evaluation are complemented by factors influencing administrators’ empowerment taken from the Integrated Clarity (IC) framework such as: direction, energy and life affirming purpose and supported by financial management training and preparation on the Integrated Planning, Budgeting and Monitoring System (IPBMS) and its underlying principles of management by objectives, transparency, participatory, accountability, autonomy and solidarity, stewardship and systemic processes.
The Life affirming purpose articulated clearly in the mission statements of these nine (9) participating Catholic schools is significantly enhanced as the processes and dynamics of planning, control and evaluation are advanced. While Direction which signifies the strategic plan, thrusts, priorities and goals of these schools are better pursued when systems and processes of planning, budgeting and control mechanisms are installed. Moreover, an increased awareness on the need to enhance its institutional identity and rediscover its unique contribution in society would require reviewing the measures and standards of performance set and to do benchmarking as an aid for enhancing institutional relevance. As institutional planning and budgeting advanced, there is a need for administrators to be trained in multi-faceted areas of school management including managing change, of financial management, organizational development, stewardship and leadership and other aspects that may increase and enhance best administrative practices.
Achieving institutional financial sustainability for Catholic schools in the Philippines is both a goal and a challenge for its economic survival. According to Patricia León (2001) financial sustainability is its capacity to generate resources in response to a demand, in order to sustain productive processes at a steady or growing rate in order to produce results and to obtain a savings.