UNIVERSITY OF GHANA COLLEGE OF HUMANITIES UNIVERSITY OF GHANA BUSINESS SCHOOL DEPARTMENT OF ACCOUNTING ACCOUNTABILITY IN THE NON-PERFORMANCE OF PUBLIC ENTERPRISES: A CULTURAL PERSPECTIVE BY ANTHONY KWAME INSAIDOO (10701556) THIS THESIS IS SUBMITTED TO THE UNIVERSITY OF GHANA, LEGON IN PARTIAL FULFILMENT OF THE REQUIREMENT FOR THE AWARD OF AN MPHIL ACCOUNTING DEGREE. SEPTEMBER 2021 University of Ghana http://ugspace.ug.edu.gh i DECLARATION I do hereby declare that this manuscript is the finding of my research and has not been presented by anyone for any academic award at this or any other university. All references used in the work have been duly acknowledged. I, therefore, bear sole responsibility for any shortcoming, being marginal or substantial. University of Ghana http://ugspace.ug.edu.gh ii CERTIFICATION I hereby certify that this thesis was supervised under procedures laid down by the University. …………………………………… DATE: ………………. DR. J. M. ONUMAH (SUPERVISOR) University of Ghana http://ugspace.ug.edu.gh iii DEDICATION This work is dedicated to the struggle. To all men and women who have embraced the struggle to push God’s agenda forward. University of Ghana http://ugspace.ug.edu.gh iv ACKNOWLEDGEMENT I thank God for the successful outcome of my research work. I thank my supervisors, Drs. J. M. Onumah and F. K. Aboagye-Okyere for their professional guidance and support. I thank my sponsors, Professors Steve Tonah and Emmanuel Debrah, my sister and brother-in- law, Mr. & Mrs. Armo-Himbson and all who have in diverse and minimal ways contributed to my sustenance during this research. A special mention goes to Rev. Fr. Professor Michael Okyerefo who, about 11 years ago, set me on this path by advising me to take a bachelor’s degree. Finally, I thank my colleagues, especially, Mr. Eric Akuoko Nyanor, Ms. Theodora Koomson and Mrs. Irene Saah, not forgetting Mr. Amos Sarpong who came to my aid in a special way during the closing weeks of the work. University of Ghana http://ugspace.ug.edu.gh v TABLE OF CONTENT DECLARATION ............................................................................................................................. i CERTIFICATION .......................................................................................................................... ii DEDICATION ............................................................................................................................... iii ACKNOWLEDGEMENT ............................................................................................................. iv TABLE OF CONTENT .................................................................................................................. v LIST OF TABLES ....................................................................................................................... viii LIST OF ACRONYMS ................................................................................................................. ix ABSTRACT ................................................................................................................................... xi 1.0 Introduction ............................................................................................................................... 1 1.1 Problem Statement .............................................................................................................. 3 1.2 Research Purpose ................................................................................................................ 4 1.3 Research Objectives ............................................................................................................ 6 1.4 Research Questions ............................................................................................................. 6 1.5 Significance of the Study .................................................................................................... 7 1.6 Organization and Structure of the Thesis ......................................................................... 7 2.0 Introduction ............................................................................................................................... 8 2.1 Theoretical Review .............................................................................................................. 8 2.1.1 Habermas’ Communicative Action Theory ............................................................... 8 2.1.2 The Principal-Agent Theory ...................................................................................... 12 2.1.3 Stakeholder Theory. ................................................................................................... 13 2.2 Relevance of the Theories to the Research...................................................................... 14 2.3 Empirical Review .............................................................................................................. 15 2.3.1 The Conceptualization of Accountability in PE Performance ............................... 16 2.3.2 PE and accountability ................................................................................................ 19 2.3.3 Dimensions of Accountability .................................................................................... 23 2.3.3.1 Accountability and Responsibility ......................................................................... 25 2.3.3.2 Accountability and Control .................................................................................... 26 2.3.3.3 Accountability and Responsiveness ....................................................................... 27 2.3.3.4 Accountability and Dialogue................................................................................... 28 2.3.3.5 Accountability and Transparency .......................................................................... 28 2.3.4 Accountability and Culture ....................................................................................... 29 University of Ghana http://ugspace.ug.edu.gh vi 3.0 Introduction ............................................................................................................................. 32 3.1 Research Philosophy and Paradigm ................................................................................ 32 3.2 Research Design and Approach ....................................................................................... 33 3.3 Study Population ............................................................................................................... 34 3.4 Study Sample ..................................................................................................................... 34 3.5 Sampling Technique .......................................................................................................... 35 3.6 Data Source and Collection Procedure ........................................................................... 36 3.6.1 Primary Data............................................................................................................... 36 3.6.2 Secondary Source. ...................................................................................................... 36 3.7 Data Analysis ..................................................................................................................... 37 3.8 Validity and Reliability ..................................................................................................... 38 3.9 Ethical Issues ..................................................................................................................... 40 3.10 Chapter Summary ........................................................................................................... 40 4.0 Introduction ............................................................................................................................. 41 4.1 Summary of Respondents’ Profile ................................................................................... 41 4.2 Stakeholders’ Understanding of the Concept of Accountability .................................. 43 4.2.1 Accountability and Responsibility ............................................................................ 44 4.2.2. Accountability and Corruption ................................................................................ 45 4.2.3. Accountability and Nepotism ................................................................................... 46 4.3 Participants’ Lack of Interest in PEs .............................................................................. 47 4.4 Cultural Notions as a Stock of Knowledge for Accountability ..................................... 48 4.4.1 Culture ......................................................................................................................... 51 4.4.2 Clannish Mentality ..................................................................................................... 54 4.4.3 Nepotism ...................................................................................................................... 55 4.5 Chapter Summary ............................................................................................................. 56 CHAPTER FIVE .......................................................................................................................... 58 5.0 Introduction ....................................................................................................................... 58 5.1 Summary of Findings ........................................................................................................ 58 5.2 Conclusion .......................................................................................................................... 61 5.3 Contribution to Theory, Policy and Practice .................................................................. 62 5.3.1 Empirical and Theoretical Contributions ................................................................ 62 5.3.2 Contribution to Policy ................................................................................................ 62 University of Ghana http://ugspace.ug.edu.gh vii 5.3.3 Contribution to Practice ............................................................................................ 63 5.4 Limitations of Study .......................................................................................................... 63 5.5 Recommendation ............................................................................................................... 64 5.5.1 Recommendation to Practice ..................................................................................... 64 5.5.2 Recommendation to Policy ........................................................................................ 65 5.5.3 Opportunities for Further Studies ............................................................................ 65 REFERENCES ............................................................................................................................. 67 APPENDIX A ............................................................................................................................... 90 INTERVIEW GUIDE ................................................................................................................... 90 University of Ghana http://ugspace.ug.edu.gh viii LIST OF TABLES Table 3.1 Description of selected stakeholders, institutions and status/positions. ....................... 35 Table 4.1 Respondents’ Educational background ......................................................................... 42 Table 4.2 Position/Status of respondents ...................................................................................... 42 Table 4.3 Respondents’ years of service ....................................................................................... 43 University of Ghana http://ugspace.ug.edu.gh ix LIST OF ACRONYMS CAF- Comprehensive Accountability Framework CMA - Central Management Agencies CSR - Corporate Social Responsibility GBE - Government Business Enterprises GC - Government Corporations GCE - Government Controlled Enterprises GLC - Government-Linked Companies ICT - Information and Communication Technologies IFRS - International Financial Reporting Standards IMF – International Monetary Fund L.I. - Legislative Instrument NACAP - National Anti-Corruption Action Plan NIRP - National Institutional Reform Program OECD - Organization for Economic Co-operation and Development PE - Public Enterprise PNDC - Provisional National Defence Council PO - Parastatal Organizations University of Ghana http://ugspace.ug.edu.gh x PSU - Public Sector Units SEC - State Enterprises Commission SES - State Enterprise Secretariat SIGA - State Interests and Governance Authority SMCD - Supreme Military Council Decree SOERP – State-Owned Enterprises Reform Program University of Ghana http://ugspace.ug.edu.gh xi ABSTRACT The study examined public enterprise stakeholders’ understanding of accountability from a cultural perspective and how it has contributed to the non-performance of public enterprises in Ghana. Data was collected from a sample of public enterprise stakeholders in Ghana through semi-structured interviews. An exploratory qualitative research approach was used. The finding of the study revealed that even though public enterprises were created to promote the social and environmental development of citizens, there are cultural notions about accountability held by citizens as stakeholders of public enterprise, which hinder their understanding of the concept. Stakeholders of public enterprise are therefore unable to play their accountability role effectively contributing to the non-performance of public enterprises in Ghana. Even though there was a general agreement about the importance of accountability in public enterprise governance, certain cultural notions, some of which have been influenced by historical antecedents like slavery and colonialism, prevent stakeholders from having a positive attitude towards state properties and seeing beyond their clans in terms of social and environmental development. The study enhances current knowledge and literature on accountability in public enterprrises. It brings out the socio-cultural aspect of accountability which can be considered together with the recommendations from the 1983 and 1995 World Bank reports, including the more recent one covering the years 2013 to 2015, to cure the perennial poor performance of PEs in Ghana. University of Ghana http://ugspace.ug.edu.gh 1 CHAPTER ONE OVERVIEW OF THE STUDY 1.0 Introduction Public enterprise (PE) was established mainly to provide public services and tasks in areas where the market fails (Greiling & Grüb, 2014). Governments worldwide used it to cater to their citizens; to ensure socio-economic development and environmental conditions. They have existed for decades evolving to provide a variety of services in the social, economic and environmental sectors worldwide, especially in developing countries (Mbo, 2017). PEs have been primarily seen as vehicles of government planning in traditional economic analysis (Heal, 1973; Bös, 2014). Despite advancement in current public economics, governments intervene in the free market due to poor distribution of goods and services (Musgrave, 1999; in Buchanan & Musgrave, 1999; Atkinson & Stiglitz, 1980; Hindriks & Myles, 2006). The OECD has succinctly defined PEs as businesses wherein the nation, region or cities have significant control through full, majority, or significant minority ownership (Anita, 2017; PwC, 2015). Even though privatization of public services has increased in recent decades (Clifton, Comin, & Diaz-Fuentes, 2007; Del Bo & Florio, 2012; Koyuncu, Ozturkler, & Yilmaz, 2010; Newberry, 2000), PEs today are considered beneficial to render services in vital areas such as “electricity, gas, public transport, postal services, telecommunication or water supply” (Greiling & Grüb, 2014, p. 209). University of Ghana http://ugspace.ug.edu.gh 2 For example, following the global financial crisis of 2007-2008, numerous governments reacted quickly to the failure of a variety of enterprises, ranging from key banks in the United Kingdom, such as the Royal Bank of Scotland, to car companies in the United States, such as General Motors (Florio, 2014; Roper & Schoenberger-Orgad, 2011). Such countries are the cradle of Anglo-Saxon neoliberal thought, and the fact that their governments explored and implemented such measures, even if only as emergency and temporary solutions, attests to their utility. This is comparable to what happened in the 1930s during the Great Depression (Florio, 2014) Bovens, Schillemans, & Hart (2008) write about the need for public authorities and by extension, PEs, to account for their actions and expenditure while in office. Accountability expectations and obligations are higher for PEs than private businesses, because they are owned by the public and exist to promote the public good (Farneti & Guthrie 2008, 2009). In the context of a democratic state, Mulgan (2000) states that the key accountability relationships are between the public and public officials, within the ranks of office holders, and between elected politicians and bureaucrats. Bovens (2006) on the other hand analyzes accountability based on the nature of the forum, nature of the actor, nature of the conduct and nature of the obligation. Even though they have proved to be important in sub-Saharan Africa (Kikeri & Kolo, 2006), PEs in the area have been known to underperform since the 1970s (Nellis, 2005). For some years, concerns relating to the performance of the PE sector, particularly in emerging countries, have been expressed. Indeed, even with the benefits and concessions that monopolies and monopsonies enjoy, they have been found to lose a lot of money (Nellis, 1989; Nellis & Kikeri, 1989). University of Ghana http://ugspace.ug.edu.gh 3 The story has not been much different in Ghana. Adda (1992) reports that by the early 1980s, PEs had become a budgetary burden on the state due to poor performance. A problem that has persisted till today. After the World Bank’s initial diagnosis of the causes of the poor performance of PEs (World Bank, 1983, 1995), they were invited again by the government of Ghana to evaluate the different PEs’ corporate governance frameworks from the year 2013 to 2015. They arrived at ‘fundamental problems’ in PE governance as key factors undermining their performance (History of SIGA, 2020). Other corporate governance reviews of selected financial and economic regulators recommended that the government develop and implement a formal accountability framework, as well as strengthen corporate governance in these state entities, particularly in the areas of transparency and accountability. (History of SIGA, 2020). Subsequently, a new oversight body, the State Interests and Governance Authority (SIGA) (History of SIGA, 2020) was set up to replace the State Enterprises Commission (SEC) (History of SIGA, 2020). During the launch of SIGA on August 19, 2019, the president of Ghana called for a new culture, a culture of accountable governance (History of SIGA, 2020). Looking at accountability in the context of PE non-performance in Ghana, this essay undertakes to study stakeholders’ understanding of accountability through their culture. 1.1 Problem Statement The public being just owners of PEs without direct control over them (PEs) raises an accountability problem (Parker, Dressel, Chevers, & Zeppetella, 2018). Vertical accountability enables the University of Ghana http://ugspace.ug.edu.gh 4 management of PEs to uphold democratic principles and avoid corruption and autocratic tendencies (Aziz, Ab Rahman, Alam, & Said, 2015; Bhuiyan & Amagoh, 2011; Morrell, 2009). However, accountability becomes a problem because management and citizens lack interest and commitment to demand accountability (Schillemans, 2016). A lot of literature has been written on accountability and PEs but studies on linking the two, especially the cultural dimension of accountability in PEs are few. Daiser, Ysa & Schmitt (2017) maintain that there are still few formal studies on PEs in general, as well as on PE adminitration. Grossi, Papenfuß, & Tremblay (2015), on the other hand, highlight the gap in studies on PE administration, stating that management and governance deficits continue to be a major challenge in many countries. Furthermore, there are concerns about the mechanisms, tools, models, and processes that authorities and state councils could employ to promote effective, efficient, and long- term delivery of public services. Therefore, there are few empirical studies on governance issues regarding PEs (Kamal, 2010). Finally, a culture-inspired study like this allows for country-level discussion because each culture is distinct in its internal dynamics, principles, laws, time and space (Hall & Hall, 2003). 1.2 Research Purpose The research seeks to elucidate the root cause of the unsatisfactory performance of PEs in Ghana by examining the notions of accountability in the culture of its stakeholders. Culture consists of norms, meanings and knowledge which shape the lives of citizens and serve as a resource for understanding the communicative action of a people (Simons, 1995; in Lawrence & Doolin, 1997; Lawrence & Doolin, 1997). Therefore, an insight can be gained into a people’s University of Ghana http://ugspace.ug.edu.gh 5 understanding of a concept by looking at their culture (Habermas, 1984; Baxter, 1987; Lawrence & Doolin, 1997). The study was framed by Habermas’s Communicative Action theory which proposes two types of linguistic action: actions directed toward success and actions directed toward understanding. Action geared toward success is linked to empirico-scientific knowledge about work and systems. (Habermas, 1984, Baxter, 1987). The second type of communicative action is focused on understanding. It highlights the meaningful world that forms the natural setting for people as they are born and grow up making it the focus of communicative action directed to intersubjective, open, and free communication (Simons, 1995; in Lawrence & Doolin, 1997; Lawrence & Doolin, 1997; Habermas, 1984). He explains how understanding reached through communicative action can bring people together. The mechanism of reaching understanding is essential to Habermas’ view of the ‘lifeworld’. Habermas envisions a lifeworld consisting of culture, personality and the institutional order in which communicative action leads to understanding, creating and organizing interaction (Habermas, 1984; Baxter, 1987; Parsons, 1949), authenticating society (as in commonly shared values) and creating the backdrop for the self-formation in society (Lawrence & Doolin, 1997). The PE regulatory body in Ghana has undergone major reorganization in a bid to make PEs viable entities (Amoako & Goh, 2015). State Enterprise Secretariat (SES) was replaced by SEC with the law that established the Commission being changed several times to give it more powers and more responsibilities, and SEC has also been replaced by SIGA (History of SIGA, 2020). This author seeks to move beyond the reasons proffered by the World Bank for the poor performance of PEs, to study the notions of accountability in the Ghanaian culture which seem to University of Ghana http://ugspace.ug.edu.gh 6 permit the destruction of PEs, while purporting to serve the citizenry at the same time. The study seeks to probe the cultural notions of accountability of the Ghanaian people about PEs to find out how it is perceived. Furthermore, engaging with Ghanaian PE in this way has the potential to improve theorizing and performance. As a result, evidence from Ghana's PE sector will considerably increase the level of knowledge, policy, and practice for PEs of other underdeveloped African nations (Simpson, 2013). The cultural dimension of accountability has benefits for culture itself and the culture-specific aspects of organizational functioning. Again, in this day of globalization, accountability’s cultural dimension has become critical as enterprises and people from all backgrounds interact more and more. In this regard, revealing cultural disparities in accountability can assist persons crossing cultural boundaries to appreciate the fact that accountability presents differently in different cultures and to adapt (Gelfand & Realo, 1999). 1.3 Research Objectives In seeking to assess the role of accountability in the non-performance of PEs in Ghana from a cultural perspective, the study examines stakeholders’ perceptions of PE. Secondly, it endeavors to find out the cultural notions of stakeholders on accountability in PEs, and finally, to explore the role of accountability in the non-performance of PEs in Ghana. 1.4 Research Questions 1. How do stakeholders in Ghana perceive PEs? 2. What are the cultural notions of stakeholders on accountability in PEs? University of Ghana http://ugspace.ug.edu.gh 7 3. What is the role of accountability in the non-performance of PEs in Ghana? 1.5 Significance of the Study The study attempts to find a long-lasting solution to the perennial problem of non-performance of PEs in Ghana. Knowledge of existing literature on accountability is improved by the research findings. A future researcher conducting further studies on the cultural aspect of accountability in Ghana and for that matter, Africa, and the developing world in general, has an addition to his/her resource materials. The inductive and qualitative research approach provides a better understanding of the phenomenon in terms of depth and richness. The theoretical contribution is quite significant and seems to be novel in existing literature (Sierra, Zorio, & Garcia-Benau, 2013). Practitioners and policymakers are enriched with evidence-based results on how to promote effective accountability. 1.6 Organization and Structure of the Thesis The research is broken down into five chapters, which are as follows: The first chapter introduces the work with the study's background, problem statement, research purpose, research objectives, and questions, as well as the study's structure, and significance. The second chapter contains a theoretical and empirical review of literature on the cultural aspect of accountability in PEs. The research methodology is covered in Chapter three and Chapter four deals with the results, findings and discussion of the study while chapter five looks at the summary, conclusion, and recommendations. University of Ghana http://ugspace.ug.edu.gh 8 CHAPTER TWO LITERATURE REVIEW 2.0 Introduction Chapter two covers the basic structure of the theories used to underpin the research and presents a review of the literature significant to it. Thus, the literature presented relates to the conceptualization of accountability in PE performance, PE and accountability, dimensions of accountability and the culture-specific aspects of accountability to answer the research questions. 2.1 Theoretical Review The theoretical review contains the structure of the theories supporting the research. Many theories have been widely applied in literature to study accountability in the public sector; however, the author found it appropriate to use stakeholder theory and principal-agent theory as a multi- dimensional framework to explicate it. Communicative action theory was used to frame the study. 2.1.1 Habermas’ Communicative Action Theory Habermas’ theory of communicative action throws light on how systems and concepts develop through communicative or strategic action (Habermas, 1984; Baxter, 1987). It describes the mechanism for reaching understanding and the lifeworld consisting of culture, personality and the institutional order which enables individuals or groups of people to reach understanding. It highlights the fact that communicative action involves the culture of a people and a complex series of mechanisms for reaching understanding (Habermas, 1984; Baxter, 1987). This is of much significance as the introduction of PE to Ghana is linked to colonialism which is an imposition by University of Ghana http://ugspace.ug.edu.gh 9 a foreign culture (Clifton, Comín, & Díaz-Fuentes, 2003; Cowen, 1984). It demonstrates how an insight can be gained into a people’s understanding of a concept by looking at their culture (Habermas, 1984; Baxter, 1987; Lawrence & Doolin, 1997). Thus, Both PE and accountability in PE are foreign phenomena (Clifton et al., 2003; Bovens et al., 2008; Dubnick, 2002) and belong to Habermas’ system world where action is oriented toward success (Simons, 1995; in Lawrence & Doolin, 1997). Action is geared toward achieving certain ends. It is empirico-scientific which is linked to system and work. This thinking, sometimes called functionalist reason is instrumental or strategic and can be found in official circles of modern society directed by power and money (Lawrence & Doolin, 1997; Broadbent, Laughlin, & Read, 1991; Habermas, 1984; Baxter, 1987). This is contrasted with his second type of communicative action which is focused on understanding: the meaningful world that forms the natural setting for people as they are born and grow up. It is characterized by intersubjective, open, and free communication. It is based on shared meanings that facilitate ordinary interaction. Meaning is buried in the symbols, language, beliefs, values and artifacts that people share in their day to day activitie (Simons, 1995; in Lawrence & Doolin, 1997; Lawrence & Doolin, 1997; Habermas, 1984). The lifeworld which is the social environment for communicative action is made up of culture, the institutional order and personality. Habermas sees culture as one of the means through which communities reach understanding and cultural reproduction as the means to secure the continuity and coherence of knowledge. Culture serves as the vital interface which facilities the flow of communication among people and their understanding. Without it, there is a loss of meaning and a legitimation and orientation crisis (Habermas, 1982; in Baxter, 1987; Parsons, 1949). To assess the meaning a society gives to a phenomenon, therefore, one may look at its culture. University of Ghana http://ugspace.ug.edu.gh 10 Habermas lays out the mechanism for reaching understanding which is important to his description of the lifeworld. First, social action which is meant to be understood needs to be communicative and not strategic, be it open or concealed. For social action not to be concealed strategically, it must be ‘avowed’. This means that communication must be essentially avowable. Otherwise, it becomes a linguistically mediated concealed strategic action (Strawson, 1964; Habermas, 1984). Secondly, the claim of the speech act and knowing the conditions that validate it is what differentiates a communicative action from an open strategic action (Habermas, 1984; Baxter, 1987). The claim in each speech act has its own set of conditions that make it acceptable: namely, in imperatives, the power of enforcement and in a regulative speech act where the person speaking puts up a validity claim, a claim to rightness. Habermas maintains that communicative action differs from open strategic action precisely in these conditions that make it acceptable. Speech acts considered under this model are regulative speech acts, constative speech acts and expressive speech acts (Habermas, 1984; Baxter, 1987). For the hearer, he or she shows understanding by accenting to or rejecting the claim. Upon accepting the claim, he/she directs his or her actions according to conventionally fixed obligations. The hearer is free to criticize or offer reasons. The speaker also offers convincing reasons where necessary rather than wielding penalties and thereby establishes a rational motivation for the communication (Baxter, 1987; Habermas, 1984). In Habermas’ theory of communicative action, the resources for understanding are culture, the institutional order and personality (Habermas, 1982; in Baxter 1987; Parsons, 1949). Cultural standards of interpretation, value and expression serve as a stock of knowledge that aids participants as they seek to understand and control their situation. University of Ghana http://ugspace.ug.edu.gh 11 Society continues to thrive through cultural reproduction and when this happens the continuity of tradition and understanding, enough for daily practice is secured (Habermas, 1982; in Baxter, 1987). A sustainable cultural life affects institutions and personality. It legitimizes basic social institutions and equips members of society with behavior for self-development and academic achievement (Habermas, 1982; in Baxter, 1987) Habermas explains that when culture fails, it results in a crisis of meaninglessness. In cultural reproduction failures, the resource that diminishes is meaning (Habermas, 1982; in Baxter, 1987), or in the citizenry, a lack of understanding. Conversely, Habermas contends, in the economic/administrative sectors a different solution, the media of money and power is found which avoids the tedious process of reaching understanding over difficult validity claims (Habermas, 1984; Baxter, 1987) As accountability and PE are both foreign phenomena (Bovens et al., 2008; Dubnick, 2002; Clifton, et al., 2003) there could be lacking in the Ghanaian culture, cultural standards of interpretation, value and expression which serve as a stock of knowledge that aids stakeholders of PE as they interpret and seek to master their situation (Habermas, 1984; Baxter, 1987). Each cultural world operates differently in terms of principles, laws (written and unwritten) and internal dynamics. Each culture's concept of time and space is distinct. Furthermore, cultural programs will fail if critical steps are skipped, which occurs when people apply their own rules to another system unconsciously (Hall & Hall, 2003). It could also be that the colonialists who introduced PE to Ghana (Appiah-Kubi, 2001), found a different solution through the media of money and power which avoided difficult validity claims (Habermas, 1984; Baxter, 1987; Luhmann, 1976). University of Ghana http://ugspace.ug.edu.gh 12 2.1.2 The Principal-Agent Theory The principal-agent relationship is explained by agency theory. The theory states that taxpayers and donors employ agents through the government to work for them. As such, taxpayers and donors become principals (Nkundabanyanga, Kasozi, Nalukenge, & Tauringana, 2014). The agent endeavors to avoid conflict of interest in discharging his/her duties. The theory explains the problems that might occur during the agent’s duties and the steps the principal takes to rectify them (Mitnick, 2015). Again, the principal-agent theory exemplifies the openness and the accessibility which should characterize the agent’s work (Gailmard, 2012; Sarkar, Wingreen, & Cragg, 2017). This theory assumes that both parties will act reasonably and agree that the agent's work affects the profit and success of the taxpayers and donors. Incomplete information, information failure and the agent's propensity to work at the expense of the principal gift him with discretionary freedom (Keil, 2005) The theory typifies the principal/agent relationship existing in PEs. As citizens fund and establish PEs through an act of parliament, agents must answer for and justify their actions (Parker et al., 2018) The fact that the public are merely owners without direct control over PEs raises an accountability problem (Parker et al., 2018). When both sides are unable to meet their shared objectives, it leads to a loss of finances (Lyonnet du Moutier; 2010; Parker et al., 2018). The theory has been used to thoroughly study accountability in public organizations. It captures the answerability and responsibility which characterize PEs (Gailmard, 2012). University of Ghana http://ugspace.ug.edu.gh 13 2.1.3 Stakeholder Theory. According to Freeman (1999), stakeholders refer to people who have an interest in a concern; they affect and are affected by it. The stakeholder theory posits that for PEs to be answerable, responsible and accountable, they must satisfy the interests and expectations of their many stakeholders. This defines the governance process of PEs (Cummings & Worley, 2014; Christopher, 2010; Chourabi et al., 2012). It places much emphasis on social responsibility and the interest of third parties (Christopher, 2010). Stakeholders of PE consist of the “public, investors, customers, suppliers, regulators, creditors, organized labor, the media, the financial community, CSOs and all the other constituencies, including the politicians, managers (i.e., PE’s top management teams), administration and staff” (Bernal, Oneto, Penfold, Schneider, & Wilcox, 2012). The stakeholder theory postulates that managers seek the welfare of stakeholders, according to Freeman, Wicks & Parmar (2004). Two main questions define the theory, namely: ‘what is the purpose of the firm’ and what ‘responsibility does management have to stakeholders?’ (Freeman et al., 2004). Strategic stakeholder theory makes the fundamental assumption that stakeholder management will result in a competitive advantage that will allow for greater value creation (Freeman, 1984; Wall & Greiling, 2011). Stakeholder theory highlights stakeholders’ participation in PE governance to overcome any conflicts that may arise (Christopher, 2010). The theory stresses the importance of PEs to act in the interest of all stakeholders using the appropriate means (Christopher, 2010). University of Ghana http://ugspace.ug.edu.gh 14 PEs must deal with many stakeholders who want disclosure on financial, environmental, and social issues. They, (PEs) face a lot of pressure to disclose information that makes them more visible and accountable (Cormier & Gordon 2001). Zhang (2018), Rose-Ackerman & Palifka (2016), Moyo (2018), and Freeman et al., (2004) state that the stakeholder theory serves as a check on corrupt and incompetent officials for the common good. The theory was therefore introduced to explain the importance of strategic management of PEs (Mainardes, Alves, & Raposo, 2011). Many public organizations have used it as a management tool (Mainardes et al., 2011). Key to the operation of PEs as envisaged by the Principal-Agent and Stakeholder theories is an appreciation on the part of principals of their role to hold agents and governance of PEs to account for their performance. However, when stakeholders of PEs show apathy to the governance of PEs because they do not fully appreciate their role in holding agents of PEs to account for their performance, this becomes a problem. 2.2 Relevance of the Theories to the Research The three theories help to explicate the three different but inter-related aspects of accountability in the performance of PEs from a cultural context: management as agents, stakeholders and culture. Jürgen Habermas’ theory of communicative action sheds light on the cultural aspect of accountability as it highlights the development of systems and concepts through communicative or strategic action. It frames the whole research. The agency theory was used to highlight the responsibility management of PEs have toward citizens as principals while the stakeholder theory provides for the integration of stakeholder interest in the governance process of PEs. It ensures the differentiation of citizens as stakeholders, and the responsibility of managers to cater to the needs of all of them. University of Ghana http://ugspace.ug.edu.gh 15 Figure 2.1 The Linkage Between Communicative Action Theory, Stakeholder Theory, Agency Theory and Public Accountability. Source: Empirical Data, 2020. 2.3 Empirical Review Empirical review relates to the literature’s position on the study. Thus, the literature presented concerns the conceptualization of accountability in PE performance, the unique nature of accountability in PEs, dimensions of accountability and accountability and culture to address the research questions. Accountability Dimensions Responsibility Control Responsiveness Dialogue Transparency STAKEHOLDERS CULTURE PUBLIC ENTERPRISE Responsibility Control Responsiveness Dialogue Transparency Public Accountability Dimensions STAKEHOLDER THEORY AGENCY THEORY COMMUNICATIVE ACTION THEORY University of Ghana http://ugspace.ug.edu.gh 16 2.3.1 The Conceptualization of Accountability in PE Performance PEs use state funds to serve societal needs while pursuing business objectives (Allini, Manes Rossi, & Hussainey, 2016; Greiling, Traxler, & Stötzer, 2015; Hodges, Wright & Keasey, 1996; Calabrò, Torchia & Ranalli, 2013). They are often known as hybrid organizations because of this (Bruton, Peng, Ahlstrom, Stan &, Xu, 2015; Koppell, 2007; Thynne, 1994). The pursuit of social and business goals has implications for the style of accountability they employ (Greiling et al., 2015; Shaoul, Stafford & Stapleton, 2012; Swiatczak, Morner, & Finkbeiner, 2015). While private-sector corporate governance objectives require a focus on profit and shareholders with its corresponding accountability style, the public sector accountability style focuses on downward accountability to the public who provide most of the resources (Greiling et al., 2015; Shaoul et al., 2012; Swiatczak et al., 2015), and make profit for its shareholders as well. In a bid to carry out the accountabilities of the two domains, PEs are faced with the dilemma of balancing two sets of contradictory objectives. They try to operate free of government control even though they also must report to government as shareholders and are closely supervised by a wider government and non-governmental bodies (O’Flynn, 2007). Governments appoint the PE board, fix their terms and remuneration, decide on new investments and expansion, fix prices, approve contracts and purchases (UN’s DPADMA, 2008). Thus, the UN’s DPADMA (2008) argues that given the role and nature of PEs, they cannot be separated from government in certain situations. It gives the example of China which has engaged private enterprise in their PEs without privatizing them (PEs). PEs end up providing more environmental and social information to justify their existence and actions (Greiling et al., 2015; OECD, 2016; van der Laan Smith, Adhikari, & Tondkar, 2005). University of Ghana http://ugspace.ug.edu.gh 17 They are, therefore, more transparent and disclose more information. For instance, they must demonstrate that there is fairness in their dealings with politicians and that the public knows their objectives (Anita, 2017). Transparency International has identified accountability through transparency and disclosure as one of the ten principles for combating corruption in PEs (Wilkinson, 2017). To this end, the financial accountability processes for PEs are also more complex. They consist of a complex system of performance objectives with many layers in a unique operational environment. Performance responsibility for the economy exists at both the local and national levels, and they are carried out by varied levels of interconnected officials with their requirements for information and roles of financial accountability. (McCrae, 1992). The accountability chain consists of the government, parliament, executive ministers, board of directors and the citizens at large. It emerges that PEs have a complex accountability chain (McCrae, 1992). Ownership separation and oversight in addition to the challenge of employing officials to act in line with the organization’s objectives affect accountability mechanisms. Citizens, through an act of parliament, establish PEs with management to run affairs on their behalf. The citizens rely on reported financial statements (annual reports). This leads to information failure creating room for distortion of reports which in turn leads to the inability of management to agree their personal goals with those of the company and even more reckless behavior (Jensen & Meckling, 1976, 1979). At the same time, PE management is called upon to make decisions that agree with policies as found in the statutes that established the PEs (McCrae, 1992). These myriad problems call for regulation in the form of a robust International Financial Reporting Standards (IFRS) and equally robust accountability mechanisms as exemplified in the four types of public accountability, University of Ghana http://ugspace.ug.edu.gh 18 namely, financial accountability, accountability for service delivery, political accountability and citizen accountability (Brinkerhoff, 2003; Romzek & Dubnick, 1987). Through the annual report, financial accountability aims to provide a comprehensive picture of the financial situation. Where private equity firms receive government funding, calls for financial transparency become even louder (Greiling & Grub, 2014). Accountability for service delivery covers a broad spectrum of firm commitments to produce and distribute government goods and services, such as widespread service delivery of a high standard to all service users, user-friendliness, the element of consistency (uninterrupted service provision), reasonable prices, and service provision based on user preferences (Green Paper EC, 2003; in Greiling & Grüb, 2014). Political accountability necessitates that PEs provide information about their performance in a way that meets the objectives and policies of the public owners (Greiling & Grub, 2014). The information needs of public owners should be adequately served in their role as customers and taxpayers. The reports should cover all aspects of the contribution of PEs to the common well- being of citizens (Greiling & Grub, 2014). As the public owners decide on whether the business continues to operate or not, the status, the structure and financial resources of the organization, it is crucial to consider them in its operation (Greiling & Grub, 2014). PEs need to provide for a systematic collaboration with citizens through customer representatives to give consumers a voice, bearing in mind a variety of financial and non-financial criteria to report on enhanced products that affect the public (2003/40/EC; in Greiling & Grüb, 2014). University of Ghana http://ugspace.ug.edu.gh 19 2.3.2 PE and accountability The complex political system and the bureaucracy of the administration in PEs in addition to financial accountability relationships present a complex matrix (McCrae, 1992) PEs are unique in the processes, policies and systems used in managing their activities efficiently and effectively; their agents and principals are unique and their management is restricted in their ability to dismiss or reward agents. Finally, their legal, financial and financing regimes are also special (McCrae, 1992). The classification system used to capture the complexity in PE accountability structures include issues of many objectives, well-defined areas and alternative types (McCrae, 1992). Often, managers of public sector organizations conduct state policies and serve citizens in critical areas at the same time. Mascarenhas, Ramanadham and others recognize the difference between PE responsibility for day-to-day activities and PEs being used to conduct state plans and held accountable for them (Miah, 1988). Giving directives goes together with responsibility for the consequences of those directives. Allowing management of PEs a free hand to run their organization, results in more productive resource use, especially, where there is a market failure (McCrae, 1992) According to Holmes (1983) (in McCrae 1992) and McCrae (1992), PE stakeholders could be classified into the responsible parties who control and manage operations in PEs, parliament, the executive government, the managers, auditors and the board of directors. Firstly, the responsible parties who have the power to influence and control PEs include the public, clients and parliament. The public elect parliamentarians through the electoral process. Members University of Ghana http://ugspace.ug.edu.gh 20 of the public also enjoy rights or services. Enterprise operations directly affect staff unions, clients and client groups, while parliament legislates and monitors performance. Secondly, parliament creates and dissolves the entities. Thirdly, the state authorities execute government policy that affects PEs. Fourthly the state authorities appoint the board of directors to plan the enterprise’s affairs. Fifthly, the managers see to the day-to-day running of the entity to achieve set objectives. Finally, Auditors perform comprehensive audits (Holmes, 1983; in McCrae, 1992; McCrae, 1992). The relationship between parliament and the public is problematic. Most PE resources come from the public and yet it is not very clear how they (public) can affect parliamentary legislation (McCrae, 1992). Society entrusts the state with the responsibility of interpreting the desired scale of social preferences and social welfare function. Members of parliament then must account to society for their stewardship (Normanton, 1981; in McCrae 1992). They serve as stewards of state values and policies, ensuring that they use resources at their disposal for the intended purpose (McCrae, 1992). The executive government's trusteeship pertains to its duty of carrying out the programs upon which they campaigned and for which they were voted into power – the so-called macroeconomic or national interest policy (Bird, 1973). They delegate but do not cede responsibility (Normanton, 1981; in McCrae 1992). The public must know that the government is being held accountable and that financial results are not being concealed. The performance of the state must be matched with state goals (McCrae, 1992). University of Ghana http://ugspace.ug.edu.gh 21 Judging the state on the financial reports alone is not helpful. The role PEs play in achieving those results and the fact that some of them have limited authority in the matter have to be acknowledged (McCrae, 1992). Agency accountability is the second level of accountability. This is the responsibility of PEs to perform efficiently in line with state policies. According to Wettenhall (1976); (in McCrae, 1992) PEs can be called to account for the discharge of this responsibility only when they are given a free hand to operate. The salary and incentives structure in PEs often does not attract qualified managers. Their opportunity cost alone likely exceeds what citizens consider acceptable. This constrains the political decision-maker as he may not want to pay a price that might be too high for voters; fearing the loss of an election (Fontes Filho & Alves, 2018). In publicly traded companies, the manager's compensation package typically consists of three components: salary, bonuses, and incentives based on stocks or options, the latter two of which are variable and dependent on performance. However, assessing the performance of managers in stakeholders-oriented PEs (even PEs listed on stock exchanges) is extremely difficult, making it much more difficult to devise compensation packages that compensate for it (Jensen, 2001). Incentive mechanisms for politicians are non-existent. If politicians manage PEs they are responsible for exceptionally well, they are not compensated accordingly. (Filho & Alves, 2018). Where managers are not adequately compensated for their work they are likely to resort to their own means to extract benefits. Companies, for example, can avoid layoffs to avoid creating political and electoral constraints. Decisions that can lead to financial insecurity and poor resource allocation may be made. Managers and politicians may become risk-averse, apathetic, spend University of Ghana http://ugspace.ug.edu.gh 22 excessive resources for their own benefit, or find themselves in more serious situations involving corruption and other illegalities (Filho & Alves, 2018). In Ghana, PEs have undergone fundamental re-organization sponsored by the World Bank and the International Monetary Fund (IMF) (Amoako & Goh, 2015). SES established in 1965 gave way to SEC in 1976. A new SEC was formed in 1981 and a third one was formed in 1987. Since then, SEC has seen further restructuring with expanded roles in a bid to improve the performance of PEs and make them viable entities (History of SIGA, 2020). According to World Bank reports from 1983 and 1995, the reasons for their (PE) poor performance included poor monitoring, managerial and technical challenges, deficient boards, poor reporting systems, large accounts receivable from other state agencies, corruption, and political interference (World Bank, 1983, 1995; Ayee, 1994; Nellis, 2005). In a recent development, the World Bank has been commissioned to do another assessment of PEs in Ghana covering the period from 2013 to 2015. It identified the following fundamental governance issues as key factors undermining PE performance: The fragmented and uncoordinated oversight of PEs by multiple Government organizations, the absence of a well-defined ownership framework, poor governance practices at the PE level, as well as the outdated enabling Act and capacity constraints of the defunct SEC that have hampered effective oversight of government investments (SIGA History, 2020). University of Ghana http://ugspace.ug.edu.gh 23 Based on these findings, it was recommended that the government streamline and centralize oversight and management of private equity firms to improve their governance and performance. Similar corporate governance reviews of selected financial and economic regulators recommended that the government develop and implement a formal accountability framework, as well as strengthen corporate governance in these state entities, particularly in the areas of transparency and accountability. SIGA, a new organization, has been formed. (History of SIGA, 2020). During the President’s launch of the SIGA on August 19, 2019, he referred to the need to develop a new culture; a culture of accountable governance (History of SIGA, 2020). This study, however, does not seek to look at a ‘new culture’, but rather the culture of stakeholders of PEs in Ghana as it relates to accountability to ascertain their understanding of the concept. 2.3.3 Dimensions of Accountability The term accountability has been used to describe a variety of concepts (Bovens et al., 2008). It is an Anglo-Norman notion (Bovens et al., 2008; Dubnick, 2002), with no semantic equivalent on the European continent. It is used to refer to transparency, responsibility, answerability and trustworthiness, (Bovens et al., 2008; Lammertink & KarlssonVinkhuyzen, 2017). Again, some scholars see it as a norm that determines the basis for judging public servants and a public good (Bovens, 2007a; Bovens et al., 2008; Dubnick, 2002, 2005; Koppell, 2005). Additionally, Bovens (2007b), Mulgan (2003) and Pollitt (2003) are, however, of the view that it is the intersubjective, open and free communication that takes place between public officials and citizens (Paulussen, Gill, Geib, Krieger & McCormack, 2018). University of Ghana http://ugspace.ug.edu.gh 24 According to Hupe & Hill (2007), Kim (2009) and Dubnick (2003), accountability ensures that acts of public servants align with the hopes and aspirations of citizens to hold them (public officials) answerable and accountable for failure. The public demands accountability to make public officials use public resources efficiently and effectively to provide public goods and services. They are also called to answer for their performance (Sylvester, 2013). The scope and meaning of accountability have been expanded over and above its original meaning of being called to account for one's actions (Mulgan, 2000). However, there is general agreement on one meaning of accountability which is associated with the process of being called to account to a higher body for one's actions (Jones, 1992; in Mulgan, 2000). This meaning is more accurately described as the classical meaning of accountability because it has the oldest use in related literature and practitioners' understanding (Finer 1941, p. 338; Thynne & Goldring, 1987, p. 8; Caiden, 1988; in Jabbra & Stone, 1989). It is outward-looking, involves social interaction and exchange, and implies authority rights, including the right to demand answers and impose sanctions. Christie (2018) proposes a Comprehensive Accountability Framework (CAF), which combines the primary elements of well-known accountability structures in the literature to produce an executable accountability system. CAF connects accountability types to values, behaviors, dominant methods, dimensions, goals, accountability frameworks (for whom and for what), results, and criteria for evaluation. It has dimensions such as responsibility, controllability, liability, transparency, and responsiveness, which are like Mulgan's dimensions of responsibility, control, responsiveness, and dialogue (Mulgan, 2000). University of Ghana http://ugspace.ug.edu.gh 25 2.3.3.1 Accountability and Responsibility The term 'accountability' is now widely used to refer to the sense of individual responsibility and concern for the public interest that is expected of public servants ('professional' and 'personal' accountability); an 'internal' sense that extends beyond the term's core external focus (Mulgan, 2000). In the 1940’s, Friedrich and Finer engaged in a debate in which Friedrich took the position of accountability as internal while Finer took the position of accountability as external. Friedrich highlighted the internal ‘responsibility’ that public servants have to their professions’ standards while Finer stressed ‘responsibility’ to direction from external political bodies (Jackson, 2009). Fifty years later, the argument has changed into the comparative advantages of the various kinds of ‘accountability’, outwards or inwards (Harmon & Mayer, 1986, pp. 47–49; Romzek & Dubnick, 1987, p. 229, Dubnick, 1998, p. 73; March & Olsen, 1995, pp. 165–7; Peters, 1995, p. 318). In Westminster jurisdictions, the earliest rendition was as in ministerial responsibility. Accountability was used to refer to an aspect of responsibility (Marshall & Moodie, 1959, p.68) and not the whole range of actions and procedures responsibility meant. Today, the term accountability is used when talking about issues in the same context (Marshall, 1991; O'Toole & Chapman, 1995; in O'Toole & Jordan, 1995; Pyper, 1996; Rhodes, 1997, pp. 101–3). Where accountability was subsumed under responsibility (the external aspect), responsibility is now considered a part of accountability (the internal aspect) (Mulgan, 2000). This area of supposed ‘internal’ accountability is variously described, in whole or in part, as “professional” (Romzek & Dubnick, 1987, p. 228; Sinclair, 1995, p. 223), “personal” (Sinclair, 1995, pp. 223, 230–1), “inward” (Corbett & Corbett, 1996, pp. 201–2) or ‘subjective’ (Kernaghan & Siegel, 1987, p. 298; Gagne, 1996). University of Ghana http://ugspace.ug.edu.gh 26 It is sensible to internalize accountability, but it is not unavoidable. Even though drawing a line between internal and external aspects of human action can be complex, accounting to someone for one’s actions can still be differentiated from not doing so. It is rational to say that public workers are accountable to certain outside bodies for how they perform their functions (Mulgan, 2000). 2.3.3.2 Accountability and Control It is also said that accountability is part of the established system which prevents governments from acting ultra vires (accountability as ‘control’) without open and free communication between them (Mulgan, 2000). Again, the application of accountability has been extended to cover different ways of controlling public organizations (Gregory, 1990). Even though “accountability” is an important tool for controlling government actions (Uhr, 1993, p. 6), sometimes it is identified with the control itself (Peters, 1995, p. 289). Thus, accountability is identified with the structures and institutions that oversee the exercise of public power including the rule of law, separation of powers, the mass media and interest groups (Peters, 1995, pp. 300-1). Even though it makes sense to extend accountability in this way it is not unpreventable. If accountability is limited to its core meaning, then, it represents only one means for checking the actions of states and state officials where they are made to report on their tenure, answer questions and accept sanctions where necessary (Mulgan, 2000). University of Ghana http://ugspace.ug.edu.gh 27 In this sense, the law becomes an accountability measure only when it establishes implementation processes. The bulk of the law, which is followed by most government workers from day to day regulates their behavior but does not hold them accountable (Mulgan, 2000). 2.3.3.3 Accountability and Responsiveness ‘Accountability’ is associated with how far states respond to their citizens’ necessities of life (accountability as ‘responsiveness’) even though they are subjected to autocratic methods (Mulgan, 2000). Thirdly, the speed with which public bodies and officers respond to their politicians and the citizenry is identified with accountability (Mulgan, 2000). Public agencies are asked to be responsive to politicians, especially, those who are elected. On the other hand, agencies serving the public are asked to respond to the needs of the public in the same way as private companies (Hughes, 2003). As a result, public servants are now expected to be accountable both “upwards” and “outwards” (Corbett & Corbett, 1996, pp. 198-200), Where public providers have been made more 'customer friendly' through other means, such as management incentives or changes in corporate culture, they have become more responsive, but not necessarily more accountable (Mulgan,2000). Once again, it is reasonable to identify accountability with this type of responsiveness (Mulgan, 2000) but then, the identification can be avoided. Rather than make ‘accountability’ equal to ‘responsiveness’, ‘accountability’ can be limited to its original sense so that it is one of several reasons which motivate public servants to respond to politicians and clients (Mulgan, 2000). Otherwise, ambitious public servants may exploit it for their advancement. In that case, the University of Ghana http://ugspace.ug.edu.gh 28 motivating factor becomes personal value rather than the prospect of being called to account (Mulgan, 2000). Hence, accountability becomes a voice and not an exit that makes subjects render account and accept direction (Mulgan, 2000). 2.3.3.4 Accountability and Dialogue Fourth, the term accountability is used to refer to the open and free discussion which is the fulcrum of democracies (accountability as 'dialogue'), even when all parties are equal (Mulgan, 2000). Accountability is viewed as a verbal activity in which public officials must answer, explain, and justify their actions, while citizens question, assess, and criticize them (Mulgan, 2000). Day & Klein (1987 p.5), for example, stress the social aspect of accountability with all parties being on the same page as far as language and justifications are concerned. They then insist accountability is all about political discourse. Harmon, as well, sees public servant accountability partly as a “continuous, open-ended dialogue” between themselves and their publics in his critique of rationalism in public administration (Harmon, 1995, pp. 191–97). Similarly, accountability is likened to explaining and justifying, implying tedious discussion between officials and accountees (Mulgan, 2000). Accountability includes public discourse, but it is not the communication between the public to be found in deliberative democracy. Accountability does not have to be identified with dialogue between citizens. It implies an interaction between a subordinate and superior involving the taking of instructions from the latter and accepting penalties when required (Mulgan, 2000). 2.3.3.5 Accountability and Transparency University of Ghana http://ugspace.ug.edu.gh 29 Finally, ‘Accountability’ is linked to the mechanism of naming and shaming (accountability as ‘transparency’) when the shameless may be naturally resistant to public exposure (Fox, 2007). The movement toward ‘right to know reforms’ was started over a half-century ago by the declaration in Article 19 of the United Nations Universal Declaration of Human Rights which explicitly espoused the right to information. Over sixty (60) nations have now legislated right-to- know reforms (Sobel et al., 2006). Around the world, the right to know has gained wide currency among civil-society organizations, governments and actors of public policy formulation in their desire to effect change in how powerful institutions behave. (Fox, 2007). However, calling for management of PEs to open their books without calling them to account and asking them questions to enforce sanctions where necessary, is not accountability. To begin, the evidence on the effects of transparency on accountability is weak. Secondly, explanations for the effects of transparency are complicated (Fox, 2007). 2.3.4 Accountability and Culture National cultural values have a host of organizational outcomes including workplace behaviors and attitudes according to research (Kluckhohn & Strodtbeck, 1961; Hall, 1976; Hofstede, 1980; Trompenaars, 1993; Schwartz, 1994; Ronen & Shenkar, 1985). Each cultural world has its inner features including its principles and laws – both documented and undocumented. The time and space of every culture are distinct and cultural programs will fail if critical steps are skipped, which occurs when people apply their own rules to another system unconsciously (Hall & Hall, 2003). It is surprising, therefore, that the sociocultural basis of accountability in organizations has received little attention from academics (Gelfand & Realo, 1999). University of Ghana http://ugspace.ug.edu.gh 30 Agreement on expectations and rules guiding behavior exists in all social systems whether primitive, loosely structured or sophisticated. This shared expectation can be said to define social systems. This means that there are ways of checking the behavior of members of a community through observation, evaluation, and sanction based on how people respond to shared expectations (Frink & Klimoski, 2004). Accountability is, therefore, at the heart of healthy communities especially in officially organized entities. Organizations are likely to fail if they do not understand accountability, and the better it is understood, the better their sustainability (Frink & Klimoski, 2004). Culture provides a sure medium both for transmitting organizational values to stakeholders of PE and for assessing how stakeholders of PE perceive accountability (Habermas, 1984; Baxter, 1987; Lawrence & Doolin, 1997). Culture serves as the vital interface which facilitates the flow of communication among people and their understanding. Without it, there is a loss of meaning and a legitimation and orientation crisis (Habermas, 1982; in Baxter, 1987; Parsons, 1949). To assess the meaning a society gives to a phenomenon, therefore, one may look at its culture. The ruins of accountability failures can be found strewn throughout the landscape of organizational history. We do not have to look far. Accountability issues can be traced back to failed Barings Bank and the faulty Hubble telescope (Frink & Ferris, 1996). Indeed, the Arthur Anderson accounting firm’s devastation in the Enron and WorldCom scandals can be defined as a failure of accountability for the accountability watchdog (not to mention the accountability failings in those two corporations) (Frink & Klimoski, 2004). Of course, PEs in Ghana have a history of failure, which could be related to a lack of accountability (History of SIGA, 2020). According to Roper and Schoenberger-Orgad (2011), a government decree mandates the infusion of the principles of Confucianism into PEs in China. In essence, these principles are like those of University of Ghana http://ugspace.ug.edu.gh 31 CSR when applied to employer-employee relationships (Zhao & Roper, 2011). Employees are considered as extended family members in a mutually beneficial relationship based on the collective worldview and the concept of harmony which are central to Confucianism. Employees who work hard for the company do well, and vice versa. However, such an approach is uncommon elsewhere, with CSR typically occurring outside of core company operations. According to Gelfand, Lim, & Raver (2004), organizational cultural forces are inextricably linked to accountability. They demonstrate how important cultural factors interact to produce accountability systems in different cultural groups. They intend to develop a cultural point of view on accountability and demonstrate that what they describe as accountability is the result of cultural influences at the individual, inter-group, and organizational levels. To do this, they employ cultural factors such as individual/collectivism, cultural tightness/looseness, and power distance. University of Ghana http://ugspace.ug.edu.gh 32 CHAPTER THREE RESEARCH METHODOLOGY AND METHODS 3.0 Introduction The adopted methodology and strategies of scientific research determine its strength (Steinmetz, 2005). The methodology and methods adopted in the study are explained and the research population, paradigm, and design, as well as the data source are discussed in this chapter. Furthermore, ethical considerations, research instruments and techniques, and data analysis are considered. Finally, the chapter demonstrates how the study's goals were met. 3.1 Research Philosophy and Paradigm A scientific researcher’s philosophical assumptions, knowledge, values, truth and beliefs affect his or her work. This has been described by social scientists as a paradigm. According to Creswell & Creswell (2017), a research paradigm is the shared characteristics of understanding that underpin research. It determines and explains how and what should be researched including the display of the results. It is normally the researchers’ view of reality (ontology) and the production of knowledge (epistemology) (Guba, 1990, P.17) The interpretivist research philosophy or constructivist paradigm is what guides this research and facilitates the interpretation of the study elements. This allows the researcher to immerse him or herself into the study. The proponents of this study believe that we get to understand a community better when we interact very closely with them. Thus, Tuli (2010) asserts that reality is constructed in the context of society. This view, therefore, enabled the researcher to gain a deeper insight into University of Ghana http://ugspace.ug.edu.gh 33 the cultural beliefs of the participants; their wants, their fears, their critical values and their morals in relation to the study (Boateng, 2016). This paradigm is characterized by a relativist ontology, a subjectivist epistemology, and a qualitative methodology (Merkl-Davies, Brennan & Vourvachis, 2011). The research paradigm enabled the researcher to decipher the reality or truth in the responses of participants concerning the cultural notions they have about accountability in PEs and how those those notions have contributed to the non-performance of PEs (Thanh & Thanh, 2015). Again, this approach enabled the researcher to place a premium on immersing himself in data interpretation to learn more about the experiences of the participants and have a better understanding of them (Thanh & Thanh, 2015). Disclosures made by the stakeholders of PE are narratives that have been subjectively produced (Hines, 1988) based on the personal experiences of stakeholders (O’Leary & Chia, 2007) to help achieve the objectives of the research. 3.2 Research Design and Approach The qualitative research approach adopted by the researcher to collect, interpret and analyze data to solve the research problem aligns with the research paradigm which seeks to explore and understand what the research participants ascribe to, regarding the research questions (Creswell & Creswell, 2017). By a qualitative research approach, a questionnaire was designed and administered which helped the researcher acquire in-depth experiences of respondents concerning the issue under research. The use of a qualitative research approach to study accountability and government performance is widely acknowledged among researchers and policy professionals (McNabb, 2017; O'Sullivan, University of Ghana http://ugspace.ug.edu.gh 34 Berner, Taliaferro, & Rassel, 2016). In addition to the qualitative approach, the study made use of an exploratory design to provide answers to the study’s research questions. An exploratory study, according to Saunders & Lewis (1997, p.110) is a study that provides fresh insight, makes new inquiries and investigates new subject matter. The study followed the research questions and objectives in chapter one to ascertain PE stakeholders’ cultural notions which have affected their understanding of accountability in a bid to improve PE performance. This is in response to the persistent failure of countless measures to improve the performance of PEs in Ghana. 3.3 Study Population Lavrakas (2008) describes population in research as the whole set of units to be studied by the researcher. For the study to be effective, similar characteristics are required within the population (Panneerselvam, 2014). The study population consists of all stakeholders of PEs in Ghana. Participants will be selected based on their knowledge and expertise. 3.4 Study Sample A sample is a smaller part of a larger population that is chosen by the researcher. To apply research findings to the larger population, the sample of participants must be typical of the population (Creswell & Poth, 2016; Polit & Beck, 2010). Ten (10) stakeholders were chosen in this regard. The people that were chosen for the study had prior expertise and understanding in the field. According to Johnson & Christensen (2019), qualitative research can be conducted adequately with in-depth interviews of up to 10-15 people selected for the study. As a result, the selection of participants was based on their in-depth expertise and knowledge about the topic. University of Ghana http://ugspace.ug.edu.gh 35 The study consisted of senior lecturers at the University of Ghana, managers, and staff of GCB Bank, and retirees. At GCB Bank, a head of a section provided the participant’s and snowballing was used to arrive at the target audience in the University. As a result of the saturation, no additional information was available, resulting in a population of ten (10). Table 3.11: List of Participants Interviewed as stakeholders. Table 3.1 shows a list of participants interviewed as stakeholders giving their stakeholder details, institutions, and status/position. Table 3.1 Description of selected stakeholders, institutions and status/positions. Selected Stakeholders Institution No. Status/Position Citizen GCB Bank 1. Retiree Citizen Ministry of Health 2. Retiree Staff University of Ghana 3. Retiree Staff University of Ghana 4. Dean Staff University of Ghana 5. Senior Research Fellow Staff GCB Bank 6. Manager Staff GCB Bank 7. Manager Staff GCB Bank 8. Head of section Staff GCB Bank 9. Head of section Staff GCB Bank 10. Head of section 3.5 Sampling Technique Purposive sampling was the data collection approach utilized by the researcher. It is a non- probability sampling method that allows the researcher to select individuals to develop a descriptive study (Boateng, 2016; Flick, 2014). However, the related limiting of generic errors and University of Ghana http://ugspace.ug.edu.gh 36 biases from the researcher is inherent in this technique (Alvi, 2016). In a few cases, the researcher had to use referrals or the snowball sampling technique. It is a multistage sampling technique. It begins with a few people selected through purposive sampling or random sampling and grows through referrals (Cooper, Schindler, & Sun, 2006). 3.6 Data Source and Collection Procedure The data source is critical to achieving the research objectives in every study. The researcher used both primary and secondary data. 3.6.1 Primary Data. The researcher's original data is referred to as primary data. This includes the outcomes of experiments, observations, and interviews (Mesly, 2015; Mohajan, 2017). Face-to-face, in-depth interviews were used in the study to allow for intimate engagement with both officers at the selected organizations and other respondents. Semi-structured in-depth interviews were undertaken in this regard (Bryman, 2017; McIntosh & Morse, 2015). The interviews were utilized to elicit subjective and in-depth knowledge from research participants to generate meaningful and superior information on the topic under investigation (Mohajan, 2017). The researcher created an interview guide to help him collect the appropriate feedback from participants to solve the research challenge (Etikan, Musa, & Alkassim, 2016; McNabb, 2015). 3.6.2 Secondary Source. Secondary data sources used were journal articles, and related books. These supported the primary data (Mesly, 2015). University of Ghana http://ugspace.ug.edu.gh 37 With the help of interview guides, the researcher conducted in-depth interviews. Participants were able to contribute meaningful information to the research, thanks to the interview guide and additional probing questions. The interview guide was written in the English language. The researcher used a letter of introduction obtained from the Department of Accounting of the University of Ghana Business School to book appointments at the institutions. These letters were delivered to the study's participants at their respective offices and homes. This was done to provide evidence and give the study the necessary validity. Participants were voluntarily recruited into the study, as mentioned in the introductory letter, with the anonymity and confidentiality of information submitted by them guaranteed. The interviews lasted anything from thirty (30) to forty-five (45) minutes each. The interviewees were guided through a series of open-ended interview questions. The researcher explained the purpose of the research as well as the associated ethical issues on the scheduled day of the interview. 3.7 Data Analysis Notes were taken during the interview and later transcribed unto a laptop and a flash drive. The interviews with the participants were conducted in the English language. Before beginning with the analysis, the researcher familiarized himself with the transcript. In addition, the study was thematically examined under the study’s objectives. Six phases of qualitative data analysis discovered by Braun, Clarke, Hayfield & Terry (2019) and Braun & Clarke (2006) were used. The first step is to become acquainted with the data. The researcher achieved this by immersing himself in the data until he was familiar with the content's breadth and depth. The generation of initial codes was the second stage. The researcher did this by giving codes to the relevant data features. The next step was to look for themes. A review of the themes was the University of Ghana http://ugspace.ug.edu.gh 38 fourth stage. During this stage, the researcher merged some of the topics and broke down others. The definition and naming of themes were included in the fifth step. The report was created in the sixth step. This is where the author laid out all the major themes for the report’s final analysis. 3.8 Validity and Reliability Although qualitative researchers differ on the terms 'reliability' and 'validity,' with some preferring the term 'verification,' research integrity and robustness are just as important in qualitative studies as they are in other types of research (Lincoln and Guba, 1985). It is widely acknowledged that qualitative research must be ethical, significant, and well documented, as well as employ acceptable and thorough procedures (Cohen & Crabtree, 2008). Replicability is essential in research involving data that can be counted or measured. However, where real life experiences must be captured, other types of data are obtained to answer issues of personal or societal relevance and this cannot be identical from one individual to the next (Hammarberg, Kirkman, & de Lacey, 2016).. Furthermore, meaning is culturally influenced and subject to change. Culture can refer to a country, a community, or any other physical or virtual entity in which people participate to varying degrees. From one research endeavor to the next, consistency in determining meaning for members of a specific group can be found. Individuals within a cultural group, on the other hand, may have unique experiences and perspectives or may defy cultural norms (Hammarberg et al., 2016). It contributes to the puzzle by providing insight into diversity and providing a piece to which other researchers can also contribute. The researcher is transformed into an instrument, and the ‘subjects’ are transformed into ‘participants’ who can assist in understanding and analyzing the data (Denzin & Lincoln, 1998; in Hammarberg, Kirkman, & de Lacey, 2016). Trustworthiness, credibility, University of Ghana http://ugspace.ug.edu.gh 39 application, and consistency are among the evaluation criteria used by qualitative researchers to defend the integrity of their work (Leininger, 1994; in Hammarberg, Kirkman, & de Lacey, 2016). Trustworthiness The same detailed procedural description is included in this qualitative study as in any other study. The study's purpose, methodology, procedural decisions, and data generation and management details are all transparent and explicit. Because the technique and procedures are adequately described, explained, and justified, a reviewer can follow the course of events and decisions and comprehend their reasoning (Kitto, Chester, & Gibrich, 2008). Credibility The credibility criterion is used to assess qualitative research’s truth value or internal validity. When the results of a qualitative study are presented with proper context descriptions, they are recognizable to persons who have shared the event. A detailed account of the interpretation process has been provided by the researcher; to demonstrate and support the interpretations, verbatim quotations from the data are offered (Sandelowski, 1986). Applicability The criterion for determining external validity is the applicability or transferability of study findings. When a study's findings can be applied to situations outside of the study, and researchers see the findings as significant and useful in their own experiences, the study is said to meet the criterion of applicability. Larger sample sizes have no effect on applicability. There could be a trade-off between depth and breadth, or there could be too much data to properly analyze. Sample sizes in qualitative research are frequently small. The study's sample size of ten (10) reached saturation when data began to repeat itself or when data stopped offering new directions and raising new questions (Charmaz, 2005; in Hammarberg, Kirkman, & de Lacey, 2016). University of Ghana http://ugspace.ug.edu.gh 40 Consistency To determine reliability, the consistency criterion, or the dependability of the outcomes, is used. This does not imply that the same conclusion would be reached under different conditions, but rather that similar patterns would be discovered by other researchers given the same data (Morse & Richards, 2002). 3.9 Ethical Issues According to Teddlie & Yu (2007), conducting research raises several ethical concerns. According to them, critical ethical issues that must be addressed include agreement of participants consent to participate, anonymity and confidentiality assurance, and allowing respondents freedom to opt out. To address these ethical concerns, the researcher must obtain participant permission and consent. The interviews were held in places and ways that protected the interviewees' privacy. Codes were used to protect respondents’ anonymity and confidentiality. Interviews and transcribed materials were kept at a safe location and respondents had the option to opt out. According to Creswell & Poth (2016), these measures are enough to address all ethical concerns. 3.10 Chapter Summary The chapter highlighted and explained the research methodology used in the study, as well as the reasons for choosing these approaches and methods. This chapter identified the main components of the research methodology. These included the research paradigm, approach, and data source. It also covered the population and data collection methods. The study employed an interpretivist research paradigm, as well as an exploratory and qualitative research design. The primary data collection tool was interviewing. University of Ghana http://ugspace.ug.edu.gh 41 CHAPTER FOUR PRESENTATION OF FINDINGS AND DISCUSSION 4.0 Introduction The fourth chapter highlights the analysis and findings of the study. The findings and analysis of the study were based on the research objectives and provided possible interpretations of the findings that were obtained from the data. It presented data from the interview on stakeholders’ perceptions of PEs in Ghana. The chapter discussed participants’ lack of interest in matters relating to PEs in Ghana, explored cultural notions of accountability held by stakeholders which indicate their understanding of accountability in PEs and the role of accountability in the non-performance of PEs. Names and exact titles were not provided in the findings to protect the participants' identities. 4.1 Summary of Respondents’ Profile Tables 4.1, 4.2, and 4.3 below show the numerical summary of the interviewees highlighting their education, positions/status and years of service. The tables provide the number of respondents in each category as well as the percentages. The researcher was able to put the study into context due to the background information provided by participants from both the selected institutions and retirees. They depict the breadth of insights and the scope of stakeholders’ contributions to the study’s conclusions. Table 4.1 below depicts the level of education of respondents. It shows that 90% of the respondents’ education is evenly distributed between first degree, master’s degree and Ph.D. University of Ghana http://ugspace.ug.edu.gh 42 Table 4.1 Respondents’ Educational background EDUCATION NUMBER OF RESPONDENTS PERCENTAGE Diploma 1 10% First Degree 3 30% Master’s Degree 3 30% PhD 3 30% Table 4.2 below shows that all respondents including those on retirement, are or were in senior positions. Table 4.2 Position/Status of respondents POSITION/STATUS NUMBER OF RESPONDENTS PERCENTAGE Professor 1 10% Dean 1 10% Senior Research Fellow 1 10% Manager 2 20% Head of Section 4 40% Principal Nursing Officer 1 10% Table 4.3 below provides the numerical summary of the interviewees highlighting their years of service. It shows that the least number of years of service of interviewees is six (6) years. University of Ghana http://ugspace.ug.edu.gh 43 Table 4.3 Respondents’ years of service YEARS OF SERVICE NUMBER OF RESPONDENTS PERCENTAGE 1-5 0 0% 6-30 7 70% 31-50 3 30% 4.2 Stakeholders’ Understanding of the Concept of Accountability At the onset of the interview, it quickly became clear that participants would struggle with the concept of accountability. When asked about their views on accountability in PEs they talked about corruption, lack of resources, proper use of resources, responsibility for resources entrusted to one’s care and recruitment linked to party affiliation. Still, others talked about questionable integrity, lack of proper records and resources seen as booty to be embezzled. This agreed with the assertion by Hu (2017) that accountability will have different meanings for different people (Behn, 2001; Bovens et al., 2008; Dubnick, 2005; Mulgan, 2003; Pollitt, 2003) and that accountability has taken on a broad meaning covering many concepts (Bovens et al., 2008). There was not a single response that addressed all the elements, which are as follows: “external, involving social interaction and exchange, and implying authority rights, including the right to demand answers and impose sanctions” (Finer 1941, p. 338; Thynne & Goldring, 1987, p. 8; Caiden, 1988; in Jabbra, & Stone, 1989). The scope and meaning of 'accountability' were broadened far beyond its core sense of being called to account for one's actions. It was internalized beyond the externalized focus implied by the term 'call to account'; applied to internal aspects of official behavior beyond the external focus implied University of Ghana http://ugspace.ug.edu.gh 44 by being called to account; to bodies that control official behavior without calling them to account; to measures that simply made officials more responsive to clients without calling them to account; and to free communication with citizens where no one called them to account. The extension was easily understood in each case because it was into an area of activity that was closely related to the practice of core accountability. However, in each case the extension of meaning weakened the aspect of external scrutiny (Mulgan, 2000). 4.2.1 Accountability and Responsibility According to Haines (1955), in order to use the term'responsibility' effectively in the current state of our moral thinking, we must be more precise: not only is liability one part of the meaning of accountability, but accountability is far from the whole, and for moralists, it is far from the most significant meaning of responsibility. According to Mulgan (2003), 'accountability' now commonly refers to the sense of individual responsibility and concern for the public interest expected of public servants ('professional' and 'personal' accountability), an 'internal' sense that extends beyond the term's core external focus. Personal liability, freedom of action, and discretion are increasingly being confined to the more familiar ethical territory of responsibility, the more internal aspects of official activity (Harmon & Mayer 1986, pp. 48–50; Uhr 1993). Haines (1955) distinguishes accountability from responsibility by stating that explanation is the other meaning of accountability, but explanation, unlike responsibility, is primarily concerned with acts and events, whereas responsibility is primarily concerned with people. He employs the triangle to represent a liability situation, with the base angles representing the actor and his significant act, and the apex representing the person or institution to whom he must respond. University of Ghana http://ugspace.ug.edu.gh 45 The accountant is the person or institution to whom the account must be rendered, and the triangle represents the agent-accountant relationship implied by every use of the term liability. In law, the accountant may be regarded as a Judge and Jury, the more ambiguous 'State,' or even the 'Law' itself. This familiar pattern of the agent-accountant relationship, which accountability implies when it means liability, must now be highlighted and given its proper place in the ordinary use of responsibility (Haines, 1955). Responsibility means much more than liability or accountability. Far from being synonymous with liability or accountability, the term 'responsibility' in this context seeks to replace or displace the concepts unique to them (Haines, 1955). Responsibility goes beyond the adherence to laws prescribed by “Accountants” to embrace the notions of personal self-responsibility (Haines, 1955). 4.2.2. Accountability and Corruption The World Bank cites corruption as one of the reasons for the failure of PEs in Ghana (World Bank, 1983 and 1995). Lederman, Loayza, & Soares (2005) emphasized the significance of political institutions in determining the prevalence of corruption. This is especially true in PEs. They cite democracies, parliamentary systems, political stability, and press freedom as being associated with lower corruption, and go on to say that previous empirical findings related to openness and legal systems do not hold when group dynamics are considered. Corruption in the public sphere is almost a direct result of the nature of government interventions resulting from some information gap between citizens and politicians. As a result, governments step in when there are market failures and private provision is ruled out as a viable option (Banerjee, 1997). Corruption occurs naturally because of the existence of rents and monitoring University of Ghana http://ugspace.ug.edu.gh 46 failures. The threat of rent extraction and the nature of the informational failure are heavily influenced by institutional arrangements (Lederman et al., 2005). Strategic action is a component of Habermas' system world, in which action is aimed at achieving success (Simons, 1995; in Lawrence & Doolin, 1997). Action is associated with empirical knowledge in this context and refers to work and systems in which individuals or groups strive to achieve specific goals. The reasoning is tactical or strategic, and is sometimes referred to as functionalist reasoning. In this case, such reasoning is manifested in the actions of modern society's administrative areas, which are governed by money and power (Lawrence & Doolin, 1997; Broadbent et al., 1991). The role of political accountability in generating good governance practices and in reducing corruption has been extensively discussed in the literature (Fackler & Lin, 1995; Linz & Stepan, 1996; Nas, Price & Weber, 1986; Bailey & Valenzuela, 1997; Rose-Ackerman & Palifka (2016); Laffont & Meleu, 2001). The main argument is that accountability allows politicians to be punished for enacting "bad policies," forcing politicians to serve their constituents. In this regard, three main characteristics can be identified: the political system's vibrant nature, the presence of checks and balances operating across different branches of government, and the system's openness (Lederman et al., 2005) 4.2.3. Accountability and Nepotism Nepotism is the illegal use of the selection process for public office for private gain (Theobald, 1990). Although hiring a relative may appear suspicious, and individuals in positions of public trust must avoid even the appearance of impropriety, hiring a relative is not always nepotism or a breach of public trust (California Department of Human Resources, 2015; in Fedderson, 2020). At University of Ghana http://ugspace.ug.edu.gh 47 least in the context of public administration, nepotism refers to the us