CONSUMER ESTABLISHMENT

The symbolism of the colors blue, red and yellow.  What does this logo mean and where is it going?  Why are these colors so important in finance.  We are going to be finalizing this logo soon.  

SCHOLAR: THEORY OF BEST PRACTICE

In large institutions and corporations, there are some errors that occur as a result of bureaucratic bloating and not as a result of incompetence.  Ex.  A person that verifies CHQ's per bank procedures has an error not because he is doing the procedure but because of bureaucratic bloating.  ie.  These additional procedures of caution actually cause procedural errors.   

To give some insight, the following procedure for verifying cheques in an institution is as follows:

1.         Check the signature

2.         Check the amount

3.         Check the Payee

4.         Check the address

5.         Check the transit

6.         Check the routing number

7.         Check the security features of the paper. 

Steps one through six are the steps that require no further discussion.  Step seven on the other hand requires additional information.  When checking a cheque for its security features, it is important to note that there are several security features in every cheque.  These security features are varied amongst every type of cheque.  Some cheques have a stripe, others have an imprint, some have a shiny sticker and others have holographic images viewable under a black light.  Verifying the cheques integrity becomes very important when issuing cheques. When issuing many cheques at once, what is striking is that those whomsoever are verifying the cheques needs to verify the location of issue and the cheque number which then these are step eight and step nine. 

8.        Verify location

9.        Verify the cheque number

The procedure for verifying the cheque with an automated program on a computer is as follows:

1.         Print the cheque.

2.        Verify the cheque location with the program

3.        Place the cheque towards the screen so that the cheque number is below the cheque number on the program

4.        Compare the cheque numbers and note it down in documentation as necessary

5.        Release the cheque by verifying the Payees identity. 

6.        Surrender the cheque to the Payee.

The above is an example of how to formally verify a cheque.  This procedure is a procedure of “best practice,” because it maintains some degree of a standard within field of finance.  “Best Practice.”  Finance has the following values per the Chartered Accountants in Ontario “integrity and due care” (CPA Ontario) which is included in the Accountants Code of Professional Conduct.  For Banks they are under a bureaucracy built on “trust.”  RBC has the following values “accountability,” and “integrity.” (RBC 2023).  BMO on the other hand has these relevant subject matter values, “integrity” and “responsibility” (BMO 2023).  Since these financial institutions deal with “trust,” as a foundation for their institution, the government in power has legislations to ensure that clients of Banks are treated fairly.  Some of these legislations are the Consumer Protection Act and the Bank Act.  Canada’s security regulation is rooted to the provincial and territorial governments as provisions within its Constitution permit the aforesaid to bestow their authority over finance under S 91 and S 92.  In S91 it says the federal government has the ability to handle 1A.  Public Debt and Property, 2.  Regulation of Trade and Commerce, 14.  Currency and Coinage, 15.  Banking, incorporation of banks, and the Issue of Paper Money, 16.  Savings Banks, 18.  Bills of Exchange and Promissory Notes, 19.  Interest, 20.  Legal Tender, 21.  Bankruptcy and Insolvency and under S 92 provisions of the provincial government 1.  The Amendment from Time to Time , notwithstanding anything in this Act, of the Constitution of the Province … (Boyd 2015).  This means that the provinces have legislations which uphold panels by which finance can be upheld with integrity and accountability.  Canadian securities regulation is overseen by a panel in Canada, The Canadian Securities Administrators (CSA) who ensure that standards for finance are upheld and that consumers are provided with the products that are advertised. 

These bureaucratic procedures are based on policy and legislation.  In government offices, individuals are expected to work with a high standard and they are sworne in.  This is a form of “strict liability.”  Strict liability means that there is liability even if in the absence of fault (Yates et al.  2017).  It is a tenant of “best practice.”  “Best practice” can be defined as “guiding principles leading to the most appropriate courses of action in certain standard practice situations (Ross-Kerr, J., et al.  2006).  These are determined through Statistics Canada which aggregate and articulate data from  the domestic environment in a bid to determine trends.  Essentially the government forecasts trends and adjusts its policies as such.  According to Sens et al.  bureaucracy is when “bureaucratic units have divergent perspectives on political issues” (2005), causing a “pulling and hauling” between these agencies as the state or entity makes decisions.  This means that people working within bureaucratic environments have checks and balances to their actions.  The bureaucratic structure can be defined through the type of culture the institution or company upholds.  There are four different types of culture which are the following “clan culture,” “market culture,” “hierarchy culture” and “adhocracy culture” (Cameron, K et al.  1999).  The focus is on the “hierarchy culture” as it pertains to the government and finance.  The Hierarchy Culture means that authority is enforced in a top down manor whereby structure and policy are stringently enforced (Cameron, K.  et al.  1999).  This means that operations are well structured and rather rigid.  It is these structures of extensive checks and balances that cause work to be fragmented between multiple employees.  For example, a cheque is produced on the grounds that several steps of the task are broken up.  Worker one determines the reason for the cheque to be issued.  Worker two fulfills the request for a cheque.  Worker three prints and verifies the cheque and worker four validates and surrenders the cheque.  The above detailed procedure for cheque release is the task of worker four.  It is done this way so that that worker serves as a balance to the check of the previous employee.  This is bureaucracy.  The problem lies with the fact that as a result of “bureaucracy,” employees are ever so cautious when conducting tasks and activities per their Job Description and as enforced by the company through the corporate strategy and the business strategy.  This results in procedural errors on the occasion.  For example, a cheque was released to a customer wherein the Payee written on the cheque is different from the identity of the client.  Worker four, the employee tasked with this, verified and validated the cheque per the procedure above.  However, the fact that he was overly cautious resulted in an error.  Bureaucracy separates the tasks into many microtasks and this is the result.  Oftentimes people have many cheques to verify and validate and there is not a way to individually verify and validate these cheques individually which then the financial institution goes back to the concept of “trust” as a means to justify these many tasks with reduced accountability and integrity.  The point is that bureaucracy creates checks and balances via separating a large task into many tasks which then results in procedural errors despite the enforcement of corporate and business strategies aimed to protect integrity and accountability.  Henceforth, bureaucratic bloating is the result.  

WORK CITED 

BMO.  (2023).  BMO Economics.  Retrieved from:  https://economics.bmo.com/en/

Boyd.  (2015).  Canadian Law.  Ontario, Canada.  Nelson. 

Cameron, K.  et al. (1999).  Diagnosing and Changing Organizational Culture.  San Francisco, USA.  John Wiley and Sons. 

CPA Ontario (2023).  CPA Code of Professional Conduct and Student Code.  Retrieved from:  https://www.cpaontario.ca/protecting-the-public/governance/code-of-professional-conduct

RBC.  (2023).  Purpose, Vision and Values.  Retrieved from:  https://www.rbc.com/our-company/purpose-vision-and-values.html

Ross-Kerr, J., et al.  (2006).  Canadian Fundamentals of Nursing.  Ontario, Canada.  Elsevier.

Sens et al. (2005).  Global Politics.  Toronto.  Thompson Nelson. 

Yates, R., et al.  (2017).  Business Law in Canada.  Ontario, Canada.  Pearson.