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C. Gopinath

IN 1809, Sweden appointed its first ombudsman, a neutral official who would receive and investigate reports of abuses by public officials. This was a parallel channel of information and authority that came with the belief that the regular channels may not always function the way we want them to or respond in a manner that may enthuse confidence. Since then, many countries have found the office of an ombudsperson to be quite useful as a means of initiating self-correction. The need to give such an individual the requisite powers to be effective makes unsure politicians drag their feet, as we have seen in India.

As organisations have grown large and bureaucratic, the idea spilled over to institutional life. Why not have an ombudsperson within the company too? Since the late 1970s there have been several such individuals appointed to many large corporations in the US. While they are common in non-profit organisations such as universities and hospitals, it is now estimated that 165 corporate and commercial organisations in the US have ombudsmen and they include names such as IBM, Kodak, American Express and United Technology.

An individual may have a complaint about a supervisor's interpersonal behaviour and may feel she has no place to turn to. Or an employee may have information about an unethical or illegal activity in the organisation, is not sure if it is true, yet wants it to be checked out. These are the kind of cases where having an ombudsperson can be very useful. The individual can investigate the matter and take corrective action. Thus, from an organisation's point of view, the system allows a problem to be caught before it becomes a crisis or becomes a legal case, which would then move outside the organisation and onto the public domain for resolution. Organisations have found it to be useful in catching sexual harassment cases, cheating customers, or waste disposal issues at the early stages.

Critical attributes necessary for such an effort to succeed are confidentiality, neutrality, and appropriate action. The information provided must be in confidence and the employees must be sure that the source of the complaint will not be revealed. Also, the neutrality of individual must be assured so that the ombudsperson's investigation is fair and accepted. Finally, there should be a perceptible result. If employees perceive that their complaints do not produce any result, the ombudsperson office will become a joke. Thus, investigations must be completed, action taken, and the results clearly perceived by the employees. All this assumes that the effort has the full backing and support of the top management of the organisation, otherwise the results of the investigations will not be acted upon. The process is presently in a state of flux. In 1997, a federal appeals court in the US upheld the right of an employee to summon records of the ombudsperson's office in a case against McDonnel Douglas Corporation on wrongful termination. This resulted in a crisis since it challenged the issue of confidentiality. If the ombudsperson can be forced to reveal the source and nature of the complaints, it will make people less willing to come forward and use the system. Some organisations even have a policy of not recording the name of the complainant so as to completely protect the source. Perhaps destroying all records of a complaint once the investigation is complete and action is taken is an option.

Would having an ombudsperson have helped the collapse of a company such as Enron? Most unlikely. As the Enron story unfolds on a daily basis, we learn that they had a senior executive who was suspicious of the special purpose entities that were being formed to divert transactions off the company books. She took her complaints anonymously and then openly both to the Chief Executive Officer and to the auditors, Arthur Andersen. She had an accounting background and believed that some of the accounting transactions were illegal and could get the company into trouble.

However, no corrective action was taken, either because there was culpability at the highest levels of the organisation, or the officers made a calculated decision that the risk was worth the rewards, or both. However, as one more attempt to fix problems before they worsen, having a system of ombudsperson is worth the effort in large organisations with many employees.

Fixing inefficiencies

But apart from ethical violations, illegal actions, and interpersonal problems that can be routed through an ombudsperson for resolution, the corporation needs to listen to its people on matters of organisational efficiency too. How often do we come across individuals frustrated with their organisation's systems and procedures that have resulted in slow decision-making or gross inefficiencies. T

here is the sales person who complains that changing his journey cycles and sales calls system will allow him to use his time better and make his calls more productive. He says he told his boss but nobody seems to listen. The marketing assistant wonders why her company is not responding to competitors new promotional scheme among the retailers. Waiting any longer may defeat the purpose. The third-shift shop floor supervisor is annoyed at the way the material flow has been designed which adds time and costs to the manufacturing process. Some of these problems may have been referred to their immediate supervisors as part of regular reports or in departmental meetings but there is no action. The supervisors may lack the imagination or the authority to take these suggestions seriously.

Some of these could be suggestions on which the supervisor cannot take a decision, or is not confident his boss will listen to him. This is more than a straightforward suggestion scheme. While the problem may require fixing a system, individuals are involved who may be preventing the system being fixed due to turf battles, fragile egos, or loss of organisational power reasons. Thus, they may be problems not pertaining to one decision to be made but the need to inquire into a system, procedure, and individuals along the line. Nobody is looking into these problems and they introduce delays in the organisation. As they accumulate, the resulting inefficiencies add to the costs, or ensure that market opportunities are lost. The organisation begins to stagnate and can ill-afford to do so in a competitive environment.

So what we need is an equivalent to the ombudsperson to whom employees can complain about the methods being followed. We need an internal management consultant who would report to the highest authority and whose job it is to receive the complaints and investigate them, conduct surveys, take outside help where necessary, and make recommendations on how jobs can be re-designed, departments re-structured, individuals re-trained, etc. This person will work on similar principles as the ombudsperson — treating the source of the complaint as confidential information, but having the authority to independently investigate any matter he deems fit without waiting for further clearance from somebody else. A one-person spark of continuous improvement that keeps the organisation well oiled.

(The author is a professor of international business and strategic management at Suffolk University, Boston, US. His Internet address is cgopinat@suffolk.edu)

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