Strategic Management in NGOs

Venkatesh Ganapathy

Reference

• Pandey, S. (2011). “Managing for Change: Organizational Challenges for Development• Organizations”. Chapter 13 in Sandip Anand,

Ibha Kumar and Anjula Srivastava (Eds),• “Challenges of the Twenty First Century: A Trans- disciplinary Perspective” , MacMillan India: New

Delhi, pp. 198-217

NGOs

• Also called as development organizations• Contribution to health, education, poverty

alleviation, environmental protection and community work.

Changes in working of NGOs : Causes

• International politics• New Technologies• Industrial development• Scarcity of natural resources• Climate change• Social and cultural change

Third sector – Voluntary sector

• Non government• Not-for- Profit

Changes since 1991: LPG

• Social, political and economic changes• Liberal economy• FDI• Growth of knowledge intensive industries• Fast urbanization• Scarcity of energy and natural resources

Critical factors in the external environment of NGOs

• Politico-legal environment• Socio-cultural environment• Economic environment• Technological environment

Statistics

• There are roughly 3.3 million NGOs registered in India

• NGO sector – Rs.75000 crores annually• Positive role of voluntary sector in national

development

Problems in NGOs

• Reduced funding supports from donor agencies

• Inadequate corporate support to long term development goals.

• Lack of professionalism in NGO management practices

• Long term institutional sustainability• Competition for resources

Problems (Cont’d)

• Organizational culture• Inappropriate strategic management• Poor decision making• Lack of special skills needed• Absence of criteria for staff selection• Inexperience in managing relations with

government and media

4 stages of growth for NGO

• Start up• Expansion/ growth• Consolidation• Phase out

Scaling up of NGOs

• NGOs – catalysts of policy innovations and social capital

• Creators of knowledge in social sector• Contribute to community and society

development

Strategic management by NGOs

• NGOs – look beyond short term considerations to create opportunities that do not exist

• Strategy can be influenced by– Focus of beneficiaries– Focus of donors– Focus of founder members– Management of change

Smaller NGOs & their strategies

• Strategy driven by goals and values of founder-leader• On scale-up, need to chalk out formal strategies for

survival and sustainable growth• Growth phase – focus on achieving operational

efficiency• Stage III – move towards long term sustainable

objectives• Stage IV – focus of strategy on institutional building

and social sustainability

Indian NGOs

• Often influenced by international donor agencies

• Focus on ensuring development missing• Partnership focused strategy may be relevant

– build capabilities of local NGOs, build networks with regional NGOs, international funding organizations and government agencies.

NGO strategy must focus on

• Social development• Long term sustainability to beneficiaries• Core competency

NGOs with a good organizational structure

• SEWA• CRY• PRIA

Large NGOs – structural inertia

• Bureaucratic systems• Absence of a professionally driven governing

board• Poor governance• Improper organizational structure• Absence of participative management• Absence of professional culture

Success of strategy depends on..• Strong organizational culture• A culture of organizational learning and capability building• Robust decision making processes• Shared commitment to a common cause• Creation and sustenance of formal teams• Formal HR policies• Mix of top-down and bottom-up approach• Proper documentation• Selection and recruitment of human capital

HR strategies

• Stage 1 – Need for committed people• Stage 2 – Professionally qualified teams• Stage 3 – Retain key people• Stage 4 – Redefine staff capacities and roles,

redeployment of human resources, capability building

Summary

• Strategic management of NGOs is more complex due to the organizational structure and culture and complexities associated with them.

• Performance evaluation, people management – crucial issues

• Reduced dependence on donors and founder members• Build organizational capabilities and networks• Need for greater transparency in sources and utilization

of funds• Change management is crucial