Greg Mortenson Case Analysis Case Studies Example

GREG MORTENSON CASE ANALYSIS

Question 1. What steps were taken to the success of three cup of tea to establish sound fiscal management in the organization?
The first attempt of Mortenson was to interest a publisher in the idea of the book. The idea did not succeed. It was the first attempt by Mortenson, but it failed. After failing, the idea came into being when Kevin Fedarko covered a story in Parade which he profiled Mortenson and CAI’s work. The work did well which invited a lot of donations to CAI. Mortenson and co-author David Oliver Relin they come into a collaboration agreement. The agreement was all about binding CAI to pay all expenses that were incurred in the book proposal preparation and the travel costs associated with the project. In addition, Mortenson and Relin signed a publishing agreement with Viking Penguin (Vaughan & Arsneault, 2014, p 175). The authors were provided with a monetary advance in the two years process of writing.

Were the steps unsuccessful or inadequate? Explain.

Despite all that was provided, the steps were unsuccessful. Mortenson was still the executive director of Central Asia Institute when the writing was on. He was also receiving the benefits of the organization. He claimed that as much as he was benefiting from Penguin and CAI, he spent his out of business time for the writing process (Vaughan & Arsneault, 2014, p 180).

Steps tookafter the book’s release to enhance fiscal control and procedures.

After the depletion of $ 1 million donation from a single donor who supported Mortenson’s goal of building schools in Pakistan and other remote areas of central Asia. Greg Mortenson, the director of Central Asia Institute, suggested to the board that book writing will be of great help to promote the mission of the nonprofit organization. The year 2006, the profile of the organization was increased by the book Three Cups of Tea. Over 4 million copies of the book were sold. After the publication of the book, donations for CAI increased from $867,148 to $ 12.4 million in 2008. The increase was steady in the following years (Vaughan & Arsneault, 2014, p 178). After tis success, allegations of financial mismanagement and lack of accountability was an issue in the public. It was raised by watchdog group American Institute of Philanthropy to the public.

Were the steps unsuccessful or inadequate? Explain.

The steps that were set by the board were unsuccessful. It is because, Mortenson failed to contribute to Central Asia Institute that were equivalent to the royalties he received from the book the organization bought. There was no equitable way that was devised to split the costs of promoting Three Cup of Tea as per the employment agreement. Going against the agreement, Mortenson was accepting travel fees from event sponsors as well from CAI. On the same point, he used the donations to CAI for his personal items. For instance, used the donations for charter flights for his family vacations and even internet downloads (Vaughan & Arsneault, 2014, p 185). It was direct that the steps set by the board were unsuccessful.
Question 2. What more could have done by the organization to compel Greg Mortenson to comply with the procedures for the expense reimbursement?
The organization would have instituted strict controls on the use of Central Asia Institute accounts. It would have also agreed to retain a public accounting firm to check the validity of questionable charges from the past years. It would have enforced a policy regarding improper expenses to Central Asia Institute. This would have helped more in the procedures for reimbursement. It was to be hard for Mortenson to cost the organization for his personal motives.
Central Asia Institute did not carry any audit for many years since it started. The Chief Finance Officer resigned in 2004 because of the hard regulations from Mortenson since she tried initiating a financial statements review of the Organization. If theauditwere enforced, the financial statements of the Institute would have been verified, and the mismanagement of funds realized (Vaughan & Arsneault, 2014, p 181). This would have compelled Mortenson to comply with the procedures for the expense reimbursement. Reviews help a lot in showing the true and fair view of the financial statements of an organization. If in any case there is fraud, the audits will note it and be prevented.
Cost related costs would have been implemented. It would have contributed a lot to making sure that non-CAI expenses require immediate reimbursement from whoever incurred the cost. On the same point, any employee who incurs acost in the organization’s name, disciplinary actions should be taken. It would have been significant for CAI to compel Mortenson to comply with the procedures for the expense reimbursement.

Why did the organization not go greater lengths to enforce compliance?

The organization was unable to enforce compliance due to factors that were an obstacle to them. Firstly, Mortenson did not submit adequate proof to support the charges he was making to the charities. Members of the organization did not know what was going on. This is because whenever they requested for cajoling, admonitions, and demands, it was hard for them to get a sufficient document from Mortenson to support his charges to the charities. After failing acquiring proper documentation from him, they went an extra mile and provided Mortenson, a personal assistant while traveling. This strategy also failed since the assistant did not also comply with the expense reimbursement requirements. He was not a solution to the organization’s problem. Instead, he added more problems (Vaughan & Arsneault, 2014, p 186). The problem of Mortenson’s expenses went on as the organization had no basis for enforcing the compliance.
Since inadequate documentation existed, the organization was unable to enforce compliance. Mortenson took this advantage, and he was charging a lot of personal expenses to Central Asia Institute. For instance, expenses like LL Bean clothing, luggage, vacations, iTunes and luxurious accommodations. It was too much for the organization. The agreement was the expenses to relate to CAI businesses. But Mortenson violated this by using the organization’s money for personal expenses. Therefore, the organization had no evidence to go greater lengths to enforce compliance (Vaughan & Arsneault, 2014, p 190).

Oral Testimony and Recommendations

The size of the organization determines the size of the Board members. This makes sure that there is enough diverse deliberation in the organization. The scale of the board members should be appropriate to the size of the institute. Similarly, the board members should comprise people with diverse backgrounds, skills, and experiences. Additionally, there should be at least two independent members who do not receive remuneration from the organization and they have no close relationship with anyone in the Institute. It will ensure that the organization’s transactions are carefully monitored hence reducing fraud possibility in the Institute (Vaughan & Arsneault, 2014, p 187).
In CAI’s case, the problem started with the small number of board members as compared to the size of the institute. There was no effective oversight since the board number was too small. It gave Mortenson a chance to misuse the organization’s funds as he wished. Due lack of skills and experience of the board members of CAI, they considered Greg Mortenson treasured to the organization. They claimed that without him the institute was nothing and this kind of perception led to the board members being unable to conduct independent oversight and management of Central Asia Institute. It gave Mortenson an opportunity to fraud the institute’s funds without being known. Mortenson took advantage of the board’s lack of sufficient independence and size to manage the affairs of the charity as a financial resource to mismanage the finances (Vaughan & Arsneault, 2014, p 188).
I would like to recommend that, strict policies should be put in place provide guidelines on how funds for charitable should be managed. If there were proper procedures in CAI, there would be no such fraud that happens. Secondly, the size of the board members should be directly proportional to the size of the organization (Vaughan & Arsneault, 2014, p 190). It will ensure that there are adequate independence and size to manage the affairs of a charity with financial resources. Board members should have diversified skills and experiences hence should not depend on one member ofmanagement of the organization and overseeing execution of internal policies and procedures adopted by the board.

GREG MORTENSON’S CASE ANALYSIS OUTLINE.

Steps that were taken to the success of three cup of tea to establish sound fiscal management in CAI.
Mortenson interested a publisher in the idea of the book.
Mortenson and co-author David Oliver Relin came into a collaboration agreement.
Mortenson and Relin signed a publishing agreement with Viking Penguin
Were the steps unsuccessful or inadequate?
Steps takenafter the book’s release to enhance fiscal control and procedures.
Board entered into a formal employment agreement with Mortenson.
Agreement on the payment of the book royalties, travel fees, and expense reimbursement.
Were the steps unsuccessful or inadequate?
What more could have done by the organization to compel Greg Mortenson to comply with the procedures for the expense reimbursement?

Strict controls on the use of Central Asia Institute accounts.

Change of management.
Conduct audits.
Increase the number of board members.
Why did the organization not go greater lengths to enforce compliance?

Lack of enough Board members.

Lack of supportive documents.
Over reliance on Greg Mortenson.
Oral Testimony and Recommendations.
Diverse deliberation in the organization.
Change of management.
Increase in board members.
Guidelines on how funds and charitable should be managed.

References

Vaughan, S.,& Arsneault, M. (2014). Managing nonprofit orgnizationins a policy world.Thousand Oaks, CQ press.