Topic: Research Methods for NGO Management (3)

I. NGO Management Theory and Practice

(This section is extracted from Ferrarao, 2002)

i. Definitions

The third sector, in fact, lacks even a wholly suitable name, which is used and
accepted by all. The term "NGO" as generally used by the World Bank refers to
organizations, some of them formally constituted and some of them informal, that
are largely independent of governance and that are characterized primarily by
humanitarian or cooperative, rather than commercia l, objectives, and that
generally seek to relieve suffering, promote the interests of the poor, protect the
environment, provide basic social services, or undertake community
development.

a. Terminology

The NGO category remains fuzzy or gray because too ma ny inaccurate

terms are used to define the sector. Far too often the terminology has a
negative rather than a positive connotation: i.e. non-profit,
non-governmental. As the sector grows, the recognition of common
terminology and the acceptance of a clear definition of the nonprofit
organization will be essential.

There are several important distinctions to he made, including, most

prominently, tile use of the word “profit” in the business world whereas the
nonprofit world should use terms such as "surplus," "excess" or the
preferred "excess of revenue over expenses." Further, NGOs do not
"market" a product; instead they "promote" a service; they do not have
"commercial activities" but rather "unrelated activities." An NGO does not
deal with a "client," a te rm linked to and determined by competition, but
rather with "users," "beneficiaries", "stakeholders" or "people who
participate." When dealing with donors, NG0s should always be careful to
use clear, "nonprofit" terminology.

b. Criteria for defining NGOs

NGOs may be defined using various criteria. They may be defined by

functional criteria, that is, what they do, what their objectives are. A

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 functional definition ideally would match up with a legal definition, that is,
what the legislation declares an NGO to be. Economic/financial criteria
are also used in many cases -- where do the NG0s get their money? Finally
they may be defined along structural/operational criteria. How is the
NGO set up and administered? In the following section we will refer to
these terms as we analyze various definitions in order to show where they
are inadequate or impractical.

Of the four types of criteria being looked at here, only the legal one can
be said to have any authority or can be termed the "correct" one. A
structural definition tells us how NGOs are set up by way of governance,
formalities, management and control. It is the closest one can come to what
NG0s are in fact. In such it is the least limiting of the definitions and can be
applied to all categories of NG0s worldw ide.

c. Characteristics of NGOs

1. Non-Profit Distribution—An NGO must indeed have no profit but it can

and should have a surplus/excess of revenues over expenses. The balance
sheet of an NGO shows no earnings, but rather fund balances with the
accumulation of surpluses or losses of that year and of previous years.
2. Private in Nature—NG0s are institutionally separate from government and
have an independent governance structure.
3. Self-Governing—They must have their own governance systems and
procedures to control their institution and distribution, with overall control
residing internally.
4. Formal Organization — There must be formal elements of
institutionalization by means of a charter or, in some countries, bylaws and,
very importantly, the stipulation of regular meetings of a governing board.

ii. Classification

NG0s may be classified in a variety of ways, usually by their field of activity.

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BINGO: Big International NGO MSO: Membership Support Organization

BONGO: Business-organized NGO NGDO: Nongovernmental Development Organization

CBO: Community Based Organization NGO: Non-governmental Organization

CSO: Civil Society Organization NNGO: Northern NGO

DONGO: Donor Organized NGO NPO: Nonprofit Organization

ENGO: Environmental NGO PDO: Private Development Organization

GDO: Grassroots Development Organization PO: Peoples Organizations

GONGO: Government Organized NGO PSO: Public Service Organization

GRINGO: Government run/initiated NGO PVDO: Private Voluntary Development Organization

GRO: Grassroots organization PVO: Private Voluntary Organization

GRSO: Grassroots Support Organization QUANGO: Quasi-NGO

IDCI: International Development Cooperation SNGO: Southern NGO

Institutions

INGO: International NGO TNGO: Transnational NGO

IO : Intermediate Organization VALG: Voluntary Agency/Organization

IPO: International Peoples Organization VDA: Village Development Organization

LDA: Local Development Association VI: Village Institution

LINGO: Little NGO VNPO: Volunteer Nonprofit Organization

LO: Local Organization VO: Voluntary Organization

MO: Membership Organization

iii Examples:

BONGO — THE SHELL FOUNDATION

The Shell Foundation is established to support efforts to achieve a balance between
economic growth and care for the environment and equitable social development - the
goal of sustainable development. The Foundation's focus on sustainable development is
based upon the Shell Group's belief that the long-term health and prosperity of societies
of which it is part, and its own future, depends on the ability of all stakeholders,
worldwide, to attain such balance.

ENGO — THE NATURE CONSERVANCY

Since 1951, we've been working with communities, businesses and people like you to
protect more than 92 million acres around the world. Our mission is to preserve the
plants, animals and natural communities that represent the diversity of life on Earth by
protecting the lands and waters they need to survive. (http://nature.org/)

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GONGO — US INSTITUTE OF PEACE
The mission of the United States Institute of Peace is to strengthen the nation's
capabilities to promote the peaceful resolution of international conflicts. The United
States Institute of Peace is an independent, nonpartisan federal institution created and
funded by Congress to strengthen the nation's capacity to promote the peaceful
resolution of international conflict. Established in 1984, the Institute meets its
congressional mandate through an array of programs, including grants, fellowships,
conferences and workshops, library services, publications, and other educational
activities. The Institute's Board of Directors is appointed by the President of the United
States and confirmed by the Senate .

MO — SIERRA CLUB
Sierra club is the non-profit membership organization; promotes conservation of
the natural environment by influencing public policy decisions; practices and promotes
responsible use of the world's ecosystems and resources; involved in campaigns,
local-level activism, public education, outings and production of numerous
publications. (http://www.sierraclub.org)

INGO — CENTRAL ASIA INSTITUTE

Central Asia Institute (CAI) is a registered 501 (c) 3 non-profit organization, started in
1996. Central Asia Institute promotes literacy, women's vocational skills, and
awareness of public health and environmental issues through community initiated
education programs in mountain regions of Central Asia. (http://www.ikat.org )

TNGO — CANADIAN FOUNDATION FOR THE AMERICAS

The Canadian Foundation for the Americas (FOCAL) is an independent,
non-governmental organization dedicated to deepening and strengthening Canada’s
relations with countries in Latin America and the Caribbean through policy discussion
and analysis. FOCAL’s mission is to develop a greater understanding of important
hemispheric issues and to help build a stronger community of the Americas.
(http://www.focal.ca )

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II. NGO Managerial Data Collection and Analysis Methods
(This section is extracted from Courtney, 2002)

i. How to measure success

We usually have no difficulty coming to a view as to whether organizations
we know well are effective or not. It is important for organizations themselves,
not to mention their funders and users, to get a clear idea about the effectiveness
of the organizations with which they are involved, or fund. Then, We explore the
concept of organizational effectiveness.

a. Achieving goals

The early explorations of the concept of organizational effectiveness

tended to resolve around a rational goal-seeking entities paradigm that
postulates that organizations are rational goal-seeking entities that process
inputs to create outputs to achieve these goals. The particular effectiveness
models suggested within this paradigm have included mission
accomplishment and goal attainment.

b. Value for money

This was also concerned with outputs, but was equally concerned with
inputs and the relationship between the two. This is sometimes called
cost-effectiveness, efficiency, or value for money.

c. Economy

In assessing economy the important consideration is the cost of the

various inputs, and particularly whether the cost could be, or could have
been, reduced. Unlike the efficiency approach, no comparison is made with
the number or quality of outputs or outcomes.

d. Equity

Any measure of voluntary nonprofit effectiveness need to also contain a

measure of equity, i.e. the extent to which the service meets the expectations
or needs of those in greatest need, or of those who tend to be socially
excluded because of gender, significant monitoring of beneficiaries to
assess the extent that equity has been promoted.

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 e. Measuring internal processes

Particular where it is not possible to develop goal attainment output or

outcome indicators, some researchers favor the development of internal
process measure of organizational effectiveness other than efficiency or
economy. 'Processes' can include all the activities that translate the input
resources into outputs and eventually outcomes.

f. Resource acquisition

The system-resource approach argues that all organizations need to be

adaptable and acquire resources from outside in order to survive. Its ability
to acquire these resources is therefore an appropriate measure of
effectiveness in sustaining their own functioning.

ii. Decision-process model

In the decision-process model, the effective organization is the one that
optimized the processes for getting, storing, retrieving, allocating, manipulating
and discarding information. However, the organization might be excellent in the
information-decision function, but provide a poor service to its beneficiaries,
quantitatively or qualitatively. It is also difficult to see how such a model might
be operationalzed, or how organizations might be compared.

a. Multiple constituency approach

In the multiple constituency approach, the diversity of perspectives of

the various stakeholders (clients, funders, board members, volunteers, staff,
etc.) is recognized (particularly that of the dominant coalition) and is used
positively to define the criteria with which the organization will be
evaluated. The weakness of the approach is that 't provides no way of
determining the particular weight that should be given to any particular
constituency or group of stake holders.

b. Political approach

The political approach starts from the bases of limited resources,

conflicting priorities, unequal power, and the formation and dissolution of
coalitions. Organizations, as viewed through the political frame, are seen as
'alive and screaming' political arenas that house a complex variety of
individual group interests. Understanding the relative power positions of
each of these various stakeholders can provide a salutary dose of reality to

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 the process of determining organizational goals, the methods to achieve
them and how achievement will be measured.

c. The symbolic frame

The symbolic frame is more interested in exploring organizational

myths symbols, culture and rituals that legitimize the organization
internally and externally. In this view, the concept of organizational
effectiveness is a myth created through organizational ritual to help
legitimize the organization internally and externally. In common with the
social constructionist perspective, what an event means is more important
than what actually happened the same event can have completely different
meanings for different people

iii. Overarching models

The various concepts discussed above are not necessarily conflicting. Various
attempts have been made to develop an overarching model that can encompass a
number of these different concepts . Kushner and Poole (1996), having reviewed
the literature on organizational effectiveness, suggested a general model of
voluntary nonprofit effectiveness with five key elements: constit uent satisfaction,
resource acquisition effectiveness, internal process effectiveness, goal attainment
and organizational effectiveness.

People
People results

Policy & Key

Leadership Resource Internal Customer
strategy performance
acquisition process results
results
Partnership & effectiveness effectiveness
Society results
resources

Organizational
Constituent Satisfaction Goal Attainment Effectiveness

Fig.1 General model of NGO effectiveness

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III. NGO Managerial Information Synthesis and Evaluation
(This section is extracted from Courtney, 2002)
Unlike the situation of a decade ago, organizations can now choose from a range of
useful frameworks designed for the board and staff of voluntary nonprofit
organizations to review their organizations. Alternatively they can use some of the
more general well-tested tools and techniques (some of which have already been
mentioned in this book) that are available as a result of previous thinking and practice
in other sectors about strategic planning.

i. Mandate analysis
Mandate analysis is a process of exploring the written documents that exist in
support of the mission of the organization. These documents can be used by the
board and staff to explore the fundamental bases for the organization's mission, to
understand the extent and nature of the need that the organization is concerned
with, and to reflect on the distinctive competencies of the organization. These are
all important in considering the appropriate strategies for the future.

ii. Stakeholder analysis

Stakeholder analysis refers to a range of tools for the identification and
description of stakeholders on the basis of their attributes, interrelationships, and
interests related to a given issue or resource. The term transcends several fields of
study, including business management, international relations, policy
development, participatory research, ecology, and natural resource management.
It is rather vague as it is often mentioned loosely without specific indication of the
context.

“Stakeholder analysis can be defin ed as an approach for understanding a

system by identifying the key actors or stakeholders in the system, and assessing
their respective interest in that system” (Grimble et al. 1995, pp. 3–4). This
definition is useful in that it defines stakeholder analysis as a natural resource
management approach and acknowledges its limits — it cannot be expected to
solve all problems or guarantee representation (Grimble and Wellard 1996).
Stakeholder analysis is not only concerned with internal analysis, as the
stakeholders will include both internal and external players, who will have views
about both the internal aspects of the organization and the implications of changes
in the external environment.

Examples of analytical tools used in stakeholder analysis:

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 ? A typology of tree resource stakeholders in Thailand on a macro- to
microcontinuum (Grimble et al. 1995), followed by another matrix
classifying the trade -offs and conflicts at each level (Grimble et al. 1995);

? A listing of stakeholder types, coupled with a description of their

composition and sensitivities to changes in forestry projects (Hobley
1996);

? Checklists for identifying stakeholders and for drawing out interests,

followed by a summary of stakeholders, interests, and the potential of a
project impact on each (ODA 1995);

? Stakeholders and a scored ranking on several dimensions: proximity to

forest, preexisting rights, dependency, indigenous knowledge,
culture–forest integration, power deficit (Colfer 1985);

? Matrices showing stakeholders vis-à-vis the “4R framework” referring to

responsibilities, rights, revenues, and relationships (Dubois 1998); and

? Predicting actor behaviour on the basis of actors’ preferences assigned to

actions and outcomes; how they acquire, process, and apply information;
the criteria they use in deciding what course of action to follow; and the
resources each actor brings to a situation (Ostrom et al. 1994).

iii. Portfolio analysis

Portfolio is the technological innovation projects and the form of acquisition
(internal development vs. external sourcing). The procedure of portfolio analysis
is as follows. A manager in a company conducts a yearly exercise to analyze the
projects that his division is undertaking, and to review new project proposals
proposed by division staff. The aim is to decide upon the next year's portfolio of
projects, such that the portfolio is aligned with the strategic direction of the
division, as well as identifying any resource or skills that need to be developed or
brought in order to meet the needs of the portfolio.

This is the example of portfolio analysis. The first step for R&D&E projects,
this essentiality means deciding whether to develop internally or resort to external
sources. There are various ways of acquiring technology from external sources.

The main evaluations of internal development are the following:

? internal development (i.e. acquiring competence through internal

R&D projects),

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 ? research consortia,

? contract research with a research institute or university

? acquisition of firms with the required competences,

? licensing

? internal ventures, i.e. creating internal groups separated from the rest
of the organization: these will be devoted to development of new
businesses based on technologies available,

? joint ventures or other forms of alliances, and

? hiring human resources with the required capability.

The main evaluations of external development are the following:

? availability of external sources (indicated in the competitive impact

analysis for each technology)

? availability of the technology for acquisition at a price that allows

adequate return for the company.

? demands and restrictions imposed by the licenser,

? time-frame demanded by the company strategy: forms of technology

acquisition such as firm acquisition or licensing clearly allow certain
technology to be acquired very quickly,

? appropriability (i.e. extent to which a certain technological

knowledge needs to e kept proprietary and made difficult to imitate):
where there are strong appropriability problems, internal development
is safer that resorting to external sources.

? degree of familiarity of the firm holding the technology: a low

familiarity with technological competences required to develop a
certain technology forces acquisition from external sources, and
degree of familiarity of the firm with the market (if the investment
into a new technology implies new product line creation): again, a
low familiarity with the activities suggests going external.

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 The second step is to interpret the result of evaluation. In a simple matrix,
external effectiveness is seen as a function of the industry’s market growth, while
internal effectiveness is viewed as a function of relative market share (Fig.2).

High Market Share Low

High
Stars Question Marks
Market
Growth
Cash Cows Dead Dogs
Low

Fig.2 Portfolio Matrix

In its simplest form, portfolio analysis involves allocating each program of

the organization to one of the following categories:

? Star—the kind of innovative program that is generating increasing

interest from the public and funders.

? Cash Cow—a popular program that receives significant support and

funding.

? Question Mark—a program that needs re-evaluating to see in which

of the other categories it best fits.

? Dog—a program that is clearly past its sell-by date and should be
cancelled.

On the basis that most products and services, including those provided by the
voluntary sector, follow the lifecycle of a normal distribution curve, at any point
in time it is likely that any service is likely to be at one of the following stages:

1 growth stage (Star) and needs to be invested in;

2 mature stage (Cash Cow) and currently requires little attention;

3 in decline (Dead Dog) and should probably be wound up;

4 unclear what category the activity should fall into (Question Mark) and
therefore in need of further investigation.

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 Dogs should be divested. Resources should move from the “cash cows” to the
“stars”; if warranted, investments should be made in the “question marks.”

Reference

Courtney, R., 2002, Strategic management for voluntary nonpr ofit organizations,
Routeledge, NY.
Ferrarao, P., 2000, Legal and organizational practices in nonprofit management,
Kluwer Law International, Netherlands.

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