We pose the question: is there a relationship between organizational cohesion and tax compliance? Kenya has just experienced national elections in August 2017. During the electioneering period, the cohesion in the country was affected. Equally, cohesion in organizations was affected.
The one question that is perhaps lingering in every Kenyan’s mind is whether we have a shared future as a country and as organizations after the national elections. In some areas in Kenya, the effects of the electioneering period and the election outcomes were positive, while in other areas, the effects were negative.
This depends on various factors beyond the scope of this post.
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However, the negative and the positive effects during the electioneering period and the outcome of the elections are likely to affect cohesion in organizations.
The result of this is that operations, especially production, in many organizations may be affected. This will ultimately affect tax compliance negatively.
What is Cohesion?
There are many definitions of cohesion, largely depending on the subject under discussion. However, for the purposes of this post, cohesion is the tendency to be in “unity while working towards a goal”. Organizations have major and mini-goals.
The mini-goals enable the organization to achieve the major goals. In many organizations, one of mini-goals is to improve tax compliance. This will enable the organization to achieve the ultimate goal.
Therefore, in any organization, there is a need for unity in efforts towards achieving the organizational mini and major goals. The unity should be from all facets of the organization.
This will enable the organization to increase productivity, sales, cash management, and ultimately profits, which will result in proper tax management.
Organizations employ many people from various backgrounds, ages, educational levels, religions, etc. Organizations also do not exist in a vacuum but in environments with many other organizations, institutions, etc. The people and environments have different cohesion.
Therefore, every organization is a meeting point of many types of cohesion, depending on the people employed and the environment where the organization is located. Hence, cohesion in any organization is influenced by cohesion from all the other different sources.
Thus, cohesion in an organization is the total of cohesion influences from other sources. But the question is: what is the source of cohesion influence in an organization? There are numerous factors that influence organizational cohesion.
Six Sources of Cohesion in Organizations
There are many sources of cohesion in any organization. However, for the purposes of this post, only six broad sources that determine cohesion in any organization are examined. These are individual, family, community, organization itself, country and the world.
The following is a brief explanation of the sources.
Family
All directors and employees come from families. Cohesion in the family will affect the director or employee. A director or employee coming from a cohesive family will impact organizational cohesion positively.
The director or employee is capable of resolving many problems, including domestic issues, and thus creating harmony within the family. This ability is also utilized at the organizational level, thus positively impacting organizational cohesion.
Individual
Every organization has people working in it as directors and employees. The people play a critical role in the operations of the organization and the achievement of its goals (mini and major).
Cohesion in the individual director or employee will impact the cohesion within the organization either negatively or positively. A director or employee who experiences self-cohesion will display various characteristics.
For example, the director or employee will be human, have internal peace (no internal struggles), motivated, outgoing, liberated, a team player and positive in their outlook of life. The cohesion in the individual will impact positively on the organizational cohesion.
Community
All directors and employees live in communities, and all organizations are in communities. Therefore, there is a synergy between the organization and the community. When a director or employee lives in a cohesive community, it benefits the organization.
A cohesive community accommodates and appreciates diversity (religious/social/political/economic) and there is no civil strife. This then impacts positively on the organizational cohesion.
Organization
In any organization, there is prevailing cohesion at anyone time. However, since cohesion is not static but dynamic, it is influenced by cohesion from within the organization and from other sources daily.
This influence on cohesion mainly originates from the characteristics of directors and employees. The directors and employees in the organization are from different tribes, clans, races, political affiliations, genders, age groups, personalities, and educational levels.
Besides, the directors and employees have different talents, work ethics, leadership styles, religious beliefs and skills. Further, the directors and employees are from different social strata, cultural backgrounds, etc.
The influence on the cohesion in the organization from the directors and employees is either positive or negative. This influence will determine organizational productivity and hence tax compliance.
Country
Workers are citizens of a country. Cohesion in a country will affect cohesion in the organization. Cohesion in a country is influenced by the happenings in the political, religious, economic and social environments. The influence will be either positive or negative.
When the influence is positive, there will be increased cohesion in the country. In such instances, there will be accommodation of diversity in religious beliefs, political affiliations, social attitudes, and the influences of economic environments, among others.
Besides, there will be peace, love for fellow countrymen and women, respect of the rule of law, unity of purpose, etc. The cohesion will help unify the country in achieving the country’s greater goal of continued existence.
As the people in the work towards achieving the country’s goals, they will also work towards achieving the organization’s mini-goals among them tax compliance, and the major goals.
World
Organizations and countries exist in the world space. Therefore, whatever happens in the world around also affects the organizations. For example, when there is no peace in the world, it affects basically all human beings. That, in essence, affects production in organizations and hence tax compliance.
Therefore, the goings-on in the world influence cohesion in organizations. When there is cohesion in the world, there is peace; where treaties and charters are valued, there is respect for international laws and human rights, and so on.
Conclusion
Cohesion improves unity in organizations. Therefore, cohesion enables the organization to achieve its mini and major goals through improved production, increased business, improved cash flows and proper management of taxes.
Some of the mini-goals in organizations include improved tax compliance. Therefore, it is in the interest of every organization to ensure that there is cohesion within the organization.
This will improve tax compliance, enable the organization to save on extra tax payments (tax fines, tax penalties and tax interest) and create wealth.
Thank you for reading the article.
Dr. Wakaguyu Wa Kiburi.
