(Solved) Platform Governance - PDF

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Role of governance in a platform-based business
Governance structure – Platform Business
Amey Uday Parulkar [21501698]
Platform Governance
Governance is essentially derived from words like government or governing in control. With regards to any
business organization, governance plays a role in decision-making that is ethical in nature and allows action
that is managerial in an organization which relies on transparency, accountability, and defined roles. [1]
Platform businesses are largely driven by innovations in the technical spectrum with an increased online
connectivity, these businesses are game changers and re-writing the pages of our book on living and work
patterns. To give you some perspective, the new way of hailing a cab service is via “Uber” application online
at your doorstep, while booking a decent room with all amenities equivalent of a traditional high standard
hotels and within budget has been made possible via “Airbnb”- again a platform-based application, while
traditional way of shopping has been completely disrupted by another platform-based application “Amazon”
charging the whole canvas of how we shop today.
Organizations above are only few examples from many such platform-based businesses utilizing the power of
web and mobile-based platforms transforming the way services are delivered. With the advent of these
innovative techniques, they have created market conditions that has disrupted there respective industries and
making them eventually follow their suite or else disappear!
The main differentiator between platform business and traditional business is a strong foundation of policies
that governs the interests of users and employees which are in place for decades when it comes to traditional
enterprises. This is quite opaque when it comes to platform-based businesses and poses new questions and
challenges for labor market, organizations, and society at large.
Hence, it is pertinent that platform governance must be at the core of any platform-based business in terms of
user protection, their privacy, and rights. [2]
Platform Governance Types
As we have established that governance is a key aspect in the formation of any successful platform-business.
However, governance is not just a single structure that can be implemented by the book. It is a layered
architecture that must be designed by asking some very important questions at each layer to address the
shortcomings of the platform when it comes to governance. These layers of governance can be broadly
categorized into 4 types as explained below:
Governance and its types described above can be further elaborated into six different functions using the
petal diagram framework. By integrating, coordinating, and balancing these six functions, a good governance
can be achieved. [9]
What are the objectives of an organization?
The objective of any organization is found via its mission and vision statements that are executed
using their strategic plan. They defined the purpose and describe on the way to achieve the same.
The strategy to achieve the goal is the key between management and governing body with
responsibility that is shared to device an effective plan for the management to execute. [10]
What are the ethics of an organization?
Ethics define the behavioral aspects of any organization. Most weightage is given to factors such as
social responsibility, sustainability and engaging the stakeholders over profits. Ethics are essentially
moral values that define the standards that govern the conduct of individuals the organization. Any
organizations ethical standards are measured by the behavior of any individual from a top-down
hierarchy. [11]
2
StructuralFinancialPerformanceRegulatory
What digital platform?
Local and Central Control
Reporting hierarchy
Management Autonomy
Budget allocation
Fund Control and processing
Investment details
Employee Evaluation
Reward structure
Performance assessment
Legislation Impact
Accounting Rules
Organizational Culture
Any organizations culture is defined the way people communicate and interact with each other.
People in decision-making positions can influence this operating culture that is decided by the
governing bodies that wants to implement it. An effective culture can be implemented by the will of
the people who wants to be “governed” and support a governance system at the core. This is
sometimes referred to as Governmentality1. Other factors that may affect organization culture
depends on how supportive an organization is in terms of risk taking or innovation. How open and
transparent or mature and professional an organization can be with high tolerance. [12]
Organizational Compliance
A compliance framework consisting of regulatory, statutory, and legal obligations that is defined by
the governing body must be ensured by the management and employees in terms of achieving
organizations goals. [13]
Management Accountability
Management must ensure accountability to uphold the ethics and culture they have developed and
influenced within the organization. They must also ensure to look after the resources under them and
take responsibility for accomplishing the strategic plan and fulfilling organization goals. [14]
Governance Framework (Design and Implementation)
A governing body is essentially responsible for organizations performance and must be responsible
for it. But it is humongous task to undertake all responsibilities themselves. To ensure smooth
governance of the organization, many responsibilities are assigned to people within the management.
Governance framework essentially defines the factors that enable the principles and structures acting
as an interface through which any organizations governance will delegate levels of authority and
responsibility to managers and others for ensuring accountability. [4]
To implement the above six functions, the governing body requires an effective framework consisting of the
primary elements that are required to achieve the objective of an organization. This is outlined in the petal
diagram framework below:
The management of project management: A conceptual framework for project governance - Scientific Figure on ResearchGate. Available from: https://www.researchgate.net/figure/Petal-diagram-of-
governance_fig4_266620368 [accessed 30 Jul, 2021]
See R. Müller, S.Pemsel, J.Shao. Organisational enablers for project governance and governmentality in project-based organisations. International
Journal of Project Management (Pre press). http://dx.doi.org/10.1016/j.ijproman.2014.07.008
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